in the united states bankruptcy court for the … · commitments with respect to their project...

IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF COLORADO In re: ) ) CEC DEVELOPMENT BORROWER, LLC, ) Case No. 20-14573 MER ) Chapter 11 Debtor. ) ______________________________________ ) ) In re: ) ) CEC RENEWABLE ASSETS, LLC, ) Case No. 20-14574 JGR ) Chapter 11 Debtor. ) ______________________________________ ) ) In re: ) Case No. 20-14575 TBM ) Chapter 11 CEC RENEWABLE ASSETS DEV, LLC, ) ) Request for Joint Administration Pending Debtor. ) )

DEBTORS’ MOTION FOR ENTRY OF INTERIM AND FINAL ORDERS (I) AUTHORIZING THE DEBTORS TO (A) OBTAIN POSTPETITION FINANCING

AND (B) UTILIZE CASH COLLATERAL, (II) GRANTING LIENS AND SUPERPRIORITY ADMINISTRATIVE EXPENSE CLAIMS, (III) GRANTING

ADEQUATE PROTECTION, (IV) MODIFYING THE AUTOMATIC STAY, (V) SCHEDULING A FINAL HEARING, AND (VI) GRANTING RELATED RELIEF

The above-captioned debtors and debtors in possession (collectively, the “Debtors”),

respectfully state as follows in support of this motion:

Case:20-14573-MER Doc#:7 Filed:07/02/20 Entered:07/02/20 17:23:09 Page1 of 39

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Relief Requested

1. By this motion, the Debtors seek entry of an interim order (the “Interim Order”),

substantially in the form attached hereto as Exhibit A,1 and a final order:2

(a) authorizing the Debtors to obtain senior secured postpetition financing on a superpriority basis in the aggregate principal amount of up to $8,902,803, consisting of (a) $2,402,803 of new money term loans (the “DIP Term Loan Facility”) and (b) a $6,500,000 roll-up (the “Roll-Up Facility”, and together with the DIP Term Loan Facility, the “DIP Facility”) pursuant to the terms and conditions of that certain Superpriority Debtor-in-Possession Credit and Guaranty Agreement (as the same may be amended, restated, supplemented, or otherwise modified from time to time, the “DIP Credit Agreement'”), by and among the Borrowers, Brevet, and Guarantors thereto (the “DIP Parties”), substantially in the form attached hereto as Exhibit B;

(b) authorizing the Debtors to execute and deliver the DIP Credit Agreement and any other agreements and documents related thereto (collectively, with the DIP Credit Agreement, the “DIP Documents”), and to perform such other acts as may be necessary or desirable in connection with the DIP Documents;

(c) granting the DIP Facility and all obligations owing thereunder and under, or secured by, the DIP Documents to the DIP Parties (collectively, and including all Obligations as described in the DIP Credit Agreement, the "DIP Obligations''), allowed superpriority administrative expense claim status in each of the Cases and any Successor Cases;

(d) granting to each of the DIP Parties, for the benefit of themselves, automatically perfected security interests in and liens on the DIP Collateral, including, without limitation, all property constituting “cash collateral” as defined in section 363(a) of the Bankruptcy Code (“Cash Collateral”) and all of the Debtors’ currently unencumbered property (including, upon entry of a final order, the proceeds of any avoidance actions (but not on the

1 Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in this motion, the DIP Credit Agreement, or in the Interim Order, each as defined herein, as applicable.

2 The Debtors will file the form of final order prior to the Final Hearing (as defined herein).


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avoidance actions themselves)), which liens shall be subject to the Carve Out and the priorities set forth herein;

(e) granting to each of the Senior Lenders, for the benefit of themselves, automatically perfected junior priority security interests in and liens on the DIP Collateral, including, without limitation, all property constituting “cash collateral” as defined in section 363(a) of the Bankruptcy Code (“Cash Collateral”) (including, upon entry of a final order, the proceeds of any avoidance actions (but not on the avoidance actions themselves)), which liens shall be subject to the Carve Out, the DIP Liens, the Adequate Protection Liens of the Tranche B Lender & CEC DB Lender, and the priorities set forth herein;

(f) authorizing the Debtors to pay the principal, interest, fees, expenses, and other amounts payable under the DIP Documents as such become earned, due and payable, including, letter of credit fees (including issuance and other related charges), continuing commitment fees, closing fees, audit fees, appraisal fees, valuation fees, liquidator fees, structuring fees, administrative agent’s fees, and the reasonable fees and disbursements of the Lenders’ attorneys, advisors, accountants, and other consultants, all to the extent provided in, and in accordance with, the DIP Documents;

(g) the waiver of the Debtors’ right to surcharge the DIP Collateral pursuant to section 506(c) of the Bankruptcy Code and, subject to entry of the Final Order, any right of the Debtors with respect to the Lender and existing collateral with respect to the Prepetition Loans under the “equities of the case” exception in section 552(b) of the Bankruptcy Code;

(h) vacating and modifying the automatic stay imposed by section 362 of the Bankruptcy Code to the extent necessary to implement and effectuate the terms and provisions of the DIP Documents and the Interim Order;

(i) scheduling of a final hearing (the '”Final Hearing'”) within 21 days of the Petition Date (as defined herein) to consider the relief requested herein and approving the form of notice with respect to the Final Hearing; and

(j) granting related relief.

2. In support of this motion, the Debtors submit the declaration of Tom Sweeney,

attached hereto as Exhibit C (the “Sweeney Declaration”), filed contemporaneously herewith.


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Jurisdiction and Venue

3. The United States Bankruptcy Court for the District of Colorado (the “Court”) has

jurisdiction over this matter pursuant to 28 U.S.C. §§ 157 and 1334. The Debtors confirm their

consent, pursuant to Rule 7008 of the Federal Rules of Bankruptcy Procedure (the “Bankruptcy

Rules”), to the entry of a final order by the Court in connection with this motion to the extent that

it is later determined that the Court, absent consent of the parties, cannot enter final orders or

judgments in connection herewith consistent with Article III of the United States Constitution.

4. Venue is proper pursuant to 28 U.S.C. 1408 and 1409.

5. The bases for the relief requested herein are sections 105, 361, 362, 363, 364, 503,

and 507 of the United States code, 11 U.S.C. 101-1532 (the “Bankruptcy Code”), Bankruptcy

Rules 2002, 4001, 6003, 6004, and 9014, Rules 2002-1, 2081-1 and 4001-2 of the Local

Bankruptcy Rules for the United States Bankruptcy Court for the District of Colorado (the “Local

Rules”).

Background

Description of Debtor’s Business and Assets

6. On July 2, 2020 (the “Petition Date”), CEC Development Borrower, LLC (“CEC

DB”), CEC Renewable Assets Development, LLC (“CEC RAD”), and CEC Renewable Assets,

LLC (“CEC RA” and together with CEC DB and CEC RAD, the “Debtors”) each filed a petition

with the Court under chapter 11 of the Bankruptcy Code (collectively, the “Chapter 11 Cases”).

The Debtors are operating their businesses and managing their properties as debtors in possession

pursuant to sections 1107(a) and 1108 of the Bankruptcy Code. No request for the appointment


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of a trustee or examiner has been made in the Chapter 11 Cases, and no committees have been

appointed or designated.

7. Debtors are subsidiaries of Clean Energy Collective, LLC (“CEC”). CEC is the

nation’s leader in delivering community-shared, clean energy solutions. CEC develops and has

managed mid-scale solar energy facilities across the country that are collectively owned by

participating utility customers. For each solar array or “Project” it develops, CEC, or a subsidiary

such as CEC DB, forms a separate “Project Company.” In its development of each Project, CEC,

among other things, identifies and negotiates for the purchase of suitable real estate upon which

the solar array can built, obtains the permitting required to construct the solar array, and negotiates

with utility companies in order to establish an interconnection services agreement to transmit the

energy generated by the solar array to the end users.

8. Until recently, as part of its Community Solar Platform, CEC also solicited and

engaged subscribers for the community solar facilities. CEC recently sold the Community Solar

Platform facet of its operations. Historically, once CEC developed a Project as described above,

it either continued to own and operate the Project (“Legacy Project”) or sold the Project to another

owner/operator who would then build out the infrastructure for the solar array. With the sale of

its Community Solar Platform, CEC ceased to own and operate any new Projects, and now

develops Projects for sale.

9. Debtors are holding companies for CEC’s Project Companies and were created to

facilitate the separate financing and development of each Project. CEC DB holds and owns the

membership interests in CEC’s Project Companies. CEC DB currently owns the membership


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interests in 47 Project Companies. These membership interests and trailing contract payment

rights from sold Projects, described below, are CEC DB’s only assets.

10. CEC DB is wholly owned by CEC RAD. The membership interest in CEC DB is

CEC RAD’s only asset.

11. CEC RAD is wholly owned by CEC RA. The membership interest in CEC RAD

is CEC RA’s only asset.

Events Leading to the Chapter 11 Filings

12. The Debtors’ bankruptcy filings were precipitated by persistent and insurmountable

difficulties in completing the sale of its Projects. Over the course of the last few years, CEC has

completely or substantially completed the development of numerous Projects. CEC contracted

with a purchaser to sell several of those Projects. The purchaser imposed many rigorous

requirements on the sale of the Projects, and as a result CEC has only been able to close sales of

three of the projects.

13. In addition, the recent spread of COVID-19 has caused significant delays in CEC’s

Project development and sales. As government agencies struggle to function at full capacity, the

permitting process has slowed to a near halt, and prospective purchasers have been forced to focus

their attention elsewhere.

14. As stated, Debtor CEC DB currently owns 47 Project Companies. For seven of

these Projects, all real property has been acquired, all necessary permitting has been obtained, and

interconnection services agreements with applicable utilities have been established. For some of

these seven Projects, subscribed have also been secured. These seven Projects are ready for sale.


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15. The remaining 38 Projects are at various stages in the process. Because CEC and

the Debtors have been unable to sell these Projects, CEC has not realized the revenue it budgeted

for and has been forced to carry the development costs. Under current conditions, the Debtors have

no reasonable prospects of being able to fully repay their debt obligations.

16. CEC projected that the Project Companies would run out of operating capital by

mid-June. To prevent the shutdown of the Project Companies and to preserve their value, in

March, CEC and the Debtors began discussions on two fronts. First, CEC and the Debtors reached

out to its their secured lenders regarding the possibility of restructuring the terms of various loan

agreements as well as the possibility of borrowing additional funds. Second, CEC and the Debtors

began discussions with Consolidated Edison Development, Inc. regarding a possible sale of the

Project Companies. Both sets of discussions involved substantial diligence, negotiation and

interaction among the relevant parties. Those discussions resulted in the Debtors entering (a) the

Plan Support Agreement; (b) the Membership Interest Purchase Agreement with CED BTM, a

company created by Consolidated Edison Development, Inc. to acquire CEC DB’s assets; and (c)

the DIP Facility with FCS Advisors, LLC d/b/a Brevet Capital Advisors (“Brevet” or “DIP

Lender”).

Description of the Debtors’ Prepetition Liabilities

CEC DB

17. CEC DB has three creditors: Brevet, Ameresco, Inc. (“Ameresco”) and SoCore MA

Development, LLC (“SoCore”).

18. CEC DB is indebted to Brevet pursuant to (a) the Development Loan Agreement

(as amended, supplemented or otherwise modified from time to time through the date hereof),


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dated as of February 28, 2019 between CEC DB and NAI CEC Development Lender Inc. which

was assigned to Brevet (the “CDB Loan”) and (b) the Loan Agreement dated as of November 13,

2018 (as amended, restated, supplemented or otherwise modified from time to time prior to the

date hereof, the “Tranche B Loan”), by and among CEC, the guarantors listed in Schedule I thereto

and Brevet. As of the Petition Date, the principal amount due under the CDB Loan is

approximately $5,338,889 and the principal amount due under the Tranche B Loan is

approximately $1,061,982

19. CEC DB is indebted to Ameresco pursuant to a membership purchase agreement

(“MIPA”) between Ameresco, Inc. and Clean Energy Community Holdco 1, LLC (“Holdco”).

Holdco assigned its interest in this MIPA to CEC DB. The principal amount due Ameresco, Inc.

as of the Petition Date is approximately $365,981.

20. CEC DB and SoCore MA Development, LLC (“SoCore”) are parties to the Engie

MIPA. The Engie MIPA will be rejected in connection with confirmation of the Plan. CEC DB

asserts that the terms of the Engie MIPA do not provide for any rejection damage claim.

CEC RAD

21. CEC RAD has no direct liabilities but it is a guarantor of various obligations owed

by CED DB and CEC RA.

CEC RA

22. CEC RA’s debt are all secured guaranty obligations. CEC RA is indebted to Brevet

pursuant to its guaranty of the Tranche B Loan CEC RA also pledged all of its assets as security

for the Tranche B Loan. CEC RA is also indebted to the Senior Lenders pursuant to the following

agreements:


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CEC RA is indebted to the Senior Lenders pursuant to its guaranty of the Note Purchase Agreement, dated as of February 5, 2016, by and among the Senior Lenders and CEC;

CEC RA is indebted to BCC pursuant to its guaranty of (a) the Secured Convertible Promissory Note issued by CEC to BCC, dated February 5, 2016, as amended by the First Amendment to Secured Promissory Note, dated September 5, 2017 and (b) the Loan Agreement, dated November 30, 2012 (as amended or modified from time to time), by and among BCC, as lender and administrative agent, CEC, and the guarantors party thereto;

CEC is indebted to FSDG pursuant to its guaranty of (a) the Secured Convertible

Promissory Note issued by CEC to FSDG, dated April 1, 2016, as amended by the First Amendment to Secured Promissory Note, dated September 5, 2017 and (b) the Second Lien Loan Agreement, dated November 21, 2014 (as amended or modified from time to time), by and among FSDG, as lender, CEC, and the guarantors party thereto.

23. The total amount owed FSDG as of the Petition Date is approximately $27,316,699. The total amount owed BCC as of the Petition Date is approximately $5,055,213.

24. The Senior Lien/Junior Intercreditor Agreement, dated November 13, 2018 (the

“Prepetition Intercreditor Agreement”) governs the rights of Brevet and Senior Lenders. Brevet is

the senior secured party, and the Senior Lenders hold a junior, subordinated position to Brevet.

The Senior Lenders do not have Liens on assets owned by CEC DB. However, CEC DB is only

entitled to retain funds received as reimbursement for development expenses. All excess project

payments are pledged to CEC and the Senior Lenders. CEC DB is required to transfer such excess

funds to CEC. Such funds are subject to the Senior Lenders’ Liens.

Preliminary Statement

25. The Debtors are in urgent need of liquidity. Absent much needed cash, Debtors will

not be able to maintain operations during the case. Failure to maintain operations will seriously


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jeopardize Debtors’ ability implement the transactions contemplated in their Joint Prepackaged

Plan of Liquidation (the “Plan of Liquidation”).

26. By this motion, the Debtors seek approval of the DIP Facility in the aggregate

amount of $8,902,803, consisting of (a) $2,402,803 of new money DIP Term Loan Facility; and

(b) a $6,500,000 Roll-Up Facility which rolls-up the prepetition Tranche B Loan and CEC DB

Loan.

27. The DIP Facility demonstrates the remarkable support provided to the Debtors by

their prepetition lenders. This DIP financing is critical to the Debtors’ ability sell their assets.

28. In exchange for these significant benefits, the Debtors have agreed to certain

commitments under the DIP Facility. These commitments include the refinancing and rollup of

the Prepetition Loans, including the Tranche B Loan and CEC DB Loan, the encumbrance of all

of the Debtors’ encumbered and unencumbered assets (including proceeds from avoidance

actions), and the payment of certain fees and expenses to the DIP Lender. These commitments

are, under the circumstances described above and herein, are necessary and justified by the facts

and circumstances of these cases.

29. For these reasons, and for the reasons set forth below, in the Sweeney Declaration,

the Debtors firmly believe that approval of the DIP Facility is vital, will avoid irreparable harm to

operations (through immediate access to funding under the Interim Order), will maximize the value

of the Debtors’ estates for the benefit of Debtors’ stakeholders, and is a sound exercise of the

Debtors’ sound business judgment. Accordingly, the Debtors respectfully request that the Court

approve the entry of the Interim Order and final order.


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Concise Statement Pursuant to Bankruptcy Rule 4001-23

30. The below chart contains a summary of the material terms of the proposed DIP

Facility, together with references to the applicable sections of the relevant source documents, as

required by Bankruptcy Rules 4001 and 4001(c)(1)(B) and Local Rule 4001-2.

Bankruptcy Code Summary of Material Terms

Borrower Bankruptcy Rule 4001(c)(1)(B)

CEC Development Borrower, LLC, CEC Renewable Assets Development, LLC, and CEC Renewable Assets, LLC as a debtors and debtors-in-possession under Chapter 11 of the Bankruptcy Code See DIP Credit Agreement preamble.

Guarantors Bankruptcy Rule 4001(c)(1)(B)

Energy Equipment Limited, Clean Energy Community Holdco 1, LLC, Clean Energy Capital, LLC, CE Services, LLC, CEC Development, LLC, CEC Solar Holdings MA, LLC, CEC Solar Fund 4 LLC, CEC Solar Holding DE, LLC, Group 1 Solar Holdings LLC, Renewable Holdings 1, LLC, Renewable Sun Management Co., LLC, Renewable Sun, LLC, Renewable Holdings TE 1, LLC, See DIP Credit Agreement: § 1.1 (def’n of Guarantor).

DIP Lender Bankruptcy Rule 4001(c)(1)(B)

FCS Advisors D/B/A Brevet Capital. See DIP Credit Agreement: § 1.1 (def’n of Lender) & preamble.

3 The summaries contained in this motion are qualified in their entirety by the provisions of the documents referenced. To the extent anything in motion is inconsistent with such documents, the terms of the applicable documents shall control. Capitalized terms used in the following summary chart but not otherwise defined have the meanings ascribed to in the DIP Documents or the Interim Order, as applicable.


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Reporting Information Bankruptcy Rule 4001(c)(1)(B)

The DIP Facility includes standard and customary conditions that require the Borrowers to provide periodic reports to the Lender and regarding the approved budget, the status of these chapter 11 cases, and certain other matters. The failure of the Borrowers to comply with such obligations will cause Event of Default that may permit the DIP Agents to exercise remedies against the Borrowers, including terminating the DIP Facility. See DIP Credit Agreement: § 5.1.

Term Bankruptcy Rule 4001(c)(1)(B) Local Rule 4001-2(a)(1)(F)

The first to occur of: (a) the date that is sixty (60) days following the Petition Date (the “Stated Maturity Date”), (b) the Plan Effective Date, (c) the consummation of a sale or other disposition of all or substantially all assets of the Debtors under section 363 of the Bankruptcy Code, and (d) the date on which Obligations hereunder shall be accelerated in accordance with the provisions of this Agreement. See DIP Credit Agreement: § 1.1 (def’n of Maturity Date)

Commitment Bankruptcy Rule 4001(c)(1)(B) Local Rule 4001-2(a)(1)(A) & (B)

Term Loan Facility. A Term Loan in the amount of $2,402,803, of which $1,052,019 of which will be available on an interim basis and an additional amount of up to $1,400,784 available on a final basis. Roll-Up Facility. $6,500,000 See DIP Credit Agreement: § 1.1 (def’n of Commitment) & § 2.1.

Conditions of Borrowing Bankruptcy Rule 4001(c)(1)(B) Local Rule 4001-2(a)(1)(C).

Conditions Precedent to the Closing Date and the making of the Loans. The DIP Documents include conditions to closing that are customary and appropriate for similar debtor-in-possession financings of this type. See DIP Credit Agreement: § 3.1, § 3.2, § 3.3.

Interest Rates Bankruptcy Rule 4001(c)(1)(B) Local Rule 4001-2(D).

Term Loan Facility: 20% Roll-Up Facility: 20%

See DIP Credit Agreement: § 2.5.


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Use of Proceeds Bankruptcy Rule 4001(c)(1)(B) Local Rule 4001-2(a)(1)(I)

The proceeds of the Loans shall be applied by Borrower (a) to pay the fees, costs and expenses required to be paid in connection with the transactions contemplated hereby and the Cases, and (b) to finance the working capital and other needs/general corporate purposes of the Borrowers following the commencement of the Cases and including the Roll-Up solely in accordance with the Weekly Project Level Financial Report, Funding Requests and Operative Approved Cash Flow Forecast (subject to Permitted Variances). See DIP Credit Agreement: § 2.3.

Adequate Protection Bankruptcy Rule 4001(b)(1)(B)(ii)

The Adequate Protection provisions are ordinary and customary for DIP financings of this type by the Borrower and each Guarantor in favor of the Tranche B Lender, CEC DB Lender and Senior Lenders.

See Interim Order, ¶ 21.

Budget Bankruptcy Rule 4001(c)(1)(B) Local Rule 4001-2(a)(1)(I)

The Lender shall have received (i) monthly operating and cash flow projections for the Debtors for the three (3) months after the Closing Date dated as of a date not more than three (3) Business Days prior to the Closing Date in form and substance satisfactory to Lender (the “DIP Budget”) and (ii) an Approved Cash Flow Forecast dated as of a date not more than three (3) Business Days prior to the Closing Date. See DIP Credit Agreement: 3.1(m).

Variance Covenant Bankruptcy Rule 4001(c)(1)(B)

Except as specifically waived by the Lender in its sole discretion, (a) beginning with the delivery of the initial Budget Variance Report and tested, as of the last day of each applicable Two-Week Test Period commencing with the last day of the first Two-Week Test Period ending after the Closing Date, for such Two-Week Test Period (i) the negative variance (as compared to the Operative Approved Cash Flow Forecast) of the actual aggregate operating cash receipts of the Credit Parties shall not exceed 15% and (ii) the positive variance (as compared to the Operative Approved Cash Flow Forecast) of the aggregate operating disbursements (excluding professional fees) made by the Credit Parties shall not exceed 15% and (b) beginning with the delivery of the third Budget Variance Report, as of the last day of each applicable Four-Week Test Period commencing with the last day of the first Four-Week Test Period ending after the Closing Date, for such Four-Week Test Period, (i) the negative variance (as compared to the Operative Approved Cash Flow Forecast Forecast) of the actual aggregate operating cash receipts of the Credit Parties shall not exceed 10% and (ii) the positive variance (as compared to the Operative Approved Cash Flow Forecast) of


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the aggregate operating disbursements (excluding professional fees) made by the Credit Parties shall not exceed 10%. See DIP Credit Agreement: § 6.6(a).

Events of Default & Remedies in Event of Default Bankruptcy Rule 4001(c)(1)(B) Local Rule 4001-2(a)(1)(G) and (H)

Events of Default & Remedies Upon Default. Usual and customary for financings of this type, including failure to obtain entry of the Interim Order. See DIP Credit Agreement: §§ 8.1 & 8.2.

Indemnification Bankruptcy Rule 4001(c)(1)(B)(ix)

The DIP Documents contain indemnification provisions ordinary and customary for DIP financing of this type by the Borrower and each Guarantor in favor of each Lender, and its Affiliates and each of Lender’s and its Affiliates' respective officers, partners, members, directors, trustees, advisors, employees, attorneys, agents, sub-agents, and controlling persons, each of them subject to customary carve-outs. See DIP Credit Agreement: § 9.3.

Entities with Interests in Cash Collateral Bankruptcy Rule 4001(c)(1)(B)(i)

The prepetition CEC DB Lender has a prepetition interest in the Cash collateral.

See Interim Order, ¶ 7(d).

Carve Out Bankruptcy Rule 4001(c)(1)(B)

The Interim Order provides a Carve Out of certain statutory fees, as detailed in the Interim Order See Interim Order, ¶ 12.


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Fees Bankruptcy Rule 4001(c)(1)(B) Local Rule 4001-2(a)(1)(E)

Financing fees in the amount of $250,000.00, which shall be due and payable in cash at the time of repayment of all or any part of the principal amount of the Loans; provided that, without limiting Lender’s other rights and remedies in connection with such default, if Borrower fails to repay the principal amount of the Loans in full on or before the Maturity Date, such financing fees will increase by $50,000, as liquidated damages and not as a penalty, for each week or partial week during the period commencing on the Maturity Date and ending on the date upon which the principal amount of the Loans are repaid in full; provided, further, that the maximum financing fees payable in accordance with this Section 2.7(a) shall not exceed $500,000 in the aggregate The DIP Agreement further contains typical and customary reimbursement of certain fees and expenses of the DIP Lender. See DIP Credit Agreement: §§ 2.7 & 3.1.

Section 506(c) Waiver Bankruptcy Rule 4001(c)(1)(B)(x) Local Rule 4001- 2(a)(2)(D) Section 552(b) Bankruptcy Rule 4001(c)(1)(B)

Limitation on Charging Expenses Against Collateral. Except to the extent of the Carve Out, no costs or expenses of administration of the Chapter 11 Cases or any future proceeding that may result therefrom, including liquidation in bankruptcy or other proceedings under the Bankruptcy Code, shall be charged against or recovered from the Collateral (including Cash Collateral) pursuant to section 506(c) of the Bankruptcy Code or any similar principle of law, without the prior written consent of Lender, and no such consent shall be implied from any other action, inaction, or acquiescence by Lender, and nothing contained in this Interim Order shall be deemed to be a consent by Lender to any charge, lien, assessment or claims against the Collateral under section 506(c) of the Bankruptcy Code or otherwise; provided that the foregoing waiver shall be without prejudice to any provisions of the Final Order with respect to costs or expenses incurred following the entry of such Final Order. Payments Free and Clear. Any and all payments or proceeds remitted to Lender pursuant to the provisions of this Interim Order, the DIP Documents (including, without limitation, the Approved Cash Flow Forecast (subject to permitted variances)) or any subsequent order of the Court shall be irrevocable, received free and clear of any claim, charge, assessment, or other liability, including without limitation, any such claim or charge arising out of or based on, directly or indirectly, sections 506(c) (subject to any provisions of the Final Order with respect to costs or expenses incurred following the entry of such Final Order) or 552(b) of the Bankruptcy Code (subject to entry of the Final Order approving the waiver of the Debtors’


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rights under 552(b) of the Bankruptcy Code), whether asserted or assessed by through or on behalf of the Debtors, See Interim Order. ¶¶ 18-19; DIP Credit Agreement § 4.22

Liens on Unencumbered Assets and Avoidance Actions Bankruptcy Rule 4001(c)(1)(B)(iii) and (xi) Local Rule 4001- 2(a)(1)(2)

Liens on Unencumbered Property. Subject and subordinate in all respects to the Carve-Out, pursuant to section 364(c)(2) of the Bankruptcy Code, a valid, binding, continuing, enforceable, fully-perfected first priority senior security interest in and lien upon all tangible and intangible pre- and postpetition property of the Credit Parties, whether existing on the Commencement Date or thereafter acquired, and the proceeds, products, rents, and profits thereof, that, on or as of the Commencement Date, is not subject to a valid, perfected and non-avoidable lien or is subject to a valid and non-avoidable lien in existence as of the Commencement Date that is perfected subsequent to the Commencement Date as permitted by section 546(b) of the Bankruptcy Code, including, without limitation, any and all unencumbered cash of the Credit Parties (whether maintained with Lender or otherwise) and any investment of such cash, inventory, accounts receivable, other rights to payment whether arising before or after the Commencement Date, contracts, properties, plants, fixtures, machinery, equipment, general intangibles, documents, instruments, securities, chattel paper, interests in leaseholds, real properties, deposit accounts, patents, copyrights, trademarks, trade names, rights under license agreements and other intellectual property, capital stock of subsidiaries, wherever located, and the proceeds, products, rents and profits of the foregoing, whether arising under section 552(b) of the Bankruptcy Code or otherwise, of all the foregoing (the “Unencumbered Property”), in each case other than the Avoidance Actions (but including Avoidance Proceeds, subject to entry of the Final Order), but in each case subject and subordinate in all respects to the Carve-Out. See Interim Order, ¶ 14(a)(i).

Stipulations to Prepetition Liens and Claims Bankruptcy Rule 4001(c)(1)(B)(iii) and (viii)

The Debtors, on their behalf and on behalf of their estates, admit, stipulate, acknowledge, and agree immediately upon entry of the Interim Order, to certain stipulations regarding the validity and extent of the CEC DB Lenders’ and Tranche B Lenders’ claims and liens with respect to the CEC DB Loan and Tranche B Loan. See Interim Order, ¶¶ 7 & 26.


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Local Rule 4001- 2(a)(2)(B)

Liens and Priorities Bankruptcy Rule 4001(c)(1)(B)(i) Local Rule 4001-2(a)(1)(J)

As security for the DIP Obligations, Lender shall receive a superpriority administrative expense claim against the Debtors. As security for the DIP Obligations, effective and perfected upon the date of the Interim Order without the necessity of the execution, recordation, or filing of mortgages, security agreements, control agreements, pledge agreements, financing statements, or similar documents, or the possession or control by the Lender of, or over, any DIP Collateral, security interests and liens are granted by the Interim Order to the Lender. See Interim Order, ¶¶ 13 & 14.

Protections under 363 & 364 Local Rule 4001-2(a)(1)(J)

Lender is granted standard protections under 363 and 364, including the protections of 364(e) and 363(m). DIP Lender shall also receive an allowed superpriority administrative expense claims against the Credit Parties on a joint and several basis (without the need to file any proof of claim) with priority over any and all claims against each of the Credit Parties, now existing or hereafter arising, of any kind whatsoever, including, without limitation, all administrative expenses of the kind specified in sections 503(b) and 507(b) of the Bankruptcy Code and any and all administrative expenses or other claims arising under sections 105, 326, 328, 330, 331, 365, 503(b), 506(c) (subject to any provisions of the Final Order with respect to costs or expenses incurred following the entry of such Final Order), 507(a), 507(b), 726, 1113 or 1114 of the Bankruptcy Code (including the Adequate Protection Obligations), whether or not such expenses or claims may become secured by a judgment lien or other non-consensual lien, levy or attachment, which allowed claims (the “DIP Superpriority Claims”) shall for purposes of section 1129(a)(9)(A) of the Bankruptcy Code be considered administrative expenses allowed under section 503(b) of the Bankruptcy Code, and which DIP Superpriority Claims shall be payable from and have recourse to all pre- and postpetition property of the Credit Parties and all proceeds thereof (excluding Avoidance Actions but including, subject to entry of the Final Order, Avoidance Proceeds) in accordance with the DIP Credit Agreement


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and this Interim Order, subject only to the Carve-Out. The DIP Superpriority Claims shall be entitled to the full protection of section 364(e) of the Bankruptcy Code in the event that this Interim Order or any provision hereof is vacated, reversed or modified, on appeal or otherwise. Subject to the Carve-Out in all respects, the DIP Superpriority Claims shall be senior to the Adequate Protection 507(b) Claims (as defined below). See Interim Order, ¶¶ 8 and 13.

Milestones Bankruptcy Rule 4001(c)(1)(B)(vi)

The DIP Documents contain milestones that are typical, ordinary, and customary for DIP financing of this type, including:

(a) On the Petition Date (or a later date acceptable to Lender), the Debtors shall have filed with the Bankruptcy Court (i) an Acceptable Plan, an Acceptable Disclosure Statement and motion to approve the Acceptable Disclosure Statement, in form and substance reasonably acceptable to Lender;

(b) no later than twenty-five (25) calendar days after the Petition Date (or such later date acceptable to Lender), the Bankruptcy Court shall have entered the Final Order;

. . .

(h) no later than thirty-five (35) calendar days after the Petition Date (or such later date acceptable to Lender), the Debtors shall obtain entry by the Bankruptcy Court of an Acceptable Disclosure Statement Order;

(i) no later than thirty-five (35) calendar days after the Petition Date, the Debtors shall obtain entry by the Bankruptcy Court of an Acceptable Confirmation Order; and

(j) no later than fourteen (14) calendar days after the entry of an Acceptable Confirmation Order, the confirmed Acceptable Plan shall have become effective;

See DIP Credit Agreement: § 5.17.


19


Challenge Period Bankruptcy Rule 4001(c)(1)(B)

Challenge Period. (x) by the Creditors’ Committee (if appointed) within 20 calendar days after the appointment of any Creditors’ Committee and (y) if no Creditors’ Committee has been appointed, by any party in interest with requisite standing within 5 calendar days after entry of the Final Order. See Interim Order, ¶ 31.

Releases Bankruptcy Rule 4001(c)(1)(B)(viii) Local Rule 4001-2(a)(2)(F)

Each of the Borrowers and the Guarantors hereby acknowledge that the Borrowers, the Guarantors and any of their Subsidiaries have no defense, counterclaim, offset, recoupment, claim, or demand of any kind or nature whatsoever that can be asserted to reduce or eliminate all of any part of the Borrowers’, the Guarantors’ or their respective Subsidiaries’ liability to repay Lender as provided in this Agreement or to seek affirmative relief or damages of any kind or nature from Lender. The Borrowers and the Guarantors, each in their own right and on behalf of their bankruptcy estates, and on behalf of all their 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 Lender and all of Lender’s officers, directors, servants, agents, attorneys, assigns, heirs, parents, subsidiaries, and each Person acting for or on behalf of any of them, each solely in their capacity as such (collectively, the “Released DIP Parties”) of and from any and all 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, in each case, existing at the time of entry of the Interim Order, whether in law, equity or otherwise (including, without limitation, 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), 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; provided, however, that the Credit Parties do not release, discharge or acquit any Released DIP Party from its obligations specifically set forth in this Agreement. See DIP Credit Agreement: § 2.15; Interim Order, ¶ 7(h).


20


Waiver/Modification of the Automatic Stay Bankruptcy Rule 4001(c)(1)(B)(iv)

Automatic stay is modified to permit the granting of liens and security interests, perfection of such interests, and with respect to payments to Lender. The automatic stay provisions of section 362 of the Bankruptcy Code would be vacated and modified to the extent necessary to permit the Lender to enforce all of its rights under the applicable DIP Documents, including declaring an Event of Default, terminating any further DIP Commitment, declare all DIP Obligations immediately due and owing, terminating the applicable DIP Documents, and/or terminating the use of cash collateral. See Interim Order, ¶¶ 14(d), 15(d)

The DIP Facility

I. The Debtors’ Need for Access to Financing and Use of Cash Collateral.

14. As described in the Sweeney Declaration, the Debtors require immediate access to

liquidity to continue operating during these chapter 11 cases and to preserve the value of their

estates for the benefit of all stakeholders. As of the Petition Date, Debtors had very limited

liquidity. Without a cash infusion at this critical point, the Debtors will be unable to meet their

commitments with respect to their project companies and will suffer irreparable harm to their

businesses. The DIP Facility provides the necessary cash to meet immediate operational needs

and provides the liquidity for a smooth transition into chapter 11 in order to consummate the Plan

of Liquidation.

a. The DIP Facility Negotiations.

15. After determining that it was in their best interest to sell their assets through a

chapter 11 process, the Debtors evaluated their liquidity position and liquidity forecasts to

determine the funding they would need. The Debtors believe the proposed DIP Facility will allow


21

them to operate their businesses and satisfy all administrative costs and expenses associated with

these chapter 11 cases as they come due.

16. The proposal before the Court represents the best available source of postpetition

financing available to the Debtors. First, substantially all of the Debtors’ assets are encumbered

under their prepetition secured credit facilities. See Sweeney Decl. ¶ 34. Second, the prepetition

secured parties, including Brevet, indicated that they would not consent to “priming” debtor-in-

possession financing provided by a third party. See Sweeney Decl. ¶ 34. As such, the Debtors

and their advisors were forced to solicit postpetition financing proposals from third parties on a

junior basis or prepare for a “priming” fight on the first day of these chapter 11 cases. Given those

limitations the Debtors focused their efforts on obtaining financing from its prepetition lender.

17. The Debtors engaged in arm’s-length negotiations with Brevet with respect to

funding these chapter 11 cases, and those negotiations were vigorous and hard fought. See

Sweeney Decl. ¶ 35. The DIP Facility includes various fees and postpetition liens, which were

expressly required by Brevet as a condition to provide the DIP Term Facility and are an integral

component of the financing package. See Sweeney Decl. ¶ 35. These fees and liens were each

subject to arm’s length negotiations. Given the financial and operating condition of the Debtors,

the timing, cost, and risk of administering these chapter 11 cases, and the Debtors’ liability profile,

these fees are appropriate under the circumstances. See Sweeney Decl. ¶ 35. Brevet was also only

willing to provide the DIP Facility if it included a roll-up of the pre-existing obligations and the

terms set forth in the DIP Facility. The roll-up is an integral component of the financing package

and is appropriate under the circumstances. See Sweeney Decl. ¶ 35.


22

18. The DIP Facility is also expressly linked to certain case milestones. See Sweeney

Decl. ¶ 36. These milestones provide a structure for the Debtors’ anticipated chapter 11 process,

which will benefit all stakeholders by continuing to drive parties towards confirmation of the Plan

of Liquidation. See Sweeney Decl. ¶ 36. The milestones were negotiated by Brevet as a condition

to providing the DIP Facility and were a critical inducement for Brevet to provide the Debtors with

the cash necessary to operate their business and fund these cases. See Sweeney Decl. ¶ 36. The

Debtors engaged in good-faith negotiations with respect to these milestones and believe the

milestones provide them with adequate time to implement a value-maximizing restructuring. See

Sweeney Decl. ¶ 36.

F. The DIP Financing ls The Best Postpetition Financing Arrangement Available to the Debtors.

19. The proposed DIP financing maximizes the value of the enterprise by providing the

Debtors with access to significant and crucial liquidity at the outset of these chapter 11 cases. It

allows the Debtors to maximize value by continuing operations with minimal disruption and

provide new money to adequately fund the cases through the confirmation process.

20. The terms of the DIP Facility are reasonable under the circumstances and were the

product of arm’s length negotiations, and that such facilities will benefit all stakeholders in these

chapter 11 cases. See Sweeney Decl. ¶ 38.


23

Basis for Relief

I. The Debtors Should Be Authorized to Obtain Postpetition Financing Through the DIP Documents.

A. Entry into the DIP Documents is an Exercise of the Debtors’ Sound Business Judgment.

21. The Court should authorize the Debtors, as an exercise of their sound business

judgment, to enter into the DIP Documents, obtain access to the DIP Facility, and continue using

Cash Collateral. Section 364 of the Bankruptcy Code authorizes a debtor to obtain secured or

superpriority financing under certain circumstances discussed in detail below. Courts grant a

debtor-in-possession considerable deference in acting in accordance with its business judgment in

obtaining postpetition secured credit, so long as the agreement to obtain such credit does not run

afoul of the provisions of, and policies underlying, the Bankruptcy Code. See, e.g., In re Trans

World Airlines, Inc., 163 B.R. 964, 974 (Bankr, D. Del. 1994) (approving a postpetition loan and

receivables facility because such facility “reflect[ed] sound and prudent business judgment”); In

re L.A. Dodgers LLC, 457 B.R. 308, 313 (Bankr. D. Del. 2011) (“[C]ourts will almost always defer

to the business judgment of a debtor in the selection of the lender.”); In re Ames Dep ‘t Stores,

Inc., 115 B.R. 34, 40 (Bankr. S.D.N.Y. 1990) (“[C]ases consistently reflect that the court’s

discretion under section 364 is to be utilized on grounds that permit reasonable business judgment

to be exercised so long as the financing agreement does not contain terms that leverage the

bankrupt process and powers or its purpose is not so much to benefit the estate as it is to benefit a

party in interest.”)

22. Specifically, to determine whether the business judgment standard is met, a court

need only “examine whether a reasonable business person would make a similar decision under


24

similar circumstances.” In re Exide Techs., 340 B.R. 222, 239 (Bankr. D. Del. 2006); see also In

re Dwight’s Piano Co., 424 B.R. 260, 285 (S.D. Ohio 2009) (“The business-judgment-rule

presumption may be rebutted by showing that no reasonable business person could possibly

authorize the action in good faith….”)

23. Furthermore, in considering whether the terms of postpetition financing are fair and

reasonable, courts consider the terms in light of the relative circumstances of both the debtor and

the potential lender. See In re Farmland Indus., Inc., 294 BOR. 855, 886 (Bankr. W.D. Mo. 2003)

(while many of the terms favored the DIP lenders, “taken in context, and considering the relative

circumstances of the parties,” the court found them to be reasonable); see also Unsecured

Creditors’ Comm. Mobil Oil Corp. v. First Nat’l Bank & Trust Co. (In re Elingsen McLean Oil

Co., Inc.), 65 B.R. 358, 365 n.7 (W.D. Mich. 1986) (recognizing a debtor may have to enter into

”hard bargains” to acquire funds for its reorganization). The Court may also appropriately take

into consideration non-economic benefits to the Debtors offered by a proposed postpetition

financing facility. For example, in ln re ION Media Networks, Inc., the bankruptcy court for the

Southern District of New York held that:

Although all parties, including the Debtors and the Committee, are naturally motivated to obtain financing on the best possible terms, a business decision to obtain credit from a particular lender is almost never based purely on economic terms. Relevant features of the financing must be evaluated, including non economic elements such as the timing and certainty of closing, the impact on creditor constituents and the likelihood of a successful reorganization. This is particularly true in a bankruptcy setting where cooperation and establishing alliances with creditor groups can be a vital part of building support for a restructuring that ultimately may lead to a confirmable reorganization plan. That which helps foster consensus may be preferable to a notionally better transaction that carries the risk of promoting unwanted conflict.


25

No. 09-13125, 2009 WL 2902568, at *4 (Bankr. S.D.N.Y. July 6, 2009) (emphasis added).

24. The Debtors’ determination to move forward with the DIP Facility is an exercise

of their sound business judgment following an arm’s-length process and careful evaluation of

available alternatives. Specifically, the DIP Facility will allow the Debtors to fund their operations

until they can confirm their Plan of Liquidation and allow them to fund the administrative cost of

these chapter 11 cases. The Debtors negotiated the DIP Facility and other DIP Documents with

the DIP Lender in good faith, at arm’s-length and the Debtors believe that they have obtained the

best financing available under the circumstances. Accordingly, the Court should authorize the

Debtors’ entry into the DIP Documents, as it is a reasonable exercise of the Debtors’ business

judgment.

B. The Debtors Should Be Authorized to Grant Liens and Superpriority Claims.

25. The Debtors propose to obtain financing under the DIP Facility by providing

security interests and liens as set forth in the DIP Documents pursuant to section 364(c) of the

Bankruptcy Code. Specifically, the Debtors propose to provide to the DIP Lender postpetition

security interest in and liens on the DIP Collateral (as defined in the Interim Order) and Prepetition

Collateral that are valid, perfected, allowed, enforceable, non-avoidable, and not subject to

challenge, dispute or subordination immediately upon entry of the Interim Order.

26. The above-described liens on encumbered and unencumbered assets are common

features of postpetition financing facilities, and as set forth in greater detail in the Sweeney

Declaration, were a necessary feature here to provide security for the proposed financings. Indeed,

postpetition financing facilities routinely are secured by the proceeds of a debtor’s unencumbered


26

assets such as leaseholds that are subject to leases that prohibit the impositions of liens thereon.

See, e.g., Blackhawk Mining, LLC, No. 19-11595 D. Del, July 19, 2019) (approving DIP liens on

collateral including my leasehold interests or the proceeds thereof as permitted by applicable law);

In re Vanguard Natural Resources, Inc., No 19-31786 (DRJ) (Bankr. S.D Tex. April 30, 2019);

In re Windstream, No. 19-22312 (RDD) S.D.N.Y. April 22, 2019) (same); In re Mission Coal

Company LLC, No. 18-04177 (TIM) (Bankr. N.D. Ala. Nov. 20, 2018) (same); In re Westmoreland

Coal Company, No. 18-35672 (DRJ) (Bankr. S.D. Tex. Nov. 15, 2018) (same).4

27. The statutory requirement for obtaining postpetition credit under section 364(c) is

a finding, made after notice and hearing, that a debtor is “unable to obtain unsecured credit

allowable under Section 503(b)(1) of [the Bankruptcy Code].” 11 U.S.C. 364(c). See In re YL

West 87th Holdings I LLC, 423 B.R. 421, 440-41 (Bankr. S.D.N.Y. 2010) (noting that secured

credit under section 364(c) of the Bankruptcy Code is authorized, after notice and hearing, upon

showing that unsecured credit cannot be obtained). Courts have articulated a three-part test to

determine whether a debtor is entitled to financing under section 364(c) of the Bankruptcy Code.

Specifically, courts look to whether:

a. the debtor is unable to obtain unsecured credit under section 364(b) of the Bankruptcy Code, i.e., by allowing a lender only an administrative claim;

b. the credit transaction is necessary to preserve the assets of the estate; and

c. the terms of the transaction are fair, reasonable, and adequate, given the circumstances of the debtor-borrower and proposed lenders.

4 Because of the voluminous nature of the orders cited herein, such orders have not been attached to this motion. Copies of these orders are available upon request of the Debtors’ proposed counsel.


27

See In re Los Angeles Dodgers LLC, 457 B.R. 308 (Bankr. D. Del. 2011); see also In re Ames

Dep’t Stores, 115 B.R. 34, 37-40 S.D.N.Y. 1990); In re St. Mary Hosp., 86 B.R. 393, 401-02

(Bankr. ED. Pa. 1988); In re Crouse Grp. Inc., 71 B.R. 544, 549 (Bankr. E.D. Pa 1987).

28. As described above and as set forth in the Sweeney Declaration, Brevet has first

priority prepetition liens on all of the assets of CEC DB and has a first priority lien on all of the

assets of CEC RA. The DIP Lender indicated it would be unwilling to provide postpetition DIP

financing on an unsecured, junior lien basis. See Sweeney Decl. ¶ 40. The Debtors’ Prepetition

Secured Parties, who hold a junior position on Debtors’ assets, have consented to the first priority

lien on all of the Debtors assets with respect to the DIP Financing. See Sweeney Decl. ¶ 40.

29. Absent the DIP Facility, which will assure creditors that the Debtors will have

sufficient liquidity to administer these chapter 11 cases, the value of the Debtors’ estates would be

significantly impaired to the detriment of all stakeholders. See Sweeney Decl. ¶ 41. Without

postpetition financing, the Debtors lack sufficient funds to operate their business until confirmation

of the Plan of Liquidation, and cover the projected costs of these chapter 11 cases. See Sweeney

Decl. ¶ 42. Given the Debtors’ circumstances, the Debtors believe that the terms of the DIP

Facility, as set forth in the DIP Documents, are reasonable as more fully set forth above and in the

Sweeney Declaration. For all these reasons, the Debtors submit that they have met the standard

for obtaining postpetition financing.

30. In the event that a debtor is unable to obtain unsecured credit allowable as an

administrative expense under section 503(b)(1) of the Bankruptcy Code, section 364(c) of the

Bankruptcy Code provides that a court “may authorize the obtaining of credit or the incurring of

debt (a) with priority over any or all administrative expenses of the kind specified in section 503(b)


28

or 507(b) of [the Bankruptcy Code]; (b) secured by a lien on property of the estate that is not

otherwise subject to a lien; or (c) secured by a junior lien on property of the estate that is subject

to a lien.” As described above, the Debtors are unable to obtain unsecured credit, junior credit,

credit on a pari passu basis, or credit secured by unencumbered property only. Therefore,

approving a superpriority claim in favor of the DIP Lender is reasonable and appropriate.

31. Further, section 364(d) of the Bankruptcy Code provides that a debtor may obtain

credit secured by a senior or equal lien on property of the estate already subject to a lien, after

notice and a hearing, where the debtor is “unable to obtain such credit otherwise” and “there is

adequate protection of the interest of the holder of the lien on the property of the estate on which

such senior or equal lien is proposed to be granted.” 11 U.S.C. 364(d)(1). The Debtors may incur

“priming” liens under the DIP Facility if either (a) the prepetition lenders have consented or (b)

prepetition lenders’ interest in collateral are adequately protected. See Anchor Savs. Bank FSB v.

Sky Valley, Inc., 99 B.R. 117, 122 (N.D. Ga. 1989) (“[B]y tacitly consenting to the superpriority

lien, those [undersecured] creditors relieved the debtor of having to demonstrate that they were

adequately protected.”). Accordingly, the Debtors may incur “priming” liens under the DIP

Facility if either (a) their prepetition lenders have consented or (b) the prepetition lenders’ interests

in collateral are adequately protected.

32. Here, the Prepetition Secured Parties and Brevet have affirmatively consented to

the DIP Facility and actively facilitated the proposed DIP Facility.


29

C. No Comparable Alternative to the Facility is Reasonably Available on More Favorable Overall Terms.

33. A debtor need only demonstrate “by a good faith effort that credit was not available

without” the protections afforded to potential lenders by sections 364(c) of the Bankruptcy Code.

In re Snowshoe Co., Inc., 789 F.2d 1085, 1088 (4th Cir. 1986); see also In re Plabell Rubber

Prods., Inc., 137 B.R. 897, 900 (Bankr. N.D. Ohio 1992). Moreover, in circumstances where only

a few lenders likely can or will extend the necessary credit to a debtor, “it would be unrealistic and

unnecessary to require [the debtor] to conduct such an exhaustive search for financing.” In re Sky

Valley, Inc., 100 B.R. 107, 113 (Bankr. N.D. Ga. 1988), af’d sub nom. Anchor Sav. Bank FSB v.

Sky Valley, Inc., 99 B.R. 117, 120 (ND. Ga. 1989); see also In re Snowshoe Co., 789 F.2d 1085,

1088 (4th Cir. 1986) (demonstrating that credit was unavailable absent the senior lien by

establishment of unsuccessful contact with other financial institutions in the geographic area); In

re Stanley Hotel, Inc., 15 B.R. 660, 663 (D. Colo. 1981) (bankruptcy court’s finding that two

national banks refused to grant unsecured loans was sufficient to support conclusion that section

364 requirement was met); Ames Dep ‘t Stores, 115 B.R. at 37-39 (debtor must show that it made

reasonable efforts to seek other sources of financing under section 364(a) and (b)).

34. As noted above, the Debtors do not believe that a more favorable alternative DIP

financing is reasonably available given the realities imposed by the Debtors’ existing capital

structure and its proposed sale of assets. Thus, the Debtors have determined that the DIP Facility

provides the most favorable terms. Simply put, the DIP Facility provides the Debtors with the

liquidity they need at the lowest cost available while simultaneously placing the Debtors on an

optimal path for plan confirmation. Therefore, the Debtors submit that the requirement of section


30

364 of the Bankruptcy Code that alternative credit on more favorable terms be unavailable to the

Debtors is satisfied.

D. The Proposed Roll Up of the CEC DB Loan and Tranche B Loan Are Necessary and Appropriate.

35. The proposed DIP Facility provides a comprehensive financing package that

includes the roll-up of the Tranche B Loan and CDB Loan. The Debtors submit that the roll up of

this prepetition debt is appropriate under the circumstances and substantially beneficial to the

Debtors and their stakeholders. See Sweeney Decl. ¶ 44.

36. Section 363(b) of the Bankruptcy Code permits a bankruptcy court, after notice and

a hearing, to authorize a debtor to “use, sell, or lease, other than in the ordinary course of business,

property of the estate.” 11 U.S.C. 363(b)(1). A court may authorize non-ordinary course

transactions using property of the estate pursuant to section 363(b) “when a sound business

purpose dictates such action.” Stephens Indus. Inc. v. McClung, 789 F. 2d386, 390 (6th Cir. 1986)

(approving a sale of assets pursuant to section 363(b)). Courts have authorized payment of certain

prepetition claims pursuant to section 3630 where there is a sound business purpose for doing so.

See, e.g., In re Montgomery Ward Holding Corp., 242 B.R. 147, 153 (D. Del. 1999) (collecting

cases); Armstrong World Indus., Inc. v. James A. Phillips, Inc. (In re James A. Phillips, Inc.), 29

B.R. 391, 397 (S.D.N.Y. 1983) (relying on section 363 to allow contractor to pay prepetition

claims of suppliers who were potential lien claimants because the payments were necessary for

general contractors to release funds owed to debtors); Ionosphere Clubs, 98 B.R. at 175 (finding

that a sound business justification existed to justify payment of certain prepetition wages).


31

37. Repayment of prepetition debt (often referred to as a “roll-up”) is a common feature

in debtor in possession financing arrangements. Courts have approved similar roll-up features,

including pursuant to interim orders. See, e.g., In re Milacron Inc., No. 09-11235 (JVA) Bankr.

SD. Ohio Mar. 11, 2009) [Docket No. 47] (authorizing approximately $55 million DIP and a roll-

up of approximately $20 million); see also In re Mattress Firm, Inc., No. 18-12241 Bankr. D Del.

Oct. 9, 2018) [Docket No. 184] (approving in interim order the roll-up of all outstanding

prepetition revolving obligations); In re Bon-Ton Stores, Inc., No. 18-10248 Bankr. D. Del. Feb.

6, 2018) [Docket No. 120] (approving in interim order the roll-up of all outstanding prepetition

revolving obligations); In re Charming Charlie LLC, No. 17-12906 (Bankr. D. Del. Dec 13, 2017)

[Docket No. 93] (approving in interim order the roll-up of all outstanding prepetition revolving

obligations; In re rue21, Inc., No. 17-22()45 (Bankr. W.D. Pa. May 18, 2017) [Docket No. 141]

(approving in interim order the roll-up of all outstanding prepetition revolving obligations and

$100 million of prepetition term loan obligations); In re Gymboree Corp., No. 17-32986 (Bankr.

E.D. Va. June 12, 2017) [Docket No. 861 (approving in interim order the roll-up of all outstanding

prepetition revolving obligations and $70 million of prepetition term loan obligations).

38. The DIP Facility reflects a roll up of the full amount outstanding under the Tranche

B Loan and CDB Loan. The roll up of funds is a sound exercise of the Debtors’ business judgment,

is a material component of the DIP Facility. See Sweeney Decl. ¶ 45.

II. The Debtors Should Be Authorized to Use the Cash Collateral. 39. Section 363 of the Bankruptcy Code generally governs the use of estate property.

Section 363(c)(2)(A) of the Bankruptcy Code permits a debtor in possession to use Cash Collateral

with the consent of the secured party. Here, the DIP Lender and the Prepetition Secured Parties


32

consent to the Debtors’ use of the Cash Collateral, subject to the terms and limitations set forth in

the Interim Order.

40. Section 363(e) of the Bankruptcy Code provides for adequate protection of interests

in property when a debtor uses Cash Collateral. Further, section 362(d)(1) of the Bankruptcy Code

provides for adequate protection of interests in property due to the imposition of the automatic

stay. See In re Cont’l Airlines, 91 F.3d 553, 556 (3d Cir. 1996) (en banc). While section 361 of

the Bankruptcy Code provides examples of forms of adequate protection, such as granting

replacement liens and administrative claims, courts decide what constitutes sufficient adequate

protection on a case-by-case basis. See, e.g., In re Swedeland Dev. Grp., Inc., 16 F.3d 552, 564

(3d Cir. 1994) (explaining that the “determination of whether there is adequate protection is made

on a case by case basis”); In re Satcon Tech. Corp., No. 12-12869 (KG), 2012 WL 6091160, at *6

(Bankr. D. Del. Dec. 7, 2012); In re N.J. Affordable Homes Corp., No. 05-60442 (DHS), 2006

WL 2128624, at *14 (Bankr. D.N.J. June 29, 2006) (“the circumstances of the case will dictate the

necessary relief to be given”); In re Columbia Gas Sys., Inc., Noso 91-803, 91-804, 1992 WL

79323, at *2 (Bankr. D. Del. Feb. 18, 1992) (“[W]hat interest is entitled to adequate protection and

what constitutes adequate protection must be decided on a case-by-case basis.”); see also In re

Dynaco Corp., 162 B.R. 389, 394 (Bankr. D.N.H, 1993) (citing 2 Collier on Bankruptcy

¶ 361.01[1] at 361-66 (15th ed. 1993) (explaining that adequate protection can take many forms

and “must be determined based upon equitable considerations arising from the particular facts of

each proceeding”)).

41. As described more fully below, and as set forth in the Interim Order, the Debtors

propose to provide Tranche B Lender and CDB Lender with a variety of adequate protection to


33

protect against the postpetition Diminution in Collateral Value resulting from the use, sale, or lease

of the Cash Collateral by the Debtors and the imposition of the automatic stay (the “Adequate

Protection Obligations”):

a. valid and perfected replacement security interests in and liens on theCollateral (subject to the Carve Out as set forth in the Interim Order);

b. allowed, superpriority administrative claims under section 507(b) of the Bankruptcy Code (subject to the Carve Out set forth in the Interim Order);

c. financial reporting and other reports and notices delivered by the Debtors under the DIP Facility;

d. payment of interest; and

e. certain milestones and additional protections.

42. The Debtors submit that the proposed Adequate Protection Obligations are

sufficient to protect the Prepetition Secured Parties from any potential diminution in value to the

Cash Collateral. In light of the foregoing, the Debtors further submit, and the Prepetition Secured

Parties agree, that the proposed Adequate Protection Obligations to be provided for the benefit of

the Prepetition Secured Parties are appropriate. Thus, the Debtors’ provision of the Adequate

Protection Obligations is not only necessary to protect against any diminution in value but is fair

and appropriate under the circumstances of these chapter 11 cases to ensure the Debtors are able

to continue using the Cash Collateral, subject to the terms and limitations set forth in the Interim

Order, for the benefit of all parties in interest and their estates.

III. The Debtors Should Be Authorized to Pay the Fees Required by the DIP Lenders and DIP Agents Under the DIP Documents. 43. Under the DIP Documents, the Debtors have agreed, subject to Court approval, to

pay certain fees to Brevet. In particular, as noted above, the Debtors have agreed to pay a $250,000


34

fee, which shall be due at the time of repayment of all or any part of the principal amount of the

Loans; provided that, without limiting Lender’s other rights and remedies in connection with such

default, if Borrower fails to repay the principal amount of the Loans in full on or before the

Maturity Date, such financing fees will increase by $50,000, as liquidated damages and not as a

penalty, for each week (prorated on a per diem basis for any partial week) during the period

commencing on the Maturity Date and ending on the date upon which the principal amount of the

Loans are repaid in full. The fee is 1 percent of the DIP Term Loan Facility.

44. Courts have approved similar aggregates in fees in chapter 11 cases. See, e.g., In

re The Wornick Company Inc., No. 08-106544 (JVA) (Bankr. S.D. Ohio Mar. 14, 2008) (approving

unspecified amounts of aggregate fees payable to the DIP agent and DIP lender in the final order);

In re Cambrian Holding Company, Inc., No. 19-51200 (GRS) (Bankr. E.D. Ky. Jul. 25, 2019)

(approving a commitment fee equal to 2.5 percent of the total DIP commitment in the final order);

see also In re Sanchez Energy Corporation, No. 19-34508 Bankr. SD. Tex. Aug. 15, 2019)

(approving an exit fee of 1 percent of the aggregate DIP loan and a backstop fee of 5 percent of

each lender’s commitment), In re AID Corporation, No. 18-12221 (KJC) (Bankr. D. Del. Oct. 26,

2018) (approving a cash fee of approximately 2 percent of the overall DIP facilities in the final

order); In re PES Holdings LLC, No. 18-10122 (KG) (Bankr. D. Del. Jam 23, 2018) (approving a

cash fee of approximately 2 percent of the overall DIP facilities in the interim order); In re Toys

“R “ US, Inc., No. 17-34665 (KLP) (Bankr. E.D. Va. Sept. 20, 2017) (approving aggregate fees

that were slightly less than 3 percent of the overall DIP facilities in the interim order). In re Alpha

Natural Resources, Inc., No. 15-33896 (KRH) Bankr. ED. Va. Sep. 17, 2015) (approving an

upfront fee of 5% of the aggregate principal amount of the postpetition term loan).


35

45. It is understood and agreed by all parties, that these fees are an integral component

of the overall terms of the DIP Facility, and were required by Brevet as consideration for the

extension of postpetition financing. See Sweeney Decl. ¶ 46. Accordingly, the Court should

authorize the Debtors to pay the fees provided under the DIP Documents in connection with

entering into those agreements.

IV. The DIP Lender Should Be Deemed a Good-Faith Lender Under Section 364(e). 46. Section 364(e) of the Bankruptcy Code protects a good faith lender’s right to collect

on loans extended to a debtor, and its right in any lien securing those loans, even if the authority

of the debtor to obtain such loans or grant such liens is later reversed or modified on appeal. Section

364(e) of the Bankruptcy Code provides that:

The reversal or modification on appeal of an authorization under this section [364 of the Bankruptcy Code] to obtain credit or Incur debt, or of a grant under this section of a priority or a lien, does not affect the validity of my debt so incurred, or any priority or lien so granted, to an entity that extended such credit in good faith, whether or not such entity knew of the pendency of the appeal, unless such authorization and the incurring of such debt, or the granting of such priority or lien, were stayed pending appeal.

47. As explained herein and in the Sweeney Declaration, the DIP Documents are the

result of (a) the Debtors’ reasonable and informed determination that the DIP Lender provided the

best postpetition financing alternative available under the circumstances and (b) extended arm’s

length, good-faith negotiations between the Debtors and the DIP Lender. The Debtors submit that

the terms and conditions of the DIP Documents are reasonable under the circumstances, and the

proceeds of the DIP Facility will be used only for purposes that are permissible under the

Bankruptcy Code, Further, no consideration is being provided to any party to the DIP Documents

other than as described herein. Accordingly, the Court should find that the DIP Lender is a “good


36

faith” lender within the meaning of section 364(e) of the Bankruptcy Code and are entitled to all

the protections afforded by that section.

V. The Automatic Stay Should Be Modified on a Limited Basis. 48. The proposed Interim Order provides that the automatic stay provisions of section

362 of the Bankruptcy Code will be modified to allow the DIP Lender to file any financing

statements, security agreements, notices of liens, and other similar instruments and documents in

order to validate and perfect the liens and security Interests granted to them under the Interim

Order. The proposed Interim Order further provides that the automatic stay is modified as

necessary to permit the Debtors to grant liens to the DIP Lender and to incur all liabilities and

obligations set forth in the Interim Order. Finally, the proposed Interim Order provides that,

following the occurrence of an Event of Default and an appropriate opportunity for the Debtors to

obtain appropriate relief from the Court, the automatic stay shall be vacated and modified to the

extent necessary to permit DIP Lender to exercise all rights and remedies in accordance with the

DIP Documents, or applicable law.

49. Stay modifications of this kind are ordinary and standard features of debtor m

possession financing arrangements and, in the Debtors’ business judgment, are reasonable and fair

under the circumstances of these chapter 11 cases. See, e.g., In re Milacron Inc., No. 09-11235

(JVA) (Bankr. S.D. Ohio Apr. 1(), 2009) (modifying automatic stay to permit DIP lender to

exercise rights under the DIP facility documents); see also In re Forever 21, Inc., No. 19-12122

(KG) (Bankr. D. Del. Sept. 29, 2019) (terminating automatic stay after an event of default on an

interim basis); In re Charming Charlie LLC, No. 19-11534 (CSS) (Bankr. D. Del. July 12, 2019)

(terminating automatic stay after a default or event of default and a notice period); In re Oreck


37

Corporation, No. 13-04006 (KML) (Bankr. M.D. Tenn. June 12, 2013) (terminating automatic

stay after a default or event of default and a notice period); In re James River Coal co., No. 03-

04095 (MFR) (Bankr. M.D. Tenn. Mar. 26, 2003) (same).

VI. Failure to Obtain Immediate Interim Access to the DIP Facility and Cash Collateral Would Cause Immediate and Irreparable Harm. 50. Bankruptcy Rules 4001(b) and 4001(c) provide that a final hearing on a motion to

obtain credit pursuant to section 364 of the Bankruptcy Code or to use Cash Collateral pursuant to

section 363 of the Bankruptcy Code may not be commenced earlier than 14 days after the service

of such motion. Upon request, however, the Court may conduct a preliminary, expedited hearing

on the motion and authorize the obtaining of credit and use of cash collateral to the extent necessary

to avoid immediate and irreparable harm to a debtor’s estate.

51. For the reasons noted above, the Debtors have an immediate postpetition need to

use Cash Collateral, and access the liquidity provided by the DIP Facility. The Debtors cannot

maintain the value of their estates during the pendency of these chapter 11 cases without access to

cash. The Debtors will use cash, among other things, to fund the operation of their business,

including paying employee wages and benefits, ensure that vendors continue to provide necessary

goods and services, and to fund the administration of these chapter 11 cases. Substantially all of

the Debtors’ available cash constitutes the Cash Collateral of the prepetition CDB Lender. The

Debtors will therefore be unable to operate their business or otherwise fund these chapter 11 cases

without access to Cash Collateral and will suffer immediate and irreparable harm to the creditors

and other parties in interest. See Sweeney Decl. ¶ 48. In short, the Debtors’ ability to administer


38

these chapter 11 cases through the use of Cash Collateral is vital to preserve and maximize the

value of the Debtors’ estates.

52. The Debtors request that the Court hold and conduct a hearing to consider entry of

the Interim Order authorizing the Debtors, from and after entry of the Interim Order the Final

Hearing, to receive initial funding under the DIP Facility. The Debtors require the initial funding

under the DIP Facility prior to the Final Hearing and entry of the final order to continue operating,

pay their administrative expenses, and to implement the relief requested in the Debtors’ other first

day’ motions. This relief will enable the Debtors to preserve and maximize value and, therefore,

avoid immediate and irreparable harm and prejudice to their estates and all parties in interest,

pending the Final Hearing.

Request for Final Hearing

53. Pursuant to Bankruptcy Rules 4001(b)(2) and 4001(c)(2), the Debtors request that

the Court set a date which is no later than 21 days after the Petition Date, to hold a hearing to

consider entry of the final order and the permanent approval of the relief requested in this motion.

The Debtors also request authority to serve a copy of the signed Interim Order, which fixes the

time and date for the filing of objections, if any, to entry of the final order, by first class mail upon

the notice parties listed below, and further request that the Court deem service thereof sufficient

notice of the hearing on the final order under Bankruptcy Rule 4001(c).

Waiver of Bankruptcy Rule 6004(a) and 6004(h)

54. To implement the foregoing successfully, the Debtors seek a waiver of the notice

requirements under Bankruptcy Rule 6004(a) and the 14-day stay of an order authorizing the use,

sale, or lease of property under Bankruptcy Rule 6004(h).


39

Notice

55. The Debtors have provided notice of this motion to the following parties or their

respective counsel: (a) the U.S. Trustee; (b) all scheduled creditors and interested parties; (c)

counsel to Brevet; (d) counsel to the Prepetition Secured Parties; (e) any party that has requested

notice pursuant to Bankruptcy Rule 2002. The Debtors submit that, in light of the nature of the

relief requested, no other or further notice need be given.

No Prior Request

56. No prior request for the relief sought in this motion has been made to this or any

other court.

WHEREFORE, the Debtors respectfully request that the Court enter the Interim Order

substantially in the form attached hereto as Exhibit A, granting the relief requested herein and

such other relief as the Court deems appropriate under the circumstances.

Dated: July 2, 2020

Respectfully Submitted, WADSWORTH GARBER WARNER CONRARDY, P.C. /s/ Aaron J. Conrardy

David V. Wadsworth, #32066 Aaron J. Conrardy, #40030 Lindsay S. Riley, #54771 2580 West Main Street, Suite 200

Littleton, Colorado 80120 (303) 296-1999; (303) 296-7600 (fax)

[email protected] [email protected] [email protected]

Attorneys for the Debtors-in-Possession


IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF COLORADO

In re: ) )

CEC DEVELOPMENT BORROWER, LLC, ) Case No. 20-_____ ___ ) Chapter 11

Debtor. ) ______________________________________ )

) In re: )

) CEC RENEWABLE ASSETS, LLC, ) Case No. 20-_____ ___

) Chapter 11 Debtor. )

______________________________________ ) )

In re: ) Case No. 20-_____ ___ ) Chapter 11

CEC RENEWABLE ASSETS DEV, LLC, ) ) Jointly Administered Under

Debtor. ) Case No. 20-_____ ___

INTERIM ORDER (I) AUTHORIZING THE DEBTORS TO (A) OBTAIN POSTPETITION FINANCING AND (B) USE CASH COLLATERAL, (II) GRANTING

LIENS AND PROVIDING SUPERPRIORITY ADMINISTRATIVE EXPENSE STATUS, (III) GRANTING ADEQUATE PROTECTION TO THE PREPETITION SECURED

PARTIES, (IV) MODIFYING THE AUTOMATIC STAY, (V) SCHEDULING A FINALHEARING, AND (VI) GRANTING RELATED RELIEF

Upon the Motion for Entry of Interim and Final Orders (I) Authorizing the Debtors to (A) Obtain

Postpetition Financing and (B) Utilize Cash Collateral, (II) Granting Liens and Superpriority

Administrative Expense Claims, (III) Granting Adequate Protection, (IV) Modifying the Automatic Stay,

(V) Scheduling a Final Hearing, and (VI) Granting Related Relief (the “Motion”)1 of CEC Development

Borrower, LLC (“CEC DB”), CEC Renewable Assets Development, LLC (“CEC RAD”), and CEC

1 Capitalized terms used herein and not herein defined have the meaning ascribed to such terms in the Motion or the DIP Credit Agreement (as defined herein).

EXHIBIT A

14573 MER

14574 JGR

14575 TBM

Case:20-14573-MER Doc#:7-1 Filed:07/02/20 Entered:07/02/20 17:23:09 Page1 of 63

2

Renewable Assets, LLC (“CEC RA,” and together with CEC DB and CEC RAD, the “Debtors”) in the

above-captioned cases (the “Chapter 11 Cases”) pursuant to sections 105, 361, 362, 363(b), 363(c)(2),

364(c)(1), 364(c)(2), 364(c)(3), 364(d)(1), 364(e), 503, 506(c), and 507 of Title 11 of the United States

Code, 11 U.S.C. §§ 101-1532 (the “Bankruptcy Code”), Rules 2002, 4001, 6003, 6004, and 9014 of the

Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”) and Rules 2002-1, 4001-1, and 4001-

2 of the Local Bankruptcy Rules for the District of Colorado (the “Local Bankruptcy Rules”) seeking,

among other things:

(i) authorization for the Debtors to obtain the obligations of the postpetition financing in an aggregate principal amount of up to approximately $8,902,803 (the “DIP Financing”), under a superpriority debtor-in-possession credit facility consisting of, among other things, (a) new money term loans (the “DIP Term Loan Facility”) in an aggregate principal amount of up to $2,402,803, and (b) rolled-up loans (the “Roll-Up Facility,” and together with the DIP Term Loan Facility, the “DIP Facility”) in an aggregate principal amount of up to $6,500,000 to be provided by FCS Advisors D/B/A Brevet Capital (“Lender,” also sometimes referred to herein as “Brevet”);

(ii) authorization for ENERGY EQUIPMENT LIMITED, CLEAN ENERGY COMMUNITY HOLDCO 1, LLC, CLEAN ENERGY CAPITAL, LLC, CE SERVICES, LLC, CEC DEVELOPMENT, LLC, CEC SOLAR HOLDINGS MA, LLC, CEC SOLAR FUND 4 LLC, CEC SOLAR HOLDING DE, LLC, GROUP 1 SOLAR HOLDINGS LLC, RENEWABLE HOLDINGS 1, LLC, RENEWABLE SUN MANAGEMENT CO., LLC, RENEWABLE SUN, LLC, and RENEWABLE HOLDINGS TE 1, LLC (the “DIP Guarantors”) to guarantee the obligations arising under the DIP Credit Agreement (the “DIP Obligations”);

(iii) authorization for the Credit Parties2 to (a) execute and enter into that certain Superpriority Secured Debtor-In-Possession Credit And Guaranty Agreement, to be dated on or around July 1, 2020 (as may be amended, restated, supplemented, waived, or otherwise modified from time to time in accordance with the terms hereof and thereof, the “DIP Credit Agreement”), among the Debtors, as borrowers, the DIP Guarantors, as guarantors, and Lender, substantially in the form attached to the Motion as Exhibit B and any other agreements, instruments, pledge agreements, guarantees, security agreements, intellectual property security agreements, control agreements, notes and other Credit Documents (as defined in

2 As used herein, the term “Credit Parties” shall mean the Borrower and DIP Guarantors.


3

the DIP Credit Agreement) and documents related thereto (as amended, restated, supplemented, waived, and/or modified from time to time in accordance with the terms hereof and thereof, and collectively with the DIP Credit Agreement, the “DIP Documents”) and (b) perform their respective obligations thereunder and all such other and further acts as may be necessary, appropriate, or desirable in connection with the DIP Documents;

(iv) authorization for the Credit Parties (a) upon entry of this Interim Order (the “Interim Order”), to incur in a single draw on the Closing Date (as defined in the DIP Credit Agreement) a portion of the DIP Term Loan Facility in a principal amount of up to $1,200,000 (the “Initial DIP Term Loan Amount”) and (b) upon entry of the Final Order (as defined below), to incur in a single draw a portion of the DIP Term Loan Facility in a principal amount of up to $1,202,803 (the “Delayed Draw DIP Term Loan Amount”), for a total aggregate principal amount of up to $2,402,803;

(v) authorization for the Credit Parties and Lender to, (a) upon entry of this Interim Order, substitute and exchange for a loan under the Roll-Up Facility in a principal amount equal to the outstanding principal and accrued interest due under the CDB Loan (as defined herein), and (b) upon entry of the Final Order, substitute and exchange for a loan under the Roll-Up Facility in a principal amount equal to the outstanding principal and accrued interest due under the Tranche B Loan (as defined herein) (each a “Roll-Up Loan”), each pursuant to the terms and conditions set forth herein and in the DIP Documents;

(vi) authorization for the Debtors to use proceeds of the DIP Term Loan Facility for working capital and general corporate purposes in accordance with the terms of the DIP Documents and Approved Cash Flow Forecast (subject to permitted variances);

(vii) subject to the restrictions set forth in the DIP Documents and this Interim Order, authorization for the Credit Parties to continue to use Cash Collateral (as defined below) and all other Prepetition Collateral (as defined below) in which Lender has an interest, and to grant adequate protection to Lender with respect to, inter alia, such use of Cash Collateral and other Prepetition Collateral;

(viii) authorization for the Credit Parties to pay, on a final and irrevocable basis, the principal, interest, fees, expenses, and other amounts payable under the DIP Documents as such become earned, due and payable, including, but not limited to, upfront fees, closing date fees, exit fees, prepayment fees, agency fees, audit fees, appraisal fees, valuation fees, the reasonable fees and disbursements of Lender’s attorneys, advisors, accountants, appraisers, bankers, and other consultants, all to the extent provided in, and in accordance with, the DIP Documents;


4

(ix) approval of certain stipulations by the Debtors with respect to the Prepetition Credit Documents (as defined below) and the liens and security interests arising therefrom;

(x) subject only to the Carve-Out, the granting to Lender of allowed superpriority claims pursuant to section 364(c)(1) of the Bankruptcy Code payable from and having recourse to all prepetition and postpetition property of the Credit Parties’ estates and all proceeds thereof (other than Avoidance Actions,3 but, upon entry of the Final Order, including Avoidance Proceeds4);

(xi) the granting to Lender of valid, enforceable, nonavoidable, and fully perfected security interests and liens (including liens pursuant to sections 364(c)(2) and 364(c)(3) of the Bankruptcy Code and priming liens pursuant to section 364(d) of the Bankruptcy Code) on all DIP Collateral, subject to (a) the Carve-Out and (b) this Interim Order and Permitted Liens (as defined in the DIP Credit Agreement);

(xii) (a) subject to any provisions of the Final Order with respect to costs or expenses incurred following the entry of such Final Order, a waiver of the Debtors’ right to surcharge the Prepetition Collateral and DIP Collateral (as defined below) (together, the “Collateral”) pursuant to section 506(c) of the Bankruptcy Code, and (b) subject to entry of the Final Order, a waiver of any right of the Debtors under the “equities of the case” exception under section 552(b) of the Bankruptcy Code;

(xiii) modification of the automatic stay to the extent set forth herein and in the DIP Documents;

(xiv) waiver of any applicable stay (including under Bankruptcy Rule 6004) and provision for immediate effectiveness of this Interim Order; and

(xv) the scheduling of a final hearing (the “Final Hearing”) to be held within twenty-one (21) days of the entry of the Interim Order to consider final approval of the DIP Facility and use of Cash Collateral pursuant to a proposed final order (the “Final Order”), as set forth in the Motion and the DIP Documents filed with this Court.

The Court having considered the interim relief requested in the Motion, the exhibits attached

thereto, the DIP Documents, and the evidence submitted and arguments made at the interim hearing held

3 “Avoidance Actions” means, collectively, claims and causes of action under sections 502(d), 544, 545, 547, 548, 549, 550,

and 553 of the Bankruptcy Code, or any other avoidance actions under Chapter 5 of the Bankruptcy Code.

4 “Avoidance Proceeds” means any proceeds or property recovered, unencumbered or otherwise, from Avoidance Actions, whether by judgment, settlement or otherwise.


5

on [DATE] (the “Interim Hearing”); and due and sufficient notice of the Interim Hearing having been

given in accordance with Bankruptcy Rules 2002, 4001(b), (c) and (d), and Local Rules 2002-1, 2081-1,

and 4001-2; and the Interim Hearing having been held and concluded; and all objections, if any, to the

interim relief requested in the Motion having been withdrawn, resolved, or overruled by the Court; and it

appearing that approval of the interim relief requested in the Motion is necessary to avoid immediate and

irreparable harm to the Debtors and their estates pending the Final Hearing, otherwise is fair and

reasonable and in the best interests of the Debtors and their estates, and is essential for the continued

operation of the Debtors’ businesses and the preservation of the value of the Debtors’ assets; and it

appearing that the Debtors’ entry into the DIP Documents is a sound and prudent exercise of the Debtors’

business judgment; and after due deliberation and consideration, and good and sufficient cause appearing

therefor.

IT IS FOUND, DETERMINED, ORDERED AND ADJUDGED, that:

1. Disposition. The relief requested in the Motion is GRANTED ON AN INTERIM BASIS

in accordance with the terms of this Interim Order. Any and all objections to the Motion with respect to

the entry of this Interim Order that have not been withdrawn, waived, settled, or resolved and all

reservations of rights included therein, are hereby denied and overruled on the merits. This Interim

Order shall become effective immediately upon its entry.

2. Commencement Date. On July 2, 2020 (the “Commencement Date”), each Debtor filed

a voluntary petition (each, a “Petition”) under chapter 11 of the Bankruptcy Code with the United States

Bankruptcy Court for the District of Colorado (this “Court”).

3. Debtors in Possession. The Debtors continue to operate their businesses and manage their

properties as debtors-in-possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code. No

trustee or examiner has been appointed in any of the Chapter 11 Cases.


6

4. Jurisdiction and Venue. This is core matter and this Court has exclusive jurisdiction over

the Chapter 11 Cases, the Motion, and the parties and property affected hereby pursuant to 28 U.S.C. §§

157(a)-(b) and 1334 and the automatic referral of all cases or proceedings brought under or related to

the Bankruptcy Code pursuant to D.C.Colo.LCivR 84.1(a). Venue for the Chapter 11 Cases and

proceedings on the Motion is proper before this Court pursuant to 28 U.S.C. §§ 1408 and 1409.

5. Committee Formation. As of the date hereof, the United States Trustee for the District of

Colorado (the “U.S. Trustee”) has not appointed an official committee of unsecured creditors in the

Chapter 11 Cases pursuant to section 1102 of the Bankruptcy Code (the “Creditors’ Committee”).

6. Notice. Appropriate notice of the Motion has been provided in accordance with the

Bankruptcy Code, the Bankruptcy Rules and the Local Bankruptcy Rules, and no other or further notice

of the Motion or the entry of this Interim Order shall be required. The interim relief granted herein is

necessary to avoid immediate and irreparable harm to the Debtors and their estates pending the Final

Hearing.

7. Debtors’ Stipulations. Without prejudice to the rights of any other party in interest and

subject to the limitations thereon contained in paragraphs 31 and 35 below, the Debtors acknowledge,

admit, stipulate, and agree that:

(a)

(i) pursuant to that certain Development Loan Agreement, dated as of

February 28, 2019 (as amended, supplemented, restated or otherwise modified prior to

the Commencement Date, the “CDB Loan Agreement,” and collectively with the other

Loan Documents (as defined in the CDB Loan Agreement) and any other agreements

and documents executed or delivered in connection therewith, each as may be amended,

restated, supplemented, waived or otherwise modified from time to time, the “CDB


7

Credit Documents”), among (a) CDB and (b) NAI CEC Development Lender Inc., a

Colorado corporation, as lender (“NAI CEC”), pursuant to which NAI CEC provided a

credit facility to CDB in the principal amount of Five Million Dollars ($5,000,000) (the

“CDB Loan”);

(ii) pursuant to an Assignment Agreement dated as of June 4, 2020, by

and among NAI CEC, North American Infrastructure LLC, a Colorado limited liability

company (“NAI”), Brevet, and CDB, NAI CEC transferred, conveyed, and assigned to

Brevet (“CDB Lender”) the CDB Loan Agreement.

(iii) pursuant to that certain Loan Agreement, dated as of November 13,

2018 (as amended, supplemented, restated or otherwise modified prior to the

Commencement Date, the “Tranche B Loan Agreement,” and collectively with the

other Loan Documents (as defined in the Tranche B Loan Agreement) and any other

agreements and documents executed or delivered in connection therewith, each as may

be amended, restated, supplemented, waived or otherwise modified from time to time,

the “Tranche B Credit Documents,” and together with the CDB Credit Documents, the

“Prepetition Credit Documents”), among (a) Clean Energy Collective, LLC, a

Colorado limited liability company (“CEC”), as borrower, (b) the guarantors listed in

Schedule I thereto (the “Tranche B Guarantors”), and (c) Brevet, in its capacity as

administrative agent for the lenders thereunder and as a lender (“Tranche B Lender”),

pursuant to which Tranche B Lender granted a credit facility to CEC, including the

Tranche B First Advance (as defined in the Tranche B Loan Agreement) in the original

principal amount of $1,000,000 (the “Tranche B Loan”), and the Tranche B Guarantors


8

guaranteed on a joint and several basis the obligations under the Tranche B Loan

Agreement and the other Tranche B Credit Documents;

(iv) CEC RA was a guarantor of the Tranche B Loan. CEC RA, like

the other guarantors, executed a Pledge and Security Agreement in connection with the

Tranche B Loan and pledge all of its assets as part of that guaranty;

(v) pursuant to the Senior Lien/Junior Lien Intercreditor Agreement,

dated November 13, 2018 (together, the “Prepetition Intercreditor Agreement”; which

shall, for the avoidance of doubt, be considered as part of the Prepetition Credit

Documents) govern the rights of Tranche B Lender, First Solar Distributed Generation,

LLC (“FSDG”), and Black Coral Capital, LLC (“BCC,” and together with FSDG and

any of their respective permitted assignees or successors, the “Prepetition Secured

Parties”), with respect to the Tranche B Loan and Junior Priority Debt (as defined in the

Prepetition Intercreditor Agreement), Tranche B Lender is the senior secured party, and

FSDG and BCC hold a junior position to Tranche B Lender.

(b) as of the Commencement Date:

(i) CEC and the Prepetition Tranche B Guarantors were justly and

lawfully indebted and liable to Lender without defense, challenge, objection, claim,

counterclaim, or offset of any kind, in the aggregate principal amount of not less than

$1,100,000 (inclusive of interest and fees (including early termination fees) through the

date of repayment (at the default contract rate) “Tranche B Debt”), which loan was made

by Tranche B Lender, pursuant to, and in accordance with the terms of, the Tranche B

Credit Documents, plus, to the extent not otherwise included, accrued, and unpaid

interest thereon and fees, expenses (including any attorneys’, accountants’, appraisers’,


9

and financial advisors’ fees and expenses, in each case, that are chargeable or

reimbursable under the Tranche B Credit Documents), costs, charges, indemnities, and

other obligations incurred in connection therewith (whether arising before or after the

Commencement Date) as provided in the Tranche B Credit Documents, which Tranche

B Debt has been guaranteed on a joint and several basis by all of the Tranche B

Guarantors;

(ii) CDB was justly and lawfully indebted and liable to CDB Lender

without defense, challenge, objection, claim, counterclaim, or offset of any kind, in the

aggregate principal amount of not less than $5,400,000 which loan (the “CDB Loan”)

was made by NAI CEC pursuant to, and in accordance with the terms of, the CDB Credit

Documents and subsequently transferred, conveyed, and assigned to CDB Lender, plus

accrued and unpaid interest thereon and fees, expenses (including any attorneys’,

accountants’, appraisers’, and financial advisors’ fees and expenses, in each case, that

are chargeable or reimbursable under the CDB Credit Documents), costs, charges,

indemnities, and other obligations incurred in connection therewith (whether arising

before or after the Commencement Date) as provided in the CDB Credit Documents (the

“CDB Debt” and, together with the Tranche B Debt, the “Prepetition Debt”), which

CDB Debt has been guaranteed by CEC;

(c) (i) the Prepetition Debt constitutes the legal, valid, binding, and non-avoidable

obligations of CEC and CDB, as applicable, and Tranche B Guarantors (including CEC RA), as

applicable, enforceable in accordance with its terms (other than in respect of the stay of enforcement

arising from section 362 of the Bankruptcy Code) and (ii) no portion of the Prepetition Debt or any

payment made to Lender or applied to or paid on account of the obligations owing under the Prepetition


10

Credit Documents prior to the Commencement Date is subject to any contest, attack, rejection, recovery,

reduction, defense, counterclaim, offset, subordination, recharacterization, avoidance or other claim (as

such term is used in the Bankruptcy Code), cause of action or other challenge of any nature under the

Bankruptcy Code or applicable non-bankruptcy law (a “Claim”);

(d) as of the Commencement Date, pursuant to and in connection with the Prepetition

Credit Documents, CDB and the Tranche B Guarantors (including CEC RA) granted to Lender, a security

interest in and continuing lien on (the “Prepetition Liens”5) substantially all of their assets and property,

including, a valid, binding, properly perfected, enforceable, first priority security interest in and continuing

lien on the Collateral (as defined in the CDB Loan Agreement) (which, for the avoidance of doubt,

includes Cash Collateral (as defined below)) and all proceeds, products, accessions, rents, and profits

thereof, in each case whether then owned or existing or thereafter acquired or arising (collectively, the

“Prepetition Collateral”6) which are not subject to avoidance, recharacterization, subordination (whether

equitable, contractual, or otherwise), recovery, attack, disgorgement, effect, rejection, reduction,

disallowance, impairment, counterclaim, offset, crossclaim, defense or Claim under the Bankruptcy Code

or applicable non-bankruptcy law, subject and subordinate only to certain other liens permitted by the

Prepetition Credit Documents, solely to the extent any such permitted liens were valid, binding,

enforceable, properly perfected, non-avoidable and pari passu or senior in priority to the Prepetition Liens

(the “Prepetition Permitted Prior Liens”);

5 As used herein, Prepetition Liens shall also include any security interest in and continuing lien on the Debtors’ property that

was granted to the Prepetition Secured Parties prior to the Petition Date

6 As used herein, Prepetition Collateral shall also include any collateral provided to the Prepetition Secured Parties with respect to their security interests and liens.


11

(e) as of the Commencement Date, except for the Prepetition Permitted Prior Liens

and the Permitted Liens, there were no liens on or security interests in the Prepetition Collateral other

than the Prepetition Liens. Nothing herein shall constitute a finding or ruling by this Court that any

alleged Prepetition Permitted Prior Lien or Permitted Lien is valid, senior, enforceable, prior, perfected,

or non-avoidable. Moreover, nothing herein shall prejudice the rights of any party-in-interest, including,

but not limited to the Debtors, Lender, trustee appointed under sections 701-703 or 1104 of the

Bankruptcy Code, or a Creditors’ Committee (if appointed), to challenge the validity, priority,

enforceability, seniority, avoidability, perfection, or extent of any alleged Prepetition Permitted Prior

Lien or Permitted Lien. The right of a seller of goods to reclaim such goods under section 546(c) of the

Bankruptcy Code is not a Prepetition Permitted Prior Lien or Permitted Lien and is expressly subject to

the Prepetition Liens and DIP Liens (as defined below);

(f) Lender does not control the Debtors or their properties or operations, and does not

have authority to determine the manner in which any Debtor’s operations are conducted or are control

persons or insiders of the Debtors by virtue of any of the actions taken with respect to, in connection

with, related to or arising from the Prepetition Credit Documents;

(g) no claims, counterclaims, offsets, objections, defenses, challenges, or causes of

action exist against, or with respect to, Lender or any of its affiliates, agents, subsidiaries, partners,

controlling persons, agents, attorneys, advisors, professionals, officers, directors, and employees,

whether arising under applicable state or federal law (including, without limitation, any

recharacterization, or other equitable relief that might otherwise impair the aforementioned parties or

their interest in the Prepetition Collateral, subordination, avoidance or other claims, including any claims

or causes of action arising under or pursuant to sections 105, 502(d), 510, 542 through 553(b), or 724(a)

of the Bankruptcy Code), in connection with or arising under any Prepetition Credit Documents or the


12

transactions contemplated thereunder or the Prepetition Debt or Prepetition Liens, including without

limitation, any right to assert any disgorgement or recovery; and the Debtors and their estates hereby

release and discharge any and all such claims, counterclaims, objections, defenses, set-off rights,

challenges, and causes of actions;

(h) the Debtors hereby absolutely, irrevocably, and unconditionally release and

forever discharge and acquit Lender and its respective Representatives (as defined below), in each case,

solely in their capacities as such (collectively, the “Released Parties”), from any and all obligations and

liabilities to the Debtors (and their successors and assigns) and from any and all claims, controversies,

disputes, obligations, counterclaims, offsets, demands, debts, damages, expenses (including, without

limitation, reasonable attorneys’ and financial advisors’ fees and expenses), liens, accounts, contracts,

liabilities, actions, and causes of action arising prior to the Commencement Date (collectively, the

“Released Claims”) of any kind, nature or description, whether known or unknown, foreseen or

unforeseen, matured or unmatured, accrued or unaccrued, or liquidated or unliquidated, arising in law

or equity or upon contract or tort or under any state or federal law or otherwise, arising out of or related

to (as applicable) the DIP Facility, the DIP Documents, the Prepetition Credit Documents, the

obligations owing and the financial obligations made thereunder, the negotiation thereof and the

transactions reflected thereby, and the obligations and financial obligations made thereunder, in each

case that the Debtors at any time had, now have or may have, or that their successors or assigns hereafter

can or may have against any of the Released Parties for or by reason of any act, omission, matter, cause

or thing whatsoever arising at any time on or prior to the date of this Interim Order, whether such

Released Claims are matured, contingent, liquidated, unliquidated, unmatured, known, unknown or

otherwise; provided that, for the avoidance of doubt, the foregoing release shall not constitute a release

of any rights of the Debtors arising under the DIP Documents;


13

(i) all cash, securities, or other property of the Credit Parties (and the proceeds

therefrom) as of the Commencement Date, including, without limitation, all cash, securities or other

property (and the proceeds therefrom) and other amounts on deposit or maintained by the Credit Parties

in any account or accounts (collectively, the “Depository Institutions”) were subject to any applicable

rights of set-off under the Prepetition Credit Documents and applicable law, for the benefit of Lender.

All proceeds of the Prepetition Collateral (including cash on deposit at the Depository Institutions as of

the Commencement Date, securities or other property, whether subject to control agreements or

otherwise, in each case that constitutes Prepetition Collateral) are “cash collateral” of Lender within the

meaning of section 363(a) of the Bankruptcy Code (the “Cash Collateral”).

8. Findings Regarding the DIP Financing and Use of Cash Collateral.

(a) Good and sufficient cause has been shown for the entry of this Interim Order and

for authorization of the Credit Parties to obtain financing pursuant to the DIP Facility.

(b) The Credit Parties have an immediate need to obtain the DIP Financing and to

continue to use the Prepetition Collateral (including Cash Collateral) in order to, among other things,

avoid the liquidation of these estates: (i) permit the orderly continuation of the operation of their

businesses, including maintaining, amending, renewing, or modifying insurance policies and surety

bonds in the ordinary course of business, (ii) maintain business relationships with customers, vendors

and suppliers, including purchasing necessary materials and services to maintain compliance with all

applicable regulatory and safety requirements, (iii) make payroll, (iv) satisfy other working capital,

capital improvement and operational needs, (v) pay professional fees, expenses, and obligations

benefitting from the Carve-Out, and (vi) pay costs, fees, and expenses associated with or payable under

the DIP Financing under the terms of this Interim Order and the DIP Documents. The Credit Parties’

use of Cash Collateral alone would be insufficient to meet the Debtors’ cash disbursement needs during


14

the period of effectiveness of this Interim Order. The access by the Credit Parties to sufficient working

capital and liquidity through the use of Cash Collateral and other Prepetition Collateral, incurrence of

new indebtedness under the DIP Documents and other financial accommodations provided under the

DIP Documents are necessary and vital to avoid an immediate liquidation and for the preservation and

maintenance of the going concern values of the Credit Parties and to a successful restructuring of the

Credit Parties. The terms of the proposed DIP Financing pursuant to the DIP Documents and this Interim

Order are fair and reasonable, reflect each Credit Party’s exercise of prudent business judgment, and are

supported by reasonably equivalent value and fair consideration.

(c) The Credit Parties are unable to obtain financing on more favorable terms from

sources other than Lender under the DIP Documents and are unable to obtain adequate unsecured credit

allowable under section 503(b)(1) of the Bankruptcy Code as an administrative expense. The Credit

Parties are also unable to obtain secured credit allowable under sections 364(c)(1), 364(c)(2), and

364(c)(3) of the Bankruptcy Code without the Credit Parties granting to Lender, subject to the Carve-

Out, the DIP Liens, and the DIP Superpriority Claims (as defined below), and incurring the Adequate

Protection Obligations (as defined below), in each case, under the terms and conditions set forth in this

Interim Order and in the DIP Documents.

(d) Based on the Motion, the declarations filed in support of the Motion, and the

record presented to the Court at the Interim Hearing, (i) the terms of the DIP Financing (including the

full roll-up of the Prepetition Debt), (ii) the terms of the adequate protection granted to Tranche B Lender

and CDB Lender as provided in paragraph 21 of this Interim Order (the “Adequate Protection”), and

(iii) the terms on which the Credit Parties may continue to use the Prepetition Collateral (including Cash

Collateral), in each case pursuant to this Interim Order and the DIP Documents, are in each case fair and

reasonable, reflect the Credit Parties’ exercise of prudent business judgment consistent with their


15

fiduciary duties, constitute reasonably equivalent value and fair consideration, and represent the best

financing available. The adequate protection provided in this Interim Order and other benefits and

privileges contained herein are consistent with and authorized by the Bankruptcy Code.

(e) To the extent such consent is required, Tranche B Lender, CDB Lender, and the

Prepetition Secured Parties, as applicable, have consented to the Credit Parties’ use of Cash Collateral

and the other Prepetition Collateral, and the Credit Parties’ entry into the DIP Documents, in accordance

with and subject to the terms and conditions in this Interim Order and the DIP Documents.

(f) The DIP Financing, the Adequate Protection, and the use of the Prepetition

Collateral (including Cash Collateral) have been negotiated in good faith and at arm’s length among the

Credit Parties, Lender, Tranche B Lender, and CDB Lender and their respective advisors, and all of the

Credit Parties’ obligations and indebtedness arising under, in respect of, or in connection with, the DIP

Financing and the DIP Documents, including, without limitation, all loans made to and guarantees issued

by the Credit Parties pursuant to the DIP Documents and any DIP Obligations shall be deemed to have

been extended by Lender and its respective affiliates in good faith, as that term is used in section 364(e)

of the Bankruptcy Code and in express reliance upon the protections offered by section 364(e) of the

Bankruptcy Code, and Lender (and the successors and assigns thereof) shall be entitled to the full

protection of section 364(e) of the Bankruptcy Code in the event that this Interim Order or any provision

hereof is vacated, reversed or modified, on appeal or otherwise.

(g) Lender acted in good faith regarding the DIP Financing and the Credit Parties’

continued use of the Prepetition Collateral (including Cash Collateral) to fund the administration of the

Credit Parties’ estates and continued operation of their businesses (including the incurrence and payment

of the Adequate Protection Obligations and the granting of the Adequate Protection Liens (as defined

herein)), in accordance with the terms hereof, and Tranche B Lender and CDB Lender (and the


16

successors and assigns thereof) shall be entitled to the full protection of section 363(m) of the

Bankruptcy Code in the event that this Interim Order or any provision hereof is vacated, reversed or

modified, on appeal or otherwise.

(h) Tranche B Lender and CDB Lender are entitled to the Adequate Protection

provided in this Interim Order as and to the extent set forth herein pursuant to sections 361, 362, 363

and 364 of the Bankruptcy Code. Based on the Motion, the declarations filed in support of the Motion,

and the record presented to the Court at the Interim Hearing, the terms of the proposed Adequate

Protection arrangements and of the use of the Prepetition Collateral (including Cash Collateral) are fair

and reasonable, reflect the Credit Parties’ prudent exercise of business judgment and constitute

reasonably equivalent value and fair consideration for the use of the Prepetition Collateral (including

Cash Collateral); provided that nothing in this Interim Order or the DIP Documents shall (x) be

construed as the affirmative consent by Tranche B Lender or CDB Lender for the use of Cash Collateral

other than on the terms set forth in this Interim Order and the Approved Cash Flow Forecast (subject to

permitted variances) and in the context of the DIP Financing authorized by this Interim Order, (y) be

construed as a consent by Tranche B Lender or CDB Lender to the terms of any other financing or any

other lien encumbering the Prepetition Collateral (whether senior or junior), or (z) prejudice, limit or

otherwise impair the rights of Tranche B Lender or CDB Lender to seek modification of the grant of

adequate protection provided hereby so as to provide new, different, or additional adequate protection

or assert the interests of Tranche B Lender or CDB Lender, and without prejudice to the right of the

Debtors and any other party in interest’s rights to contest such modification.

(i) Lender does not control the Debtors or their properties or operations, and does not

have authority to determine the manner in which any Debtor’s operations are conducted or are control


17

persons or insiders of the Debtors by virtue of any of the actions taken with respect to, in connection

with, related to or arising from this Interim Order or the DIP Documents;

(j) The Debtors have prepared and delivered to Lender a 13-week cash flow forecast

(the “Initial Cash Flow Forecast”), a copy of which is attached hereto as Exhibit 1. The Initial Cash

Flow Forecast reflects the Debtors’ anticipated cash receipts and anticipated disbursements for the

calendar week during which the Commencement Date occurs and through and including the end of the

twelfth (12th) calendar week following such week. The Initial Cash Flow Forecast may be modified,

amended and updated from time to time in accordance with the DIP Credit Agreement, and once

approved by, in form and substance reasonably satisfactory to Lender, shall supplement and replace the

Initial Cash Flow Forecast (together with each subsequent approved 13-week cash flow forecast, shall

constitute without duplication, an “Approved Cash Flow Forecast”). The Debtors believe that the

Initial Cash Flow Forecast is reasonable under the facts and circumstances known to them, taken as a

whole, as of the Commencement Date. Lender is relying, in part, upon the Debtors’ agreement to

comply with the Approved Cash Flow Forecast, the other DIP Documents, and this Interim Order in

determining to enter into the postpetition financing arrangements provided for in this Interim Order.

(k) The full rollup of the Prepetition Debt reflect the Debtors’ good faith exercise of

prudent business judgment consistent with their fiduciary duties.

(l) The Debtors have requested immediate entry of this Interim Order pursuant to

Bankruptcy Rules 4001(b)(2) and 4001(c)(2) and the Local Bankruptcy Rules and good cause has been

shown for the immediate entry of this Interim Order. For the reasons set forth in the Motion, the

declarations filed in support of the Motion, and the record presented to the Court at the Interim Hearing,

absent granting the relief set forth in this Interim Order, the Credit Parties’ estates would face significant

business disruption resulting in immediate and irreparable harm. Consummation of the DIP Financing


18

and the use of Prepetition Collateral (including Cash Collateral), in accordance with this Interim Order

and the DIP Documents are therefore in the best interests of the Credit Parties, their estates and their

creditors.

(m) The Motion and this Interim Order comply with the requirements of Local

Bankruptcy Rule 4001-2 and the requested relief is necessary and cause exists to grant the same.

9. Authorization of the DIP Financing and the DIP Documents.

(a) Subject to the terms and conditions of this Interim Order, the Credit Parties are

hereby authorized to execute, enter into and perform all obligations under the DIP Documents. The DIP

Documents and this Interim Order shall govern the financial and credit accommodations to be provided

to the Debtors by Lender in connection with the DIP Financing. The Borrowers are hereby authorized

to forthwith borrow money pursuant to the DIP Credit Agreement, and the Guarantors are hereby

authorized to guarantee the Credit Parties’ DIP Obligations with respect to such borrowings, in each

case up to a principal amount equal to the Initial DIP Term Loan Amount on an interim basis, together

with applicable interest, protective advances, expenses, fees and other charges payable in connection

with the DIP Facility and, subject to entry of the Final Order, a principal amount equal to the Delayed

Draw DIP Term Loan Amount, in each case together with applicable interest, protective advances,

expenses, fees and other charges payable in connection therewith, subject to any limitations on

borrowing or incurrence under the DIP Documents, which shall be used for all purposes permitted under

the DIP Documents and this Interim Order, including, without limitation, (1) to provide working capital

and capital improvements, to fund vendor payments and to pay for other general corporate purposes for

the Borrower and certain of its Subsidiaries (as defined in the DIP Credit Agreement), and (2) to pay

interest, fees and expenses and make adequate protection and other payments in accordance with this

Interim Order and the DIP Documents. Notwithstanding anything to the contrary herein, the DIP Term


19

Loans, and all cash proceeds thereof, shall at no time constitute Prepetition Collateral and shall at all

times constitute DIP Collateral.

(b) In furtherance of the foregoing and without further approval of this Court, each

Debtor is authorized and directed to perform all acts, to make, execute and deliver all instruments and

documents (including, without limitation, the execution or recordation of pledge and security

agreements, mortgages, deeds of trust and financing statements), and to pay all fees that may be

reasonably required or necessary for the Credit Parties to implement the terms of, performance of their

obligations under or effectuate the purposes of and transactions contemplated by this Interim Order or

the DIP Financing, including, without limitation:

(i) the execution and delivery of, and performance under, each of the DIP

Documents;

(ii) the execution and delivery of, and performance under, one or more

amendments, waivers, consents, or other modifications to and under the DIP Documents, in each case,

in such form as the Credit Parties and Lender, pursuant to the terms of the DIP Documents, may agree,

it being understood that no further approval of the Court shall be required for authorizations,

amendments, waivers, consents, or other modifications to and under the DIP Documents (and any fees

and other expenses (including any attorneys’, accountants’, appraisers’ and financial advisors’ fees),

amounts, charges, costs, indemnities, and other obligations paid in connection therewith) that do not

shorten the maturity of the extensions of credit thereunder or increase the aggregate commitments or the

rate of interest payable thereunder; provided that, for the avoidance of doubt, updates and supplements

to the Approved Cash Flow Forecast required to be delivered by the Credit Parties under the DIP

Documents shall not be considered amendments or modifications to the Approved Cash Flow Forecast


20

or the DIP Documents; provided further that a copy (which may be provided through electronic mail or

facsimile) of the amendment, modification, or supplement is provided to the U.S. Trustee.

(iii) the non-refundable and, upon entry of this Interim Order, irrevocable

payment to Lender of all fees, including, without limitation, any closing date fee, upfront fee, exit fee,

prepayment fee, or agency fee (which fees, in each case, shall be, and shall be deemed to have been,

approved upon entry of this Interim Order, and which fees shall not be subject to any challenge, contest,

attack, rejection, recoupment, reduction, defense, counterclaim, offset, subordination,

recharacterization, avoidance or other claim, cause of action or other challenge of any nature under the

Bankruptcy Code, under applicable non-bankruptcy law or otherwise) and any amounts due (or that may

become due) in respect of the indemnification obligations, in each case referred to in the DIP Credit

Agreement (and in any separate letter agreements between any or all Credit Parties, on the one hand,

and Lender, on the other, in connection with the DIP Financing) and the costs and expenses as may be

due from time to time, including, without limitation, fees and expenses of the following professionals

retained by Lender, whether incurred before or after the Commencement Date: (a) Steptoe & Johnson

LLP, counsel to Lender, (b) one local bankruptcy counsel to Lender in the District of Colorado, and,

solely to the extent necessary to enforce rights and remedies under the DIP Documents, (c) one counsel

to Lender in each local jurisdiction, and (d) any other advisors retained by Lender, in each case of the

foregoing (a)-(d), solely to the extent provided for in the DIP Documents (the “DIP Fees and

Expenses”), without the need to file retention motions or fee applications or to provide notice to any

party; and

(iv) the performance of all other acts required under or in connection with the

DIP Documents, including the granting of the DIP Liens and DIP Superpriority Claims and perfection

of the DIP Liens and DIP Superpriority Claims as permitted herein and therein.


21

(c) Upon execution and delivery of the DIP Documents, each of the DIP Documents

shall constitute valid, binding, enforceable, and non-avoidable obligations of the Credit Parties, fully

enforceable against each Credit Party in accordance with the terms of the DIP Documents and this

Interim Order. No obligation, payment, transfer or grant of security under the DIP Documents or this

Interim Order to Lender (including its Representatives) shall be stayed, restrained, voidable or

recoverable under the Bankruptcy Code or under any applicable law (including, without limitation,

under sections 502(d), 544, 548 or 549 of the Bankruptcy Code, any applicable Uniform Fraudulent

Transfer Act, Uniform Fraudulent Conveyance Act or other similar state statute or common law), or

subject to any defense, reduction, recoupment, recharacterization, subordination, disallowance,

impairment, cross-claim, claim, counterclaim, or offset.

(d) Lender shall have no obligation or responsibility to monitor any Credit Party’s use

of the DIP Financing, and Lender may rely upon each Credit Party’s representations that the amount of

DIP Financing requested at any time and the use thereof are in accordance with the requirements of this

Interim Order, the DIP Documents, and Bankruptcy Rule 4001(c)(2).

(e) Subject to the terms and conditions of this Interim Order, Lender is hereby

authorized and directed to execute, enter into and perform all rights and obligations under the DIP

Documents.

10. Roll-Up of CDB Debt into DIP Obligations. Upon entry of this Interim Order and the

occurrence of the Closing Date (as defined in the DIP Credit Agreement), without any further action by

the Debtors or any other party, all outstanding CDB Debt shall be converted into a Roll-Up Loan.

Notwithstanding any other provisions of this Interim Order or the DIP Documents, all rights of CDB

Lender related to the CDB Debt shall be fully preserved. CDB Lender would not otherwise consent to

the use of its Cash Collateral or the subordination of its liens to any DIP Liens, and Lender would not


22

be willing to provide the DIP Facility or extend credit to the Debtors thereunder without the inclusion

of the DIP Obligations. Moreover, the roll-up of all outstanding CDB Debt into a Roll-Up Loan will

enable the Debtors to obtain urgently needed financing that they need to administer these Chapter 11

Cases and fund their operations. Because the DIP Obligations are subject to the reservation of rights set

forth in paragraph 31 below, they will not prejudice the right of any other party in interest.

11. Roll-Up of Tranche B Debt into DIP Obligations. On the Full Availability Date (as

defined in the DIP Credit Agreement) (or such earlier date as Lender may agree), without any further

action by the Debtors or any other party, all outstanding Tranche B Debt shall be converted into a Roll-

Up Loan. Notwithstanding any other provisions of this Interim Order or the DIP Documents, all rights

of Tranche B Lender related to the Tranche B Debt shall be fully preserved. Tranche B Lender would

not otherwise consent to the use of its Cash Collateral or the subordination of its liens to any DIP Liens,

and Lender would not be willing to provide the DIP Facility or extend credit to the Debtors thereunder

without the inclusion of the DIP Obligations. Moreover, the roll-up of all outstanding Tranche B Debt

into Roll-Up Loans will enable the Debtors to obtain urgently needed financing that they need to

administer these Chapter 11 Cases and fund their operations. Because the DIP Obligations are subject

to the reservation of rights set forth in paragraph 31 below, they will not prejudice the right of any other

party in interest.

12. Carve-Out.

(a) Notwithstanding anything to the contrary herein, the Debtors’ obligations to

Lender and the liens, security interests and superpriority claims granted herein and/or under the DIP

Documents, including the DIP Liens, the DIP Superpriority Claims, the Superpriority Adequate

Protection Liens, and the Superpriority 507(b) Claims, shall be subject in all respects and subordinate

to the Carve-Out.


23

(b) Carve-Out. As used in this Interim Order, the “Carve-Out” means the sum of all

fees required to be paid to the Clerk of the Court and to the Office of the United States Trustee under

section 1930(a) of title 28 of the United States Code plus interest at the statutory rate to the extent

incurred prior to the declaration of an Event of Default under the DIP Credit Documents.

(c) Fees and Expenses of Professionals. The Debtors shall be permitted to pay the

compensation and reimbursement of fees and expenses allowed and payable under 11 U.S.C. §§ 328,

330 and 331 (but excluding fees and expenses of third party professionals employed by the Creditors’

Committee members individually), as the same may be due and payable and as are otherwise permitted

under this Interim Order and the DIP Credit Documents, as limited by the DIP Budget. Nothing

contained herein is intended to constitute, nor should be construed as consent to the allowance of any

fees, disbursements or expenses by any party and nothing herein shall affect the ability or right of the

Debtors, the Lender, the Creditors’ Committee, the U.S. Trustee or any other party in interest to object

to the allowance and payment of any amounts incurred or requested. Lender shall not be responsible

for the payment or reimbursement of any fees or disbursements of any Professional Person incurred in

connection with the Chapter 11 Cases or any successor cases under any chapter of the Bankruptcy Code.

Nothing in this Interim Order or otherwise shall be construed to obligate Lender in any way, to pay

compensation to, or to reimburse expenses of, any Professional Person or to guarantee that the Debtors

have sufficient funds to pay such compensation or reimbursement.

13. DIP Superpriority Claims. Pursuant to section 364(c)(1) of the Bankruptcy Code, all of the

DIP Obligations shall constitute allowed superpriority administrative expense claims against the Credit

Parties on a joint and several basis (without the need to file any proof of claim) with priority over any and

all claims against each of the Credit Parties, now existing or hereafter arising, of any kind whatsoever,

including, without limitation, all administrative expenses of the kind specified in sections 503(b) and


24

507(b) of the Bankruptcy Code and any and all administrative expenses or other claims arising under

sections 105, 326, 328, 330, 331, 365, 503(b), 506(c) (subject to any provisions of the Final Order with

respect to costs or expenses incurred following the entry of such Final Order), 507(a), 507(b), 726, 1113

or 1114 of the Bankruptcy Code (including the Adequate Protection Obligations), whether or not such

expenses or claims may become secured by a judgment lien or other non-consensual lien, levy or

attachment, which allowed claims (the “DIP Superpriority Claims”) shall for purposes of section

1129(a)(9)(A) of the Bankruptcy Code be considered administrative expenses allowed under section

503(b) of the Bankruptcy Code, and which DIP Superpriority Claims shall be payable from and have

recourse to all pre- and postpetition property of the Credit Parties and all proceeds thereof (excluding

Avoidance Actions but including, subject to entry of the Final Order, Avoidance Proceeds) in accordance

with the DIP Credit Agreement and this Interim Order, subject only to the Carve-Out. The DIP

Superpriority Claims shall be entitled to the full protection of section 364(e) of the Bankruptcy Code in

the event that this Interim Order or any provision hereof is vacated, reversed or modified, on appeal or

otherwise. Subject to the Carve-Out in all respects, the DIP Superpriority Claims shall be senior to the

Adequate Protection 507(b) Claims (as defined below).

14. DIP Liens.

(a) DIP Liens. As security for the DIP Obligations, effective and perfected upon the

date of this Interim Order and without the necessity of the execution, recordation or filing by the Credit

Parties or Lender 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 Lender of, or over, any DIP Collateral, the following security interests and liens

(all such liens and security interests granted to Lender pursuant to this Interim Order and the DIP


25

Documents, the “DIP Liens”) are hereby granted to Lender (all property identified in clauses (i)-(iii)

below being collectively referred to as the “DIP Collateral”)7:

(i) Liens on Unencumbered Property. Subject and subordinate in all respects to the

Carve-Out, pursuant to section 364(c)(2) of the Bankruptcy Code, a valid, binding, continuing,

enforceable, fully-perfected first priority senior security interest in and lien upon all tangible and

intangible pre- and postpetition property of the Credit Parties, whether existing on the Commencement

Date or thereafter acquired, and the proceeds, products, rents, and profits thereof, that, on or as of the

Commencement Date, is not subject to a valid, perfected and non-avoidable lien or is subject to a valid

and non-avoidable lien in existence as of the Commencement Date that is perfected subsequent to the

Commencement Date as permitted by section 546(b) of the Bankruptcy Code, including, without

limitation, any and all unencumbered cash of the Credit Parties (whether maintained with Lender or

otherwise) and any investment of such cash, inventory, accounts receivable, other rights to payment

whether arising before or after the Commencement Date, contracts, properties, plants, fixtures,

machinery, equipment, general intangibles, documents, instruments, securities, chattel paper, interests

in leaseholds, real properties, deposit accounts, patents, copyrights, trademarks, trade names, rights

under license agreements and other intellectual property, capital stock of subsidiaries, wherever located,

and the proceeds, products, rents and profits of the foregoing, whether arising under section 552(b) of

the Bankruptcy Code or otherwise, of all the foregoing (the “Unencumbered Property”), in each case

other than the Avoidance Actions (but including Avoidance Proceeds, subject to entry of the Final

Order), but in each case subject and subordinate in all respects to the Carve-Out;

7 Notwithstanding anything to the contrary herein, the DIP Collateral shall not include any Excluded Assets (as defined in the

DIP Credit Agreement).


26

(ii) Liens Priming Certain Prepetition Liens. Pursuant to section 364(d)(1) of the

Bankruptcy Code, and subject and subordinate in all respects to the Carve-Out, a valid, binding,

continuing, enforceable, fully-perfected first priority priming security interest in and lien upon all pre-

and postpetition property of the Credit Parties of the same nature, scope, and type as the Prepetition

Collateral (the “DIP Priority Collateral”), regardless of where located, regardless of whether or not

any liens on such assets are voided, avoided, invalidated, lapsed or unperfected, which security interest

and lien shall prime the Prepetition Liens (the “DIP Priming Liens”). Notwithstanding anything herein

to the contrary, the DIP Priming Liens shall be (A) subject and junior to the Carve-Out in all respects

(B) senior in all respects to the other Prepetition Liens on DIP Priority Collateral, (C) senior to any

Adequate Protection Liens on DIP Priority Collateral and (D) not subordinate to any lien, security

interest or mortgage that is avoided and preserved for the benefit of the Debtors and their estates under

section 551 of the Bankruptcy Code. The Prepetition Liens with respect to the Prepetition Priority

Collateral shall be primed by and made subject and subordinate to the Carve-Out and the DIP Term

Priming Liens;

(iii) [Reserved];

(iv) Liens Senior to Certain Other Liens. The DIP Liens shall not be (i) subject or

subordinate to or made pari passu with (A) any lien or security interest that is avoided and preserved for

the benefit of the Credit Parties and their estates under section 551 of the Bankruptcy Code, (B) unless

otherwise provided for in the DIP Documents or in this Interim Order, any liens or security interests

arising after the Commencement Date, including, without limitation, any liens or security interests

granted in favor of any federal, state, municipal or other governmental unit (including any regulatory

body), commission, board or court for any liability of the Credit Parties, or (C) any intercompany or


27

affiliate liens of the Credit Parties or security interests of the Credit Parties; or (ii) subordinated to or

made pari passu with any other lien or security interest under section 363 or 364 of the Bankruptcy Code.

(b) [Reserved.]

(c) Specified Leases. Notwithstanding anything to the contrary in the Motion, the DIP

Documents, or this Interim Order, for purposes of this Interim Order, in no event shall the DIP Collateral

include or the DIP Liens or Adequate Protection Liens granted under this Interim Order attach to any

lease or other real property right, to which any Debtor is a party or any of such relevant Debtor’s rights

or interests thereunder, if and for so long as the grant of such security interest would constitute or result

in: (x) the abandonment, invalidation, unenforceability or other impairment of any right, title or interest

of any Debtor therein, or (y) a breach or termination pursuant to the terms of, or a default under, any

such lease or other real property right pursuant to any provision thereof, unless, in the case of each of

clauses (x) and (y), the applicable provision is rendered ineffective, unenforceable, and/or invalid by

applicable non-bankruptcy law or the Bankruptcy Code (such leases the “Specified Lease”); provided

that, the foregoing shall not preclude any counterparty to a Specified Lease from an opportunity to be

heard in this Court on notice with respect to whether applicable non-bankruptcy law or the Bankruptcy

Code renders such provision ineffective, unenforceable, and/or invalid if requested by this non-Debtor

party to the Specified Lease, and the Court shall retain jurisdiction to hear and adjudicate issues related

thereto; provided further that DIP Collateral shall include and the DIP Liens and Adequate Protection

Liens granted under this Interim Order shall attach to any proceeds of any Specified Lease.

(d) Automatic Effectiveness of Liens. The automatic stay imposed under section 362(a)

of the Bankruptcy Code is hereby vacated and modified to effectuate all of the terms and provisions of

this Interim Order, including to (i) permit the Credit Parties to grant the liens and security interests to

Lender, and (ii) authorize the Credit Parties to pay, and Lender to retain and apply, payments made in


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accordance with this Interim Order, to the extent, in cases (i) and (ii), contemplated by this Interim Order

and the other DIP Documents.

15. Protection of Lender.

(a) So long as there are any DIP Obligations outstanding or Lender has any

outstanding Commitments under the DIP Credit Agreement, the Prepetition Secured Parties shall: (i)

have no right to and shall take no action to foreclose upon, or recover in connection with, the liens granted

thereto pursuant to the Prepetition Credit Documents or this Interim Order, or otherwise seek to exercise

or enforce any rights or remedies against such DIP Term Collateral, including in connection with the

Prepetition Liens or the Adequate Protection Liens; (ii) be deemed to have consented to any transfer,

disposition or sale of, or release of liens on, such DIP Collateral (but not any proceeds of such transfer,

disposition or sale to the extent remaining after payment in cash in full of the DIP Obligations and

termination of the DIP Commitments (defined as “Commitment” in the DIP Credit Agreement)), to the

extent such transfer, disposition, sale or release is authorized under the DIP Documents; (iii) not file any

further financing statements, trademark filings, copyright filings, mortgages, notices of lien or similar

instruments, or otherwise take any action to perfect their security interests in such DIP Collateral unless,

solely as to this clause (iii) Lender files financing statements or other documents to perfect the liens

granted pursuant to this Interim Order, or as may be required by applicable state law to continue the

perfection of valid and non-avoidable liens or security interests as of the Commencement Date; and (iv)

at the request of Lender, deliver or cause to be delivered, at the Credit Parties’ cost and expense, any

termination statements, releases and/or assignments in favor of Lender or other documents necessary to

effectuate and/or evidence the release, termination and/or assignment of liens on any portion of such DIP

Collateral subject to any sale or disposition permitted by the DIP Documents and this Interim Order.


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(b) To the extent any Prepetition Secured Party has possession of any Prepetition

Collateral or DIP Collateral or has control with respect to any Prepetition Collateral or DIP Collateral,

or has been noted as a secured party on any certificate of title for a titled good constituting Prepetition

Collateral or DIP Collateral, then such Prepetition Secured Party shall be deemed to maintain such

possession or notation or exercise such control as a gratuitous bailee and/or gratuitous agent for

perfection for the benefit of Lender, and, it shall comply with the instructions of Lender with respect to

the exercise of such control.

(c) Any proceeds of Prepetition Collateral received by any Prepetition Secured Party

in connection with the exercise of any right or remedy relating to the Prepetition Collateral or otherwise

received by any Prepetition Secured Party shall be segregated and held in trust for the benefit of and

forthwith paid over to Lender in the same form as received, with any necessary endorsements, or as a

court of competent jurisdiction may otherwise direct.

(d) The automatic stay provisions of section 362 of the Bankruptcy Code are hereby

vacated and modified to the extent necessary to permit Lender to enforce all of its rights under the

applicable DIP Documents and take any or all of the following actions, at the same or different time, in

each case without further order or application of the Court: (i) immediately upon the occurrence of an

Event of Default, declare (A) the termination, reduction, or restriction of any further DIP Commitment

to the extent any such DIP Commitment remains, (B) all DIP Obligations to be immediately due, owing,

and payable, without presentment, demand, protest, or other notice of any kind, all of which are

expressly waived by the Credit Parties, notwithstanding anything in the DIP Order or in any DIP

Document to the contrary, and (C) the termination of the applicable DIP Documents as to any future

liability or obligation of Lender (but, for the avoidance of doubt, without affecting any of the DIP Liens

or the DIP Obligations), and (ii) upon the occurrence of an Event of Default and the giving of three (3)


30

days’ prior written notice (which shall run concurrently with any notice required to be provided under

the DIP Documents) (the “Remedies Notice Period ”) via email to counsel to the Debtors, Creditors’

Committee (if any), counsel to Lender and the U.S. Trustee, unless the Bankruptcy Court orders

otherwise during the Remedies Notice Period after a hearing, (A) whether or not the maturity of any of

the DIP Obligations shall have been accelerated, proceed to protect, enforce, and exercise all rights and

remedies of Lender under the DIP Documents, DIP Orders, or applicable law, whether for the specific

performance of any covenant or agreement contained in any such DIP Document or any instrument

pursuant to which such DIP Obligations are evidenced, and, if such amount shall have become due, by

declaration or otherwise, proceed to enforce the payment thereof or any other legal or equitable right of

Lender, including, but not limited to, by suit in equity, action at law or other appropriate proceeding,

including, without limitation, (1) commencing judicial or nonjudicial foreclosure proceedings against

the Collateral, (2) accepting the Collateral in partial or full satisfaction of the Obligations in accordance

with applicable law, (3) enforcing the Lender’s security interest in the Collateral by means of one or

more public or private sales thereof, (4) exercising any or all of the rights of a secured party pursuant to

applicable law, and (5) commencing judicial or nonjudicial proceeding for specific performance of any

covenant or agreement contained in the Credit Documents, and (B) withdraw consent to the Credit

Parties’ continued use of Cash Collateral and exercise all other rights and remedies provided for in the

DIP Documents and under applicable law with respect to the DIP Collateral; provided that no such

notice shall be required for any exercise of rights or remedies to block or limit withdrawals from any

bank accounts that are a part of the Collateral (including, without limitation, by sending any control

activation notices to depositary banks pursuant to any control agreement).

(e) During the Remedies Notice Period, the Credit Parties shall be permitted to use

Cash Collateral solely to fund the Carve-Out. During the Remedies Notice Period, the Debtors shall be


31

entitled to seek an emergency hearing with the Court within the Remedies Notice Period solely for the

purpose of contesting whether, in fact, an Event of Default has occurred and is continuing. Except as

set forth in this Interim Order, the Debtors shall waive their right to seek relief under the Bankruptcy

Code, including, without limitation, under section 105 of the Bankruptcy Code, to the extent that such

relief would in any way impair or restrict the rights or remedies of Lender set forth in this Interim Order

or the DIP Documents. Any party-in-interest shall be entitled to seek an emergency hearing for the

purpose of contesting whether assets constitute assets of the Debtors’ estates and nothing in this Order

shall affect any party-in-interest’s rights or positions at such hearing.

(f) In no event shall Lender be subject to the equitable doctrine of “marshaling” or

any similar doctrine with respect to the Prepetition Collateral or the DIP Collateral. Further, subject to

entry of the Final Order, in no event shall the “equities of the case” exception in section 552(b) of the

Bankruptcy Code apply to the secured claims of the Prepetition Secured Parties.

(g) No rights, protections or remedies of Lender granted by the provisions of this

Interim Order or the DIP Documents shall be limited, modified or impaired in any way by: (i) any actual

or purported withdrawal of the consent of any party to the Credit Parties’ authority to continue to use

Cash Collateral; (ii) any actual or purported termination of the Credit Parties’ authority to continue to

use Cash Collateral; or (iii) the terms of any other order or stipulation related to the Credit Parties’

continued use of Cash Collateral or the provision of adequate protection to any party.

16. [Reserved.]

17. Proceeds of Subsequent Financing. Without limiting the provisions and protections of

paragraph 13 above, but subject in all respects to the Carve-Out, if at any time prior to the repayment in

full in accordance with the DIP Documents of all the DIP Obligations (including subsequent to the

confirmation of any chapter 11 plan or plans with respect to any of the Debtors), the Debtors’ estates,


32

any trustee, any examiner with enlarged powers, or any responsible officer subsequently appointed shall

obtain credit or incur debt pursuant to sections 364(b), 364(c), 364(d), or any other provision of the

Bankruptcy Code in violation of this Interim Order or the DIP Documents, then all of the cash proceeds

derived from such credit or debt and all Cash Collateral shall immediately be turned over to Lender for

application to the DIP Obligations until such DIP Obligations are Paid in Full.8

18. Limitation on Charging Expenses Against Collateral. Except to the extent of the Carve

Out, no costs or expenses of administration of the Chapter 11 Cases or any future proceeding that may

result therefrom, including liquidation in bankruptcy or other proceedings under the Bankruptcy Code,

shall be charged against or recovered from the Collateral (including Cash Collateral) pursuant to section

506(c) of the Bankruptcy Code or any similar principle of law, without the prior written consent of

Lender, and no such consent shall be implied from any other action, inaction, or acquiescence by Lender,

and nothing contained in this Interim Order shall be deemed to be a consent by Lender to any charge,

lien, assessment or claims against the Collateral under section 506(c) of the Bankruptcy Code or

otherwise; provided that the foregoing waiver shall be without prejudice to any provisions of the Final

Order with respect to costs or expenses incurred following the entry of such Final Order.

19. Payments Free and Clear. Any and all payments or proceeds remitted to Lender pursuant

to the provisions of this Interim Order, the DIP Documents (including, without limitation, the Approved

Cash Flow Forecast (subject to permitted variances)) or any subsequent order of the Court shall be

irrevocable, received free and clear of any claim, charge, assessment, or other liability, including without

limitation, any such claim or charge arising out of or based on, directly or indirectly, sections 506(c)

8 For purposes of this Interim Order, the terms “Paid in Full,” and “Payment in Full” shall mean, with respect to any

referenced DIP Obligations and/or Prepetition Debt, (i) the indefeasible payment in full in cash (or other agreed consideration) of such obligations, and (ii) the termination of all commitments under the DIP Documents and/or the Prepetition Credit Agreements.


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(subject to any provisions of the Final Order with respect to costs or expenses incurred following the

entry of such Final Order) or 552(b) of the Bankruptcy Code (subject to entry of the Final Order

approving the waiver of the Debtors’ rights under 552(b) of the Bankruptcy Code), whether asserted or

assessed by through or on behalf of the Debtors.

20. Use of Cash Collateral. The Credit Parties are hereby authorized, subject to the terms and

conditions of this Interim Order, to use Cash Collateral; provided that (a) Lender is granted the Adequate

Protection as hereinafter set forth and (b) except on the terms and conditions of this Interim Order, the

Credit Parties shall be enjoined and prohibited from at any time using the Cash Collateral absent further

order of the Court.

21. Adequate Protection of Tranche B Lender & CDB Lender. Subject to the Carve-Out in

all respects and the roll-up of the respective Tranche B Loan or CDB Loan, Tranche B Lender & CDB

Lender are entitled, pursuant to sections 361, 362, 363(e), 364(d)(1), and 507 of the Bankruptcy Code,

to adequate protection of their interests in all Prepetition Collateral, including Cash Collateral, for and

equal in amount to the aggregate diminution in the value of Tranche B Lender or CDB Lender’s interests

in the Prepetition Collateral (including Cash Collateral) from and after the Commencement Date, if any

(“Diminution in Collateral Value”), for any reason provided for under the Bankruptcy Code, including,

without limitation, any such diminution resulting from the sale, lease or use by the Credit Parties (or

other decline in value) of the Prepetition Collateral, the priming of the Prepetition Liens by the DIP

Priming Liens pursuant to the DIP Documents and this Interim Order, the payment of any amounts under

the Carve-Out, and the imposition of the automatic stay pursuant to section 362 of the Bankruptcy Code

(the “Adequate Protection Claims”). To the extent of any Diminution in Collateral Value, Tranche B

Lender and CDB Lender are hereby granted the following, in each case subject to the Carve-Out

(collectively, the “Adequate Protection Obligations”):


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(a) Tranche B Lender or CDB Lender Adequate Protection Liens. Tranche B Lender

and CDB Lender are hereby granted (effective and perfected upon the date of this Interim Order and

without the necessity of the execution of any mortgages, security agreements, pledge agreements,

financing statements, or other agreements), in the amount of Tranche B Lender’s or CDB Lender’s

Adequate Protection Claims, a valid, perfected replacement security interest in and lien upon all of the

DIP Collateral, in each case subject and subordinate only to (A) the Carve-Out and (B) the DIP Liens

(the “Adequate Protection Liens”);

(b) Tranche B Lender Adequate Protection Payments. Until the date upon which the

full roll-up of the Tranche B Loan into a Roll-Up Loan occurs, as additional adequate protection, subject

to the Carve-Out as set forth in this Interim Order, Tranche B Lender shall receive current payment of

interest (at the contractual default rate) due under the Tranche B Loan Agreement with respect to

outstanding Obligations (as defined in the Tranche B Loan Agreement), whether due prior to, on, or

subsequent to the Commencement Date, subject to the rights reserved in paragraph 31 below.

(c) CDB Lender Adequate Protection Payments. Until the date upon which the full

roll-up of the CDB Loan into a Roll-Up Loan occurs, as additional adequate protection, subject to the

Carve-Out as set forth in this Interim Order, CDB Lender shall receive current payment of interest (at the

contractual default rate) due under the CDB Loan Agreement with respect to outstanding Obligations (as

defined in the CDB Loan Agreement), whether due prior to, on, or subsequent to the Commencement

Date, subject to the rights reserved in paragraph 31 below.

(d) Tranche B Lender or CDB Lender Section 507(b) Claim. Solely to the extent of

any diminution in value, the Tranche B Lender and CDB Lender are hereby granted, subject to the

Carve-Out, an allowed superpriority administrative expense claim as provided for in section 507(b) of

the Bankruptcy Code in the amount of Lender’s Adequate Protection Claims, with, except as set forth


35

in this Interim Order, priority in payment over any and all administrative expenses of the kind specified

or ordered pursuant to any provision of the Bankruptcy Code (the “Superpriority 507(b) Claims”),

which Superpriority 507(b) Claims shall be payable from and have recourse to all prepetition and

postpetition property of the Credit Parties and all proceeds thereof (excluding Avoidance Actions but

including, without limitation, subject to entry of the Final Order, the Avoidance Proceeds). The

Superpriority 507(b) Claims shall be subject and subordinate only to the Carve-Out and the DIP

Superpriority Claims granted in respect of the DIP Obligations. Except to the extent expressly set forth

in this Interim Order, the Final Order, or the DIP Documents, Tranche B Lender and CDB Lender shall

not receive or retain any payments, property or other amounts in respect of the Superpriority 507(b)

Claims unless and until the DIP Obligations (other than contingent indemnification obligations as to

which no claim has been asserted) and any claims having a priority superior to or pari passu with the

DIP Superpriority Claims have indefeasibly been paid in cash in full and all DIP Commitments have

been terminated.

22. Adequate Protection of FSDG and BCC. Subject to the Carve-Out in all respects and

subject solely to the prior and senior liens of Tranche B Lender and CDB Lender in all Prepetition

Collateral and their liens granted herein, FSDG and BCC are entitled, pursuant to sections 361, 362,

363(e), 364(d)(1), and 507 of the Bankruptcy Code, to adequate protection of their interests in all

Prepetition Collateral, including Cash Collateral, for and equal in amount to the aggregate diminution

in the value of FSDG’s or BCC’s interests in the Prepetition Collateral (including Cash Collateral) from

and after the Commencement Date, if any (“Diminution in Collateral Value”), for any reason provided

for under the Bankruptcy Code, including, without limitation, any such diminution resulting from the

sale, lease or use by the Credit Parties (or other decline in value) of the Prepetition Collateral, the priming

of their prepetition liens, by the DIP Priming Liens, pursuant to the DIP Documents and this Interim


36

Order, the payment of any amounts under the Carve-Out, and the imposition of the automatic stay

pursuant to section 362 of the Bankruptcy Code (the “Junior Priority Adequate Protection Claims”).

To the extent of any Diminution in Collateral Value, FSDG and BCC are hereby granted the following,

in each case subject to the Carve-Out (collectively, the “Junior Priority Adequate Protection

Obligations”) and the liens and Adequate Protection Obligations of the DIP Lender, Tranche B Lender,

and CDB Lender:

(a) FSDG and BCC Junior Priority Adequate Protection Liens. FSDG and BCC are

hereby granted (effective and perfected upon the date of this Interim Order and without the necessity of

the execution of any mortgages, security agreements, pledge agreements, financing statements, or other

agreements), in the amount of FSDG’s and BCC’s Junior Adequate Protection Claims, a valid, perfected

replacement security interest in and lien upon all of the DIP Collateral, in each case subject and

subordinate only to (A) the Carve-Out, (B) the DIP Liens and (C) the Adequate Protection Liens of the

Tranche B Lender and the CDB Lender (the “Junior Priority Adequate Protection Liens”);

(b) FSDG and BCC Section 507(b) Claim. Solely to the extent of any diminution in

value, FSDG and BCC are hereby granted, subject to the Carve-Out, and the DIP Liens and Tranche B

Lender’s and CDB Lender’s Adequate Protection Claims and Adequate Protection Liens, an allowed

superpriority administrative expense claim as provided for in section 507(b) of the Bankruptcy Code in

the amount of FSDG’s and BCC’s Junior Priority Adequate Protection Claims, with, except as set forth

in this Interim Order, priority in payment over any and all administrative expenses of the kind specified

or ordered pursuant to any provision of the Bankruptcy Code (the “Junior Superpriority 507(b)

Claims”), which Junior Superpriority 507(b) Claims shall be payable from and have recourse to all

prepetition and postpetition property of the Credit Parties and all proceeds thereof (excluding Avoidance

Actions but including, without limitation, subject to entry of the Final Order, the Avoidance Proceeds).


37

The Superpriority 507(b) Claims shall be subject and subordinate only to the Carve-Out and the DIP

Superpriority Claims granted in respect of the DIP Obligations and the Adequate Protection Claims of

Tranche B Lender or CDB Lender, including the Superiority 507(b) Claims and the Adequate Protection

Liens. Except to the extent expressly set forth in this Interim Order, the Final Order, or the DIP

Documents, FSDG and BCC shall not receive or retain any payments, property or other amounts in

respect of the Junior Superpriority 507(b) Claims unless and until the DIP Obligations (other than

contingent indemnification obligations as to which no claim has been asserted) and any claims having a

priority superior to or pari passu with the DIP Superpriority Claims, Superpriority 507(b) Claims, and

Adequate Protection Claims have indefeasibly been paid in cash in full and all DIP Commitments have

been terminated.

(c) The Junior Priority Adequate Protection Claims, Junior Priority Adequate Protection Obligations,

Junior Priority Adequate Protection Liens, Junior Superpriority 507(b) Claims, shall be subject to the

rights set froth in the Prepetition Intercreditor Agreement.

(d) For the avoidance of doubt, nothing in this Interim Order shall grant FSDG and BCC any liens,

claims or interests of any kind in or to the Potential Purchaser’s (as defined in the DIP Documents)

break-up fee of $500,000 (the “Break-Up Fee”) regardless of the source of such Break-Up Fee, and

FSDG and BCC expressly waive, release, relinquish and disclaim any liens, claims or interests of any

kind in or to the Break-Up Fee.

23. Reservation of Rights of Tranche B Lender and CDB Lender. Under the circumstances

and given that the above-described adequate protection is consistent with the Bankruptcy Code, the

Court finds that the adequate protection provided herein is reasonable and sufficient to protect the

interests of the Tranche B Lender, CDB Lender, FSDG and BCC.

24. Perfection of DIP Liens and Adequate Protection Liens.


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(a) Lender is hereby authorized, but not required, to file or record (and to execute in

the name of the Credit Parties, as their true and lawful attorneys, with full power of substitution, to the

maximum extent permitted by law) financing statements, trademark filings, copyright filings,

mortgages, notices of lien or similar instruments in any jurisdiction, or take possession of or control over

cash or securities or other property, or take any other action in order to validate and perfect the liens and

security interests granted to them hereunder. Whether or not Lender shall, in its sole discretion, choose

to file such financing statements, trademark filings, copyright filings, mortgages, notices of lien or

similar instruments, or take possession of or control over any cash or securities or other property, or

otherwise confirm perfection of the liens and security interests granted to them hereunder, such liens

and security interests shall be deemed valid, perfected, allowed, enforceable, non-avoidable and not

subject to challenge, dispute or subordination (subject to the priorities set forth in this Interim Order), at

the time and on the date of entry of this Interim Order or thereafter. Upon the request of Lender, each

of the Credit Parties, without any further consent of any party, is authorized to take, execute, deliver,

and file such instruments (in each case, without representation or warranty of any kind) to enable Lender

to further validate, perfect, preserve, and enforce the DIP Liens and the applicable Adequate Protection

Liens, respectively. All such documents will be deemed to have been recorded and filed as of the

Commencement Date.

(b) A certified copy of this Interim Order may, in the discretion of Lender be filed

with or recorded in filing or recording offices in addition to or in lieu of such financing statements,

mortgages, notices of lien or similar instruments, and all filing offices are hereby authorized to accept

such certified copy of this Interim Order for filing and/or recording, as applicable. The automatic stay

of section 362(a) of the Bankruptcy Code shall be modified to the extent necessary to permit Lender to


39

take all actions, as applicable, referenced in this subparagraph (b) and the immediately preceding

subparagraph (a).

(c) To the extent that Lender is the secured party under any account control

agreements, listed as loss payee or additional insured under any of the Credit Parties’ insurance policies

or is the secured party under any other agreement, Lender shall, subject to the terms of this Interim

Order, act in that capacity and distribute any proceeds recovered or received in respect of any of the

foregoing, first, to the payment in full of the DIP Obligations, and second, to the payment of the

Prepetition Debt.

25. Preservation of Rights Granted Under This Interim Order.

(a) Other than (i) the Carve-Out and (ii) other claims and liens expressly granted by

this Interim Order, no claim or lien having a priority superior to or pari passu with those granted by this

Interim Order to Lender shall be permitted while any of the DIP Obligations or the Adequate Protection

Obligations remain outstanding, and, except as otherwise expressly provided in paragraphs 12, 17, or 19

of this Interim Order, the DIP Liens and the Adequate Protection Liens shall not be: (A) subject or junior

to any lien or security interest that is avoided and preserved for the benefit of the Credit Parties’ estates

under section 551 of the Bankruptcy Code; (B) subordinated to or made pari passu with any other lien

or security interest, whether under section 364(d) of the Bankruptcy Code or otherwise; (C) subordinated

to or made pari passu with any liens arising after the Commencement Date including, without limitation,

any liens or security interests granted in favor of any federal, state, municipal or other domestic or

foreign governmental unit (including any regulatory body), commission, board or court for any liability

of the Credit Parties; or (D) subject or junior to any intercompany or affiliate liens or security interests

of the Credit Parties.


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(b) The occurrence of (i) any Event of Default (as defined in the DIP Credit

Agreement) or (ii) any violation of any of the terms of this Interim Order, shall, after notice by Lender

in writing to the Borrowers, constitute an event of default under this Interim Order (each an “Event of

Default”) and, subject to the Term Remedies Notice Period, as applicable, terminate the right of the

Credit Parties to use Cash Collateral pursuant to this Interim Order and upon any such Event of Default,

interest, including, where applicable, default interest, shall accrue and be paid as set forth in the DIP

Credit Agreement. Notwithstanding any order that may be entered dismissing any of the Chapter 11

Cases under section 1112 of the Bankruptcy Code: (A) the DIP Superpriority Claims, the Adequate

Protection 507(b) Claims, the DIP Liens, and the Adequate Protection Liens, and any claims related to

the foregoing, shall continue in full force and effect and shall maintain their priorities as provided in this

Interim Order until all DIP Obligations and Adequate Protection shall have been paid in full (and that

such DIP Superpriority Claims, Adequate Protection 507(b) Claims, DIP Liens and Adequate Protection

Liens shall, notwithstanding such dismissal, remain binding on all parties in interest); (B) the other rights

granted by this Interim Order shall not be affected; and (C) this Court shall retain jurisdiction,

notwithstanding such dismissal, for the purposes of enforcing the claims, liens and security interests

referred to in this paragraph and otherwise in this Interim Order.

(c) If any or all of the provisions of this Interim Order are hereafter reversed, modified,

vacated or stayed, such reversal, modification, vacation or stay shall not affect: (i) the validity, priority

or enforceability of any DIP Obligations or Adequate Protection Obligations incurred prior to the actual

receipt of written notice by Lender of the effective date of such reversal, modification, vacation or stay;

or (ii) the validity, priority or enforceability of the DIP Liens, the Adequate Protection Liens, the

Prepetition Liens or the Prepetition Debt. Notwithstanding any such reversal, modification, vacation

or stay of any use of Cash Collateral or Collateral, any DIP Obligations, DIP Liens, Adequate


41

Protection Obligations or Adequate Protection Liens incurred by the Credit Parties to Lender, prior to

the actual receipt of written notice by Lender of the effective date of such reversal, modification,

vacation, or stay shall be governed in all respects by the original provisions of this Interim Order, and

Lender shall be entitled to all the rights, remedies, privileges and benefits granted in section 364(e) of

the Bankruptcy Code, this Interim Order and the DIP Documents with respect to all uses of Cash

Collateral, the DIP Obligations, and Adequate Protection.

(d) Except as expressly provided in this Interim Order or in the DIP Documents, the

DIP Liens, the DIP Superpriority Claims, the Adequate Protection Liens, the Prepetition Liens, the

Prepetition Debt, and the Adequate Protection and all other rights and remedies of Lender, Tranche B

Lender, CDB Lender, and the Prepetition Secured Parties granted by the provisions of this Interim

Order and the DIP Documents shall survive, and shall not be modified, impaired or discharged by: (i)

the entry of an order converting any of the Chapter 11 Cases to a case under chapter 7, dismissing any

of the Chapter 11 Cases, substantively consolidating any of the cases with another case, terminating

the joint administration of these Chapter 11 Cases or by any other act or omission; (ii) the entry of an

order approving the sale of any DIP Collateral pursuant to section 363(b) of the Bankruptcy Code

(except to the extent permitted by the DIP Documents); or (iii) the entry of an order confirming a

chapter 11 plan in any of the Chapter 11 Cases and, pursuant to section 1141(d)(4) of the Bankruptcy

Code, the Credit Parties have waived any discharge as to any remaining DIP Obligations or Adequate

Protection Obligations and with respect to the Prepetition Debt. The Borrowers and DIP Guarantors

shall not propose or support any plan of reorganization or sale of all or substantially all of the

Borrowers’ and DIP Guarantors’ assets, or order confirming such plan or approving such sale, that is

not conditioned upon the indefeasible payment in full, no later than the effective date of such plan or

sale, of (A) all claims of the Lender, (B) all claims of Tranche B Lender and CDB Lender on account


42

of the Prepetition Debt, and (C) all Adequate Protection Claims of Tranche B Lender and CDB Lender,

in each case in cash or such other consideration acceptable to Lender, Tranche B Lender, or CDB

Lender, regardless of whether the DIP Debt becomes undersecured at any point during the Chapter 11

Cases and regardless of the value of the Prepetition Collateral and the value of the gross accounts

receivable and gross inventory. The terms and provisions of this Interim Order and the DIP Documents

shall continue in these Chapter 11 Cases, in any successor cases if these Chapter 11 Cases cease to be

jointly administered and in any superseding chapter 7 cases under the Bankruptcy Code, and the DIP

Liens, the DIP Superpriority Claims, the Adequate Protection Liens, the Prepetition Debt, the

Prepetition Liens and the Adequate Protection Claims and all other rights and remedies of Lender

granted by the provisions of this Interim Order and the DIP Documents shall continue in full force and

effect until the DIP Obligations are paid in full, as set forth herein and in the DIP Documents, and the

DIP Commitments have been terminated.

26. Limitation on Use of DIP Financing Proceeds and Collateral. Notwithstanding any other

provision of this Interim Order or any other order entered by the Court, no loans under the DIP Facility,

DIP Collateral, Prepetition Collateral, or any portion of the Carve-Out, may be used directly or

indirectly by any Debtor, any Committee (as defined below), or any trustee appointed in the Chapter

11 Cases or any successor case, including any chapter 7 case, or any other person, party or entity (i) in

connection with the investigation, initiation or prosecution of any claims, causes of action, adversary

proceedings or other litigation (a) against Lender, Tranche B Lender, CDB Lender, or the Prepetition

Secured Parties, or their respective predecessors-in-interest, agents, affiliates, representatives,

attorneys, or advisors, or any action purporting to do the foregoing in respect of the Prepetition Debt,

liens on the Prepetition Collateral, DIP Obligations, DIP Liens, DIP Superpriority Claims, and/or the

adequate protection, adequate protection liens and superpriority claims granted under the Interim Order


43

or the Final Order, as applicable, or (b) challenging the amount, validity, perfection, priority, or

enforceability of or asserting any defense, counterclaim, or offset with respect to, the Prepetition Debt,

the DIP Obligations, and/or the liens, claims, rights, or security interests granted under this Interim

Order, the Final Order, the DIP Documents, or the Prepetition Credit Documents including, in each

case, without limitation, for lender liability or pursuant to section 105, 510, 544, 547, 548, 549, 550, or

552 of the Bankruptcy Code, applicable non-bankruptcy law or otherwise; (ii) to prevent, hinder, or

otherwise delay the Prepetition Secured Parties’, Lender’s, Tranche B Lender’s, or CDB Lender’s as

applicable, enforcement or realization on the Prepetition Debt, Prepetition Collateral, DIP Obligations,

DIP Collateral, and the liens, claims and rights granted to such parties under the Interim Order or the

Final Order, as applicable, each in accordance with the DIP Documents, the Prepetition Credit

Documents or this Interim Order; (iii) to seek to modify any of the rights and remedies granted to the

Prepetition Secured Parties, Tranche B Lender, CDB Lender, and/or Lender under this Interim Order,

the Prepetition Credit Documents, or the DIP Documents, as applicable; (iv) to apply to the Court for

authority to approve superpriority claims or grant liens (other than the liens permitted pursuant to the

DIP Documents) or security interests in the DIP Collateral or any portion thereof that are senior to, or

on parity with, the DIP Liens, DIP Superpriority Claims, adequate protection liens and superpriority

claims, and liens granted to the Prepetition Secured Parties, Tranche B Lender, and CDB Lender, unless

all DIP Obligations, Prepetition Debt, Adequate Protection, and claims granted to Lender, Tranche B

Lender, CDB Lender, or Prepetition Secured Parties under this Interim Order, have been refinanced or

paid in full or otherwise agreed to in writing by Lender; or (v) to seek to pay any amount on account

of any claims arising prior to the Commencement Date unless such payments are agreed to in writing

by Lender, in or are otherwise included in the “Approved Cash Flow Forecast” (as initially attached to

the Motion, and as updated in accordance with the terms of the DIP Documents).


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27. Real Property Leases. As a requirement and precondition to Lender’s willingness to lend

and in furtherance of the DIP Superpriority Claims provided for in this Interim Order and pursuant to

the DIP Documents, which are payable from and have recourse to all of the Debtors’ pre- and post-

petition property including, among other things, each lease of Leasehold Property (as defined in the DIP

Credit Agreement) to which a Debtor is a counterparty (each, a “Real Property Lease”), Lender shall

have the following protections with respect to the Debtors’ Real Property Leases, regardless of whether

any particular Real Property Lease or group of Real Property Leases constitutes Collateral, which

protections shall be enforced by Lender as authorized, approved, and granted pursuant to the provisions

of this Interim Order and in accordance with the terms of the DIP Credit Agreement (and, after the

indefeasible Payment in Full of the DIP Obligations, the automatic stay provisions pursuant to section

362 of the Bankruptcy Code are vacated and modified to the extent necessary so as to permit Lender to

exercise any of their rights with respect to Real Property Leases under this paragraph 27):

(a) Remedies Upon an Event of Default. If an Event of Default shall have occurred

and be continuing, Lender shall, with respect to any Real Property Lease or group of Real Property

Leases, be permitted, and are hereby authorized, approved, and granted the following rights and

remedies:

(i) to exercise the Debtors’ rights pursuant to section 365(f) of the Bankruptcy Code with respect to any such Real Property Lease(s) and, subject to this Court’s approval after notice and hearing, assign any such Real Property Lease(s) in accordance with section 365 of the Bankruptcy Code notwithstanding any language to the contrary in any of the applicable lease documents or executory contracts;

(ii) to require any Debtor to complete promptly, pursuant to section 363 of the Bankruptcy Code, subject to the rights of Lender to credit bid (unless otherwise ordered by the Court), an Asset Sale9 of any such Real Property Lease(s) in one

9 “Asset Sale” shall mean (a) the sale, lease, transfer, assignment, conveyance or other disposition (including any sale and lease back transaction) of any assets or rights by a Borrower or any of its Subsidiaries (as defined in the


45

or more parcels at public or private sales, at Lender’s offices or elsewhere, for cash, at such time or times and at such price or prices and upon such other terms as Lender may deem commercially reasonable;

(iii) to access the leasehold interests of the Debtors or debtors in possession in any such Real Property Lease(s) for the purpose of (A) marketing such property or properties for sale and (B) removing any Collateral thereon or arranging for the Asset Sale of any such Collateral except to the extent prohibited by the terms of the Real Property Lease (unless the applicable provision is rendered ineffective by applicable non-bankruptcy law or the Bankruptcy Code); provided that the foregoing shall not preclude any counterparty to a Real Property Lease (each, a “Counterparty”) from an opportunity to be heard in this Court on notice with respect to the foregoing;

(iv) (A) to find an acceptable (in Lender’s good faith and reasonable discretion) replacement lessee, which may include Lender or any of its affiliates, to whom such Real Property Lease(s) may be assigned, (B) to hold, and manage all aspects of, an auction or other bidding process to find such acceptable replacement lessee, (C) in connection with any such auction, agree, on behalf of the Debtors, to reimburse reasonable fees and expenses of any stalking horse bidder, if necessary, and/or (D) to notify the Debtors of the selection of any replacement lessee pursuant to this paragraph 27, upon receipt of which the Debtors shall promptly (1) file a motion seeking, on an expedited basis, approval of the Debtors’ assumption and assignment of such Real Property Lease(s) to such proposed assignee, and (2) cure any defaults, if any, that have occurred and are continuing under such Real Property Lease(s) to the extent required by the Court (subject to Lender’s right to cure defaults as set forth in paragraph 27(e) of this Interim Order); or

(v) to direct the Debtors to (A) assign any such Real Property Lease(s) to Lender as Collateral securing the DIP Obligations, subject to clause (B), if applicable, (B) seek this Court’s approval of the assumption of any such Real Property Lease(s) to the extent that this Court determines pursuant to a final order that an assumption is required in order to assign such lease or leases as Collateral, and (C) promptly cure any default that has occurred and is continuing under such Real Property Lease(s) to the extent required by the Court; provided that any assignment of any such Real Property Lease(s) as Collateral securing the applicable DIP Obligations shall not impair the Debtors’ ability to subsequently assume (if not already assumed) and assign such Real Property Lease(s) pursuant

DIP Credit Agreement); or (b) the issuance or sale of equity interests by any Subsidiary or the sale by a Borrower or any of its Subsidiaries of equity interests in any Subsidiary.


46

to section 365 of the Bankruptcy Code or to enjoy the protections of section 365(f) of the Bankruptcy Code with respect to any such assignment.

(b) Right to Credit Bid. Prior to any assignment of any Real Property Lease or group

of Real Property Leases, the Debtors shall first provide at least five (5) business days’ prior written

notice (the “Initial Notice Period”) to Lender, unless such notice provision is waived by Lender, which

Initial Notice Period may be extended up to a further twenty-five (25) days by Lender in its sole

discretion by delivering written notice of such extension to the Debtors prior to expiration of the Initial

Notice Period, and by any further period as is mutually agreeable between Lender and the Debtors (such

notice period being the “Aggregate Notice Period”). During such notice period, Lender shall be

permitted, subject to the terms of the DIP Documents and unless otherwise ordered by the Court, to

credit bid forgiveness of some or all of the outstanding DIP Obligations (in an amount equal to at least

the consideration offered by any other party in respect of such assignment) outstanding under the DIP

Facilities as consideration in exchange for any such Real Property Lease(s); provided that to the extent

the Debtors are entitled to retain a portion of the total consideration paid in respect of such assignment

in accordance with the DIP Credit Agreement, the applicable portion of the consideration to be retained

by Company shall be paid in cash (provided that such proceeds shall constitute DIP Collateral and Cash

Collateral). In addition, in connection with the exercise of any of Lender’s rights pursuant to the DIP

Credit Agreement or this Interim Order to direct or compel a sale or other Asset Sale of any Real Property

Lease(s), Lender shall be permitted to credit bid forgiveness of some or all of the outstanding DIP

Obligations (in an amount equal to at least the consideration offered by any other party in respect of

such sale or other Asset Sale) as consideration in exchange for such Real Property Lease(s). Pursuant

to section 364(e) of the Bankruptcy Code, absent a stay pending appeal, Lender’s right to credit bid shall

not be affected by the reversal or modification on appeal of the Debtors’ authorization pursuant to this

Interim Order to obtain credit and incur debt as and in accordance with the terms set forth herein.


47

(c) Right of First Refusal with Respect to Proposed Assignments and Rejections of

Real Property Leases. Unless all DIP Obligations shall have indefeasibly been satisfied pursuant to the

DIP Credit Agreement, the Debtors shall not seek, and it shall constitute, an Event of Default and

terminate the right of the Debtors under the DIP Credit Agreement and this Interim Order if any of the

Debtors seeks, the sale or other Asset Sale of, or the rejection or other termination of, or if there is

entered an order pursuant to section 365 of the Bankruptcy Code assigning or rejecting, any Real

Property Lease or group of Real Property Leases, or if any Real Property Lease or group of Real Property

Leases is deemed rejected due to the expiration of the assumption period provided for in section

365(d)(4) (the “Statutory Rejection Date”), without the Debtors’ first providing thirty (30) days’ prior

written notice to Lender, or if such notice is given more than thirty (30) days in advance of the Statutory

Rejection Date, prior written notice at least equal to the Aggregate Notice Period; provided, however,

that the right of first refusal of Lender as set forth in this paragraph 27(c) shall not apply to (x) any

assignment or sale of a Real Property Lease or group of Real Property Leases to a winning bidder at an

auction authorized by this Court, and (y) so long as no Event of Default has occurred and is ongoing, or

to the extent such action would result in an Event of Default, any assignment or sale of a Real Property

Lease or group of Real Property Leases that are not material leases generating cash proceeds (net of

reasonable costs, expenses, and any applicable taxes) up to $25,000 in the aggregate value for all such

sales or assignments. During such notice period, Lender shall be permitted to:

(i) (A) notify the Debtors that it elects to take action pursuant to this paragraph, upon receipt of which the Debtors shall promptly withdraw any previously filed rejection motion, (B) find an acceptable (in Lender’s good faith and reasonable discretion) replacement lessee, which may include Lender or any of its affiliates, to whom any such any Real Property Lease or group of Real Property Leases may be assigned (subject to Court approval), (C) hold, and manage all aspects of, an auction or other bidding process to find such acceptable replacement lessee, (D) in connection with any such auction, agree, on behalf of the Debtors (and subject to Court approval) to reimburse the reasonable fees and expenses of any stalking horse bidder, if necessary, and (E) notify the Debtors of the selection of any


48

replacement lessee pursuant to this paragraph, upon receipt of which the Debtors shall (1) not seek to reject any such Real Property Lease(s), (2) promptly withdraw any pending motion to reject any such Real Property Lease(s), (3) promptly file a motion seeking, on an expedited basis, approval of the Debtors’ assumption and assignment of such Real Property Lease(s) to Lender’s proposed assignee, and (4) promptly cure any defaults that have occurred and are continuing under such Real Property Lease(s) to the extent authorized by the Court; or

(ii) direct the Debtors to (A) assign any Real Property Lease or group of Real Property Leases as Collateral securing the DIP Obligations (subject to Court approval), (B) seek the Court’s approval of the assumption of any such Real Property Lease(s) if it is determined pursuant to a final order of this Court that an assumption is required in order to assign such lease(s) as Collateral, and (C) promptly cure any defaults that have occurred and are continuing under such Real Property Lease(s) (subject to Lender’s right to cure defaults as set forth in paragraph 27(e) of this Interim Order) to the extent authorized by the Court; provided that any assignment of any Real Property Lease(s) as Collateral securing the DIP Obligations shall not impair the Debtors’ ability to subsequently assume (if not already assumed) and assign any such Real Property Lease(s) pursuant to section 365 of the Bankruptcy Code or to enjoy the protections of section 365(f) of the Bankruptcy Code with respect to any such assignment.

(iii) Notwithstanding anything to the contrary herein, the foregoing rights of Lender set forth in this paragraph shall not apply to Real Property Leases that are rejected, terminated, sold, or assigned on the effective date of any plan of reorganization in any of the Chapter 11 Cases that, among other things, indefeasibly repays the DIP Obligations in full on the effective date thereof. For the avoidance of doubt, on or prior to the thirtieth (30) day prior to the Statutory Rejection Date (as provided in section 365(d)(4) of the Bankruptcy Code), the Debtors shall have delivered written notice to Lender of each outstanding Real Property Lease that they intend to reject (including, without limitation, through statutory rejection on the Statutory Rejection Date) from and after the date of such notice (or, if applicable, notice that the Debtors have obtained the applicable landlord’s consent to extension of the Statutory Rejection Date); provided that if the Debtors fail to deliver any such notice to Lender prior to such date with respect to any such Real Property Lease(s) (or a notice indicating that no such Real Property Lease(s) shall be rejected), the Debtors shall be deemed, for all purposes hereunder, to have delivered notice to Lender as of such date that they intend to reject all outstanding Real Property Leases.

(d) Assumption Orders. Any order of this Court approving the assumption of any

Real Property Lease shall specifically provide that the applicable Debtor shall be authorized to assign

such Real Property Lease pursuant to, and to enjoy the protections of, section 365(f) of the Bankruptcy


49

Code subsequent to the date of such assumption. To the extent that such provision is for any reason not

included in any order of the Court approving the assumption of any Real Property Lease, then such Real

Property Lease may not be assumed by the applicable Debtor unless the order approving the assumption

provides for the assignment of such Real Property Lease, on the date of such order, to an acceptable (in

Lender’s good faith and reasonable discretion) replacement lessee (which may include Lender or its

respective affiliates).

(e) Lender’s Right to Cure Defaults. If any of the Debtors are required to cure any

monetary defaults under any Real Property Lease pursuant to any order of this Court or otherwise in

connection with any assumption or assumption and assignment of any such Real Property Lease pursuant

to section 365(f) of the Bankruptcy Code, and such monetary default is not, within five (5) business days

of the receipt by such Debtor of notice from Lender pursuant to the applicable provision(s) of the DIP

Credit Agreement or any other notice from Lender requesting the cure of such monetary default, cured

in accordance with the provisions of such applicable court order as arranged by Lender, Lender may

cure any such monetary defaults on behalf of the applicable Debtor(s).

28. Approved Cash Flow Forecast. The Approved Cash Flow Forecast is approved on an

interim basis. Proceeds of the DIP Facility and Cash Collateral under this Interim Order shall be used

by the Credit Parties in accordance with the DIP Credit Agreement and this Interim Order and consistent

with the Approved Cash Flow Forecast or as otherwise agreed by Lender (subject to permitted

variances). Lender’s consent to, or acknowledgment of, the Approved Cash Flow Forecast shall be

construed as consent to use of the proceeds of the DIP Facilities or Cash Collateral beyond the maturity

date set forth in the DIP Credit Agreement, regardless of whether the aggregate funds shown on the

Approved Cash Flow Forecast have been expended.


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29. Payment of Fees and Expenses. The Credit Parties are authorized to pay the DIP Fees and

Expenses, as provided in the DIP Documents. Subject to the review procedures set forth in this

paragraph 29, payment of all DIP Fees and Expenses and Adequate Protection Fees and Expenses shall

not be subject to allowance or review by the Court. Professionals for Lender shall not be required to

comply with the U.S. Trustee fee guidelines. Notwithstanding the foregoing, the Debtors are authorized

and directed to pay on the Closing Date the DIP Fees and Expenses and Adequate Protection Fees and

Expenses incurred on or prior to such date without the need for any professional engaged by Lender to

first deliver a copy of its invoice or other supporting documentation to the Review Parties (other than

the Debtors). No attorney or advisor to Lender shall be required to file an application seeking

compensation for services or reimbursement of expenses with the Court. Any and all fees, costs, and

expenses paid prior to the Commencement Date by any of the Debtors to the Lender in connection with

or with respect to (i) the DIP Facility; and (ii) these matters, are hereby approved in full and shall not be

subject to recharacterization, avoidance, subordination, disgorgement or any similar form of recovery

by the Debtors or any other person.

30. Limits to Lender Liability. Nothing in this Interim Order, the DIP Documents, or any

other documents related to these transactions shall in any way be construed or interpreted to impose or

allow the imposition upon Lender of any liability for any claims arising from the prepetition or

postpetition activities of the Debtors in the operation of their business, or in connection with their

restructuring efforts. So long as Lender complies with its obligations under the DIP Documents and

their obligations, if any, under applicable law (including the Bankruptcy Code), (a) Lender shall not, in

any way or manner, be liable or responsible for (i) the safekeeping of the DIP Collateral, (ii) any loss or

damage thereto occurring or arising in any manner or fashion from any cause, (iii) any diminution in the

value thereof, or (iv) any act or default of any carrier, servicer, bailee, custodian, forwarding agency or


51

other person and (b) all risk of loss, damage or destruction of the Collateral shall be borne by the Credit

Parties.

31. Effect of Stipulations on Third Parties. The Debtors’ stipulations, admissions, agreements

and releases contained in this Interim Order, including, without limitation, in paragraph 7 of this Interim

Order, shall be binding upon the Debtors and any successor thereto (including, without limitation, any

chapter 7 or chapter 11 trustee or examiner appointed or elected for any of the Debtors) in all

circumstances and for all purposes. The Debtors’ stipulations, admissions, agreements and releases

contained in this Interim Order, including, without limitation, in paragraph 7 of this Interim Order, shall

be binding upon all other parties in interest, including, without limitation, any statutory or non-statutory

committees appointed or formed in the Chapter 11 Cases, if any (a “Committee”), and any other person

or entity acting or seeking to act on behalf of the Debtors’ estates, in all circumstances and for all

purposes unless: (a) such Committee, or any other person or entity acting or seeking to act on behalf of

the Debtors’ estates, in each case with requisite standing (subject in all respects to any agreement or

applicable law that may limit or affect such entity’s right or ability to do so), has timely filed an adversary

proceeding or contested matter (subject to the limitations contained herein, including, inter alia, in this

paragraph) by (i) (x) the Creditors’ Committee (if appointed) within twenty (20) calendar days after the

appointment of any Creditors’ Committee and (y) if no Creditors’ Committee has been appointed, by

any party in interest with requisite standing within five (5) calendar days after entry of the Final Order

(the time period established by the foregoing clauses (i) and (ii), the “Challenge Period”), (A) objecting

to or challenging the amount, validity, perfection, enforceability, priority or extent of the Prepetition

Debt or the Prepetition Liens, or (B) otherwise asserting or prosecuting any action for preferences,

fraudulent transfers or conveyances, other avoidance power claims or any other claims, counterclaims

or causes of action, objections, contests, or defenses (collectively, the “Challenges”) against any of the


52

Tranche B Lender or CDB Lender or their respective affiliates and subsidiaries and each of their

respective former, current or future officers, partners, directors, managers, members, principals,

employees, agents, related funds, investors, financing sources, financial advisors, attorneys, accountants,

investment bankers, consultants, representatives and other professionals and the respective successors

and assigns thereof, in each case in their respective capacity as such (each a “Representative” and,

collectively, the “Representatives”) in connection with matters related to the Prepetition Credit

Documents, the Prepetition Debt, the Prepetition Liens, and the Prepetition Collateral; and (b) there is a

final non-appealable order in favor of the plaintiff sustaining any such Challenge in any such timely

filed adversary proceeding or contested matter; provided, however, that any pleadings filed in connection

with any Challenge shall set forth with specificity the basis for such challenge or claim and any

challenges or claims not so specified prior to the expiration of the Challenge Period shall be deemed

forever, waived, released and barred. If no such Challenge is timely and properly filed during the

Challenge Period or the Court does not rule in favor of the plaintiff in any such proceeding then: (a) the

Debtors’ stipulations, admissions, agreements and releases contained in this Interim Order, including,

without limitation, those contained in paragraph 7 of this Interim Order, shall be binding on all parties

in interest; (b) the obligations of the Credit Parties under the Prepetition Credit Documents, including

the Prepetition Debt, shall constitute allowed claims not subject to defense, claim, counterclaim,

recharacterization, subordination, offset or avoidance, for all purposes in the Chapter 11 Cases, and any

subsequent chapter 7 case(s); (c) the Prepetition Liens on the Prepetition Collateral shall be deemed to

have been, as of the Commencement Date, legal, valid, binding, perfected, security interests, and liens,

not subject to recharacterization, subordination, avoidance or other defense; and (d) the Prepetition Debt

and the Prepetition Liens on the Prepetition Collateral shall not be subject to any other or further claim

or challenge by any Committee, or any other party in interest acting or seeking to act on behalf of the


53

Debtors’ estates, including, without limitation, any successor thereto (including, without limitation, any

chapter 7 trustee or chapter 11 trustee or examiner appointed or elected for any of the Debtors) and any

defenses, claims, causes of action, counterclaims, and offsets by any Committee, if any, or any other

party acting or seeking to act on behalf of the Debtors’ estates, including, without limitation, any

successor thereto (including, without limitation, any chapter 7 trustee or chapter 11 trustee or examiner

appointed or elected for any of the Debtors), whether arising under the Bankruptcy Code or otherwise,

against any of the Tranche B Lender or CDB Lender and their Representatives arising out of or relating

to any of the Prepetition Credit Documents shall be deemed forever waived, released and barred. If any

such Challenge is timely filed during the Challenge Period, the stipulations, admissions, agreements and

releases contained in this Interim Order, including, without limitation, those contained in paragraph 7 of

this Interim Order, shall nonetheless remain binding and preclusive (as provided in the second sentence

of this paragraph) on any Committee, if any, and on any other person or entity, except to the extent that

such stipulations, admissions, agreements and releases were expressly and successfully challenged in

such Challenge as set forth in a final, non-appealable order of a court of competent jurisdiction. Nothing

in this Interim Order vests or confers on any Person (as defined in the Bankruptcy Code), including any

Committee, standing or authority to pursue any claim or cause of action belonging to the Debtors or

their estates, including, without limitation, Challenges with respect to the Prepetition Credit Documents,

the Prepetition Debt or the Prepetition Liens. Any motion seeking standing shall attach a draft complaint

or other pleading that sets forth such Challenge, and any Challenge not included therein shall be deemed

forever waived, released, and barred. For the avoidance of doubt, none of the foregoing challenge

provisions set forth in this paragraph shall apply to Lender, in its capacity as a secured party under the

DIP Credit Agreement, and in no event shall the DIP Facility, DIP Obligations, or DIP Liens be subject

to challenge pursuant to this paragraph on avoidance or any other grounds by any party.


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32. Postpetition Release. In addition, subject to the entry of the Final Order, notwithstanding

anything to the contrary set forth herein, upon the repayment of all DIP Obligations owed to Lender by

the Debtors and termination of the rights and obligations arising under the DIP Documents (which

payment and termination shall be on terms and conditions acceptable to Lender), Lender shall be

released from any and all obligations, liabilities, actions, duties, responsibilities, and causes of action

arising or occurring, on or prior to the date of such repayment and termination, in connection with or

related to the DIP Documents, or the Interim Order (including without limitation any obligation or

responsibility (whether direct or indirect, absolute or contingent, due or not due, primary or secondary,

liquidated or unliquidated) to pay or otherwise fund the Carve-Out on terms and conditions acceptable

to Lender).

33. Landlord Agreements; Access.

(a) Subject to the entry of the Final Order, any title, landlord’s lien, right of distraint

or levy, security interest or other interest that any landlord or mortgagee may have in any DIP Collateral

or Prepetition Collateral of the Debtors located on such leased premises, to the extent the same is not

avoidable under sections 544, 545, 547, 548, 549, 550, or 552 of the Bankruptcy Code, applicable non-

bankruptcy law or otherwise, is hereby expressly subordinated to the liens of Lender.

(b) Without limiting any other rights or remedies of Lender set forth in this Interim

Order, the DIP Documents, or otherwise available at law or in equity, and subject to the terms of the

DIP Documents, upon three (3) business days’ written notice to counsel to the Debtors and any landlord,

lienholder, licensor, or other third party owner of any leased or licensed premises or intellectual property,

after the expiration of the Remedies Notice Period, that an Event of Default has occurred and is

continuing, Lender (i) may, unless otherwise expressly provided in any separate agreement by and

between the applicable landlord or licensor and Lender, enter upon any leased or licensed premises of


55

the Debtors for the purpose of exercising any remedy with respect to DIP Collateral located thereon, and

(ii) shall be entitled to all of the Debtors’ rights and privileges as lessee or licensee under the applicable

license and to use any and all trademarks, trade names, copyrights, licenses, patents, or any other similar

assets of the Debtors, which are owned by or subject to a lien of any third party and which are used by

Debtors in their businesses, without unreasonable interference from landlords, lienholders, or licensors

thereunder; provided, however, that Lender shall pay only rent and additional rent, fees, royalties, or

other monetary obligations of the Debtors that first arise after the written notice referenced above from

Lender and that accrue during the period of such occupancy or use by Lender calculated on a per diem

basis. For the avoidance of doubt, (A) all of the Debtors’ obligations under any applicable lease or

license shall not be affected, limited, or otherwise modified by the rights granted to Lender pursuant to

this paragraph and (B) any affected landlords, lienholders, and/or licensors shall retain all remedies

available under applicable non-bankruptcy law. Nothing herein shall require the Debtors or Lender to

assume any lease or license under Bankruptcy Code section 365(a) as a precondition to the rights

afforded to Lender herein.

34. Interim Order Governs. In the event of any inconsistency between the provisions of this

Interim Order, the DIP Documents or any other order entered by this Court (other than the Final Order),

the provisions of this Interim Order shall govern. Notwithstanding anything to the contrary in any other

order entered by this Court, any payment made pursuant to, or authorization contained in, any other

order entered by this Court shall be consistent with and subject to the requirements set forth in this

Interim Order and the DIP Documents, including, without limitation, the Approved Cash Flow Forecast

(subject to permitted variances).

35. Binding Effect; Successors and Assigns. Subject only to paragraph 31, the DIP

Documents and the provisions of this Interim Order, including all findings herein, shall be binding upon


56

all parties in interest in these Chapter 11 Cases, including, without limitation, Lender, the Prepetition

Secured Parties, Tranche B Lender, CDB Lender, any Committee, and the Debtors and their respective

successors and assigns (including any chapter 7 or chapter 11 trustee hereinafter appointed or elected

for the estate of any of the Debtors, an examiner appointed pursuant to section 1104 of the Bankruptcy

Code, or any other fiduciary appointed as a legal representative of any of the Debtors or with respect to

the property of the estate of any of the Debtors) and shall inure to the benefit of Lender, the Prepetition

Secured Parties, Tranche B Lender, CDB Lender, and the Debtors and their respective successors and

assigns; provided, that Lender, Tranche B Lender, CDB Lender, and the Prepetition Secured Parties

shall have no obligation to permit the use of the Prepetition Collateral (including Cash Collateral) by, or

to extend any financing to, any chapter 7 trustee, chapter 11 trustee or similar responsible person

appointed for the estates of the Debtors.

36. Exculpation. Nothing in this Interim Order, the DIP Documents, the existing agreements

or any other documents related to the transactions contemplated hereby shall in any way be construed

or interpreted to impose or allow the imposition upon Lender of any liability for any claims arising from

the prepetition or postpetition activities of the Credit Parties in the operation of their businesses, or in

connection with their restructuring efforts.

37. Limitation of Liability. In determining to make any loan or other extension of credit under

the DIP Credit Agreement, to permit the use of Cash Collateral or in exercising any rights or remedies

as and when permitted pursuant to this Interim Order or the DIP Documents, Lender shall not (a) be

deemed to be in “control” of the operations or participating in the management of the Debtors; (b) owe

any fiduciary duty to the Debtors, their respective creditors, shareholders or estates; or (c) be deemed to

be acting as a “Responsible Person” or “Owner” or “Operator” with respect to the operation or

management of the Debtors (as such terms or similar terms are used in the United States Comprehensive


57

Environmental Response, Compensation and Liability Act, 42 U.S.C. §§ 9601, et seq., as amended, or

any similar federal or state statute).

38. Proof of Claim. Tranche B Lender and CDB Lender shall not be required to file proofs of

claim in the Chapter 11 Cases or any successor case in order to assert claims on behalf of itself for

payment of the applicable Prepetition Debt arising under the applicable Prepetition Credit Documents.

The statements of claim in respect of the Prepetition Debt set forth in this Interim Order, together with

any evidence accompanying the Motion and presented at the Interim Hearing, are deemed sufficient to

and do constitute proofs of claim in respect of such debt and such secured status.

39. Effectiveness. This Interim Order shall constitute findings of fact and conclusions of law10

and shall take effect and be fully enforceable nunc pro tunc to the Commencement Date immediately

upon entry hereof. Notwithstanding Bankruptcy Rules 4001(a)(3), 6004(h), 6006(d), 7062, or 9014 of

the Bankruptcy Rules, or any Local Bankruptcy Rule, or Rule 62(a) of the Federal Rules of Civil

Procedure, this Interim Order shall be immediately effective and enforceable upon its entry and there

shall be no stay of execution or effectiveness of this Interim Order.

40. Modification of DIP Documents and Approved Cash Flow Forecast. The Credit Parties

are hereby authorized, without further order of this Court, to enter into agreements with Lender

providing for any consensual non-material modifications to the Approved Cash Flow Forecast or the

DIP Documents, or of any other modifications to the DIP Documents necessary to conform the terms of

the DIP Documents to this Interim Order, in each case consistent with the amendment provisions of the

DIP Documents.

10 Findings of fact shall be construed as conclusions of law, and conclusions of law shall be construed as findings of fact,

pursuant to Bankruptcy Rule 7052.


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41. Headings. Section headings used herein are for convenience only and are not to affect the

construction of or to be taken into consideration in interpreting this Interim Order.

42. Payments Held in Trust. Except as expressly permitted in this Interim Order or the DIP

Documents, in the event that any person or entity receives any payment on account of a security interest

in DIP Collateral, receives any DIP Collateral or any proceeds of DIP Collateral or receives any other

payment with respect thereto from any other source prior to Payment in Full of all DIP Obligations under

the DIP Documents and termination of the DIP Commitments in accordance with the DIP Documents,

such person or entity shall be deemed to have received, and shall hold, any such payment or proceeds of

Collateral in trust for the benefit of Lender (as applicable based on the specific asset at issue) and shall

immediately turn over such proceeds to Lender, or as otherwise instructed by this Court, for application

in accordance with the DIP Documents and this Interim Order.

43. Credit Bidding. Unless otherwise ordered by the Court, subject to the terms of the DIP

Documents, Lender shall have the right to credit bid, in accordance with the DIP Documents, up to the

full amount of the DIP Obligations in any sale of the DIP Collateral (or any part thereof), as provided

for in section 363(k) of the Bankruptcy Code, without the need for further Court order authorizing the

same and whether any such sale is effectuated through section 363(k) or 1129(b) of the Bankruptcy

Code, by a chapter 7 trustee under section 725 of the Bankruptcy Code, or otherwise. The foregoing

provision shall not apply if the Court does not require an auction process with respect to the proposed

sale of assets to CED BTM Development Solar, LLC.

44. Certain Governmental Matters

(a) Notwithstanding anything to the contrary in this Interim Order or DIP Documents,

nothing in this Interim Order or the DIP Documents shall relieve the Debtors of any obligations under

federal, state or local police or regulatory laws or under 28 U.S.C. § 959(b), provided that nothing herein


59

shall limit or impair the Debtors’ rights to assert defenses under applicable law and nothing herein shall

create new defenses to obligations under police or regulatory laws or 28 U.S.C. § 959(b).

(b) Notwithstanding anything to the contrary in this Interim Order or the DIP

Documents, nothing in this Interim Order or the DIP Documents shall impair or adversely affect the

United States of America’s rights, claims and defenses of set-off and recoupment, or those of any State

or any of the foregoing’s respective agencies, departments or agents, and all such rights, claims and

defenses shall be preserved in their entirety.

(c) Paragraphs 30, 31, 32, and 37 of this Interim Order shall apply with respect to

liabilities to governmental units under environmental law only so long as the actions of Lender has not

constituted and does not constitute, within the meaning of 42 U.S.C. § 9601(20)(F), actual participation

in the management or operational affairs of a vessel or facility owned or operated by the Debtors, or

otherwise caused lender liability to arise or the status of control, responsible person, owner, or operator

to exist under applicable federal, state, or local law; provided, however, in determining to make any loan

or other extension of credit under the DIP Credit Agreement, to permit the use of Cash Collateral, in

performing under the Interim Order and the DIP Documents in the ordinary course, Lender shall not be

deemed to have participated in the management or operational affairs of a vessel or facility owned or

operated by the Debtors, or to have otherwise caused lender liability to arise or assumed the status of

control, responsible person, owner, or operator.

(d) Notwithstanding anything to the contrary in this Interim Order or the DIP

Documents, nothing in this Interim Order or the DIP Documents shall impair or adversely affect any

right under applicable law of any governmental unit with respect to any financial assurance, letter of

credit, trust, or bond or limit any governmental unit in the exercise of its police powers in accordance

with 11 U.S.C. § 362(b)(4).


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(e) Notwithstanding anything to the contrary in this Interim Order or the DIP

Documents, nothing in this Interim Order or the DIP Documents shall impair or adversely affect the

right of the United States or any State to object to any credit bid for cause.

45. [Reserved.]

46. Nothing herein shall be deemed or construed as approval by the Bankruptcy Court of the

Debtors entry into, or the terms of, any restructuring support agreement, including that certain Plan

Support Agreement entered into among the Debtors, Brevet and Senior Lenders, on July 2, 2020.

47. No Third Party Rights. Except as explicitly provided for herein, this Interim Order does

not create any rights for the benefit of any third party, creditor, equity holder or any direct, indirect or

incidental beneficiary.

48. Bankruptcy Rules. The requirements of Bankruptcy Rules 4001, 6003 and 6004, in each

case to the extent applicable, are satisfied by the contents of the Motion.

49. Necessary Action. The Debtors are authorized to take any and all such necessary actions

as are reasonable and appropriate to implement the terms of this Interim Order.

50. Retention of Jurisdiction. The Court shall retain jurisdiction to implement, interpret and

enforce the provisions of this Interim Order, and this retention of jurisdiction shall survive the

confirmation and consummation of any chapter 11 plan for any one or more of the Debtors

notwithstanding the terms or provisions of any such chapter 11 plan or any order confirming any such

chapter 11 plan.

51. Final Hearing. The Final Hearing is scheduled for [DATE], at [TIME] a.m. (prevailing

Mountain Standard Time) before this Court in [COURTROOM], United States Bankruptcy Court,

[ADDRESS]. Any objections or responses to entry of a final order granting the relief requested in the

Motion shall be filed on or before [TIME] p.m., prevailing Mountain Standard Time, on [DATE].


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52. Objections. Any party in interest objecting to the relief sought at the Final Hearing shall

file and serve written objections, which objections shall be served upon:

(a) proposed counsel to the Debtors, Wadsworth Garber Warner Conrardy, P.C. (Attn: David V. Wadsworth, Esq. ([email protected]) and Aaron J. Conrardy, Esq. ([email protected]);

(b) counsel to Lender, Steptoe & Johnson LLP, 1330 Connecticut Avenue NW, Washington, DC 20036 (Attn: Fil Agusti, Esq. ([email protected]) and Joshua Taylor, Esq. ([email protected]));

(c) the U.S. Trustee (Attn: [NAME] ([EMAIL])); and (d) any other party that has filed a request for notices with this Court,

to allow actual receipt by the foregoing no later than [DATE], at 4:00 p.m., prevailing Mountain

Standard Time.

53. The Debtors shall within two (2) business days of its entry serve copies of this Interim

Order (which shall constitute adequate notice of the Final Hearing, including, without limitation, notice

that the Debtors will seek approval at the Final Hearing of a waiver of rights under sections 506(c) and

552(b) of the Bankruptcy Code) to the parties having been given notice of the Interim Hearing, to any

party that has filed a request for notices with this Court.

54. The Debtors shall serve this order in accordance with all applicable rules and shall file a

certificate of service evidencing compliance therewith.

SO ORDERED.

BY THE COURT:


Exhibit 1


Cash Flow Forecast

Week Ended 10-Jul 17-Jul 24-Jul 31-Jul 7-Aug 14-Aug 21-Aug 28-Aug 4-Sep 11-Sep 18-Sep 25-Sep 2-OctWeek Total 0 1 2 3 4 5 6 7 8 9 10 11 12

Borrower ReceiptsBrevet DIP Draws 2,402,803$ 484,096$ 193,524$ 52,299$ 233,973$ 19,142$ 218,568$ 1,201,200$ -$ -$ -$ -$ -$ -$ CCR Sale Proceeds 944,406$ -$ -$ -$ -$ -$ 944,406$ -$ -$ -$ -$ -$ -$ -$ ConEd Sale Proceeds 9,187,707$ -$ -$ -$ -$ -$ -$ 9,187,707$ -$ -$ -$ -$ -$ -$ Expense Reimbursements -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

Total Receipts 12,534,915$ 484,096$ 193,524$ 52,299$ 233,973$ 19,142$ 1,162,974$ 10,388,907$ -$ -$ -$ -$ -$ -$

Borrower ExpensesSalary (468,123)$ -$ (149,223)$ -$ (149,223)$ -$ (169,677)$ -$ -$ -$ -$ -$ -$ -$ Payroll Taxes (32,569)$ -$ (10,292)$ -$ (10,292)$ -$ (11,986)$ -$ -$ -$ -$ -$ -$ -$ Employee Benefits (65,138)$ (1,000)$ (30,569)$ (1,000)$ (1,000)$ (1,000)$ (30,569)$ -$ -$ -$ -$ -$ -$ -$ Office Expenses (supplies, postage, etc.) (7,040)$ (1,075)$ (1,075)$ (1,075)$ (1,665)$ (1,075)$ (1,075)$ -$ -$ -$ -$ -$ -$ -$ Insurance (4,250)$ -$ (2,125)$ -$ -$ -$ (2,125)$ -$ -$ -$ -$ -$ -$ -$ Telephone & Internet (6,184)$ (2,860)$ (240)$ (224)$ (743)$ (2,117)$ -$ -$ -$ -$ -$ -$ -$ -$ Software/Subscriptions (17,622)$ (12,036)$ -$ -$ -$ (5,450)$ (136)$ -$ -$ -$ -$ -$ -$ -$ CO Office Rent (36,507)$ (9,906)$ -$ -$ (26,601)$ -$ -$ -$ -$ -$ -$ -$ -$ -$ MA Office Rent (1,900)$ (950)$ -$ -$ (950)$ -$ -$ -$ -$ -$ -$ -$ -$ -$ Customer Acquisition (50,000)$ -$ -$ (50,000)$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ CEC Trade Payables (309,262)$ -$ -$ -$ -$ -$ -$ (309,262)$ -$ -$ -$ -$ -$ -$ CEC Project Expenses (557,794)$ (6,269)$ -$ -$ (43,500)$ (9,500)$ (3,000)$ (495,525)$ -$ -$ -$ -$ -$ -$ MIPA Unwind (396,413)$ -$ -$ -$ -$ -$ -$ (396,413)$ -$ -$ -$ -$ -$ -$ Escrow (300,000)$ -$ -$ -$ -$ -$ (300,000)$ -$ -$ -$ -$ -$ -$ -$ Legal & Court Fees (551,321)$ (450,000)$ -$ -$ -$ -$ -$ (101,321)$ -$ -$ -$ -$ -$ -$ Brevet Fees (250,000)$ -$ -$ -$ -$ -$ -$ (250,000)$ -$ -$ -$ -$ -$ -$ Brevet Interest (182,460)$ -$ -$ -$ -$ -$ -$ (182,460)$ -$ -$ -$ -$ -$ -$ Brevet Principal (8,820,170)$ -$ -$ -$ -$ -$ -$ (8,820,170)$ -$ -$ -$ -$ -$ -$ Distributions (478,161)$ -$ -$ -$ -$ -$ -$ (478,161)$ -$ -$ -$ -$ -$ -$

Total Expenses (12,534,915)$ (484,096)$ (193,524)$ (52,299)$ (233,973)$ (19,142)$ (518,568)$ (11,033,313)$ -$ -$ -$ -$ -$ -$

Beginning Balance -$ -$ -$ -$ -$ -$ 644,406$ 0$ 0$ 0$ 0$ 0$ 0$ Change in Cash 0$ -$ -$ -$ -$ -$ 644,406$ (644,406)$ -$ -$ -$ -$ -$ -$

Cumulative Operating Cash -$ -$ -$ -$ -$ 644,406$ 0$ 0$ 0$ 0$ 0$ 0$ 0$

* CCR Sale Proceeds related to Notice to Proceed with construction milestone payments for the Fairhaven E and Charlemont A projects** Salary row through MA Office Rent row are expenses paid underneath a service agreement between CEC and CEC DB

Clean Energy Co 7/1/2020


Agarcia

Text Box

EXHIBIT 1

SUPERPRIORITY DEBTOR-IN-POSSESSION CREDIT AND GUARANTY AGREEMENT

dated as of [DATE]

among

CEC DEVELOPMENT BORROWER, LLC, as a debtor and debtor-in-possession under Chapter 11 of the Bankruptcy Code,

CEC RENEWABLE ASSETS, LLC, as a debtor and debtor-in-possession under Chapter 11 of the Bankruptcy Code,

CEC RENEWABLE ASSETS DEVELOPMENT, LLC, as a debtor and debtor-in-possession under Chapter 11 of the Bankruptcy Code,

ENERGY EQUIPMENT LIMITED CLEAN ENERGY COMMUNITY HOLDCO 1, LLC

CLEAN ENERGY CAPITAL, LLC CE SERVICES, LLC

CEC DEVELOPMENT, LLC CEC SOLAR HOLDINGS MA, LLC

CEC SOLAR FUND 4 LLC CEC SOLAR HOLDING DE, LLC

GROUP 1 SOLAR HOLDINGS LLC RENEWABLE HOLDINGS 1, LLC

RENEWABLE SUN MANAGEMENT CO., LLC RENEWABLE SUN, LLC

RENEWABLE HOLDINGS TE 1, LLC, as Guarantors,

and

FCS ADVISORS, LLC D/B/A BREVET CAPITAL ADVISORS, as Lender

EXHIBIT BCase:20-14573-MER Doc#:7-2 Filed:07/02/20 Entered:07/02/20 17:23:09 Page1 of 106

TABLE OF CONTENTS

SECTION 1.DEFINITIONS AND INTERPRETATION .......................................................... 2

1.1 Definitions. ................................................................................................................... 2

1.2 Accounting Terms. ..................................................................................................... 26

1.3 Interpretation, Etc. ...................................................................................................... 26

1.4 LLC Division. ............................................................................................................. 27

SECTION 2.LOANS ................................................................................................................ 27

2.1 Loans. ......................................................................................................................... 27

2.2 Draws from the Controlled Account. ......................................................................... 29

2.3 Use of Proceeds. ......................................................................................................... 29

2.4 Joint and Several Obligation....................................................................................... 29

2.5 Interest on Loans ........................................................................................................ 29

2.6 Interest. ....................................................................................................................... 29

2.7 Fees. ............................................................................................................................ 30

2.8 Repayment of Loans. .................................................................................................. 30

2.9 Voluntary Prepayments. ............................................................................................ 30

2.10 Mandatory Prepayments. ............................................................................................ 30

2.11 Application of Prepayments. ...................................................................................... 31

2.12 General Provisions Regarding Payments. .................................................................. 32

2.13 Taxes; Withholding, Etc. ............................................................................................ 32

2.14 Priority and Liens; No Discharge. .............................................................................. 34

2.15 Release. ....................................................................................................................... 37

SECTION 3.CONDITIONS PRECEDENT ............................................................................. 37

3.1 Conditions to Borrowing on the Closing Date or During the Availability Period. .... 37

3.2 Conditions to Borrowing on the Full Availability Date. ............................................ 41

3.3 Conditions to each Credit Extension. ......................................................................... 41

SECTION 4.REPRESENTATIONS AND WARRANTIES .................................................... 43

4.1 Organization; Requisite Power and Authority; Qualification. ................................... 43

4.2 Equity Interests and Ownership. ................................................................................. 43

4.3 Due Authorization. ..................................................................................................... 43

4.4 No Conflict. ................................................................................................................ 43

4.5 Governmental Consents. ............................................................................................. 44

4.6 Binding Obligation. .................................................................................................... 44

4.7 Historical Financial Statements. ................................................................................. 44


4.8 Security Interest in Collateral. .................................................................................... 44

4.9 No Material Adverse Effect. ....................................................................................... 45

4.10 Adverse Proceedings, Etc. .......................................................................................... 45

4.11 Payment of Taxes. ...................................................................................................... 45

4.12 Properties. ................................................................................................................... 45

4.13 Environmental Matters. .............................................................................................. 46

4.14 Permits and Monitoring of the Environmental Laws. ................................................ 46

4.15 Governmental Regulation. .......................................................................................... 47

4.16 Federal Reserve Regulations; Exchange Act.............................................................. 47

4.17 Employee Benefit Plans.............................................................................................. 47

4.18 Compliance with Statutes, Etc. ................................................................................... 47

4.19 Disclosure. .................................................................................................................. 48

4.20 Foreign Corrupt Practices Act. ................................................................................... 48

4.21 PATRIOT Act............................................................................................................. 48

4.22 Bankruptcy Related Matters. ...................................................................................... 48

SECTION 5.AFFIRMATIVE COVENANTS.......................................................................... 49

5.1 Financial Statements and Other Reports. ................................................................... 49

5.2 Existence. .................................................................................................................... 53

5.3 Payment of Taxes. ...................................................................................................... 53

5.4 Maintenance of Properties. ......................................................................................... 53

5.5 Insurance. .................................................................................................................... 54

5.6 Books and Records; Inspections. ................................................................................ 54

5.7 Lender Calls.. .............................................................................................................. 55

5.8 Compliance with Laws. .............................................................................................. 55

5.9 Environmental. ........................................................................................................... 55

5.10 Subsidiaries. ................................................................................................................ 56

5.11 Additional Real Estate Assets. .................................................................................... 56

5.12 Use of Proceeds. ......................................................................................................... 57

5.13 Further Assurances. .................................................................................................... 57

5.14 [RESERVED]. ............................................................................................................ 57

5.15 Post-Closing Covenants. ............................................................................................. 57

5.16 First and Second Day Orders. ..................................................................................... 57

5.17 Milestones. .................................................................................................................. 57

5.18 Bankruptcy Notices. ................................................................................................... 58


5.19 Business and Property of the Credit Parties. .............................................................. 59

5.20 Bankruptcy Related Matters. ...................................................................................... 59

5.21 PATRIOT Act............................................................................................................. 60

5.22 Controlled Account..................................................................................................... 60

5.23 Lockbox Acount. ........................................................................................................ 60

5.24 Proceeds of Loxbox Account. .................................................................................... 60

5.25 Inventory Appraisals................................................................................................... 60

5.26 MIPA. ......................................................................................................................... 60

SECTION 6. NEGATIVE COVENANTS ............................................................................... 61

6.1 Indebtedness. .................................................................................................................. 61

6.2 Liens. .............................................................................................................................. 63

6.3 No Further Negative Pledges. ........................................................................................ 65

6.4 Restrictions on Subsidiary Distributions. ....................................................................... 65

6.5 Investments. .................................................................................................................... 66

6.6 Financial Covenants ....................................................................................................... 66

6.7 Fundamental Changes; Disposition of Assets. ............................................................... 67

6.8 Sales and Lease-Backs. .................................................................................................. 67

6.9 Transactions with Affiliates. .......................................................................................... 67

6.10 Conduct of Business. .................................................................................................. 68

6.11 Amendments or Waivers of Organizational Documents. ........................................... 68

6.12 Fiscal Year. ................................................................................................................. 68

6.13 Subrogation. ................................................................................................................ 68

6.14 Draws. ......................................................................................................................... 68

6.15 Additional Bankruptcy Matters. ................................................................................. 68

SECTION 7. GUARANTY ...................................................................................................... 69

7.1 Guaranty of the Obligations. .......................................................................................... 69

7.2 Payment by Guarantors. ................................................................................................. 70

7.3 Liability of Guarantors Absolute. ................................................................................... 70

7.4 Waivers by Guarantors. .................................................................................................. 72

7.5 Guarantors’ Rights of Subrogation, Contribution, Etc. .................................................. 72

7.6 Subordination of Other Obligations. .............................................................................. 73

7.7 Continuing Guaranty. ..................................................................................................... 73

7.8 Authority of Guarantors or Borrower. ............................................................................ 73

7.9 Financial Condition of Each Borrower. ......................................................................... 74


7.10 Bankruptcy, Etc. ......................................................................................................... 74

SECTION 8. EVENTS OF DEFAULT .................................................................................... 75

8.1 Events of Default. ........................................................................................................... 75

8.2 Rights and Remedies Upon an Event of Default. ........................................................... 80

8.3 Application of Funds. ..................................................................................................... 81

8.4 Application of Collateral Proceeds. ............................................................................... 82

8.5 Collateral Documents and Guaranty. ............................................................................. 82

SECTION 9. MISCELLANEOUS............................................................................................ 83

9.1 Notices. ........................................................................................................................... 83

9.2 Expenses. ........................................................................................................................ 84

9.3 Indemnity. ...................................................................................................................... 85

9.4 Set-Off. ........................................................................................................................... 87

9.5 Amendments and Waivers. ............................................................................................ 87

9.6 Successors and Assigns. ................................................................................................. 88

9.7 Independence of Covenants. .......................................................................................... 88

9.8 Survival of Representations, Warranties and Agreements. ............................................ 88

9.9 No Waiver; Remedies Cumulative. ................................................................................ 89

9.10 Termination.. .............................................................................................................. 89

9.11 Marshalling; Payments Set Aside. .............................................................................. 89

9.12 Severability. ................................................................................................................ 89

9.13 Headings. .................................................................................................................... 90

9.14 APPLICABLE LAW. ................................................................................................. 90

9.15 CONSENT TO JURISDICTION. .............................................................................. 90

9.16 WAIVER OF JURY TRIAL. ..................................................................................... 91

9.17 Confidentiality. ........................................................................................................... 91

9.18 Usury Savings Clause. ................................................................................................ 92

9.19 Effectiveness; Counterparts; Orders Control. ............................................................. 93

9.20 PATRIOT Act............................................................................................................. 93

9.21 [Reserved]. .................................................................................................................. 93

9.22 No Fiduciary Duty; Lender Counterparty. ................................................................. 93

SECTION 10. LEASEHOLD PROPERTY ............................................................................ 94

10.1 Special Rights with respect to Leasehold Property. ................................................... 94


APPENDICES: A Notice Addresses SCHEDULES:

1.1 Guarantors 4.1 Jurisdictions of Organization and Qualification 4.2 Equity Interests and Ownership 4.10 Adverse Proceedings 4.11 Payment of Taxes 4.12 Real Estate Assets 4.13 Environmental Matters 4.14(b) Certain Environmental Obligations 5.15 Post-Closing Covenants 6.1 Certain Indebtedness 6.2 Certain Liens 6.6 Certain Investments 8.1(h) Litigation

EXHIBITS: A Interim Order B Closing Date Certificate C Counterpart Agreement D Pledge and Security Agreement E Critical Vendor Report F Funding Notice G Monthly Consolidated Financial Reports H Compliance Certificate I Services Agreement J Membership Interest Purchase Agreement K Collateral Assignment


SUPERPRIORITY DEBTOR-IN-POSSESSION CREDIT AND GUARANTY AGREEMENT

This SUPERPRIORITY DEBTOR-IN-POSSESSION CREDIT AND GUARANTY AGREEMENT, dated as of [DATE], is entered into by and among CEC DEVELOPMENT BORROWER, LLC, a limited liability company organized and existing under the laws of the State of Colorado, as debtor and debtor-in-possession under Chapter 11 of the Bankruptcy Code (“CEC DB”), CEC RENEWABLE ASSETS DEVELOPMENT, LLC, a limited liability company organized and existing under the laws of the State of Colorado, as debtor and debtor-in-possession under Chapter 11 of the Bankruptcy Code (“CRAD”), CEC RENEWABLE ASSETS, LLC, a limited liability company organized and existing under the laws of the State of Colorado, as debtor and debtor-in-possession under Chapter 11 of the Bankruptcy Code (“CRA”), and the guarantors listed on Schedule 1.1 (each, a “Guarantor” and collectively the “Guarantors”), and FCS ADVISORS, LLC D/B/A BREVET CAPITAL (“Lender”, and sometimes referred to herein as “Brevet”).

RECITALS:

WHEREAS, capitalized terms used but not defined in these Recitals shall have the respective meanings set forth for such terms in Section 1.1 hereof;

WHEREAS, on July 2, 2020, (the “Petition Date”), CEC DB, CRA and CRAD (each, a “Borrower” and collectively the “Borrowers” and together with any other Subsidiaries that become debtors-in-possession in the Cases, the “Debtors” and each, a “Debtor”) filed voluntary petitions with the Bankruptcy Court initiating their respective cases that are pending under Chapter 11 of the Bankruptcy Code (each case of CEC DB, CRA, and CRAD, a “Case” and collectively, the “Cases”) and have continued in the possession of their assets and in the management of their businesses pursuant to Section 1107 and 1108 of the Bankruptcy Code;

WHEREAS, pursuant to a Loan Agreement dated as of November 13, 2018 (as amended, restated, supplemented or otherwise modified from time to time prior to the date hereof, the “Tranche B Loan Agreement”), by and among CLEAN ENERGY COLLECTIVE, LLC, a Colorado limited liability company (“CEC”), the guarantors listed in Schedule I thereto and Brevet (“Tranche B Lender”), in its capacity as administrative agent for the lenders thereunder and as a lender (the “Tranche B Loan”), Brevet granted a credit facility to CEC, including the Tranche B First Advance (as defined therein) of which the principal amount of One Million Dollars ($1,000,000) remains outstanding (the “Tranche B Loan Balance”) and CRA guaranteed the Tranche B Loan and pledged all of its assets as security for the Tranche B Loan;

WHEREAS, CEC DB and NAI CEC Development Lender Inc., a Colorado corporation (“NAI CEC”) entered into that certain Development Loan Agreement, dated as of February 28, 2019 (as amended, supplemented, or otherwise modified from time to time through the date hereof, the “CEC DB Loan Agreement,” and together with the Tranche B Loan Agreement the “Prepetition Loans”), pursuant to which NAI CEC made certain Loans available to CEC DB in the principal amount of Five Million Dollars ($5,000,000) (the “Development Loan” );


2

WHEREAS, pursuant to an Assignment Agreement dated as of June 4, 2020, by and among NAI CEC, North American Infrastructure LLC, a Colorado limited liability company (“NAI”), Brevet and CEC DB, NAI CEC transferred, conveyed, and assigned to Brevet (“CEC DB Lender”) all of NAI CEC’s right, title, and interest in and to the CEC DB Loan Agreement, of which the principal amount of Five Million Dollars ($5,000,000) is outstanding as of the date of this Agreement (the “CEC DB Loan Balance”);

WHEREAS, the Borrowers have requested Lender to extend credit in the form of (i) a delayed-draw term loan facility in an aggregate principal amount not exceeding $2,402,803 (the “Term Loan Facility”) and (ii) a roll-up term loan facility that will exchange the Prepetition Loans for loans under this Agreement, in an aggregate principal amount not exceeding $6,500,000 (the “Roll-Up Facility”), with all of the obligations with respect to the foregoing to be guaranteed by each Guarantor;

WHEREAS, Lender is willing to extend such credit to the Borrowers on the terms and subject to the conditions set forth herein; and

WHEREAS, all of the claims and the Liens granted under the Orders and the Credit Documents to Lender in respect of the Term Loan Facility and the Roll-Up Facility shall be subject to the Carve Out;

NOW, THEREFORE, in consideration of the premises and the agreements, provisions and covenants herein contained, the parties hereto agree as follows:

SECTION 1. DEFINITIONS AND INTERPRETATION

1.1 Definitions. The following terms used herein, including in the preamble, recitals, exhibits and schedules hereto, shall have the following meanings:

“Acceptable Confirmation Order” means an order of the Bankruptcy Court confirming an Acceptable Plan that is, unless otherwise agreed by Lender, in form and substance satisfactory to Lender in its reasonable discretion (as the same may be amended, supplemented, or modified from time to time after entry thereof with the consent of Lender in its reasonable discretion).

“Acceptable Disclosure Statement” means the disclosure statement relating to the Acceptable Plan in form and substance satisfactory to Lender in its reasonable discretion (as the same may be amended, supplemented, or modified from time to time after the initial filing thereof with the consent of Lender in its reasonable discretion).

“Acceptable Disclosure Statement Order” means an order of the Bankruptcy Court approving the Acceptable Disclosure Statement, in form and substance reasonably satisfactory to Lender (as the same may be amended, supplemented, or modified from time to time after entry thereof so long as such amendment, supplement, or modification is reasonably satisfactory to Lender).

“Acceptable Plan” means a Reorganization Plan that is satisfactory to Lender in its reasonable discretion and, unless otherwise agreed by Lender, that indefeasibly satisfies all claims of Lender on account of the Term Loans and Roll-Up Loans in full, including without limitation,


3

principal, interest, fees, and expenses, in cash or such other consideration acceptable to Lender (as the same may be amended, supplemented, or modified from time to time after entry thereof with the consent of Lender in its reasonable discretion).

“Accounting Change” as defined in Section 1.2.

“Adverse Proceeding” means any action, suit, proceeding, hearing (whether administrative, judicial or otherwise), governmental investigation, or arbitration (whether or not purportedly on behalf of any Debtor) at law or in equity, or before or by any Governmental Authority, domestic or foreign, whether pending or, to the actual knowledge of any Debtor, threatened in writing against or directly affecting any Borrower or any of their respective Subsidiaries or any property of a Borrower or any of its respective Subsidiaries.

“Affiliate” means, as applied to any Person, any other Person directly or indirectly controlling, controlled by, or under common control with, that Person. For the purposes of this definition, “control” (including, with correlative meanings, the terms “controlling”, “controlled by” and “under common control with”), as applied to any Person, means the possession, directly or indirectly, of the power (a) to vote 10% or more of the Securities having ordinary voting power for the election of directors of such Person, or (b) to direct or cause the direction of the management and policies of that Person, whether through the ownership of voting securities or by contract or otherwise.

“Affiliate Transaction” as defined in Section 6.9.

“Agreement” means this Superpriority Debtor-In-Possession Credit and Guaranty Agreement, as it may be amended, restated, supplemented, or otherwise modified from time to time.

“Approved Cash Flow Forecast” as defined in Section 5.l(m).

“Asset Sale” means (a) the sale, lease, conveyance or other disposition of any assets by any Borrower or any of a Borrower’s Subsidiaries, or (b) the issuance of Equity Interests by any Borrower Subsidiaries, or the sale by any Borrower or any Borrower Subsidiaries of Equity Interests in any Borrower Subsidiaries. Notwithstanding the preceding, none of the following items will be deemed to be an “Asset Sale”:

(i) the sale, lease, conveyance, or other disposition of assets between or among a Borrower and a Guarantor subject to the consent of Lender;

(ii) an issuance of Equity Interests by a Subsidiary of a Borrower to such Borrower or a Subsidiary of such Borrower; provided that any such issuance by a Credit Party shall only be made to another Credit Party;

(iii) the sale, lease, or other transfer of inventory, products, services or accounts receivable in the ordinary course of business and any sale or other disposition of damaged, worn-out or obsolete assets in the ordinary course of business;


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(iv) non-exclusive licenses and sublicenses by any Borrower or any of Borrower’s Subsidiaries of software or Intellectual Property in the ordinary course of business;

(v) any surrender or waiver of contract rights or settlement, release, recovery on or surrender of contract, tort or other claims in the ordinary course of business or consistent with past practices;

(vi) the granting of Liens not prohibited by Section 6.2, including any leases or licenses of property in the ordinary course of business or that do not materially adversely affect the value of said property;

(vii) the sale or other disposition of cash or Cash Equivalents in the ordinary course of business;

(viii) dispositions of assets resulting from condemnation or casualty events; and

(ix) the sale of Equity Interests in the Borrowers’ Subsidiaries to Potential Purchaser pursuant to an Acceptable Confirmation Order.

“Authorized Officer” means, as applied to any Person, any individual holding the position of chairman of the board (if an officer), chief executive officer, chief operating officer, president or one of its vice presidents (or the equivalent thereof), and such Person’s chief financial officer or treasurer (or other officer that is reasonably acceptable to Lender).

“Automatic Rejection Date” means with respect to any particular lease, the last day of the assumption period for the Credit Parties in the Cases provided for in Section 365(d)(4) of the Bankruptcy Code, to the extent applicable (including as may have been extended in accordance with Section 365(d)(4) of the Bankruptcy Code).

“Automatic Stay” has the meaning provided for such term under Section 362 of the Bankruptcy Code.

“Availability Period” means the period from and including the Closing Date to but excluding the earlier of the Full Availability Date and the date of termination of the Commitment in accordance with the terms hereof.

“Avoidance Actions” as defined in Section 4.22(c).

“Bankruptcy Code” means Title 11 of the United States Code entitled “Bankruptcy,” as now and hereafter in effect, or any successor thereto.

“Bankruptcy Court” means the United States Bankruptcy Court for the District of Colorado or any other court having jurisdiction over the Cases from time to time.

“Bankruptcy Law” means each of (a) Title 11 of the United States Code, as now or hereafter in effect, or any successor thereto, (b) any domestic or foreign law relating to liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, debt adjustment, receivership, or similar debtor relief


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from time to time in effect and affecting the rights of creditors generally (including without limitation any plan of arrangement provisions of applicable corporation statutes), and (c) any order made by a court of competent jurisdiction in respect of any of the foregoing.

“Bankruptcy Rules” means the Federal Rules of Bankruptcy Procedure, as the same may from time to time be in effect and applicable to the Cases.

“Beneficial Owner” has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under the Exchange Act, except that in calculating the beneficial ownership of any particular “person” (as that term is used in Section 13(d)(3) of the Exchange Act), such “person” will be deemed to have beneficial ownership of all securities that such “person” has the right to acquire by conversion or exercise of other securities, whether such right is currently exercisable or is exercisable only after the passage of time.

“Beneficial Ownership Certificate” means a certification regarding beneficial ownership as required by 31 C.F.R. § 1010.230.

“Benefit Plan” means any of (a) an “employee benefit plan” (as defined in ERISA) that is subject to Title I of ERISA, (b) a “plan” as defined in and subject to Section 4975 of the Code, or (c) any Person whose assets include (for purposes of ERISA Section 3(42) or otherwise for purposes of Title I of ERISA or Section 4975 of the Code) the assets of any such “employee benefit plan” or “plan.”

“Bidding Procedures Motion” as defined in Section 5.17(a).

“Bidding Procedures Order” as defined in Section 5.17(a).

“Board of Governors” means the Board of Governors of the United States Federal Reserve System, or any successor thereto.

“Borrower” or “Borrowers” as defined in the recitals hereto.

“Budget Variance Report” shall mean a weekly variance report, commencing with a variance report for the one week period following the Closing Date, the two week period following the Closing Date, the three week period following the Closing Date and the four week period following the Closing Date, and each subsequent four week period ending each week thereafter, with the report for each such subsequent four week period including a cumulative report of such four week period and an individual report of the last week of such four week period (each such one week, two week, three week and four week period, a “Reporting Period”), in each case, setting forth for the one-week, two-week, three week or four-week period, as applicable, ended on the immediately preceding Friday prior to the delivery thereof (a) the negative variance (as compared to the Operative Approved Cash Flow Forecast) of the aggregate operating cash receipts of the Debtors in the aggregate for the applicable Reporting Period and for the last week of the applicable Reporting Period, (b) the positive variance (as compared to the Operative Approved Cash Flow Forecast) of the aggregate operating disbursements (excluding professional fees) made by the Debtors in the aggregate for the applicable Reporting Period and for the last week of the applicable Reporting Period, and (c) an explanation, in reasonable detail, for any material negative


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variance (in the case of receipts) or material positive variance (in the case of disbursements), certified by an Authorized Officer of each Borrower.

“Business Day” means any day excluding Saturday, Sunday and any day which is a legal holiday under the laws of the State of New York or is a day on which banking institutions located in such state are authorized or required by law or other Governmental Acts to close.

“Capital Lease” means, subject to Section 1.2, as applied to any Person, any lease of any property (whether real, personal or mixed) by that Person as lessee that, in conformity with GAAP, is required to be accounted for as a capital lease on the balance sheet of that Person.

“Capital Lease Obligation” means, at the time any determination is to be made, the amount of the liability in respect of a Capital Lease that would at that time be required to be capitalized on a balance sheet prepared in accordance with GAAP; provided that all obligations of any Borrower and any of their respective Subsidiaries that are or would be characterized as an operating lease as determined in accordance with GAAP as in effect on the date of this Agreement (whether or not such operating lease was in effect on such date) shall continue to be accounted for as an operating lease (and not as a Capital Lease Obligation) for purposes of this Agreement regardless of any change in GAAP following the date of this Agreement that would otherwise require such obligation to be recharacterized as a Capital Lease Obligation.

“Capital Stock” means (a) in the case of a corporation, corporate stock; (b) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock; (c) in the case of a partnership or limited liability company, partnership interests (whether general or limited or whether common or subordinated), or membership interests; and (d) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person, but excluding from all of the foregoing any debt securities convertible into Capital Stock, whether or not such debt securities include any right of participation with Capital Stock.

“Carve Out” has the meaning set forth in the Interim Order or the Final Order, as applicable.

“Case” as defined in the recitals hereto.

“Cash” means money, currency or a credit balance in any demand account.

“Cash Collateral” has the meaning set forth in the Interim Order or the Final Order, as applicable.

“Cash Equivalents” means: (i) (a) Dollars, euro, or any national currency of any member state of the European Union; or (b) any other foreign currency held by any Borrower or any of their respective Subsidiaries in the ordinary course of business; (ii) securities issued or directly and fully guaranteed or insured by the United States government or any agency or instrumentality of the United States government (provided that the full faith and credit of the United States is pledged in support of those securities) having maturities of not more than six (6) months from the date of acquisition; (iii) certificates of deposit and Eurodollar time deposits with maturities of six (6) months or less from the date of acquisition, bankers’ acceptances with maturities not exceeding


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six (6) months and overnight bank deposits, in each case, with any domestic commercial bank having capital and surplus in excess of five hundred million and a Thomson Bank Watch Rating of “B” or better; (iv) repurchase obligations with a term of not more than seven days for underlying securities of the types described in clauses (ii) and (iii) above entered into with any financial institution meeting the qualifications specified in clause (iii) above; or (v) commercial paper having one of the two highest ratings obtainable from Moody’s or S&P and, in each case, maturing within six (6) months after the date of acquisition; and money market funds at least 95% of the assets of which constitute Cash Equivalents of the kinds described in clauses (i) through (v) of this definition.

“Cash Flow Forecast” means a projected statement of sources and uses of cash for the Credit Parties, prepared in accordance with Section 5.l(m), for the current and following twelve (12) calendar weeks (but not any preceding weeks), including the anticipated uses of the Draw proceeds for each week during such period and to include a separate line item for any uses of cash (including the purchase, sale, lease, or exchange of any property or the rendering of any service) from a Credit Party to any Subsidiary. As used herein, “Cash Flow Forecast” shall initially refer to the 13-week cash flow forecast most recently delivered on or prior to the Petition Date and, thereafter, the most recent Cash Flow Forecast delivered by the Borrowers in accordance with Section 5.l(m).

“Cash Management Obligations” means obligations in respect of cash management services (including treasury, depository, overdraft, credit or debit card, electronic funds transfer and other cash management arrangements), including obligations for the payment of fees, interest, charges, expenses and disbursements in connection therewith to the extent provided for in the documents evidencing such cash management services.

“CEC DB Lender” as defined in the recitals hereto.

“CEC DB Loan Agreement” as defined in the recitals hereto.

“CEC DB Loan Balance” as defined in the recitals hereto.

“CEC DB Roll-Up Loan” as defined in Section 2.1(b)(i).

“Change of Control” means, (a) the direct or indirect sale, lease, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the properties or assets of a Borrower and its Subsidiaries taken as a whole to any Person (including any “person” (as that term is used in Section 13(d)(3) of the Exchange Act)); (b) the adoption of a plan relating to the liquidation or dissolution of a Borrower; (c) the consummation of any transaction (including, without limitation, any merger or consolidation), the result of which is that any Person (including any “person” (as defined above)), other than the Principals and their Related Parties, becomes the Beneficial Owner, directly or indirectly, of more than 50% of the Voting Stock in such Borrower, measured by voting power rather than number of shares; or (d) the first day on which 100% of the outstanding Capital Stock of a Borrower ceases to be owned directly or indirectly by CEC; provided, however, that the sale of Equity Interests in the Borrowers’ Subsidiaries to Potential Purchaser pursuant to an Acceptable Confirmation Order shall not be considered to be a Change of Control.


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“Closing Date” as defined in Section 3.1.

“Closing Date Certificate” means a Closing Date Certificate substantially in the form of Exhibit B.

“Closing Date Interim Term Loan” means the Interim Term Loan to be made on the Closing Date as requested in the Funding Notice therefor.

“Collateral” means, collectively, (a) all of the real, personal and mixed property (including Equity Interests) in which Liens are purported to be granted pursuant to the Orders or Collateral Documents as security for all or any part of the Obligations under the Credit Documents (subject to exceptions contained in the Collateral Documents), and (b) “DIP Collateral” or words of similar intent, as defined in any Order.

“Collateral Assignment” means a collateral assignment to Lender of all of the Borrowers’ right, title and interest in and to the guaranty delivered by the Potential Purchaser in accordance with the MIPA, substantially in the form of Exhibit K.

“Collateral Documents” means the Pledge and Security Agreement, the Mortgages (if any), the Intellectual Property Security Agreements, the Collateral Assignment and all other instruments, documents and agreements delivered by or on behalf of any Credit Party pursuant to this Agreement or any of the other Credit Documents or the Orders in order to grant to, or perfect in favor of Lender, a Lien on any real, personal or mixed property of that Credit Party as security for all or any part of the Obligations (subject to exceptions contained in the Collateral Documents).

“Collateral Questionnaire” means a certificate in form reasonably satisfactory to Lender that provides information with respect to the personal or mixed property of each Credit Party.

“Commitment” means Lender’s obligation to make Loans under Section 2.1 in an aggregate principal amount not to exceed $8,902,803, subject to the terms and conditions set forth in this Agreement, the Interim Order and the Final Order, as such amount shall be reduced by the making of Loans under Section 2.1.

“Compliance Certificate” means a Compliance Certificate substantially in the form of Exhibit H.

“Contractual Obligation” means, as applied to any Person, any provision of any Security issued by that Person or of any indenture, mortgage, deed of trust, contract, undertaking, agreement or other instrument to which that Person is a party or by which it or any of its properties is bound or to which it or any of its properties is subject.

“Controlled Account” means an agreed deposit account of the Borrowers held at ANB Bank, which is subject to a DACA.

“Counterpart Agreement” means a Counterpart Agreement substantially in the form of Exhibit C delivered by a Credit Party pursuant to Section 5.l0(a).

“Credit Date” means the date of a Credit Extension.


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“Credit Document” means any of this Agreement, the Collateral Documents, any fee letter or other document relating to the fees referred to in Section 2.11, and all other documents, certificates, instruments or agreements executed and delivered by a Credit Party for the benefit of Lender in connection herewith.

“Credit Extension” means the making of a Loan.

“Credit Facilities” means, one or more debt facilities, commercial paper facilities, or indentures, in each case, with banks, other institutional lenders, or other investors providing for revolving credit loans, term loans, receivables financing (including through the sale of receivables to such lenders or to special purpose entities formed to borrow from such lenders against such receivables) or letters of credit, in each case, as amended, restated, modified, renewed, refunded, replaced in any manner (whether upon or after termination or otherwise) or refinanced (including by means of sales of debt securities) in whole or in part from time to time.

“Credit Party” means each Borrower and each Guarantor from time to time party to a Credit Document.

“Critical Vendor Report” means a report, in a form reasonably acceptable to Lender (it being agreed that the form previously provided to Lender prior to the Closing Date is acceptable), describing in reasonable detail the matter set forth in Exhibit E.

“Current Assets” means, collectively, Gross Receivables and Gross Inventory.

“DACA” means a Deposit Account Control Agreement, in form and substance acceptable to Lender, by and among Lender, the Borrowers, and ANB Bank.

“Debtor Relief Laws” means the Bankruptcy Code, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief laws of the United States or other applicable jurisdictions from time to time in effect.

“Debtors” as defined in the recitals hereto.

“Default” means a condition or event that constitutes an Event of Default, or after notice or expiration of any grace period set forth in Section 8 or both, would constitute an Event of Default.

“Default Rate” as defined in Section 2.6(b).

“Development Loan” as defined in the recitals hereto.

“DIP Budget” as defined in Section 3.l(m).

“DIP Collateral” means the “DIP Collateral” as defined in the Orders.

“Dollars” and the sign”$” mean the lawful money of the United States.


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“Draw” as defined in Section 2.2.

“Employee Benefit Plan” means any “employee benefit plan” as defined in Section 3(3) of ERISA, other than a Multiemployer Plan, which is sponsored, maintained or contributed to by, or required to be contributed by a Credit Party or, with respect to employee benefit plans for which a Credit Party could reasonably be expected to have any actual or potential liability, any of their respective ERISA Affiliates.

“Environmental Claim” means any investigation, notice, notice of violation, claim, action, suit, proceeding, demand, abatement order or other order or directive, by any Governmental Authority or any other Person, arising (a) pursuant to or in connection with any actual or alleged violation of any Environmental Law or any Governmental Authorization issued thereto; (b) in connection with any Release or threatened Release of any Hazardous Material or any actual or alleged Hazardous Materials Activity; (c) in connection with any actual or alleged damage, injury, threat or harm to health, safety, natural resources or the environment that could give rise to any liability or obligation under applicable Environmental Law; or (d) in connection with any contractual agreement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

“Environmental Laws” means, any and all applicable federal, state and local laws, ordinances, regulations, and common law, or any enforceable administrative or judicial order, consent, decree or judgment or Governmental Authorizations relating to (a) pollution or the preservation and protection of the environment, including laws relating to the Release of any Hazardous Materials; (b) the generation, use, storage, transportation or disposal of, or exposure to, Hazardous Materials; or (c) occupational safety and health, industrial hygiene, land use or the protection of human, plant or animal health or welfare (with respect to Hazardous Materials), in any manner applicable to any Borrower or any of their respective Subsidiaries or any Facility.

“Equity Interests” means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for, Capital Stock).

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

“ERISA Affiliate” means, as applied to any Person: (a) any corporation which is a member of a controlled group of corporations within the meaning of Section 414(b) of the Internal Revenue Code of which that Person is a member; (b) any trade or business (whether or not incorporated) which is a member of a group of trades or businesses under common control within the meaning of Section 414(c) of the Internal Revenue Code of which that Person is a member; and (c) solely for purposes of Section 412 and 430 of the Internal Revenue Code, any member of an affiliated service group within the meaning of Section 414(m) or (o) of the Internal Revenue Code of which that Person is a member. Any former ERISA Affiliate of any Credit Party shall continue to be considered an ERISA Affiliate of such Credit Party within the meaning of this definition with respect to the period such entity was an ERISA Affiliate of such Credit Party solely with respect to liabilities arising after such period for which such Credit Party could reasonably be expected to be liable under the Internal Revenue Code or ERISA.


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“ERISA Event” means: (a) a “reportable event” within the meaning of Section 4043 of ERISA and the regulations issued thereunder with respect to any Pension Plan (excluding those for which the provision for 30-day notice to the PBGC has been waived by regulation); (b) the failure of any Pension Plan to meet the minimum funding standard of Section 412 or Section 430 of the Internal Revenue Code (or Section 302 or 303 of ERISA, in each case whether or not waived) or the failure by a Credit Party or any of its ERISA Affiliates to make by its due date a required installment under Section 430(j) of the Internal Revenue Code with respect to any Pension Plan or the failure of any of Credit Parties or any of their respective ERISA Affiliates to make any required contribution to a Multiemployer Plan; (c) the provision by the administrator of any Pension Plan pursuant to Section 4041 (a )(2) of ERISA of a notice of intent to terminate such plan in a distress termination described in Section 4041 (c) of ERISA; (d) the withdrawal by any Credit Party or any of their respective ERISA Affiliates from any Pension Plan with two or more contributing sponsors or the termination of any such Pension Plan resulting in liability to a Credit Party or any of its ERISA Affiliates pursuant to Section 4063 or 4064 of ERISA; (e) the institution by the PBGC of proceedings to terminate any Pension Plan, or the occurrence of any event or condition which would reasonably be expected to constitute grounds under ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan; (f) the imposition of liability on any of the Credit Parties or any of their respective ERISA Affiliates pursuant to Section 4062 or 4069 of ERISA or by reason of the application of Section 4212(c) of ERISA; (g) the withdrawal of any of the Credit Parties or any of their respective ERISA Affiliates in a complete or partial withdrawal (within the meaning of Sections 4203 and 4205 of ERISA) from any Multiemployer Plan if there is any potential liability therefor, or the receipt by any of the Credit Parties or any of their respective ERISA Affiliates of notice from any Multiemployer Plan that it is in reorganization or insolvency pursuant to Section 4241 or 4245 of ERISA, or that it intends to terminate or has terminated under Section 4041A or 4042 of ERISA; (h) the occurrence of an act or omission which could reasonably be expected to give rise to the imposition on a Credit Party or any of its ERISA Affiliates of fines, penalties, taxes or related charges under Chapter 43 of the Internal Revenue Code or under Section 406, Section 409, Sections 502(c), (i) or (1), or Section 4071 of ERISA in respect of any Employee Benefit Plan; (i) the assertion of a material claim (other than routine claims for benefits) against any Employee Benefit Plan or the assets thereof, or against any of the Credit Parties or any of their respective ERISA Affiliates in connection with any Employee Benefit Plan; (j) receipt from the Internal Revenue Service of notice of the failure of any Pension Plan (or any other Employee Benefit Plan intended to be qualified under Section 401(a) of the Internal Revenue Code) to qualify under Section 401(a) of the Internal Revenue Code, or the failure of any trust forming part of any Pension Plan to qualify for exemption from taxation under Section 501(a) of the Internal Revenue Code; (k) the imposition of a Lien on the assets of any of the Credit Parties or any of their respective ERISA Affiliates pursuant to Section 430(k) of the Internal Revenue Code or pursuant to Section 303(k) of ERISA with respect to any Pension Plan; (l) a determination that the aggregate benefit liabilities under any Pension Plan exceed the aggregate current value of the assets of such Pension Plan, as of the end of any plan year, on the basis of the actuarial assumptions specified for funding purposes in the most recent actuarial valuation for such Pension Plan at the time of such determination; (m) a determination that any Multiemployer Plan is, or is expected to be, in “critical” or “endangered” status under Section 432 of the Internal Revenue Code or Section 305 of ERISA, to the extent such Multiemployer Plan is not in such status as of the date hereof; or (n) failure of a Credit Party or


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any of its ERISA Affiliates to comply with the requirements of Section 515 of ERISA with respect to a Multiemployer Plan.

“Event of Default” means each of the conditions or events set forth in Section 8.1.

“Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, and any successor statute.

“Excluded Assets” means each of the following:

(a) pledges and security interests prohibited or restricted by applicable law (including the requirement to obtain the consent of any Governmental Authority to the extent not obtained);

(b) Margin Stock and interests in any Person other than wholly-owned subsidiaries to the extent not permitted by the terms of such Person’s organizational or joint venture documents or could not be pledged without the consent of third parties;

(c) any assets to the extent a security interest in such assets could reasonably be expected to result in material adverse tax consequences or material adverse regulatory consequences, in each case, as reasonably determined by the Borrowers in consultation with Lender;

(d) any intent-to-use United States Trademark applications for which an amendment to allege use or statement of use has not been filed under federal law or, if filed, has not been deemed in conformance with federal law;

(e) any lease, license, permit or other agreement, or any property subject to a purchase money security interest, capital lease obligation or similar arrangement to the extent that a grant of a security interest therein would require consent thereunder, or would violate or invalidate such lease, license, permit, or agreement, purchase money arrangement, capital lease or similar arrangement or create a right of termination in favor of any other party thereto (other than a Credit Party), after giving effect to the applicable anti-assignment provisions of the UCC, the Orders or other applicable law; provided, however, that the Collateral shall include and such security interest shall attach at such time as the contractual or legal prohibition shall no longer be applicable and to the extent severable, shall attach immediately to any portion of such lease, license, permit or agreement not subject to the prohibitions specified in this clause (e); provided, further, unless such term has been rendered ineffective pursuant to the applicable Order, upon the request of Lender (i) the Credit Parties are using or have used commercially reasonable efforts (in each case, for a period of up to sixty (60) days from the Closing Date) to obtain such consent or waiver as may be necessary to grant such a Lien except in the case of any lease, license, contract, property right, or agreement which, when considered in the aggregate with all such other items requiring such consent or waiver, would not be material (provided that the obligation of any Borrower and other Credit Parties to use commercially reasonable efforts shall not require any Borrower or any other Credit Party to request any consent or waiver with respect to a restriction on assignment in any agreement which is imposed by any legal requirement or which such Borrower or such other Credit Party reasonably determines would have a material adverse effect on such agreement or on a Borrower’s or other Credit Party’s relationship with the other party or parties to such agreement; provided, further, that the use of commercially reasonable efforts shall (x) not require any payment


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or other consideration (other than reimbursements of costs incurred to review such requests for consent) from a Borrower or other Credit Parties and/or (y) not require a Borrower or other Credit Parties to seek any change to any terms of any lease, license, contract property right or agreement other than the specific consent or waiver and (ii) such lease, license, contract, property right or agreement will cease to be an Excluded Asset and will become subject to the Lien granted under the Collateral Documents, immediately and automatically, at such time as such consent or waiver is obtained or such consequences will no longer result;

(f) any governmental license or state or local franchises, charters and authorizations to the extent a security interest therein is prohibited or restricted by applicable law;

(g) cash segregated to fund the Carve-Out;

(h) any assets where the cost of obtaining a security interest therein exceeds the practical benefit to Lender afforded thereby as agreed by the Borrowers and Lender;

(i) any “building” or “mobile home” (each as defined in Regulation H as promulgated by the Board of Governors under the Flood Program) presently or hereafter located on any land comprising part of any Real Estate Assets located in the United States until Lender has requested and received a Flood Certificate in form and substance reasonably satisfactory to Lender; and

(j) any assets that require action under the law of any foreign jurisdiction to create or perfect a security interest in such assets under such foreign jurisdiction;

provided that the exclusions referred to in clauses (a) through (j) above shall not include any Proceeds of any such assets unless such Proceeds would otherwise be excluded by virtue of being the type of asset described in such clauses (a) through (j). For the avoidance of doubt, Specified Excluded Unencumbered Property (as defined in the Orders) shall constitute “Excluded Assets” only to the extent that clause (g) of the foregoing is applicable to such Specified Excluded Unencumbered Property.

“Excluded Damages” as defined in Section 9.3.

“Excluded Taxes” means any of the following Taxes imposed on or with respect to a Recipient or required to be withheld or deducted from a payment to a Recipient: (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result of such Recipient being organized under the laws of, or having its principal office or, in the case of Lender, its applicable lending office located in, the jurisdiction imposing such Tax (or any political subdivision thereof), or (ii) that are Other Connection Taxes, (b) in the case of Lender, U.S. federal withholding Taxes imposed on amounts payable to or for the account of Lender with respect to an applicable interest in a Loan or Commitment pursuant to a law in effect as of the date hereof, or (ii) Lender changes its lending office, and (c) any U.S. federal withholding Taxes imposed under FATCA.

“Facility” means any real property (including all buildings, fixtures or other improvements located thereon) now, hereafter or heretofore owned, leased, operated, or used by any Borrower or any of their respective Subsidiaries.


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“Fair Market Value” means the value (which, for the avoidance of doubt, will take into account any liabilities associated with related assets) that would be paid by a willing buyer to an unaffiliated willing seller in a transaction not involving distress or necessity of either party, determined in good faith by the Borrowers. Any determination of Fair Market Value in respect of a transaction or series of related transactions shall be evidenced by a resolution of the Board of Directors of such Borrower and shall be approved by a majority of the disinterested members of the Board of Directors of such Borrower; provided that a decision by the Bankruptcy Court that a transaction or series of related transactions is not for Fair Market Value shall override any such determination and shall conclusively evidence that such transaction or series of related transactions is not for Fair Market Value.

“FATCA” means Sections 1471 through 1474 of the Internal Revenue Code as of the date of this Agreement (or any successor or future version thereof that is substantially comparable and not materially more onerous to comply with) and any current or future regulations or official interpretations thereof.

“Final Order” means, collectively, the order of the Bankruptcy Court entered in the Cases after a final hearing under Bankruptcy Rule 4001(c)(2) or such other procedures as approved by the Bankruptcy Court, which order shall be in the form of the Interim Order (with only such modifications thereto as are necessary to convert the Interim Order to a final order and such other modifications as are satisfactory to Lender), and from which no appeal or motion to reconsider has been timely filed, or if timely filed, such appeal or motion to reconsider has been dismissed or denied with no further appeal and the time for filing such appeal has passed (unless Lender waives such requirement), together with all extensions, modifications, and amendments thereto, in form and substance satisfactory to Lender.

“Final Order Entry Date” means the date on which the Final Order is entered by the Bankruptcy Court.

“Financial Officer” means the chief financial officer, senior vice president of finance or treasurer of the manager of a Borrower (or officer with similar responsibilities).

“Financial Officer Certification” means, with respect to the financial statements for which such certification is required, the certification of a Financial Officer that such financial statements fairly present, in all material respects, the financial condition of such Borrower and its Subsidiaries as at the dates indicated and the results of their operations and their cash flows for the periods indicated.

“First Priority” means, with respect to any Lien purported to be created in any Collateral pursuant to the Orders or any Collateral Document, that such Lien has the priority and ranking as set forth in the Orders.

“Fiscal Month” means a fiscal month of any Fiscal Year.

“Fiscal Quarter” means a fiscal quarter of any Fiscal Year.

“Fiscal Week” means the Saturday through the Friday of a week.


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“Fiscal Year” means the fiscal year of each Borrower and its Subsidiaries ending on December 31 of each calendar year.

“Flood Certificate” means a “Standard Flood Hazard Determination Form” of the Federal Emergency Management Agency and any successor Governmental Authority performing a similar function.

“Flood Hazard Property” means any Real Estate Asset that constitutes Collateral in favor of Lender with buildings or mobile homes located in a Flood Zone.

“Flood Program” means the National Flood Insurance Program created by the U.S. Congress pursuant to the National Flood Insurance Act of 1968, the Flood Disaster Protection Act of 1973, the National Flood Insurance Reform Act of 1994 and the Flood Insurance Reform Act of 2004, in each case as amended from time to time, and any successor statutes.

“Flood Zone” means areas having special flood hazards as described in the National Flood Insurance Act of 1968, as amended from time to time, and any successor statute.

“Four-Week Test Period” means, at any time, the four-week period ended on the immediately preceding Friday; provided that only periods ending on the fourth Friday following the Closing Date and each fourth Friday thereafter shall constitute Four-Week Test Periods.

“Full Availability Date” means the Credit Date for the Full Availability Loan set forth in a Funding Notice; provided that such date shall not be (a) earlier than the date upon which the conditions precedent set forth in Sections 3.2 and 3.3 have been satisfied or waived, or (b) later than one (1) Business Day after the Final Order Entry Date.

“Full Availability Term Loan” means the Loan made pursuant to Section 2.l(a)(ii).

“Funding Notice” means a notice substantially in the form of Exhibit F.

“GAAP” means, subject to the limitations on the application thereof set forth in Section 1.2, United States generally accepted accounting principles in effect as of the date of determination thereof.

“Governmental Acts” means any act or omission, whether rightful or wrongful, of any present or future de jure or de facto government or Governmental Authority.

“Governmental Authority” means any foreign or domestic, federal, state, municipal, supranational, national or other government, governmental department, commission, board, bureau, court, agency, or instrumentality or political subdivision thereof or any entity, officer or examiner exercising executive, legislative, judicial, taxing, regulatory, or administrative functions of or pertaining to any government or any court, in each case whether associated with a state of the United States, the United States, or a foreign entity or government.

“Governmental Authorization” means any permit, license, authorization, plan, directive, consent order or consent decree of or from any Governmental Authority.


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“Grantor” has the meaning ascribed to such term in the applicable Pledge and Security Agreement.

“Gross Inventory” means, as of any date of determination, the Cost of the Inventory of CEC DB at such time.

“Gross Receivables” means, as of any date of determination, the then-unpaid amount of the Receivables of the Credit Parties at such time, as reasonably estimated by the Credit Parties.

“Guaranteed Obligations” as defined in Section 7.l.

“Guarantor” means those persons listed on Schedule 1.1.

“Guaranty” means the guaranty of each Guarantor set forth in Section 7.

“Hazardous Materials” means all explosive or radioactive substances or wastes and all hazardous or toxic materials, substances or wastes or other contaminants or pollutants, including petroleum or petroleum distillates, asbestos or asbestos-containing materials, polychlorinated biphenyls, radon gas, and all other materials, substances or wastes of any nature prohibited, limited or regulated by any Governmental Authority or under any Environmental Law or any Environmental Laws due to its toxic or deleterious properties or characteristics (including, without limitation, any chemical, material or substance exposure to which is prohibited, limited or regulated by Environmental Laws).

“Hazardous Materials Activity” means any past, current, proposed or threatened activity, event or occurrence involving any Hazardous Materials, including the use, manufacture, possession, storage, holding, presence, existence, location, Release, threatened Release, discharge, placement, generation, transportation, processing, construction, treatment, abatement, removal, remediation, disposal, disposition or handling of any Hazardous Materials, and any corrective action or response action with respect to any of the foregoing.

“Highest Lawful Rate” means the maximum lawful interest rate, if any, that at any time or from time to time may be contracted for, charged, or received under the laws applicable to Lender which are presently in effect or, to the extent allowed by law, under such applicable laws which may hereafter be in effect and which allow a higher maximum nonusurious interest rate than applicable laws now allow.

“Historical Financial Statements” means as of the Closing Date, (a) the audited financial statements of CEC and its Subsidiaries, for the 2016, 2017, and 2018 Fiscal Years, consisting of balance sheets and the related consolidated statements of income, stockholders’ equity and cash flows for such Fiscal Years, and (b) the unaudited financial statements of CEC and its Subsidiaries for the Fiscal Year ended December 31, 2019, the quarter ending March 31, 2020, consisting of a balance sheet and the related consolidated statements of income, stockholders’ equity and cash flows for the three-, six- or nine-month period, as applicable, ending on such date, in each case, delivered under the Tranche B Loan Agreement.

“Increased Amount” of any Indebtedness shall (a) mean any increase in the amount of such Indebtedness in connection with any accrual of interest, the accretion of accreted value, the


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amortization of original issue discount, the payment of interest in the form of additional Indebtedness with the same terms, accretion of original issue discount or liquidation preference and, in each case under this clause (a), at the rate in effect on the Petition Date and (b) increases in the amount of Indebtedness outstanding solely as a result of fluctuations in the exchange rate of currencies or increases in the value of property securing Indebtedness.

“Indebtedness” means, with respect to any specified Person, any indebtedness of such Person (excluding accrued expenses and trade payables), whether or not contingent:

(i) in respect of borrowed money;

(ii) evidenced by bonds, notes, debentures or similar instruments or letters of credit (or reimbursement agreements in respect thereof);

(iii)in respect of banker’s acceptances;

(iv) representing Capital Lease Obligations; or

(v) representing the balance deferred and unpaid of the purchase price of any property or services due more than twelve (12) months after such property is acquired or such services are completed, other than trade payables incurred in the ordinary course of business.

If and to the extent any of the preceding items (other than letters of credit) would appear as a liability upon a balance sheet of the specified Person prepared in accordance with GAAP. In addition, the term “Indebtedness” includes all Indebtedness of others secured by a Lien on any asset of the specified Person (whether or not such Indebtedness is assumed by the specified Person) (provided that the amount of any such Indebtedness shall not exceed the lesser of the amount of such Indebtedness and fair market value of the assets subject to such Lien) and, to the extent not otherwise included, the guarantee by the specified Person of any Indebtedness of any other Person. Indebtedness shall be calculated without giving effect to the effects of Statement of Financial Accounting Standards No. 133 and related interpretations to the extent such effects would otherwise increase or decrease an amount of Indebtedness for any purpose under the indenture as a result of accounting for any embedded derivatives created by the terms of such Indebtedness.

“Indemnified Liabilities” means, collectively, any and all liabilities, obligations, losses, damages (including natural resource damages), penalties, claims (including Environmental Claims), actions, judgments, suits, costs (including the reasonable and documented costs of any investigation, study, sampling, testing, abatement, cleanup, removal, remediation or other response action necessary to remove, remediate, clean up or abate any Hazardous Materials Activity), expenses and disbursements of any kind or nature whatsoever (including the reasonable and documented out-of-pocket fees and disbursements of counsel for Indemnitees in connection with any investigative, administrative or judicial proceeding or hearing commenced or threatened by any Person, whether or not any such Indemnitee shall be designated as a party or a potential party thereto, and any reasonable and documented out of pocket fees or expenses incurred by Indemnitee s in enforcing this indemnity), whether direct, indirect, special or consequential and whether based on any federal, state or foreign laws, statutes, rules or regulations (including securities and commercial laws, statutes, rules or regulations and Environmental Laws), on common law or


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equitable cause or on contract or otherwise, that may be imposed on, incurred by, or asserted against any such Indemnitee, in any manner relating to or arising out of (a) this Agreement or the other Credit Documents or the transactions contemplated hereby or thereby (including Lender’s agreement to make Credit Extensions, the syndication of the credit facilities provided for herein or the use or intended use of the proceeds thereof, any amendments, waivers or consents with respect to any provision of this Agreement or any of the other Credit Documents, or any enforcement of any of the Credit Documents (including any sale of, collection from, or other realization upon any of the Collateral or the enforcement of the Guaranty)); or (b) any Environmental Claim or any Hazardous Materials Activity relating to or arising from, directly or indirectly, any past or present activity, operation, land ownership, or practice of any Borrower or any of its respective Subsidiaries; provided that “Indemnified Liabilities” shall not include any Taxes, which are the subject of Section 2.13.

“Indemnitee” as defined in Section 9.3(a).

“Intellectual Property” as defined in the applicable Pledge and Security Agreement.

“Intellectual Property Security Agreements” has the meaning assigned to that term in the applicable Pledge and Security Agreement.

“Interest Rate” as defined in Section 2.5.

“Interim Order” means the order of the Bankruptcy Court entered in the Cases after an interim hearing (assuming satisfaction of the standard prescribed in Bankruptcy Rule 4001 and other applicable law) substantially in the form of Exhibit A hereto or otherwise in form and substance satisfactory to Lender, which, among other matters but not by way of limitation, authorizes, on an interim basis, the Borrowers and Guarantors to execute and perform under the terms of this Agreement and the other Credit Documents.

“Interim Order Entry Date” means the date on which the Interim Order is entered by the Bankruptcy Court and Lender shall have received a certified copy thereof.

“Interim Term Loans” means the Loans made pursuant to Section 2.1(a)(i).

“Internal Revenue Code” means the Internal Revenue Code of 1986, as amended to the date hereof and from time to time hereafter, and any successor statute (in each case, unless otherwise indicated).

“Inventory” has the meaning assigned to such term in the UCC.

“Inventory Appraisal” shall mean an Inventory appraisal conducted by an independent appraisal firm reasonably satisfactory to Lender and delivered pursuant to Section 5.25 hereof.

“Inventory Appraisal Trigger Event” shall mean the earliest to occur of (a) an Event of Default pursuant to Section 8.1(a) and 8.1(c) (with respect to Section 6.7(d)), (b) the date that is six (6) months following the Closing Date, or (c) the filing with the Bankruptcy Court of a Reorganization Plan that is not an Acceptable Plan.


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“Investment” means (a) any direct or indirect purchase or other acquisition by any Borrower or any of its respective Subsidiaries of, or of a beneficial interest in, any of the Equity Interests or Securities of any other Person; (b) any direct or indirect loan, advance (other than advances to employees for moving, entertainment and travel expenses, drawing accounts and similar expenditures in the ordinary course of business) or capital contributions by any Borrower or any of their respective Subsidiaries to any other Person; and (c) any purchase or other acquisition (other than purchases or other acquisitions of inventory, materials and equipment in the ordinary course of business and capital expenditures), 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. The amount of any Investment of the type described in clauses (a), (b) and (c) shall be the original cost of such Investment plus the cost of all additions thereto, without any adjustments for increases or decreases in value, or write-ups, write-downs or write-offs with respect to such Investment. Except as otherwise provided in the Agreement, the amount of an Investment will be determined at the time the Investment is made and without giving effect to subsequent changes in value and net of any dividends, distributions, repayments or redemptions received in respect of such Investment.

“Joint Venture” means a joint venture, partnership or other similar arrangement with a third-party non-Affiliate, whether in corporate, partnership or other legal form.

“Leasehold Property” means any interest of any Credit Party as lessee or licensee in, to and under leases or licenses of land, improvements and/or fixtures, other than any such leasehold interest designated from time to time by Lender as not being required to be included in the Collateral.

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

“Lien” means any lien, mortgage, pledge, collateral assignment, security interest, charge, or encumbrance of any kind (including any agreement to give any of the foregoing, any conditional sale or other title retention agreement, and any lease or license in the nature thereof) and any option, trust or other preferential arrangement having the practical effect of any of the foregoing.

“Liquidity” means, the aggregate amount of cash and Cash Equivalents held in accounts on the consolidated balance sheet of any Borrower or any of their respective Subsidiaries that is “unrestricted” in accordance with GAAP (including, for the avoidance of doubt, any cash or Cash Equivalents held in the Controlled Account).

“LLC Division” means the statutory division of any limited liability company into two or more limited liability companies pursuant to Section 18.217 of the Delaware Limited Liability Company Act or a comparable provision of a different jurisdiction’s laws, as applicable.

“Loan” or “Loans” means, individually or collectively as the context requires, a Term Loan and/or a Roll-Up Loan.

“Lockbox Account” means a lockbox account established by Lender in accordance with Section 5.23.

“Margin Stock” as defined in Regulation U.


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“Material Adverse Effect” means a material adverse effect on (a) the business, operations, properties, assets or financial condition of the Restricted Group taken as a whole (other than by virtue of the commencement of the Cases, any matter disclosed in Schedule 4.10 and in each case, the events and circumstances giving rise thereto (including any payment defaults prior to the Petition Date relating to Indebtedness or other obligations)); (b) the ability of the Credit Parties, taken as a whole, to fully and timely perform their Obligations (other than by virtue of the commencement of the Cases, any matter disclosed in Schedule 4.10 and in each case, the events and circumstances giving rise thereto (including any payment defaults prior to the Petition Date relating to Indebtedness or other obligations)); (c) the legality, validity, binding effect or enforceability against a Credit Party of a Credit Document to which it is a party; or (d) the rights, remedies and benefits available to, or conferred upon, Lender under any Credit Document.

“Material Lease” means any lease or license demising to any Credit Party any Real Estate Asset that constitutes a Leasehold Property.

“Maturity Date” means the first to occur of: (a) the date that is sixty (60) days following the Petition Date (the “Stated Maturity Date”), (b) the Plan Effective Date, (c) the consummation of a sale or other disposition of all or substantially all assets of the Debtors under section 363 of the Bankruptcy Code, and (d) the date on which Obligations hereunder shall be accelerated in accordance with the provisions of this Agreement.

“MIPA” means the Membership Interest Purchase Agreement attached as Exhibit J.

“Monthly Consolidated Financial Reports” means financial reports with respect to Borrowers and their respective Subsidiaries, substantially in the form of Exhibit G hereto (modified to include a schedule that details each of the projects and amounts spent per project) for any Fiscal Month, that set forth consolidated information and operating statistics, delivered in accordance with Section 5.l(a).

“Mortgage” means a mortgage, deed to secure debt, deed of trust or similar instrument in form and substance reasonably satisfactory to Lender.

“Multiemployer Plan” means any “multiemployer plan” as defined in Section 4001(a)(3) of ERISA to which a Credit Party or any of its ERISA Affiliates contributes or is required to contribute or could reasonably be expected to have any actual or potential liability.

“Net Asset Sale Proceeds” means, with respect to any Asset Sale, an amount equal to: (a) Cash payments (including any Cash received by way of deferred payment pursuant to, or by monetization of, a note receivable or otherwise, but only as and when so received) received by any Borrower or its Subsidiaries from such Asset Sale, minus (b) any direct costs, fees, and expenses relating to such Asset Sale, including (i) Taxes paid or payable by the seller as a result of any gain recognized in connection with such Asset Sale, (ii) all reasonable fees, legal fees, brokerage fees, commissions, costs, relocation expenses and other expenses in connection with such Asset Sale, (iii) payment of the outstanding principal amount of, premium or penalty, if any, and interest on any Indebtedness (other than Prepetition Debt) that is secured by a Lien on the stock or assets in question and that is required to be repaid under the terms thereof as a result of such Asset Sale, and (iv) cash held in escrow from the sale price and any reasonable reserve taken in connection


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with such Asset Sale, including for any purchase price adjustments, or any indemnification payments (fixed or contingent) attributable to seller’s indemnities and representations and warranties to purchaser in respect of such Asset Sale undertaken by such Borrower or any of its Subsidiaries in connection with such Asset Sale; provided that upon release of any such reserve, the amount released shall be considered Net Asset Sale Proceeds.

“Net Insurance/Condemnation Proceeds” means an amount equal to: (a) any Cash payments or proceeds received by a Debtor or any of its Subsidiaries (i) under any property or casualty insurance policy in respect of a covered loss thereunder or (ii) as a result of the taking of any assets of a Borrower or any of its Subsidiaries by any Person pursuant to the power of eminent domain, condemnation or otherwise, or pursuant to a sale of any such assets to a purchaser with such power under threat of such a taking, minus (b) (i) any actual and reasonable costs incurred by such Borrower or any of its Subsidiaries in connection with the adjustment or settlement of any claims of such Borrower or any of its Subsidiaries in respect thereof, (ii) any bona fide direct costs, fees and expenses incurred in connection with any sale of such assets as referred to in clause (b)(ii) of this definition, including Taxes payable as a result of any gain recognized or otherwise in connection therewith, and (iii) payment of the outstanding principal amount of, premium or penalty, if any, and interest on any Indebtedness (other than Prepetition Debt) that is secured by a Lien on the assets subject to the relevant event described in clause (a)(i) or (ii) above that is required that to be repaid as a result of such event.

“Non-Public Information” means material non-public information (within the meaning of United States federal, state or other applicable securities laws) with respect to a Borrower or its Subsidiaries.

“Obligations” means all obligations of every nature of each Credit Party, including obligations from time to time owed to Lender under any Credit Document, whether for principal, interest (including interest which, but for the filing of a petition in bankruptcy with respect to such Credit Party, would have accrued on any Obligation, whether or not a claim is allowed against such Credit Party for such interest in the related bankruptcy proceeding); provided, however, that in the event the Tranche B Loan is not rolled-up pursuant to Section 2.1(b)(ii) on or before the Full Availability Date, then any and all obligations under the Tranche B Loan shall be excluded; provided, further, that in the event of such exclusion, the obligations of the Credit Parties under the Loan Documents (as defined in the Tranche B Loan Agreement) shall remain in full force and effect.

“Obligee Guarantor” as defined in Section 7.6.

“Operative Approved Cash Flow Forecast” means, with respect to any Reporting Period, Two-Week Test Period or Four Week Test Period, the Approved Cash Flow Forecast most recently delivered that contains projections for each week included in such Reporting Period, Two-Week Test Period or Four Week Test Period.

“Orders” shall mean, collectively, the Interim Order and the Final Order.

“Organizational Documents” means (a) with respect to any corporation, its certificate or articles of incorporation or organization, as amended, and its by-laws, as amended, (b) with respect


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to any limited partnership, its certificate of limited partnership, as amended, and its partnership agreement, as amended, (c) with respect to any general partnership, its partnership agreement, as amended, and (d) with respect to any limited liability company, its articles of organization, as amended, and its operating agreement, as amended. In the event any term or condition of this Agreement or any other Credit 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 in such official’s relevant jurisdiction.

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

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

“PATRIOT Act” as defined in Section 3.l(l).

“Payment in Full” or “Paid in Full” means, with respect to the Obligations, payment in full in cash of all Obligations under the Credit Documents (other than contingent indemnification obligations and other obligations not then payable which expressly survive termination and as to which no claim has been asserted).

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

“Pension Plan” means any Employee Benefit Plan, other than a Multiemployer Plan, which is subject to Section 412 of the Internal Revenue Code or Section 302 of ERISA and which a Credit Party or any of its ERISA Affiliates sponsors, maintains or is required to contribute to or could reasonably be expected to have any actual or potential liability to.

“Permitted Business” means any business that is the same as, or reasonably related, ancillary or complementary to, any of the businesses in which a Borrower or any of its Subsidiaries are engaged on the Closing Date.

“Permitted Liens” means each of the Liens permitted pursuant to Section 6.2.

“Permitted Variance” as defined in Section 6.6.

“Petition Date” as defined in the recitals hereto.

“Plan Effective Date” means the date of the substantial consummation (as defined in section 1101 (2) of the Bankruptcy Code, which for purposes hereof shall be no later than the


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effective date) of one or more plans of reorganization confirmed pursuant to a final order entered by the Bankruptcy Court.

“Pledge and Security Agreement” means the Pledge and Security Agreement executed by each Borrower, each Guarantor and Lender, dated as of the Closing Date, substantially in the form of Exhibit D as it may be amended, restated, supplemented or otherwise modified from time to time.

“Potential Purchaser” means CED BTM Development Solar, LLC, a Delaware limited liability company

“Prepetition” means the time period immediately prior to the filing of the applicable Case.

“Prepetition Debt” means, collectively, the Indebtedness of each Debtor outstanding and unpaid on the date on which such Person becomes a Debtor.

“Principal Office” means such other office or office of a third party or sub-agent, as appropriate, as such Person may from time to time designate in writing to each Borrower and Lender.

“Proceeds” has the meaning assigned to such term in the UCC.

“PSA” means that certain Plan Support Agreement dated as of July 2, 2020, executed and delivered by the Credit Parties and the other parties thereto, as such agreement may be amended, supplemented or otherwise modified from time to time in accordance with the terms thereof.

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

“Real Estate Asset” means, at any time of determination, any interest (fee, leasehold or otherwise) then owned by any Credit Party in any real property.

“Receivables” means all rights to the payment of a monetary obligation now or hereafter owing to any Credit Party, evidenced by Accounts, Instruments, Chattel Paper or General Intangibles (as such terms are defined in Article 9 of the UCC), calculated on a gross basis.

“Recipient” means Lender or any other recipient of any payment to be made by or on account of any obligation of any Credit Party hereunder.

“Regulation D” means Regulation D of the Board of Governors, as in effect from 43 time to time and all official rulings and interpretations thereunder or thereof.

“Regulation FD” means Regulation FD as promulgated by the U.S. Securities and Exchange Commission under the Securities Act and Exchange Act as in effect from time to time.

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


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

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

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

“Release” means any release, spill, emission, leaking, pumping, pouring, injection, escaping, deposit, disposal, discharge, dispersal, dumping, leaching or migration of any Hazardous Material into the indoor or outdoor environment (including the abandonment or disposal of any barrels, containers or other closed receptacles containing any Hazardous Material), including the migration of any Hazardous Material through the air, soil, surface water or groundwater. of the Debtors.

“Released DIP Parties” as defined in Section 2.15.

“Releasing Parties” as defined in Section 2.15.

“Remedies Notice” as defined in Section 8.2.

“Remedies Notice Period” as defined in Section 8.2.

“Reorganization Plan” means a plan of reorganization in any or all of the Cases.

“Reporting Period” as defined in the definition of “Budget Variance Report”.

“Restricted Group” means each Borrower and its Subsidiaries.

“Roll-Up” as defined in Section 2.l(b)(ii).

“Roll-Up Facility” as defined in the recitals hereto.

“Roll-Up Loans” as defined in Section 2.1(b)(ii).

“Roll-Up Obligations” means all obligations of every nature of each Borrower and Guarantors with respect to the Roll-Up Loans, including obligations from time to time owed to Lender, under any Credit Document.

“Securities” means any stock, shares, partnership interests, voting trust certificates, certificates of interest or participation in any profit-sharing agreement or arrangement, options, warrants, bonds, debentures, notes, or other evidences of indebtedness, secured or unsecured, convertible, subordinated or otherwise, or in general any instruments commonly known as “securities” or any certificates of interest, shares or participations in temporary or interim certificates for the purchase or acquisition of, or any right to subscribe to, purchase or acquire, any of the foregoing.


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“Securities Act” means the Securities Act of 1933, as amended from time to time, and any successor statute.

“Services Agreement” means that certain Services Agreement by and between the Borrowers and CEC dated as of July 2, 2020, in the form attached hereto as Exhibit I.

“Stated Maturity Date” as defined in clause (a) of the definition of “Maturity Date” hereunder.

“Subsidiary” means, with respect to any Person, (1) any corporation, association or other business entity (other than a partnership) of which more than 50% of the total voting power of shares of Capital Stock entitled to vote in the election of directors, managers or trustees of the corporation, association or other business entity is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other subsidiaries of that Person (or a combination thereof), or (2) any partnership of which such Person or any subsidiary of such Person is a controlling general partner or otherwise controls such entity.

“Subsidiary” means, unless the context otherwise requires, a subsidiary of Borrower.

“Superpriority Claims” means the “DIP Superpriority Claims” (as defined in the Orders).

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

“Term Loan” means an Interim Term Loan and/or the Full Availability Term Loan, as the context may require.

“Term Loan Facility” as defined in the preamble hereto, including the Interim Term Loans and the Full Availability Term Loan.

“Term Loan Proceeds” as defined in Section 2.l(c)(ii).

“Tranche B Roll-Up Loan” as defined in Section 2.1(b)(ii).

“Tranche B Lender” as defined in the recitals hereto.

“Tranche B Loan” as defined in the recitals hereto.

“Tranche B Loan Balance” as defined in the recitals hereto.

“Tranche B Loan Agreement” as defined in the recitals hereto.

“Two-Week Test Period” means, at any time, the two-week period ended on the immediately preceding Friday; provided that only periods ending on the second Friday following the Closing Date and each fourth Friday thereafter shall constitute Two-Week Test Periods.

“UCC” means the Uniform Commercial Code (or any similar or equivalent legislation) as in effect from time to time in the State of New York; provided, however, that in the event that, by


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reason of mandatory provisions of law, any or all of the perfection or priority of, or remedies with respect to, any Collateral is governed by the Uniform Commercial Code as enacted and in effect in a jurisdiction other than the State of New York, the term “UCC” shall mean the Uniform Commercial Code as enacted and in effect in such other jurisdiction solely for purposes of the provisions hereof relating to such perfection, priority or remedies.

“Voting Stock” of any specified Person as of any date means the Equity Interest of such Person that is at the time entitled to vote in the election of the Board of Directors of such Person.

“Weekly Project Level Financial Reports” means project-level financial reports with respect to Borrowers and their subsidiaries, in form acceptable to Lender, setting forth (a) all cash receipts and disbursements by Borrowers and their subsidiaries during the Fiscal Week ending on such Friday and (b) the Borrowers’ good faith projection of all cash receipts and disbursements that will be made or incurred in connection with the operation of the Borrowers and their respective Subsidiaries’ business during the immediately following one Fiscal Week period.

1.2 Accounting Terms. Except as otherwise expressly provided herein, all accounting terms not otherwise defined herein shall have the meanings assigned to them in conformity with GAAP. Financial statements and other information required to be delivered by the Borrowers to Lender pursuant to Sections 5.1(b) and 5.1(c) shall be prepared in accordance with GAAP as in effect at the time of such preparation (and delivered together with the reconciliation statements provided for in Section 5.1(e), if applicable). In the event that any Accounting Change (as defined below) results in a change in the method of calculation of financial covenants, standards or terms in this Agreement, then the Borrowers and Lender agree to enter into good faith negotiations in order to amend such provisions of this Agreement so as to equitably reflect such Accounting Change with the desired result that the criteria for evaluating each Borrower’s financial condition shall be the same after such Accounting Change as if such Accounting Change had not been made. Until such time as such an amendment shall have been executed and delivered by the Borrower and Lender, all financial covenants, standards and terms in this Agreement shall continue to be calculated or construed as if such Accounting Change had not occurred. “Accounting Change” refers to any change in accounting principles required by the promulgation of any rule, regulation, pronouncement or opinion by the Financial Accounting Standards Board of the American Institute of certified Public Accountants or, if applicable, the U.S. Securities and Exchange Commission and/or the Public Company Accounting Oversight Board (or successors thereto or agencies with similar functions). Anything in this Agreement to the contrary notwithstanding, any obligation of a Person under a lease (whether existing now or entered into in the future) that is not (or would not be) required to be classified and accounted for as a capital lease on the balance sheet of such Person under GAAP as in effect on December 15, 2018 shall not be treated as a capital lease solely as a result of (a) the adoption of any changes in, or (b) changes in the application of, GAAP after the Closing Date.

1.3 Interpretation, Etc. Any of the terms defined herein may, unless the context otherwise requires, be used in the singular or the plural, depending on the reference. References herein to any Section, Appendix, Schedule or Exhibit shall be to a Section, an Appendix, a Schedule or an Exhibit, as the case may be, hereof unless otherwise specifically provided. The use herein of the word “include” or “including”, when following any general statement, term or matter, shall not be construed to limit such statement, term or matter to the specific items or matters


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set forth immediately following such word or to similar items or matters, whether or not non-limiting language (such as “without limitation” or “but not limited to” or words of similar import) is used with reference thereto, but rather shall be deemed to refer to all other items or matters that fall within the broadest possible scope of such general statement, term or matter. The terms “lease” and “license” shall include sub-lease and sub-license, as applicable. References to any “Agent,” any “Credit Party,” any “Lender,” any “obligor,” any “party” or any other persons shall be construed so as to include successors in title, permitted assigns and permitted transferees. References to “assets” include present and future properties, revenues and rights of every description. References to a “Credit Document” or any other agreement or instrument is a reference to that Credit Document or other agreement or instrument as amended, novated, supplemented, extended or restated, strictly in accordance with the terms thereof. References to any “Guarantor,” the “Guaranteed Obligations,” or any “Subsidiary Guarantor,” shall be construed so as give effect to the obligation to the Payment in Full of the Guaranteed Obligations by the Guarantors as set forth in Section 7.1.

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

SECTION 2. LOANS

2.1 Loans.

(a) Term Loans. Subject to the terms and conditions of this Agreement and relying upon the representations and warranties herein set forth:

(i) Lender agrees to make Term Loans to the Borrowers during the Availability Period not exceeding, in the aggregate, $1,200,000 (the “Interim Term Loans”); and

(ii) In addition to the Interim Term Loans, Lender agrees to make a Term Loan to the Borrowers on the Full Availability Date in an amount equal to $1,202,803 (the “Full Availability Term Loan”).

The aggregate amount of the Term Loans made in accordance with this Section 2.1(a) shall not exceed $2,402,803.

Any amount borrowed under this Section 2.1(a) and subsequently repaid or prepaid may not be reborrowed. Subject to Section 2.13(a) and 2.14, all amounts owed hereunder with respect to the Term Loans shall be Paid in Full no later than the Maturity Date.

The Commitment for Term Loans shall reduce on the date of each Credit Extension by the amount of such Credit Extension and shall terminate on the Maturity Date.


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(b) Roll-Up Loans. Subject to the terms and conditions hereof and the Orders,

(i) on the Closing Date, the Development Loan held by Lender, shall be automatically substituted and exchanged for (and prepaid by) loans hereunder in a principal amount equal to the outstanding principal and accrued interest, fees and expenses due under the CEC DB Loan Agreement on the Full Availability Date, not to exceed $5,400,000 on the Closing Date (the “CEC DB Roll-Up Loan”) which, for the avoidance of doubt, shall be in a principal amount equal to $5,000,000 (and such CEC DB Roll-Up Loan shall be deemed funded on the Closing Date and shall constitute and shall be deemed to be a Loan hereunder);

(ii) on the Full Availability Date (or such earlier date as Lender may agree), the Tranche B Loan held by Lender, shall be automatically substituted and exchanged for (and prepaid by) loans hereunder in a principal amount equal to the outstanding principal and accrued interest, fees, and expenses due under the Tranche B Loan Agreement on the Full Availability Date, not to exceed $1,100,000 (the “Tranche B Roll-Up Loan”, and together with the CEC DB Roll-Up Loan, the “Roll-Up Loans”) which, for the avoidance of doubt, shall be in a principal amount confirmed by the Parties in writing no later than one (1) Business Day prior to the Full Availability Date (and such Tranche B Roll-Up Loan shall constitute and shall be deemed to be Loans hereunder) (the foregoing substitution and exchange of CEC DB Loan and Tranche B Loan into Roll-Up Loans shall be defined herein, generally, as the “Roll-Up”).

(c) Borrowing Mechanics for Term Loans.

(i) Request for Term Loan.

(1) To request an Interim Term Loan, the Borrowers shall submit to Lender a fully executed Funding Notice, not later than Friday of each week commencing with the first Friday after the Closing Date (or, for the Closing Date Interim Term Loan, prior to the Closing Date). Each such Funding Notice shall specify the aggregate amount of the requested Interim Term Loan, which shall not exceed the lesser of (A) the Borrowers’ good faith projection of disbursements, net of cash receipts that will be made in connection with the operation of the Borrowers and their respective Subsidiaries’ business during the immediately following one Fiscal Week period, and (B) the undrawn balance of the Term Loan Facility set forth in Section 2.1(a)(i).

(2) To request the Full Availability Term Loan, the Borrowers shall submit to Lender a fully executed Funding Notice no later than three (3) Business Days prior to the Full Availability Date.

(ii) Disbursement of Term Loans. Upon satisfaction or waiver of the conditions precedent specified herein, Lender shall make the proceeds of the Term Loans (the “Term Loan Proceeds”) available to the Borrowers on the applicable Credit Date by causing an amount of same day funds in Dollars equal to the proceeds of such Term Loan to be credited to


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the Controlled Account. Provided such conditions precedent are satisfied or waived, the date of disbursement of such Interim Term Loan shall be by Tuesday of each week.

2.2 Draws from the Controlled Account. The Borrowers may draw from the Controlled Account (each, a “Draw”), subject to compliance with Sections 5.22 and 6.1, and use the proceeds of such draws solely in accordance with Sections 2.3 and 5.12.

2.3 Use of Proceeds. The proceeds of the Loans shall be applied by the Borrowers (a) to pay the fees, costs, and expenses required to be paid in connection with the transactions contemplated hereby and the Cases, and (b) to finance the working capital and other needs/general corporate purposes of the Borrowers following the commencement of the Cases and including the Roll-Up and expenses pursuant to the Service Agreement, in each case, solely in accordance with the Weekly Project Level Financial Report, Funding Requests and Operative Approved Cash Flow Forecast (subject to Permitted Variances) delivered from time to time pursuant to this Agreement and not in contravention of any applicable law and not in violation of this Agreement, the other Credit Documents or the Orders; provided that, for purposes of clarity, the Borrowers may not use any proceeds of the Loans to pay any “break-up” fee to any party (including the Potential Purchaser unless there is a Bankruptcy Court approved auction process pursuant to 11 U.S.C. § 363 acceptable to the Lender, the Potential Purchaser is outbid by an amount that exceeds the amount of such break-up fee, and the Bankruptcy Court approves a sale of substantially all of the Debtors assets to a third-party); provided, further, that in no event shall the Borrowers use the proceeds of the Loans to pay any indemnification amounts owed to any party, including the Potential Purchaser.

2.4 Joint and Several Obligation. Each Borrower shall be jointly and severally liable for the repayment, in cash, of the aggregate outstanding principal amount of each Loan on its respective Maturity Date together with interest as set forth in Section 2.6.

2.5 Interest on Loans. Except as otherwise set forth herein, each Loan shall bear interest on the unpaid principal amount thereof from the date made through repayment (whether by acceleration or otherwise) thereof at a per annum rate of interest equal at all times to twenty percent (20%) (the “Interest Rate”). Interest shall be computed on the basis of a 365-day or 366-day year, as the case may be, for the actual number of days elapsed in the period during which it accrues. In computing interest on any Loan, the date of payment of such Loan shall be excluded; provided, if a Loan is repaid on the same day on which it is made, one day’s interest shall be paid on that Loan. Except as otherwise set forth herein, interest on each Loan shall accrue on a daily basis and shall be payable in arrears on the earlier of (a) the date of repayment of all or any portion of the principal amount of such Loan or (b) an Event of Default.

2.6 Default Interest Rate.

(a) Upon the occurrence and during the continuance of an Event of Default, any overdue amounts in respect of the Term Loans and, to the extent permitted by applicable law, any overdue interest payments on the Term Loans or any overdue fees or other amounts owed hereunder, shall thereafter bear interest (including post-petition interest in any proceeding under Debtor Relief Laws) payable on demand at a rate that is 3.00% per annum in excess of the Interest


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Rate (or, in the case of any such fees and other amounts, at a rate which is 3.00% per annum in excess of the Interest Rate).

(b) Upon the occurrence and during the continuance of an Event of Default, any overdue amounts in respect of the Roll-Up Loans and, to the extent permitted by applicable law, any overdue interest payments on the Roll-Up Loans or any overdue fees or other amounts owed hereunder, shall thereafter bear interest (including post-petition interest in any proceeding under Debtor Relief Laws) payable on demand at a rate that is 3.00% per annum in excess of the Interest Rate (or, in the case of any such fees and other amounts, at a rate which is 3.00% per annum in excess of the Interest Rate) (the “Default Rate”).

(c) Payment or acceptance of the increased rates of interest provided for in this Section 2.6 is not a permitted alternative to timely payment and shall not constitute a waiver of any Event of Default or otherwise prejudice or limit any rights or remedies of Lender.

2.7 Fees. The Borrowers agree to pay Lender financing fees in the amount of $250,000.00, which shall be due and payable in cash at the time of repayment of all or any part of the principal amount of the Loans; provided that, without limiting Lender’s other rights and remedies in connection with such default, if the Borrowers fail to repay the principal amount of the Loans in full on or before the Maturity Date, such financing fees will increase by $50,000, as liquidated damages and not as a penalty, for each week during the period commencing on the Maturity Date and ending on the date upon which the principal amount of the Loans are repaid in full; provided, further, that the maximum financing fees payable in accordance with this Section 2.7 shall not exceed $500,000 in the aggregate.

2.8 Repayment of Loans. The Borrowers hereby unconditionally promise to pay to Lender the then unpaid principal amount of the Loans, together with all other amounts owed hereunder with respect thereto, including all applicable fees in accordance with Section 2.7, on the Maturity Date.

2.9 Voluntary Prepayments. Any time and from time to time, the Borrowers may prepay any Loans on any Business Day in whole or in part, in an aggregate minimum amount of Five Hundred Thousand Dollars ($500,000) (unless a lesser amount is required to repay such Loan in full). All such prepayments shall be made upon not less than one (1) Business Day’s prior written or telephonic notice and given to Lender by 1:00 p.m. (New York City time) on the date required and, if given by telephone, promptly confirmed in writing to Lender. Upon the giving of any such notice, the principal amount of the Loans specified in such notice shall become due and payable on the prepayment date specified therein. Any such voluntary prepayment shall be applied as specified in Section 2.11.

2.10 Mandatory Prepayments.

(a) Asset Sales. No later than five (5) Business Days following the date of receipt by a Borrower or any of its Subsidiaries of any Net Asset Sale Proceeds, without duplication, (i) in an aggregate amount in excess of Twenty-Five Thousand Dollars ($25,000) for all aggregate Asset Sales following the Closing Date, and (ii) in an aggregate amount in excess of Ten Thousand Dollars ($10,000) for any individual Asset Sale, the Borrowers shall prepay the


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Loans as set forth in Section 2.9 in an aggregate amount equal to such excess Net Asset Sale Proceeds.

(b) Insurance/Condemnation Proceeds. No later than five (5) Business Days following the date of receipt by a Borrower or any of its Subsidiaries of any Net Insurance/Condemnation Proceeds, (i) in an aggregate amount in excess of Ten Thousand Dollars ($10,000) for all such Net Insurance/Condemnation Proceeds received following the Closing Date and (ii) in an aggregate amount in excess of Ten Thousand Dollars ($10,000) in connection with Net Insurance/Condemnation Proceeds in connection with any event, Borrower shall prepay the Loans as set forth in Section 2.9 in an aggregate amount equal to such excess Net Insurance/Condemnation Proceeds; provided that, so long as no Event of Default shall have occurred and be continuing on the date of receipt of such proceeds, the Borrowers shall have the option, directly or through one or more of its Subsidiaries to reinvest such Net Insurance/Condemnation Proceeds, only to the extent such Proceeds do not constitute Collateral, within one-hundred eighty (180) days of receipt thereof in the repair, restoration, or replacement of the applicable assets thereof.

(c) Issuance of Debt. Within five (5) Business Days of the receipt by a Borrower or any of its Subsidiaries of any net cash proceeds from the incurrence of any Indebtedness of such Borrower or any of its Subsidiaries (other than with respect to any Indebtedness permitted to be incurred pursuant to Section 6.1), Borrower shall prepay the Loans as set forth in Section 2.9 in an aggregate amount equal to 100% of such proceeds, net of underwriting discounts, debt issuance and commitment fees and commissions and other reasonable costs and expenses associated therewith, including reasonable legal fees and expenses.

(d) Prepayment Certificate. Concurrently with any prepayment of the Loans pursuant to Sections 2.10(a) through 2.10(c), each Borrower shall deliver to Lender a certificate of an Authorized Officer demonstrating the calculation of the amount of the applicable net proceeds. In the event that the Borrowers shall subsequently determine that the actual amount received exceeded the amount set forth in such certificate, the Borrowers shall promptly make an additional prepayment of the Loans in an amount equal to such excess to the extent not otherwise permitted to be reinvested in the case of Net Insurance/Condemnation Proceeds, and each Borrower shall concurrently therewith deliver to Lender a certificate of an Authorized Officer demonstrating the derivation of such excess.

2.11 Application of Prepayments. All Prepayments pursuant to Section 2.9 and 2.10 shall be accompanied by accrued interest to the extent required by Section 2.5 and 2.6. Subject to the Carve Out, each prepayment of Loans pursuant to Section 2.9 and 2.10 shall be applied by the Borrowers, in accordance with the Orders, and to the extent not in contravention with the Orders, to be remitted by the Borrowers to Lender and applied by Lender ratably to repay the Loans then outstanding. The designation of such proceeds shall be reasonably acceptable to Lender and no such prepayment shall be made until so approved; provided that Lender shall be deemed to have approved a prepayment notice delivered pursuant to this Section 2.11 unless Lender shall have


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objected to such prepayment notice within five (5) Business Days. If not so approved, the parties agree to negotiate in good faith to reach a resolution as to such allocation.

2.12 General Provisions Regarding Payments.

(a) All payments by the Borrowers of principal, interest, fees, and other Obligations shall be made in Dollars in same day funds, without defense, recoupment, setoff or counterclaim, free of any restriction or condition, and delivered to Lender prior to 3:00 p.m. (New York City time) on the date due at the Principal Office of Lender.

(b) All payments in respect of the principal amount of any Loan shall be accompanied by payment of accrued interest on the principal amount being repaid or prepaid, and all such payments (and, in any event, any payments in respect of any Loan on a date when interest is due and payable with respect to such Loan) shall be applied to the payment of interest then due and payable before application to principal.

(c) Whenever any payment to be made hereunder with respect to any Loan shall be stated to be due on a day that is not a Business Day, such payment shall be made on the next succeeding Business Day; provided, that if such extension would cause such payment to be made in the next succeeding Fiscal Quarter, such payment shall be made on the immediately preceding Business Day instead.

(d) Lender shall deem any payment by or on behalf of the Borrowers hereunder that is not made in same day funds prior to 3:00 p.m. (New York City time) to be a non-conforming payment. Any such payment shall not be deemed to have been received by Lender until the later of (i) the time such funds become available funds, and (ii) the applicable next Business Day. Lender shall give prompt telephonic notice to the Borrowers if any payment is non-conforming. To the extent not made in same day funds no later than 6:00 p.m. (New York City time), any non-conforming payment may constitute or become a Default or Event of Default in accordance with the terms of Section 8.1(a). Interest shall continue to accrue on any principal as to which a non-conforming payment is made until such funds become available funds (but in no event less than the period from the date of such payment to the next succeeding applicable Business Day) at the Default Rate from the date such amount was due and payable until the date such amount is Paid in Full.

(e) If an Event of Default shall have occurred and not otherwise been waived, and the maturity of the Obligations shall have been accelerated pursuant to Section 8.1 or pursuant to any sale of, any collection from, or other realization upon all or any part of the Collateral as a result thereof, all payments or proceeds received by Lender hereunder in respect of any of the Obligations shall be applied in accordance with Section 8.3.

2.13 Taxes; Withholding, Etc.

(a) Payments to Be Free and Clear. Subject to Section 2.13(b), all sums payable by any Credit Party hereunder and under the other Credit Documents shall (except to the extent required by law) be paid free and clear of, and without any deduction or withholding on account


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of, any Tax imposed, levied, collected, withheld or assessed by any Governmental Authority or any political subdivision or taxing authority thereof or therein.

(b) Withholding of Taxes. If any Credit Party or Lender is required by law to make any deduction or withholding on account of any Tax from any sum paid or payable by or on behalf of any Credit Party to Lender under any of the Credit Documents: (i) each Borrower shall notify Lender or Lender shall notify each Borrower, as applicable, of any such requirement or any change in any such requirement as soon as reasonably possible after such Borrower or Lender becomes aware of it; (ii) Borrower or Lender (or other relevant Credit Party) shall pay any such Tax to the relevant Governmental Authority before the date on which penalties attach thereto, such payment to be made (if the liability to pay is imposed on any Credit Party) for its own account or (if that liability is imposed on Lender) on behalf of and in the name of Lender; (iii) the sum payable by such Credit Party in respect of which the relevant deduction or withholding is required shall be increased to the extent necessary to ensure that, after the making of that deduction or withholding (including such deductions and withholdings applicable to additional sums payable under this Section), Lender, as the case may be, receives on the relevant due date a net sum equal to what it would have received had no such deduction or withholding been required or made; and (iv) within thirty (30) days after paying any sum from which any deduction or withholding has been made, such Borrower shall deliver to Lender evidence reasonably satisfactory to Lender of such deduction or withholding and of the remittance thereof to the relevant tax or other authority; provided, no such additional amount shall be required to be paid under clause (iii) above with respect to any Excluded Taxes.

(c) Payment of Other Taxes. In addition, each Borrower shall timely pay to the relevant Governmental Authority in accordance with applicable law, and shall indemnify and timely reimburse Lender for the payment of any Other Taxes.

(d) Borrower Indemnification for Failure to Pay Required Taxes, etc. Each Borrower shall indemnify Lender for any Taxes (including Taxes imposed or asserted on or attributable to amounts payable under this Section 2.13) payable or paid by Lender or required to be withheld or deducted from a payment to Lender and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. Payment under this indemnification must be made within fifteen (15) days from the date any of Lender or any of their respective Affiliates makes written demand therefore accompanied by appropriate evidence of the Tax and its payment. A certificate as to the amount of such payment or liability delivered to such Borrower by Lender shall be conclusive absent manifest error.

(e) Treatment of Certain Refunds. If Lender determines, in its sole discretion, that it has received a refund of any Taxes or Other Taxes as to which it has been indemnified pursuant to this Section 2.13 or Section 9.9 or with respect to which the Credit Party has paid additional amounts pursuant to this Section 2.13, it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made, or additional amounts paid, under this Section 2.13 with respect to the Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) of such indemnified party, and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund); provided that the indemnifying party, upon the request of the indemnified party, agrees to repay


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the amount paid over to the indemnifying party (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the indemnified party in the event the indemnified party is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this paragraph (e), in no event will the indemnified party be required to pay any amount to any indemnifying party pursuant to this paragraph (e) the payment of which would place the indemnified party in a less favorable net after-Tax position than the indemnified party would have been in if the indemnification payments or additional amounts giving rise to such refund had never been paid. This paragraph shall not be construed to require the indemnified party to make available its tax returns (or any other information relating to its Taxes that it deems confidential) to any indemnifying party or any other Person.

(f) FATCA. If a payment made to Lender under any Credit Document would be subject to U.S. federal withholding Tax imposed by FATCA if 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 Internal Revenue Code, as applicable), Lender shall deliver to the Borrowers at the time or times prescribed by law and at such time or times reasonably requested by the Borrowers such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Internal Revenue Code) and such additional documentation reasonably requested by the Borrowers as may be necessary for the Borrowers to comply with their obligations under FATCA and to determine whether Lender has complied with Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this Section 2.17(f), “FATCA” shall include any amendments made to FATCA after the Closing Date that are not already included in the definition of “FATCA.”

(i) Survival. Each party’s obligations under this Section 2.13 shall survive any assignment of rights by Lender, the termination of any Commitment and the repayment, satisfaction or discharge of all obligations under any Credit Document.

2.14 Priority and Liens; No Discharge.

(a) The Liens with respect to the Collateral shall be a valid, binding, continuing, enforceable, fully-perfected first priority senior security interest, subject, as to priority, the Interim Order (and, when entered, the Final Order). All of the Liens described herein shall be effective and perfected upon entry of the Interim Order without the necessity of the execution or recordation of filings by the Debtors of security agreements, mortgages, control agreements, pledge agreements, financing statements or other similar documents, or the possession or control by Lender or over, any Collateral, as set forth in the Interim Order and, when entered, the Final Order.

(b)

(i) Each Credit Party that is a Debtor hereby confirms and acknowledges that, pursuant to the Interim Order (and, when entered, the Final Order), the Liens in favor of Lender in all of the DIP Collateral (as defined in the Interim Order, but in any case, excluding any Avoidance Actions (but including, subject to the entry of the Final Order, the proceeds thereof)), which includes, without limitation, all of such Debtor’s Real Estate Assets (other than Excluded Assets), now existing or hereafter acquired, shall be created and perfected


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without the recordation or filing in any land records or filing offices of any mortgage, assignment or similar instrument.

(ii) Further to Section 2.14(b)(i) and the Interim Order (and, when entered, the Final Order), subject to Section 2.14(b)(iv) below, to secure the full and timely payment and performance of the Secured Obligations, each Credit Party that is a Debtor hereby MORTGAGES, GRANTS, BARGAINS, ASSIGNS, SELLS, CONVEYS and CONFIRMS, to Lender, all or any Real Estate Assets (in any case, excluding any Real Estate Assets that are Excluded Assets), but which, for the avoidance of doubt, shall include all of such Credit Party’s right, title, and interest now or hereafter acquired in and to (A) any and all easements, rights-of-way, reversions, sidewalks, strips and gores of land, drives, roads, curbs, streets, ways, alleys, passages, passageways, sewer rights, waters, water courses, water rights, mineral, gas and oil rights, as-extracted collateral and all power, air, light and other rights, estates, titles, interests, privileges, liberties, servitudes, licenses, tenements, hereditaments and appurtenances whatsoever, in any way belonging, relating or appertaining thereto, or any part thereof, or which hereafter shall in any way belong, relate or be appurtenant thereto; (B) the lessee’s interest and estate in, to and under any leases and subleases to which such Credit Party is a party (as such leases and subleases may be extended, amended, supplemented, modified or restated), together with any and all easements, rights-of-way, reversions, sidewalks, strips and gores of land, drives, roads, curbs, streets, ways, alleys, passages, passageways, sewer rights, waters, water courses, water rights, mineral, gas and oil rights, as-extracted collateral and all power, air, light and other rights, estates, titles, interests, privileges, liberties, servitudes, licenses, tenements, hereditaments and appurtenances whatsoever, in any way demised under such leases and subleases; (C) any and all buildings, foundations, structures and other fixtures and improvements and any and all alterations and all materials now or hereafter intended for construction, reconstruction or repair thereof; (D) any and all permits, certificates, authorizations, consents, approvals, licenses, franchises, waivers or other instruments now or hereafter required by any Governmental Authority to operate or use and occupy the Real Estate Assets and related assets for its intended uses; (E) all materials, supplies, equipment, apparatus and other items of personal property now owned or hereafter acquired by such Credit Party, and water, gas, electrical, telephone, storm and sanitary sewer facilities and all other utilities whether or not situated in easements or in connection with any related activities or the maintenance or preservation thereof; (F) all goods, accounts, general intangibles, instruments, documents, chattel paper, as-extracted collateral and all other personal property of any kind or character, including such items of personal property as defined in the UCC; (G) all reserves, escrows or impounds and all deposit accounts; (H) such Credit Party’s right, title and interest as lessor, landlord, sublessor, sublandlord, franchisor, licensor or grantor, in all leases and subleases (including, without limitation, intercompany leases) of land or improvements, leases and subleases of space, oil, gas and mineral leases, franchise agreements, licenses, occupancy or concession agreements or other agreements which grant to any Person (other than such Credit Party) a possessory interest in, or the right to use any Real Estate Assets, including, all rents, additional rents, royalties, cash, guaranties, letters of credit, bonds, sureties or securities deposited thereunder to secure performance of the lessee’s, sublessee’s, franchisee’s, licensee’s or obligee’s obligations thereunder, revenues, earnings, profits and income, advance rental or royalties, payments, payments incident to assignment, sublease or surrender of a lease, claims for forfeited deposits and claims for damages, now due or hereafter to become due, with respect to any lease, any indemnification against, or reimbursement for, sums paid and costs and expenses incurred by such Credit Party under any lease or otherwise, and any award in the event of the bankruptcy of


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any tenant or lessee under or guarantor of a lease; (I) all other agreements, such as construction contracts, architects’ agreements, engineers’ contracts, utility contracts, maintenance agreements, management agreements, service contracts, listing agreements, guaranties, warranties, permits, licenses, certificates and entitlements in any way relating to the construction, use, occupancy, operation, maintenance, enjoyment or ownership of any Real Estate Assets; (K) all rights, privileges, tenements, hereditaments, rights-of-way, easements, appendages and appurtenances appertaining to the foregoing; (L) all property tax refunds payable to such Credit Party; (M) all accessions, replacements and substitutions for any of the foregoing and all proceeds thereof; (N) all insurance policies, unearned premiums therefor and proceeds from such policies covering any of the above property now or hereafter acquired by such Credit Party; and (O) any awards, damages, remunerations, reimbursements, settlements or compensation heretofore made or hereafter to be made by any Governmental Authority pertaining to the Real Estate Assets (BUT EXCLUDING from the foregoing grants, Excluded Assets), TO HAVE AND TO HOLD to Lender, and such Credit Party does hereby bind itself, its successors and assigns to WARRANT AND FOREVER DEFEND the title to such property, assets and interests unto Lender.

(iii) Each Credit Party that is a Debtor further agrees that upon the request of Lender such Credit Party shall execute and deliver to Lender, as soon as reasonably practicable following such request but in any event within forty-five (45) days following such request (or such later date as may be extended by Lender), with respect to Real Estate Assets owned or leased by such Credit Party (in any case, excluding any Real Estate Assets that are Excluded Assets) and identified by Lender, the applicable Credit Party shall deliver:

(A) fully executed and notarized Mortgages, in proper form for recording in all appropriate places in all applicable jurisdictions, encumbering each such Real Estate Asset, and any ancillary deliverables as reasonably requested by Lender (including, without limitation, memoranda of leases in recordable form, duly executed by the applicable landlord and Credit Party);

(B) an opinion of counsel (which counsel shall be reasonably satisfactory to Lender) in each state in which each such Real Estate Asset is located with respect to the enforceability of the form(s) of Mortgages to be recorded in such state and such other matters as Lender may reasonably request, in each case in form and substance reasonably satisfactory to Lender; and

(C) (A) a completed Flood Certificate with respect to any Real Estate Asset that constitutes Collateral and that is improved with structures eligible for flood insurance under the Flood Program , which Flood Certificate shall (x) be addressed to Lender and (y) otherwise comply with the Flood Program; (B) if the Flood Certificate states that such Real Estate Asset is located in a Flood Zone, Debtor’s written acknowledgment of receipt of written notification from Lender (x) as to the existence of each such Real Estate Asset and (y) as to whether the community in which such Real Estate Asset is located is participating in the Flood Program; and (C) if such Real Estate Asset is located in a Flood Zone and is located in a community that participates in the Flood Program, evidence that Debtor has obtained a


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policy of flood insurance that is in compliance with all applicable requirements of the Flood Program.

(iv) Notwithstanding anything to the contrary herein, except as set forth in the Orders, in no event shall the Collateral of the Debtors include any other property specifically excluded pursuant to the Orders.

(v) Each of the Credit Parties agrees that to the extent that its Obligations have not been Paid in Full, (A) its obligations shall not be discharged by any order confirming a Reorganization Plan (and each of the Credit Parties, pursuant to Section 1141(d)(4) of the Bankruptcy Code, hereby waives any such discharge), and (B) the Superpriority Claim granted to Lender pursuant to the Orders and the Liens granted to Lender pursuant to the Orders shall not be affected in any manner by any order confirming a Reorganization Plan; provided that such Obligations shall be discharged upon such Payment in Full, and such Obligations may be otherwise treated in accordance with an Acceptable Plan and such treatment will provide for the discharge of the Obligations arising hereunder if so provided by such Acceptable Plan.

2.15 Release. Each of the Borrowers and the Guarantors hereby acknowledge that the Borrowers, the Guarantors and any of their Subsidiaries have no defense, counterclaim, offset, recoupment, claim, or demand of any kind or nature whatsoever that can be asserted to reduce or eliminate all of any part of the Borrowers’, the Guarantors’ or their respective Subsidiaries’ liability to repay Lender as provided in this Agreement or to seek affirmative relief or damages of any kind or nature from Lender. The Borrowers and the Guarantors, each in their own right and on behalf of their bankruptcy estates, and on behalf of all their 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 Lender and all of Lender’s officers, directors, servants, agents, attorneys, assigns, heirs, parents, subsidiaries, and each Person acting for or on behalf of any of them, each solely in their capacity as such (collectively, the “Released DIP Parties”) of and from any and all 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, in each case, existing at the time of entry of the Interim Order, whether in law, equity or otherwise (including, without limitation, 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), 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; provided, however, that the Credit Parties do not release, discharge or acquit any Released DIP Party from its obligations specifically set forth in this Agreement.

SECTION 3. CONDITIONS PRECEDENT

3.1 Conditions to Borrowing on the Closing Date or During the Availability Period. The effectiveness of this Agreement and the borrowing to be made on the Closing Date or during the Availability Period are subject to the satisfaction (or waiver) of the following


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conditions on or before the Closing Date (and the date such conditions are satisfied or waived, the “Closing Date”):

(a) Petition Date. The Petition Date shall have occurred and each Borrower shall be a debtor and debtor-in-possession in the Cases.

(b) Credit Documents. Lender shall have received each Credit Document required to be delivered on the Closing Date, originally executed and delivered by each applicable Credit Party.

(c) Organizational Documents; Incumbency. Lender shall have received, in respect of each Credit Party, (i) the Organizational Documents of such Credit Party and, to the extent applicable; (ii) signature and incumbency certificates of the officers of such Credit Party; (iii) resolutions of the Board of Directors or similar governing body of such Credit Party approving and authorizing the execution, delivery and performance of this Agreement and the other Credit Documents to which it is a party as of the Closing Date, certified as of the Closing Date by its secretary or an assistant secretary as being in full force and effect without modification or amendment; and (iv) a good standing certificate from the applicable Governmental Authority of such Credit Party’s jurisdiction of incorporation, organization or formation, each dated the Closing Date or a recent date prior thereto.

(d) Organizational and Capital Structure. The organizational structure and capital structure of each Borrower and its respective Subsidiaries, after giving effect to transactions contemplated by this Agreement, shall be as set forth on Schedule 4.1.

(e) Existing Indebtedness. Each Borrower and its respective Subsidiaries shall have no outstanding Indebtedness other than Indebtedness permitted under this Agreement.

(f) Personal Property Collateral. Each Credit Party shall have delivered to Lender:

(i) evidence reasonably satisfactory to Lender of the compliance by each Credit Party of their obligations under the Collateral Documents (including their obligations to execute or authorize, as applicable, and deliver UCC financing statements, originals of securities, instruments and chattel paper and any agreements governing deposit and/or securities accounts (other than Excluded Assets) as provided therein);

(ii) a completed Collateral Questionnaire dated the Closing Date and executed by an Authorized Officer of each Credit Party, together with all attachments contemplated thereby;

(iii) fully executed Intellectual Property Security Agreements, in proper form for filing or recording in the United States Patent and Trademark Office and the United States Copyright Office, as applicable, memorializing and recording the encumbrance of the Intellectual Property assets listed in Exhibit B to the Pledge and Security Agreement; and

(iv) evidence that each Credit Party shall have taken or caused to be taken any other action, executed, and delivered or caused to be executed and delivered any other


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agreement, document, and instrument (including any intercompany notes evidencing Indebtedness permitted to be incurred pursuant to Section 6.1(b)) and made or caused to be made any other filing and recording (other than as set forth herein) reasonably required by Lender.

(g) Financial Statements. Lender shall have received from the Borrowers (i) the Historical Financial Statements and a pro forma consolidated balance sheet of CEC and its Subsidiaries on a consolidated basis as of the last day of the most recently completely four-fiscal quarter period for which financial statements were delivered under clause (i) of the definition of the term “Historical Financial Statements”, the related financings and the other transactions contemplated by the Credit Documents to occur on or prior to the Closing Date as if such transactions occurred as of such date, and (ii) a pro forma consolidated balance sheet of CEC and its Subsidiaries on a consolidated basis as of May 31, 2020.

(h) Opinions of Counsel to Credit Parties. Lender shall have received executed copies of the favorable written opinions of counsel for Credit Parties in jurisdictions to be agreed (which shall be substantially consistent (taking into account the Cases) with the opinions delivered pursuant to the Tranche B Loan Agreement), as to such matters as Lender may reasonably request, dated as of the Closing Date and in form and substance reasonably satisfactory to Lender (and each Credit Party hereby instructs such counsel to deliver such opinions to Lender).

(i) Fees. Lender shall have received a fee letter for the financing fees provided for in Section 2.7 in form and substance satisfactory to Lender, executed and delivered by the Borrowers and Lender.

(j) Expenses. (i) Lender shall have received, in each case for the account of the applicable Persons all fees and other amounts due and payable by any Credit Party to Lender on or prior to the Closing Date, including, to the extent invoiced (each such invoice to be accompanied by customary backup documentation) two (2) Business Days prior to the Petition Date, reimbursement or payment of all reasonable out-of-pocket expenses required to be reimbursed or paid by any Credit Party under the Credit Documents or any fee, engagement or similar letter, (ii) Steptoe & Johnson LLP shall have received all invoiced and unpaid fees and expenses of Steptoe & Johnson LLP through the Closing Date, and (iii) The Majorie Firm LTD shall have received all invoiced and unpaid fees and expenses of The Majorie Firm LTD through the Closing Date (in each case of clauses (ii) and (iii)), it being agreed that such amounts may be funded with the proceeds of the Term Loans requested to be made on the Closing Date); provided that the aggregate amounts payable by the Borrowers in accordance with clauses (ii) and (iii) shall be capped at an aggregate of $300,000 if each of the following conditions is satisfied (A) each of the Borrowers shall have filed voluntary petitions under Chapter 11 of the Bankruptcy Code commencing bankruptcy cases, in accordance with the PSA, no later than Thursday, July 2, 2020, (B) the sale of Equity Interests in the Borrowers’ Subsidiaries to Potential Purchaser, at the price and in accordance with the terms set forth in the MIPA, shall close not more than thirty (30) days (or forty-four (44) days if the fourteen (14)-day stay pursuant to Rule 6004 of the Bankruptcy Rules is not waived by the Bankruptcy Court) after the Petition Date, and (C) no substantive


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additional issues or requirements, as reasonably determined by Lender, shall be raised by third parties in or in connection with the Cases.

(k) Closing Date Certificate. The Borrowers shall have delivered to Lender a Closing Date Certificate, together with all attachments thereto.

(l) USA PATRIOT Act. At least three (3) days prior to the Closing Date, Lender shall have received all documentation and other information with respect to the Credit Parties that shall have been reasonably requested by Lender in writing at least five (5) days prior to the Closing Date (including a Beneficial Ownership Certificate to the extent required under 31 C.F.R. §1010.230) and that Lender reasonably determines is required by regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including, without limitation, the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act (Title m of Pub. L. 107-56 (signed into law October 26, 2001) the “PATRIOT Act”).

(m) DIP Budget; Cash Flow Forecast. Lender shall have received (i) monthly operating and cash flow projections for the Debtors for the three (3) months after the Closing Date dated as of a date not more than three (3) Business Days prior to the Closing Date in form and substance satisfactory to Lender (the “DIP Budget”) and (ii) an Approved Cash Flow Forecast dated as of a date not more than three (3) Business Days prior to the Closing Date.

(n) Interim Order. The Interim Order Entry Date shall have occurred not later than five (5) days following the Petition Date (or such later date Lender may agree) and the Interim Order shall not have been vacated, reversed, modified, amended, or stayed in any respect without the prior written consent of Lender.

(o) Material Adverse Effect. Since January 1, 2020, there has been no Material Adverse Effect (after giving effect to the qualifications set forth in such definition), other than the potential insolvency of the Borrowers.

(p) First Day Orders. All “first day” orders intended to be entered by the Bankruptcy Court at or immediately after the Debtors’ “first day” hearing shall be in form and substance reasonably acceptable to Lender and shall have been entered by the Bankruptcy Court.

(q) Credit Extension Conditions. Each of the conditions set forth in Section 3.3 shall have been satisfied

(r) Consent of Junior Lenders. The Junior Priority Debt Parties (as defined in the Tranche B Loan Agreement) shall have provided written consent, in a form reasonably satisfactory to Lender, to (i) the terms of, the Borrowers’ execution of, and implementation of this Credit Agreement and the Credit Documents, (ii) to the terms of, the entry of, and implementation of the DIP Orders, (iii) to the terms of, the entry of, and implementation of the Plan.

(s) Accounts. The Controlled Account and Lockbox Account shall each have been established and shall be subject to a DACA or other control of Lender, acceptable to Lender.


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3.2 Conditions to Borrowing on the Full Availability Date. The obligation of Lender to make the Full Availability Term Loan is subject to the satisfaction of the following conditions precedent:

(a) Closing Date. The Closing Date shall have occurred and the conditions set forth in Section 3.1 have been satisfied.

(b) Final Order. The Final Order Entry Date shall have occurred no later than forty-five (45) days after the Petition Date and the Final Order shall approve the full amount of the Term Loan Facility and the Roll-Up Facility.

(c) Second Day Motions. All “second day” orders approving on a final basis the relief granted under any first day orders shall have been entered by the Bankruptcy Court, shall be reasonably satisfactory to Lender, shall be in full force and effect, shall not have been vacated or reversed, shall not be subject to a stay and shall not have been modified or amended other than as reasonably acceptable to Lender. All pleadings related to procedures for approval of significant transactions, including, without limitation, asset sale procedures, regardless of when filed or entered, shall be reasonably satisfactory in form and substance to Lender.

(d) Officer’s Certificate. Lender shall have received a certificate from an Authorized Officer of the Borrower, dated the Full Availability Date certifying that the conditions set forth in paragraphs (a), (b) and (e) of Section 3.3 have been satisfied.

(e) Collateral. The requirements set forth in Section 3.l(f) shall have been satisfied.

(f) Fees. Lender shall have received, in each case for the account of the applicable Persons the fees provided for in Section 2.7 and all other amounts due and payable by any Credit Party to Lender on or prior to the Full Availability Date, including, to the extent invoiced (each such invoice to be accompanied by customary backup documentation) three (3) Business Days prior to the Full Availability Date, reimbursement or payment of all reasonable out-of-pocket expenses required to be reimbursed or paid by any Credit Party under the Credit Documents or the fee letter provided for in Section 3.1(i) (it being agreed that such amounts may be funded with the proceeds of the Term Loans requested to be made on the Closing Date).

(g) Credit Extension Conditions. Each of the conditions set forth in Section 3.3 shall have been satisfied.

3.3 Conditions to each Credit Extension. The obligation of Lender to make a Loan on the occasion of any Credit Extension, is subject to the satisfaction of the following conditions:

(a) Accuracy of Representations. As of the date of such Credit Extension, the representations and warranties set forth in Section 4 and in the other Credit Documents shall be true and correct in all material respects on and as of the date of such Credit Extension (both immediately prior to and after giving effect to the funding of the applicable Term Loans) to the same extent as though made on and as of that date, except to the extent such representations and warranties specifically relate to an earlier date, in which case such representations and warranties shall have been true and correct in all material respects on and as of such earlier date; provided


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that, in each case, such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof.

(b) No Default. At the time of and immediately after giving effect to such Credit Extension, no event shall have occurred and be continuing that would constitute a Default or an Event of Default.

(c) Weekly Project Level Financial Report. With respect to any Interim Term Loan, Lender shall have received the Weekly Project Level Financial Report and Funding Request therefor.

(d) Effective Interim Order. At any time prior to the Final Order Entry Date, the Interim Order shall be in full force and effect and shall not have been vacated, reversed, modified, amended, or stayed in any respect without the prior written consent of Lender.

(e) Effective Final Order. With respect to any Credit Extension on or after the Final Order Entry Date, the Final Order shall be in full force and effect and shall not have been vacated or reversed, shall not be subject to a stay, and shall not have been modified or amended in any respect without the prior written consent of Lender.

(f) Plan Support Agreement. The PSA shall have become effective and binding in accordance with its terms and no Termination Event (as defined in the PSA) shall have occurred.

(g) No Trustee. No trustee, examiner, or receiver shall have been appointed or designated with respect to the Credit Parties’ business, properties, or assets.

(h) Dismissal; Conversion. The Cases of any Debtors shall have not been dismissed or converted to cases under Chapter 7 of the Bankruptcy Code

(i) Sale to Potential Purchaser. Potential Purchaser and the Borrowers shall have entered into the MIPA, the purchase price payable by Potential Purchaser under the MIPA shall not be less than the Fair Market Value of the Equity Interests being sold pursuant thereto.

(j) Services Agreement. The Services Agreement, in the form attached hereto as Exhibit I, shall have become effective and binding in accordance with its terms and shall provide, without limitation that (i) it automatically terminates, without notice or further action by the parties thereto, without payment of any termination fee or other fee, upon an Event of Default under the Credit Documents, (ii) that Lender is a third party beneficiary of the automatic termination provided for in clause (i) and can enforce such termination, and (iii) it cannot be amended, restated, supplemented, or otherwise modified, except without the prior written consent


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of Lender, and that any amendment, restatement, supplement or modification without the prior written consent of Lender shall be void and ineffective.

SECTION 4. REPRESENTATIONS AND WARRANTIES

In order to induce Lender to enter into this Agreement and to make each Credit Extension to be made thereby, each Credit Party represents and warrants to Lender, on the Closing Date and the date of each Credit Extension, that the following statements are true and correct:

4.1 Organization; Requisite Power and Authority; Qualification. Except as otherwise stated on Schedule 4.1, each Borrower and each of its Subsidiaries (a) is duly organized, validly existing and in good standing under the laws of its jurisdiction of organization as identified in Schedule 4.1, (b) has all requisite power and authority to (i) own and operate its properties, to carry on its business as now conducted and as proposed to be conducted, and (ii) subject, in case of each Credit Party that is a Debtor, to the entry of the Orders and the terms thereof, enter into the Credit Documents to which it is a party and to carry out the transactions contemplated thereby, and (c) is qualified to do business and in good standing in every jurisdiction necessary to carry out its business and operations, except in jurisdictions where the failure to be so qualified or in good standing has not had, and could not be reasonably expected to have, a Material Adverse Effect.

4.2 Equity Interests and Ownership. The Equity Interests of each Borrower and each of its Subsidiaries have been duly authorized and validly issued and are fully paid and to the extent applicable thereto, non-assessable. Except as set forth on Schedule 4.2(a), as of the Closing Date, there is no existing option, warrant, call, right, commitment, or other agreement to which any Borrower or any of its Subsidiaries is a party requiring, and there is no membership interest or other Equity Interests of any Borrower or any of its Subsidiaries outstanding which upon conversion or exchange would require, the issuance by such Borrower or any of its Subsidiaries of any additional membership interests or other Equity Interests of such Borrower or any of its Subsidiaries or other Securities convertible into, exchangeable for or evidencing the right to subscribe for or purchase, a membership interest, or other Equity Interests of such Borrower or any of its Subsidiaries. Schedule 4.2(a) correctly sets forth the ownership interest of each Borrower and each of its Subsidiaries as of the Closing Date. Schedule 4.2(b) correctly sets forth the membership interest purchase agreements held by each Borrower and each of its Subsidiaries as of the Closing Date.

4.3 Due Authorization. Subject, in the case of each Credit Party that is a Debtor, to the entry of the Orders and the terms thereof, the execution, delivery, and performance of the Credit Documents have been duly authorized by all necessary corporate, limited liability company, or other action on the part of each Credit Party that is a party thereto.

4.4 No Conflict. Subject, in the case of each Credit Party that is a Debtor, to the entry of the Orders and the terms thereof, the execution, delivery, and performance by Credit Parties of the Credit Documents to which they are parties and the consummation of the transactions contemplated by the Credit Documents do not and will not (a) violate (i) any provision of any law or any governmental rule or regulation applicable to any Borrower or any of their respective Subsidiaries, (ii) any of the Organizational Documents of any Borrower or any of their respective Subsidiaries, or (iii) any order, judgment, or decree of any court or other agency of government


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binding on any Borrower or any of their respective Subsidiaries, except in the case of clauses (i) or (iii), such violations as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; (b) conflict with, result in a breach of or constitute (with due notice or lapse of time or both) a default under any Contractual Obligation of any Borrower or any of their respective Subsidiaries (other than, in the case of a Debtor, any Prepetition Debt) except to the extent such conflict, breach or default could not reasonably be expected to have a Material Adverse Effect; (c) result in or require the creation or imposition of any Lien upon any of the properties or assets of any Borrower or any of their respective Subsidiaries (other than any Liens created under the Orders, or Liens created under any of the Credit Documents in favor of Lender); or (d) require any approval of stockholders, members or partners or any approval or consent of any Person under any Contractual Obligation of a Borrower or any of their respective Subsidiaries, except for such approvals or consents which will be obtained on or before the Closing Date and except for any such approvals or consents the failure of which to obtain will not have a Material Adverse Effect.

4.5 Governmental Consents. Except as would not be reasonably expected to result in a Material Adverse Effect, the execution, delivery, and performance by Credit Parties of the Credit Documents to which they are parties and the consummation of the transactions contemplated by the Credit Documents to which they are a party do not and will not require any registration with, consent or approval of, or notice to, or other action to, with or by, any Governmental Authority except as otherwise set forth herein, and except for filings and recordings with respect to the Collateral to be made, or otherwise delivered to Lender for filing and/or recordation, as of the Closing Date.

4.6 Binding Obligation. Subject, in the case of each Credit Party that is a Debtor, to the entry of the Orders and the terms thereof, each Credit Document has been duly executed and delivered by each Credit Party that is a party thereto and is the legally valid and binding obligation of such Credit Party, enforceable against such Credit Party in accordance with its respective terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or limiting creditors’ rights generally or by general equitable principles relating to enforceability (whether enforcement is sought by proceedings in equity or at law).

4.7 Historical Financial Statements. The Historical Financial Statements were prepared in conformity with GAAP (except as indicated in any notes thereto, and excluding implementation of ASC 606) and fairly present, in all material respects, the financial position, on a consolidated basis, of the Persons described in such financial statements as at the respective dates thereof and the results of operations and cash flows, on a consolidated basis, of the entities described therein for each of the periods then ended, subject, in the case of any such unaudited financial statements, to changes resulting from audit and normal year-end adjustments.

4.8 Security Interest in Collateral. Subject, in the case of each Credit Party that is a Debtor, to the entry of the Orders and the terms thereof, the provisions of the Orders, this Agreement and the other Credit Documents create legal and valid Liens on all the Collateral in favor of Lender, and upon entry of the Orders, such Liens constitute perfected and continuing Liens on the Collateral, securing the Secured Obligations (as defined in any applicable Collateral Document), enforceable (except as enforceability may be limited by bankruptcy, insolvency, fraudulent conveyance, or similar laws affecting creditors’ rights generally and general principles


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of equity (regardless of whether the application of such principles is considered in a proceeding in equity or at law)) against the applicable Credit Party and all third parties, and having priority over all other Liens on the Collateral as contemplated by the Orders.

4.9 No Material Adverse Effect. Since January 1, 2020, there has been no Material Adverse Effect (after giving effect to the qualifications set forth in such definition) other than the potential insolvency of the Borrowers.

4.10 Adverse Proceedings, Etc. Except as set forth in Schedule 4.10, there are no Adverse Proceedings that could reasonably be expected to have a Material Adverse Effect. None of the Borrowers, nor any of their respective Subsidiaries (a) is in violation of any applicable laws that could reasonably be expected to have a Material Adverse Effect, or (b) is subject to or in default with respect to any final judgments, writs, injunctions, decrees, rules, or regulations of any court or any federal, state, municipal, or other governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, that could reasonably be expected to have a Material Adverse Effect.

4.11 Payment of Taxes. Except as set forth on Schedule 4.11 or otherwise permitted under Section 5.3, all material tax returns and reports of each Borrower and its respective Subsidiaries required to be filed by any of them have been timely filed, and all material post-petition Taxes due and payable and all other material post-petition assessments, fees and other governmental charges upon each Borrower and its respective Subsidiaries and upon their respective properties, assets, income, businesses, and franchises which are due and payable have been paid when due and payable except those which are being actively contested by such Borrower or such Subsidiary in good faith by appropriate proceedings and for which reserves or other appropriate provisions, if any, required by GAAP shall have been made or provided therefor.

4.12 Properties.

(a) Title. Each Borrower and its respective Subsidiaries has (i) good and legal title to (in the case of fee interests in real property), (ii) valid leasehold interests in (in the case of leasehold interests in real or personal property), (iii) valid ownership of, valid licensed rights in or the valid right to use (in the case of interests in Intellectual Property), or (iv) good title to (in the case of all other personal property), all of their respective properties and assets; in each case of the foregoing except where failure to do so would not reasonably be expected to result in a Material Adverse Effect. Except as permitted by this Agreement, all such properties and assets are free and clear of Liens other than Permitted Liens.

(b) Real Estate. As of the Closing Date, Schedule 4.12 contains a true, accurate and complete list of (i) all Real Estate Assets, and (ii) all leases, subleases or assignments of leases (together with all amendments, modifications, supplements, renewals or extensions of any thereof) affecting each Real Estate Asset of any Credit Party, regardless of whether such Credit Party is the landlord or tenant (whether directly or as an assignee or successor in interest) under such lease, sublease or assignment. Each agreement listed in clause (ii) of the immediately preceding sentence is in full force and effect, and each such agreement constitutes the legally valid and binding obligation of each applicable Credit Party, enforceable against such Credit Party in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization,


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moratorium, or similar laws relating to or limiting creditors’ rights generally or by equitable principles relating to enforceability.

4.13 Environmental Matters. Except as set forth in Schedule 4.13 or would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, there are no pending or, to the knowledge of any Borrower, threatened Environmental Claims against any Borrower or any of their Subsidiaries. No Borrower nor any of their Subsidiaries nor any of their respective Facilities or operations are subject to any outstanding written order, notice, consent decree, or settlement agreement with any Person relating to any Environmental Law, any Environmental Claim, or any Hazardous Materials Activity that, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect. Each Borrower and each of its respective Subsidiaries have received all Governmental Authorizations required pursuant to Environmental Law for its business as currently conducted and are, and at all times have been, in compliance with all applicable Environmental Laws (including compliance with Environmental Laws with respect to any Real Estate Asset or governing its business and the requirements of any Governmental Authorizations issued under such Environmental Laws with respect to any such Real Estate Asset or the operations of each Borrower and its respective Subsidiaries) except for such failure to receive or such noncompliance which would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. There are and, to each Borrower’s knowledge, have been, no conditions, occurrences, or Hazardous Materials Activities which would reasonably be expected to form the basis of an Environmental Claim against or any liability under Environmental Law of any Borrower or any of its Subsidiaries that would, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. No Borrower nor any of its Subsidiaries’ operations involves the transportation, treatment, storage, or disposal of hazardous waste, as defined under C.F.R. Parts 260-270 or any state equivalent, that, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect. To the knowledge of each Borrower, no event or condition has occurred or is occurring with respect to any Borrower or any of their respective Subsidiaries or on any Real Estate Asset relating to any Environmental Law, any Release of Hazardous Materials, or any Hazardous Materials Activity which event or condition individually or in the aggregate has had, or would, individually or in the aggregate, reasonably be expected to have, a Material Adverse Effect.

4.14 Permits and Monitoring of the Environmental Laws.

(a) Each Borrower and each of its Subsidiaries possess, maintain in full force and effect, and are in compliance with all Governmental Authorizations required by the United States Environmental Protection Agency, the United States Army Corps of Engineers, the United States Department of Interior, and corresponding state agencies, as are necessary under applicable law (including, without limitation, any Environmental Law) to own, lease, or operate their current properties and conduct their current businesses, except to the extent that the failure to possess, maintain, or be in compliance with any such Governmental Authorizations would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect. Each Borrower and each of its Subsidiaries has fulfilled and performed all of its obligations with respect to the Governmental Authorizations, and no event has occurred that allows, or after notice or lapse of time would allow, revocation or termination thereof or results in any other impairment of the rights of the holder or any such Governmental Authorizations, except to the extent that any such failure


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to fulfill or perform, revocation, termination, or impairment would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.

(b) Except as would not, individually or in the aggregate, be reasonably expected to result in a Material Adverse Effect, each Borrower and each of its Subsidiaries: (i) are conducting their businesses and operations in compliance with Environmental Laws; (ii) have not received any written notice from a Governmental Authority or any other third party alleging any violation of Environmental Law or liability thereunder (including, without limitation, liability as a “potentially responsible party” and/or for fines or penalties and/or exposure to Hazardous Materials); (iii) do not have knowledge of any release of Hazardous Materials that, individually or in the aggregate, can reasonably be expected to require any material capital expenditures by such Borrower or any of its Subsidiaries regarding the investigation, remediation or cleanup thereof; (iv) are not subject to any pending or, to the knowledge of a Borrower, threatened claim or other legal proceeding under any Environmental Laws against such Borrower or any of its Subsidiaries; (v) possess and maintain in full force and effect all bonds, letters of credit, and other financial assurances required under Environmental Laws; (vi), except as set forth on Schedule 4.14(b), have not agreed to assume, undertake, or provide indemnification for any liability of any other Person under any Environmental Law, including any obligation of any other Person for reclamation, cleanup or remedial action, except as set forth on Schedule 4.14(b); and (vii) are not aware of any facts or issues with respect to any Borrower or any of its respective Subsidiaries regarding compliance with Environmental Laws, pending legal proceedings or liabilities under the Environmental Laws or other obligations under Environmental Laws, including the release or threatened release of Hazardous Materials.

4.15 Governmental Regulation. No Borrower nor any of its respective Subsidiaries is subject to regulation under the Investment Company Act of 1940 or under any other federal or state statute or regulation which may limit its ability to incur Indebtedness such that it will render all or any portion of the Obligations unenforceable. No Borrower nor any of its respective Subsidiaries is a “registered investment company” or a company “controlled” by a “registered investment company” or a “principal underwriter” of a “registered investment company” as such terms are defined in the Investment Company Act of 1940.

4.16 Federal Reserve Regulations; Exchange Act. No Borrower nor any of its respective Subsidiaries is engaged principally, or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying any Margin Stock. No part of the proceeds of the Loans made to such Credit Party will be used to purchase or carry any such Margin Stock in violation of Regulation T, Regulation U or Regulation X of the Board of Governors or to extend credit to others for the purpose of purchasing or carrying any such Margin Stock or for any purpose that violates the provisions of Regulation T, Regulation U or Regulation X of the Board of Governors.

4.17 Employee Benefit Plans. Except as would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect, no ERISA Event has occurred or is reasonably expected to occur.

4.18 Compliance with Statutes, Etc. Each Borrower and each its respective Subsidiaries is in compliance with all applicable statutes, regulations, and orders of, and all


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applicable restrictions imposed by, all Governmental Authorities, in respect of the conduct of its business and the ownership of its property, except such non-compliance that, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect.

4.19 Disclosure. The representations and warranties of any Credit Party contained in any Credit Document or in any other documents, certificates or written statements furnished to Lender by or on behalf of the Borrower or any of their respective Subsidiaries for use in connection with the transactions contemplated hereby (other than projections, pro forma financial information, other forward-looking information and general economic or industry data or third party data), when taken as a whole, as of the date furnished, do not contain any untrue statement of a material fact or omits to state a material fact (known by such Borrower, in the case of any document not furnished by either of them) necessary in order to make the statements contained herein or therein not materially misleading in light of the circumstances in which the same were made. Any projections and pro forma financial information of the Credit Parties contained in such materials are based upon good faith estimates and assumptions believed by the Borrowers to be reasonable at the time made, it being recognized by Lender that such projections as to future events are not to be viewed as facts and that actual results during the period or periods covered by any such projections may differ materially from the projected results.

4.20 Foreign Corrupt Practices Act. No Borrower nor any of its respective Subsidiaries, nor, to the knowledge of any Borrower, any director, officer, agent, employee or other person associated with or acting on behalf of such Borrower or any of its Subsidiaries has (a) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity, (b) made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds, (c) violated or is in violation of any provision of the Foreign Corrupt Practices Act of 1977, or (d) made any bribe, rebate, payoff, influence payment, kickback, or other unlawful payment.

4.21 PATRIOT Act. To the extent applicable, each Credit Party and its respective Subsidiaries thereof is in compliance, in all material respects, with (a) the Trading with the Enemy Act, as amended, and each of the foreign assets control regulations of the United States Treasury Department (31 C.F .R., Subtitle B, Chapter V, as amended) and any other enabling legislation or executive order relating thereto, and (b) the PATRIOT Act. No part of the proceeds of the Loans will be used, directly or indirectly, for any payments to any governmental official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977, as amended.

4.22 Bankruptcy Related Matters.

(a) The Cases were commenced on the Petition Date in accordance with applicable laws and proper notice thereof was given for (i) the motion seeking approval of the Credit 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 (provided that notice of the


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final hearing will be given as soon as reasonably practicable after such hearing has been scheduled).

(b) After the entry of the Interim Order, and pursuant to and to the extent permitted in the Interim Order and the Final Order, the Obligations will constitute allowed administrative expense claims in the Cases having priority over all administrative expense claims and unsecured claims against the Debtors 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 Carve Out.

(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, binding, continuing, enforceable, fully-perfected first priority senior security interest and Lien on all of the assets of the Credit Parties that are Debtors, whether currently existing or thereafter acquired, of the same nature, scope and type as the Collateral, subject, as to priority, to the extent set forth in the Interim Order or the Final Order, and to the extent such Collateral is not subject to valid, enforceable, perfected and non-avoidable Liens as of the Petition Date, and in any case, (i) subject to Permitted Liens and (ii) excluding claims and causes of action under sections 502(d), 544, 545, 547, 548, 549, 550, and 553 of the Bankruptcy Code, and any other claim or cause of action under Chapter 5 of the Bankruptcy Code (collectively “Avoidance Actions”) (but including, upon entry of the Final Order, the proceeds thereof).

(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), vacated, or, without Lender’s consent, modified, or amended. The Credit Parties are in compliance in all material respects with the Orders.

SECTION 5. AFFIRMATIVE COVENANTS

Each Borrower and each Subsidiary covenants and agrees that, until Payment in Full of all Obligations (other than contingent indemnification obligations for which no claim has been asserted), each such Person shall perform, and shall cause each of its Subsidiaries to perform, all covenants in this Section 5.

5.1 Financial Statements and Other Reports. Each Borrower will deliver to Lender:

(a) Monthly Financial Reports. Within thirty (30) days after the end of each Fiscal Month of each Fiscal Year, commencing with the Fiscal Month ending June 30, 2020, the Monthly Consolidated Financial Report, together with a Financial Officer Certification.

(b) Quarterly Financial Statements. Within forty-five (45) days after the end of each of the first three Fiscal Quarters of each Fiscal Year, commencing with the Fiscal Quarter ending June 30, 2020 (or, in the case of the Fiscal Quarter ending December 31, 2020, within sixty (60) days), the consolidated balance sheets of CEC and its Subsidiaries as at the end of such Fiscal


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Quarter and the related consolidated statements of income, stockholders’ equity and cash flows of CEC and its Subsidiaries for such Fiscal Quarter and for the period from the beginning of the then current Fiscal Year to the end of such Fiscal Quarter, setting forth in each case in comparative form the corresponding figures for the corresponding periods in the Cash Flow Forecast all in reasonable detail together with a Financial Officer Certification;

(c) Annual Financial Statements. Within ninety (90) days after the end of each Fiscal Year, commencing with the Fiscal Year in which the Closing Date occurs, the consolidated balance sheets of each Borrower and its Subsidiaries as at the end of such Fiscal Year and the related consolidated statements of income, stockholders’ equity and cash flows of each Borrower and its Subsidiaries for such Fiscal Year, setting forth in each case in comparative form the corresponding figures for the previous Fiscal Year, in reasonable detail, together with a Financial Officer Certification.

(d) Compliance Certificate. Together with each delivery of financial statements of the Borrowers pursuant to Sections 5.l(b) and (c), commencing with the financial statements for the Fiscal Quarter ending June 30, 2020, a duly executed and completed Compliance Certificate;

(e) Statements of Reconciliation after Change in Accounting Principles. If, as a result of any change in accounting principles and policies from those used in the preparation of the Historical Financial Statements, the consolidated financial statements of the Borrowers delivered pursuant to Section 5.1(a), (b) and (c) will differ in any material respect from the consolidated financial statements that would have been delivered pursuant to such subdivisions had no such change in accounting principles and policies been made, then, together with the first delivery of such financial statements after such change, one or more statements of reconciliation reflecting such change;

(f) Notice of Default. Promptly upon any Authorized Officer of any Borrower obtaining knowledge (i) of any condition or event that constitutes a Default or an Event of Default or that written notice has been given by Lender to any Borrower with respect thereto; (ii) that any Person has given any default notice to any Borrower or any of its Subsidiaries, in each case, with respect to any event or condition set forth in Section 8.1(b); or (iii) of the occurrence of any event or change that has caused or evidences, either in any case or in the aggregate, a Material Adverse Effect, a certificate of its Authorized Officer specifying the nature and period of existence of such condition, event or change, or specifying the notice given and action taken by any such Person and the nature of such claimed Event of Default, Default, default, event or condition, and what action such Borrower has taken, is taking and proposes to take with respect thereto;

(g) Notice of Litigation. Promptly upon any Authorized Officer of any Borrower obtaining knowledge of (i) the institution of, or non-frivolous threat of, any Adverse Proceeding (other than litigation related to the Cases) not previously disclosed in writing by the Borrowers to Lender, or (ii) any material development in any Adverse Proceeding that, in the case of either clause (g) or (g) as to which there is a reasonable possibility of adverse determination and which, if adversely determined would be reasonably expected to have a Material Adverse Effect, or seeks to enjoin or otherwise prevent the consummation of, or to recover any damages or obtain relief as a result of, the transactions contemplated hereby, written notice thereof together with such


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other information as may be reasonably available to such Borrower to enable Lender and its counsel to evaluate such matters;

(h) ERISA. (i) Promptly upon any Authorized Officer of any Borrower obtaining knowledge of the occurrence of or forthcoming occurrence of any ERISA Event that would result in a Material Adverse Effect, a written notice specifying the nature thereof, what action the applicable Credit Party or ERISA Affiliate of a Credit Party has taken, is taking or proposes to take with respect thereto and, when known, any action taken or threatened by the Internal Revenue Service, the Department of Labor or the PBGC with respect thereto; and (ii) with reasonable promptness after a request has been made by Lender, copies of (1) all notices received by the Credit Parties or their ERISA Affiliates from a Multiemployer Plan sponsor concerning an ERISA Event; and (2) to the extent in possession of a Credit Party or ERISA Affiliate of a Credit Party, copies of such other documents or governmental reports or filings relating to any Pension Plan or Multiemployer Plan as Lender shall reasonably request provided that if the relevant Credit Party or ERISA Affiliate has not requested any documents that it may request under Section 101(k) or Section 101(l) of ERISA from the administrator or sponsor of the applicable Multiemployer Plan, then, upon reasonable request of Lender, such Credit Party or ERISA Affiliate shall promptly make a request for such documents from such administrator or sponsor and Borrower shall provide copies of such documents to Lender promptly after receipt thereof; provided, further, that Lender shall have no duty to make such request;

(i) Insurance Report. At Lender’s reasonable request (but no more than once per year other than during the continuance of an Event of Default), a certificate from any Borrower’s insurance broker(s) in form and substance reasonably satisfactory to Lender outlining all material insurance coverage maintained as of the date of such certificate by such Borrower and its Subsidiaries;

(j) Information Regarding Collateral. Each Borrower will furnish to Lender reasonable prior written notice of any change (i) in any Credit Party’s corporate name, (ii) in any Credit Party’s form of formation or incorporation, (iii) in any Credit Party’s jurisdiction of organization, or (iv) in any Credit Party’s Federal Taxpayer Identification Number or state organizational identification number. Each Borrower also agrees promptly to notify Lender if any material portion of the Collateral is damaged or destroyed;

(k) Annual Collateral Verification. Each year, at the time of delivery of annual financial statements with respect to the preceding Fiscal Year pursuant to Section 5.1(c) (or such later date as reasonably agreed by Lender), each Borrower shall deliver to Lender a certificate of its Authorized Officer either confirming that there has been no change in the information required by the Collateral Questionnaire since the date of the Collateral Questionnaire delivered on the Closing Date or the date of the most recent certificate delivered pursuant to this Section 5.1 and/or identifying such changes;

(l) Other Information. (i) Promptly upon their becoming available, copies of (A) all financial statements, reports, notices, and proxy statements sent or made available generally by each Borrower to its security holders acting in such capacity or by any Subsidiary of a Borrower to its security holders other than a Borrower or another Subsidiary of a Borrower, (B) all regular and periodic reports and all registration statements and prospectuses, if any, filed by any Borrower


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or any of its Subsidiaries with any securities exchange or with the Securities and Exchange Commission or any other Governmental Authority, and (C) all press releases made available generally by any Borrower or any of its Subsidiaries to the public concerning material developments in the business of such Borrower or any of its Subsidiaries, and (ii) such other information and data with respect to any Borrower or any of its Subsidiaries as from time to time may be reasonably requested by Lender that is reasonably available without undue cost or burden;

(m) Cash Flow Forecast. No later than the Friday following the end of every fourth calendar week, commencing with the Friday of the fourth calendar week following the week in which the Closing Date occurs, a Cash Flow Forecast. Each Cash Flow Forecast shall be reasonably acceptable to Lender and no such Cash Flow Forecast shall be effective until so approved; provided that Lender shall be deemed to have approved a Cash Flow Forecast delivered after the Closing Date pursuant to this Section 5.1(m) unless Lender shall have objected to such Cash Flow Forecast prior to 11:59 p.m. on the Wednesday immediately succeeding the delivery of such Cash Flow Forecast. Upon such approval or deemed approval by Lender pursuant to this Section 5.1(m), a Cash Flow Forecast delivered pursuant to this Section 5.1(m) and the Cash Flow Forecast delivered pursuant to Section 3.1 shall constitute an “Approved Cash Flow Forecast.” The Borrowers may, at their option, at other times propose that an amendment or supplement to or replacement of any Cash Flow Forecast that has become effective (any such proposal to be submitted at least three (3) Business Days prior to the proposed effectiveness thereof) and (ii) any proposed amended, supplemented or replacement Cash Flow Forecast delivered pursuant to this Section 5.1(m) shall become an Approved Cash Flow Forecast once approved by Lender; provided further that, until any such proposed amended, supplemented, or replacement cash flow forecast is so approved, the then-current form of the Approved Cash Flow Forecast shall remain in effect;

(n) Budget Variance Reports. No later than the Thursday of the first week after each Reporting Period (commencing with the Thursday of the first week after the first Reporting Period ending following the Closing Date), a Budget Variance Report for the immediately preceding Reporting Period. Each such report shall be certified by an Authorized Officer of the Borrower as being prepared in good faith and fairly presenting in all material respects the information set forth therein;

(o) Critical Vendor Reports. No later than the Thursday of every other week (commencing with the Thursday of the first full week following the Petition Date), a Critical Vendor Report. Each such report shall be certified by an Authorized Officer of each Borrower as being prepared in good faith and fairly presenting in all material respects the information set forth therein; and

(p) Liquidity Reports. No later than the Thursday of every week (commencing with the Thursday of the first full week following the Petition Date), a report detailing the Liquidity of each Borrower for close of business on Friday of the preceding week. Each such report shall be certified by an Authorized Officer of each Borrower as being prepared in good faith and fairly presenting in all material respects the information set forth therein.

(q) Current Assets Reports. No later than the Thursday of every week (commencing with the Thursday of the first full week following the Petition Date), a report detailing the Current Assets of the Credit Parties (the “Current Assets Report”) for close of


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business on Friday of the preceding week. Each such report shall be certified by an Authorized Officer of each Borrower as being prepared in good faith and fairly presenting in all material respects the information set forth therein.

(r) Carve Out Reports. No later than the Thursday of every week (commencing with the Thursday of the first full week following the Petition Date), a report detailing the aggregate amount that has been funded into the Funded Reserve Account (as defined in the Interim Order), including the identification of the amount of proceeds of any Collateral that has been funded into the Funded Reserve Account in the preceding week. Each such report shall be certified by an Authorized Officer of each Borrower as being prepared in good faith and fairly presenting in all material respects the information set forth therein. Documents required to be delivered pursuant to this Section 5.1 may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date on which such documents are sent via e-mail to Lender. If the delivery of any of the foregoing shall fall on a day that is not a Business Day, such deliverable shall be due on the next succeeding Business Day.

(s) Weekly Project Reports. No later than Friday of each week commencing with the first Friday after the Closing Date and continuing until the Loans are Paid in Full, the Weekly Project Level Financial Report together with a Financial Officer Certification.

5.2 Existence. Subject to Bankruptcy Law, the terms of the applicable Orders and any required approval by the Bankruptcy Court, and except as otherwise permitted under Section 6.8, each Credit Party will, and will cause each of its Subsidiaries to, at all times preserve and keep in full force and effect its existence and all rights and franchises, licenses and permits material to its business; provided, no Credit Party (other than Borrower with respect to existence) or any of its Subsidiaries shall be required to preserve any such existence, right or franchise, licenses and permits if such Credit Party shall determine that the preservation thereof is no longer desirable in the conduct of the business of such Person, and that the loss thereof would not reasonably be expect to result in a Material Adverse Effect.

5.3 Payment of Taxes. Subject to Bankruptcy Law, the terms of the applicable Orders and any required approval by the Bankruptcy Court, and except as would not reasonably be expected to have a Material Adverse Effect, each Credit Party will, and will cause each of its Subsidiaries to, file all material Tax returns and pay all material post-petition Taxes imposed upon it or any of its properties or assets or in respect of any of its income, businesses or franchises before any penalty or fine accrues thereon; provided that no such Tax need be paid if it is being contested in good faith by appropriate proceedings promptly instituted and diligently conducted, so long as (a) adequate reserve or other appropriate provision, as shall be required in conformity with GAAP shall have been made therefor, and (b) in the case of a Tax which has or may become a Lien against any of the Collateral, such contest proceedings conclusively operate to stay the sale of any portion of the Collateral to satisfy such Tax. No Credit Party will, nor will it permit any of its Subsidiaries to, file or consent to the filing of any consolidated, combined or unitary income Tax return with any Person (other than CEC, a Borrower, or any of its current or future Subsidiaries).

5.4 Maintenance of Properties. Each Borrower and each Subsidiary will, and will cause each of its Subsidiaries to, maintain or cause to be maintained in working order and condition, ordinary wear and tear, casualty and condemnation excepted, all material tangible


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properties used or useful in the business of the Restricted Group and from time to time will make or cause to be made all appropriate repairs, renewals and replacements thereof in its commercially reasonable business judgment, except where the failure to do so would not reasonably be expected to result in a Material Adverse Effect.

5.5 Insurance. Each Borrower will maintain or cause to be maintained, with financially sound and reputable insurers (or pursuant to self-insurance to the extent commercially reasonable), such public liability insurance, third party property damage insurance, business interruption insurance and casualty insurance with respect to liabilities, losses or damage in respect of the assets, properties and businesses of such Borrower and its Subsidiaries, in each case in such amounts (giving effect to self-insurance) and with such deductibles, covering such risks and otherwise, in each case, as are prudent in the good faith judgment of the officers of such Borrower and its Subsidiaries (after giving effect to any reasonable and customary self-insurance). Without limiting the generality of the foregoing, each Borrower will maintain or cause to be maintained (a) flood insurance with respect to each Flood Hazard Property that is located in a community that participates in the Flood Program, in each case in compliance with any applicable regulations of the Board of Governors, and (b) replacement value casualty insurance on the Collateral under such policies of insurance, with such insurance companies (or pursuant to self-insurance to the extent commercially reasonable), in such amounts, with such deductibles, and covering such risks as are prudent in the good faith judgment of the officers of each Borrower and its Subsidiaries. Each such policy of insurance (other than directors and officers liability, workers compensation insurance, other employee benefits related insurance and business interruption insurance) shall (i) name Lender as an additional insured thereunder as its interests may appear and (ii) in the case of each casualty insurance policy, contain a loss payable clause or endorsement, reasonably satisfactory in form and substance to Lender, that names Lender as the loss payee thereunder and each Borrower will use commercially reasonable efforts to cause such policy to provide for at least thirty (30) days’ prior written notice to Lender of any material modification or cancellation of such policy.

5.6 Books and Records; Inspections. Each Credit Party will, and will cause each of its Subsidiaries to, keep proper books of record and accounts in which complete, true and correct entries in conformity in all material respects with GAAP shall be made of all dealings and transactions in relation to its business and activities. Each Credit Party will, and will cause each of its Subsidiaries to, permit any authorized representatives designated by Lender, upon reasonable advance notice during normal business hours, to visit and inspect any of the properties of any Credit Party and any of its respective Subsidiaries, to inspect, copy and take extracts from its and their financial and accounting records, to conduct field examinations, evaluate and make physical verifications of the Inventory following an Inventory Appraisal Trigger Event, and to discuss its and their affairs, finances and accounts with its and their officers and (so long as such Borrower is afforded an opportunity to be present) independent public accountants, all upon reasonable notice and at such reasonable times during normal business hours and as often as may reasonably be requested; provided, so long as no Event of Default is continuing, the Borrowers shall not be required to pay or reimburse the expenses (to the extent otherwise required to do so hereunder) of more than one such visit and inspection during any Fiscal Year. Upon an Inventory Appraisal Trigger Event, Lender shall have the right to conduct an Inventory Appraisal, it being agreed that the Borrowers shall pay to Lender’s agents or representatives as directed by Lender) for its own


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use and benefit reasonable charges for examinations of the Collateral performed by the agents or representatives of Lender in such amounts as Lender may from time to time request.

5.7 Lender Calls. The Borrowers will participate in a telephonic conference call with Lender once each week at such time as may be agreed to by the Lender, in each case, to discuss cash flows and operations of the Borrowers and their Subsidiaries.

5.8 Compliance with Laws. Except as otherwise excused by Bankruptcy Law, the Borrowers and each of their Subsidiaries will comply with the requirements of all applicable laws, rules, regulations, and orders of any Governmental Authority (including all Environmental Laws), except for any noncompliance which would not reasonably be expected to have, in the aggregate, a Material Adverse Effect.

5.9 Environmental.

(a) Environmental Disclosure. The Borrowers will deliver to Lender:

(i) as soon as practicable following receipt thereof, copies of all environmental audits, investigations, analyses and reports of any kind or character, whether prepared by personnel of each Borrower or any of its Subsidiaries or by independent consultants, Governmental Authorities or any other Persons, with respect to environmental matters at any Facility or with respect to any Environmental Claims that, in either case, would reasonably be expected to result in liability of such Borrower or any of its Subsidiaries in excess of Twenty-Five Thousand ($25,000);

(ii) promptly upon the occurrence thereof, written notice describing in reasonable detail any of the following that would reasonably be expected to results in liabilities of any Borrower or any of its Subsidiaries in excess of Twenty-Five Thousand ($25,000): (A) any Release of Hazardous Materials required to be reported to any federal, state or local governmental or regulatory agency under any applicable Environmental Laws, (B) any remedial action taken by a Borrower or any other Person in response to (1) any Hazardous Materials Activities the existence of which has a reasonable possibility of resulting in one or more Environmental Claims, or (2) any Environmental Claims, and (C) a Borrower’s discovery of any occurrence or condition on any real property adjoining or in the vicinity of any Facility that would reasonably be expected to cause such Facility or any part thereof to be subject to any restrictions on the ownership, occupancy, transferability or use thereof under any Environmental Laws;

(iii) as soon as practicable following the sending or receipt thereof by a Borrower or any of its Subsidiaries, a copy of any and all written communications with respect to any of the following that would reasonably be expected to result in liabilities of a Borrower or any of its Subsidiaries in excess of Twenty-Five Thousand ($25,000) (A) any Environmental Claims, (B) any Release required to be reported to any Governmental Authority, and (C) any request for information from any Governmental Authority that suggests such Governmental Authority is investigating whether a Borrower or any of its Subsidiaries may be potentially responsible for any


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liability (including penalties, fine or enforcement actions) arising from any Hazardous Materials Activity;

(iv) reasonably prompt written notice describing in reasonable detail (A) any proposed acquisition of stock, assets, or property by any Borrower or any of its Subsidiaries that would reasonably be expected to (a) expose such Borrower or any of its Subsidiaries to, or result in, Environmental Claims that would reasonably be expected to result in liabilities of such Borrower or any of its Subsidiaries in excess of Twenty-Five Thousand ($25,000) or (2) affect the ability of such Borrower or any of its Subsidiaries to maintain in full force and effect all Governmental Authorizations required under any Environmental Laws for their respective operations that would reasonably be expected to result in liabilities of such Borrower or any of its Subsidiaries in excess of Twenty-Five Thousand ($25,000) and (B) any proposed action to be taken by any Borrower or any of its Subsidiaries to modify current operations in a manner that would reasonably be expected to subject any Borrower or any of its Subsidiaries to any additional obligations or requirements under any Environmental Laws resulting in liabilities of any Borrower or any of its Subsidiaries in excess of Twenty-Five Thousand ($25,000); and

(v) with reasonable promptness, such other documents and information as from time to time may be reasonably requested by Lender in relation to any matters disclosed pursuant to this Section 5.9.

(b) Hazardous Materials Activities, Etc. Each Credit Party shall promptly take, and shall cause each of its Subsidiaries promptly to take, any and all actions necessary to (i) cure any violation of applicable Environmental Laws or any Environmental Laws by such Credit Party or its Subsidiaries that would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, or if remained uncured would cause any Credit Party, and (ii) make an appropriate response to any Environmental Claim against such Credit Party or any of its Subsidiaries and discharge any obligations it may have to any Person thereunder, except where failure to do so would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

5.10 Subsidiaries. In the event that (a) any Person becomes a wholly-owned subsidiary of a Borrower, or (b) any Person becomes a wholly-owned subsidiary of a Subsidiary after the Closing Date (it being understood and agreed that none of the events described in clauses (a) through (b) above shall occur without the consent of Lender), the Borrowers shall (i) within forty-five (45) days (or such later date as Lender may agree) cause such subsidiary to become a Guarantor hereunder and a Grantor under the Pledge and Security Agreement, by executing and delivering to Lender a Counterpart Agreement, and (ii) cause such Subsidiary within forty-five (45) days (or such later date as Lender), to take all such actions and execute and deliver, or cause to be executed and delivered, all such documents, instruments, agreements, and certificates reasonably requested by Lender, including those which are similar to those described in Section 2.14(b)(iii) and Sections 3.1(c), 3.1(f), and 3.1(h).

5.11 Additional Real Estate Assets. In the event that any Credit Party that is a Debtor acquires a Real Estate Asset or a Person that is required to become a Guarantor pursuant to Section 5.10 after the Closing Date or any Subsidiary that owns or leases a Real Estate Asset is required to become a Guarantor pursuant to Section 5.10 after the Closing Date, then, such Real Estate


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Asset shall automatically become subject to the Lien as provided in Section 2.14 and Section 2.14(b)(iii) shall apply to such Real Estate Assets. In addition to the foregoing, Borrower shall, at the reasonable request of Lender, deliver to Lender such appraisals as are required by law or regulation of Real Estate Assets with respect to which Lender has been granted a Lien.

5.12 Use of Proceeds. The Borrowers and each other Credit Party shall use the proceeds of the Loans solely for the purposes described in Section 2.3.

5.13 Further Assurances. At any time or from time to time upon the reasonable request of Lender, each Credit Party will, at its expense, promptly execute, acknowledge and deliver such further documents and do such other acts and things as Lender may reasonably request in order to effect fully the purposes of the Orders and Credit Documents. In furtherance and not in limitation of the foregoing, each Credit Party shall take such actions as Lender may reasonably request from time to time to ensure that the Obligations are guaranteed by the Guarantors and are secured by substantially all of the assets of each Borrower, and its Subsidiaries (other than Excluded Assets) and all of the outstanding Equity Interests of each Borrower and its Subsidiaries, in each case subject to the limitation set forth herein and in the other Credit Documents and subject to the priorities set forth in the Orders.

5.14 [Reserved].

5.15 Post-Closing Covenants. Each of the Credit Parties shall satisfy the requirements set forth on Schedule 5.15 on or before the date specified for such requirement or, except with respect to the payment of any fees and expenses, such later date to be determined by Lender.

5.16 First and Second Day Orders. The Borrowers shall cause all proposed “first day” orders, “second day” orders and all other orders establishing procedures for administration of the Cases or approving significant or outside the ordinary course of business transactions submitted to the Bankruptcy Court to be in accordance with and permitted by the terms of this Agreement and reasonably acceptable to Lender in all material respects, it being understood and agreed that the forms of orders approved by Lender prior to the Petition Date are in accordance with and permitted by the terms of this Agreement in all respects and are acceptable.

5.17 Milestones.

(a) On the Petition Date (or a later date acceptable to Lender), the Debtors shall have filed with the Bankruptcy Court (i) an Acceptable Plan, an Acceptable Disclosure Statement and motion to approve the Acceptable Disclosure Statement, in form and substance reasonably acceptable to Lender or (ii) a motion (the “Bidding Procedures Motion”) seeking entry of an order (the “Bidding Procedures Order”), which Bidding Procedures Motion and Bidding Procedures Order shall be in form and substance reasonably acceptable to Lender and shall seek (A) approval of procedures governing the sale and marketing process for all or substantially all of the assets of the Debtors and a stalking horse credit bid from Lender or its designees (which bid may be in the form of a plan of reorganization) that contemplates, among other things, cash payment of administrative expenses and wind-down costs set forth in a wind down budget acceptable to Lender or its designees in their sole discretion and (B) to establish dates for the submission of bids and the Auction (if any) in accordance with such procedures;


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(b) no later than twenty-five (25) calendar days after the Petition Date (or such later date acceptable to Lender), the Bankruptcy Court shall have entered the Final Order;

(c) in the event the Bidding Procedures Motion is filed, no later than twenty-five (25) calendar days after the Petition Date (or such later date acceptable to Lender), the Bankruptcy Court shall have entered the Bidding Procedures Order;

(d) in the event the Bidding Procedures Motion is filed, no later than fifty-five (55) calendar days after the Petition Date (or such later date acceptable to Lender), the Bid Deadline (as defined in the Bidding Procedures Order) shall have passed;

(e) in the event the Bidding Procedures Motion is filed sixty (60) calendar days after the Petition Date (or such later date acceptable Lender), the Auction (as defined in the Bidding Procedures Order), if any, shall have occurred;

(f) in the event the Bidding Procedures Motion is filed, the Auction has occurred, no later than sixty-five (65) calendar days after the Petition Date (or such later date acceptable to Lender), the Bankruptcy Court shall have entered a sale order (the “Sale Order”) approving the sale of all or substantially all of the assets of the Debtors pursuant to section 363 of the Bankruptcy Code, which order shall be in form and substance acceptable to Lender in its reasonable discretion;

(g) in the event the Bidding Procedures Motion is filed, the Auction has occurred, no later than fourteen (14) calendar days after entry of the Sale Order (or such later date acceptable to Lender), the sale transactions contemplated thereby shall have closed;

(h) no later than thirty-five (35) calendar days after the Petition Date (or such later date acceptable to Lender), the Debtors shall obtain entry by the Bankruptcy Court of an Acceptable Disclosure Statement Order;

(i) no later than thirty-five (35) calendar days after the Petition Date, the Debtors shall obtain entry by the Bankruptcy Court of an Acceptable Confirmation Order; and

(j) no later than fourteen (14) calendar days after entry of the Acceptable Confirmation Order, the confirmed Acceptable Plan shall have become effective;

provided, however, that in the event that there is no sale or auction process pursuant to Section 363 of the Bankruptcy Code, Sections 5.17(a)(ii), (c), (d), (e), (f), and (g) shall not apply.

5.18 Bankruptcy Notices. The Borrowers will furnish to Lender and counsel to the Lender:

(a) copies of any informational packages provided to potential bidders, draft agency agreements, purchase agreements, status reports, and updated information related to the


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sale or any other transaction and copies of any such bids and any updates, modifications, or supplements to such information and materials;

(b) as soon as reasonably practicable in advance of, but no later than one day prior to the earlier of (x) filing with the Bankruptcy Court or (y) delivering to any statutory committee appointed in the Cases or the United States Trustee (the “U.S. Trustee”), as the case may be, all proposed orders and pleadings related to the Loans and the Credit Documents, any other financing or use of cash collateral, any sale or other disposition of Collateral outside the ordinary course, cash management, adequate protection, any Reorganization Plan, and/or any disclosure statement related thereto (except that with respect to any emergency pleading or document for which, despite the Debtors’ best efforts, such advance notice is impracticable, the Debtors shall be required to furnish such documents as soon as reasonably practicable and in no event later than concurrently with such filings or deliveries thereof, as applicable); and

(c) by the earlier of (i) two (2) Business Days prior to being filed (and if impracticable, then as soon as possible and in no event later than as promptly practicable before being filed) on behalf of any of the Debtors with the Bankruptcy Court, or (ii) at the same time as such documents are provided by any of the Debtors to any statutory committee appointed in the Cases or the U.S. Trustee, all other notices, filings, motions, pleadings or other information concerning the financial condition of a Borrower or any of its Subsidiaries or any request to approve any compromise and settlement of claims or for relief under Section 363, 365, 1113 or 1114 of the Bankruptcy Code or Bankruptcy Rule 9019 or any other request for relief (to the extent not covered by Section 5.18(b) above).

5.19 Business and Property of the Credit Parties. Unless Lender otherwise agrees, upon and after the Closing Date, no Credit Party nor any of their respective Subsidiaries proposes to engage in any business other than those businesses in which such entity is engaged on the date of this Agreement or that are reasonably related thereto and activities necessary to conduct the foregoing. On the Closing Date, subject to the entry of the Interim Order and the other “first day orders,” the Credit Parties and their Subsidiaries has good and marketable title to, valid leasehold interests in, or valid licenses or other rights to use all personal property and possess all of the rights and consents necessary for the conduct of such businesses.

5.20 Bankruptcy Related Matters. The Borrowers will and will cause each of the other Credit Parties to:

(a) cause all proposed (i) “first day” orders, (ii) “second day” orders, (iii) orders related to or affecting the Loans and other Obligations, the Prepetition Debt and the Credit Documents, any other financing or use of Cash Collateral, any sale or other disposition of Collateral outside the ordinary course, cash management, adequate protection, any plan of reorganization and/or any disclosure statement related thereto, (iv) orders concerning the financial condition of a Borrower or any of its Subsidiaries or other Indebtedness of the Credit Parties or seeking relief under section 363, 365, 1113 or 1114 of the Bankruptcy Code or section 9019 of the Federal Rules of Bankruptcy Procedure, (v) orders authorizing additional payments to Critical Vendors (outside of the relief approved in the “first day” and “second day” orders), and (vi) orders establishing procedures for administration of the Cases or approving significant transactions submitted to the Bankruptcy Court, in each case, proposed by the Debtors to be in accordance with


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and permitted by the terms of this Agreement and reasonably acceptable to Lender in all respects, it being understood and agreed that the forms of orders approved by Lender prior to the Petition Date are in accordance with and permitted by the terms of this Agreement and are reasonably acceptable in all respects;

(b) comply in all material respects with each order entered by the Bankruptcy Court in connection with the Cases;

(c) comply in a timely manner with their obligations and responsibilities as debtors-in-possession under the Bankruptcy Code, the Bankruptcy Rules, the Interim Order and the Final Order, as applicable, and any other order of the Bankruptcy Court; and

(d) deliver to counsel to Lender and to counsel to Lender promptly as soon as available but no later than two (2) Business Days prior to filing, copies of all proposed non-ministerial or administrative pleadings, motions, applications, orders, financial information, and other documents to be filed by or on behalf of the Credit Parties with the Bankruptcy Court in the Cases, or distributed by or on behalf of the Credit Parties to any official or unofficial committee appointed or appearing in the Cases or any other party in interest, and shall consult in good faith with Lender’s advisors regarding the form and substance of any such document.

5.21 PATRIOT Act. Promptly following any request therefor, information and documentation reasonably requested by Lender for purposes of compliance with applicable “know your customer” and anti-money laundering rules and regulations, including, without limitation, the PATRIOT Act and the Beneficial Ownership Certificate (to the extent required under 31 C.F.R. § 1010.230).

5.22 Controlled Account. Subsequent to each Credit Extension, hold the proceeds of the Term Loans in the Controlled Account subject to Draws made by the Borrowers in accordance with Section 2.2(b).

5.23 Lockbox Account.

(a) Lender, or at Lender’s request, the Borrowers, shall establish the Lockbox Account, which shall be controlled by Lender. All charges for the Lockbox Account shall be payable by the Borrowers.

(b) Subject to any requirements of the Bankruptcy Court, all of the following amounts shall be deposited directly into the Lockbox Account: (i) the sales proceeds under MIPA; (ii) all Net Asset Sale Proceeds; and (iii) all checks, drafts, items, money, cash and remittances constituting or evidencing revenues, proceeds, receipts and other amounts payable to any of the Borrowers or the Borrower Subsidiaries. The Borrowers shall, and shall cause all Borrower Subsidiaries to, in all invoices and other instructions, notices or agreements submitted by the Borrower or the Borrower Subsidiaries, to the purchaser under the MIPA and the appropriate payor of each of the amounts set forth in clauses (ii) and (iii) above, instruct such entities to make all payments to, and only to, the Lockbox Account. Lender shall authorize the holder of the Lockbox Account to disclose to the Borrowers not more often than each Business Day the amounts and sources of funds deposited in the Lockbox Account upon an inquiry by the Borrowers.


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(c) In the event that any amount described in Section 5.23(b) is paid to any of the Borrowers or any Borrower Subsidiary, such Borrower shall hold or shall cause such Borrower Subsidiary to hold, as applicable, such amount in trust for the Lender and shall immediately pay such amount into the Lockbox Account.

5.24 Proceeds of Lockbox Account. The Borrowers acknowledge and agree that they shall be entitled to withdraw funds from the Lockbox Account solely and exclusively to pay line items of expenditures set forth in the Weekly Project Level Financial Report pursuant to this Agreement that are approved by Lender. Upon an Event of Default, all funds in the Lockbox Account shall be deemed to be cash collateral of the Lender.

5.25 Inventory Appraisals. Following the occurrence of an Inventory Appraisal Trigger Event, Lender shall conduct Inventory Appraisals and field exams from time to time and each Borrower agrees to cooperate, and cause each other Credit Party to cooperate, in such appraisal process and each Borrower agrees to reimburse Lender for all fees and expenses of the applicable appraisers.

5.26 MIPA. Without the prior written consent of Lender, prior to Payment in Full, (a) CEC DB shall not amend or modify the payment terms under the MIPA, including without limitation, Section 2.02 thereof, and (b) none of the Credit Parties shall escrow or otherwise dedicate any cash or other collateral of Lender for the benefit of the Potential Purchaser or its successor or designee.

SECTION 6. NEGATIVE COVENANTS

Until Payment in Full of all Obligations (other than contingent indemnity obligations for which no claim has been asserted), none of the Borrowers nor any Subsidiary shall, nor shall it permit any Subsidiary to, directly or indirectly:

6.1 Indebtedness. Create, incur, issue, or assume or guaranty, or otherwise become or remain liable (collectively, “incur”) with respect to any Indebtedness, except:

(a) the Obligations;

(b) (i) Indebtedness of any Subsidiary to any Borrower or to any other Subsidiary that is a Debtor, or of any Borrower to any Subsidiary that is a Debtor, and (ii) Indebtedness of any Borrower or to any other Subsidiary that is a Debtor; provided, (A) all such Indebtedness shall be unsecured and subordinated in right of payment to the Payment in Full of the Obligations and (B) such Indebtedness is permitted as an Investment under Section 6.5;

(c) the incurrence by any Borrower or its Subsidiaries of Indebtedness in respect of workers’ compensation claims, payment obligations in connection with health or social security benefits, unemployment or other insurance obligations, statutory obligations, bankers’ acceptances, performance, letter of credit or completion or performance guarantees (including, without limitation, performance guarantees pursuant to equipment leases) and surety,


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performance, utility, bid, stay, statutory, appeal bonds, or similar obligations in the ordinary course of business;

(d) Indebtedness in respect of any customary cash management, cash pooling or netting or setting off arrangements in the ordinary course of business and/or in connection with the Controlled Account;

(e) the guarantee by the Borrowers or any Subsidiary of Indebtedness of the Borrowers to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 6.1; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Obligations, then the guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;

(f) Capital Lease Obligations incurred prior to the Petition Date and Indebtedness set forth on Schedule 6.1 (including Capital Lease Obligations incurred to renew, roll-over, refund, refinance, replace, defense, or discharge any Indebtedness outstanding pursuant to this clause (f));

(g) the incurrence by any Borrower or any of its Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings, or purchase money obligations or other financings, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction or installation of property, plant or equipment used in the business of Borrower or any of its Subsidiaries, in an aggregate principal amount, not to exceed Ten Thousand ($10,000) at any time outstanding;

(h) other Indebtedness of any Borrower or its Subsidiaries in an aggregate amount not to exceed at any time Twenty Thousand ($20,000);

(i) Indebtedness supported by letters of credit in a principal amount outstanding not in excess of the stated amount of such letter of credit to finance insurance policy premiums in the ordinary course of business;

(j) [Reserved]; and

(k) the incurrence by any Borrower or its Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five (5) Business Days.

The accrual of interest or preferred stock dividends, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on preferred stock in the form of additional shares of the same class of preferred stock will not be deemed to be an incurrence of Indebtedness or an issuance of preferred stock for purposes of this Section 6.1.

The amount of any Indebtedness outstanding as of any date will be:


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(1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;

(2) the principal amount of the Indebtedness, in the case of any other Indebtedness; and

(3) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:

(a) the Fair Market Value of such assets at the date of determination; and

(b) the amount of the Indebtedness of the other Person.

6.2 Liens. Create, incur, assume, or permit to exist any Lien on or with respect to any property or asset of any kind (including any document or instrument in respect of goods or accounts receivable) of any Borrower or any of its Subsidiaries, whether now owned or hereafter acquired (and including any license right), or any income or profits therefrom, except:

(a) Liens in favor of Lender granted pursuant to any Credit Document;

(b) Liens for (i) pre-petition taxes, assessments or government charges or claims or unpaid utilities that are not yet delinquent as of the Petition Date or that are being contested in good faith by appropriate proceedings promptly instituted and diligently concluded; provided that any reserve or other appropriate provision as is required in conformity with GAAP has been made therefor, and (ii) taxes, assessments or government charges or claims or unpaid utilities that are not yet delinquent as of the Petition Date or that are being contested in good faith by appropriate proceedings promptly instituted and diligently concluded; provided that any reserve or other appropriate provision as is required in conformity with GAAP has been made therefor;

(c) Liens imposed by law, such as carriers’, warehousemen’s, landlord’s, mechanics’ Liens, repairmen’s and other like Liens, (other than any such Lien imposed on the assets of a Credit Party pursuant to Section 430(k) of the Internal Revenue Code or Section 303(k) ERISA with respect to a Pension Plan), in each case incurred in the ordinary course of business;

(d) Liens to secure the performance of statutory obligations, insurance, performance, trade contracts, utility services, government contracts, return of money bonds, surety or appeal bonds and other obligations of like nature, reclamation liabilities, workers compensation obligations, unemployment insurance and other types of social security and deposits securing liability to insurance carriers under insurance or self-insurance arrangements, performance bonds or other obligations of a like nature incurred in the ordinary course of business (including Liens to secure letters of credit issued to assure payment of such obligations); provided, that no more than Ten Thousand Dollars ($10,000) of cash may be posted following the Petition Date under this Section 6.2(d);

(e) survey exceptions, easements or reservations of, rights of others for, licenses, rights-of-way, sewers, electric lines, telegraph and telephone lines and other similar purposes, or zoning or other restrictions or similar encumbrances as to the use of real property that were not incurred in connection with Indebtedness and that do not in the aggregate materially


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adversely affect the value of said properties or materially impair their use in the operation of the business of any Borrower or any of its Subsidiaries;

(f) Liens arising from (i) protective filings of UCC financing statements regarding operating leases entered into by any Borrower and its Subsidiaries in the ordinary course of business and (ii) filings of UCC financing statements as a precautionary measure in connection with operating leases;

(g) Liens securing obligations outstanding on the Petition Date and Liens described in Schedule 6.2 securing Indebtedness and other obligations outstanding on the Petition Date;

(h) Liens securing Indebtedness permitted pursuant to Section 6.1(i); provided, such Liens shall encumber only the asset acquired with the proceeds of such Indebtedness;

(i) Liens on Borrower’s or its Subsidiaries cash resulting from deposits or prepayments of royalties;

(j) Liens securing Indebtedness or other liabilities in an aggregate amount not to exceed Ten Thousand Dollars ($10,000) at any one time outstanding;

(k) Liens granted to provide adequate protection pursuant to the Interim Order or the Final Order;

(l) Liens securing Cash Management Obligations with an aggregate principal amount that do not exceed Ten Thousand Dollars ($10,000) at any one time outstanding;

(m) Liens on the Controlled Account in favor of Lender;

(n) Liens on insurance policies and proceeds thereof, or other deposits, to secure insurance premium financings;

(o) Liens on specific items of inventory or other goods (and the proceeds thereof) of any Person securing such Person’s obligations in respect of bankers’ acceptances issued or created in the ordinary course of business for the account of such Person to facilitate the purchase, shipment or storage of such inventory or other goods;

(p) Liens arising out of conditional sale, title retention, consignment or similar arrangements for the sale of goods entered into in the ordinary course of business;

(q) Liens in favor of banking institutions arising as a matter of law or contract encumbering deposits (including the right of setoff) which are within the general parameters customary in the banking industry; and

(r) Liens of the Junior Priority Debt Parties; provided that in no circumstance shall the Lender’s rights under the Credit Documents be junior to the foregoing Liens and any Liens or rights granted to the Lender pursuant to the Credit Documents or DIP Orders. For the avoidance of doubt, notwithstanding any provision to the contrary, the liens and/or claims of the


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Junior Priority Debt Parties shall be junior to the liens and/or claims of the Lender, Tranche B Lender, and CEC DB Lender.

Notwithstanding any other provision of this covenant, the maximum amount of liabilities that may be secured by Liens pursuant to this Section 6.2 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values. In addition, with respect to any Lien securing Indebtedness or other obligations that is outstanding on the Petition Date, such Lien shall also be permitted to secure any Increased Amount of such Indebtedness or other obligation.

6.3 No Further Negative Pledges. Enter into any agreement prohibiting the creation or assumption of any Lien upon any of its properties or assets, whether now owned or hereafter acquired, to secure the Obligations except with respect to (a) specific property encumbered to secure payment of particular Indebtedness or to be sold pursuant to an executed agreement with respect to a permitted Asset Sale, (b) restrictions by reason of customary provisions restricting assignments, subletting, or other transfers contained in leases, licenses, and similar agreements entered into in the ordinary course of business (provided that such restrictions are limited to the property or assets secured by such Liens or the property or assets subject to such leases, licenses, or similar agreements, as the case may be), (c) restrictions in any Prepetition Debt as in effect on the Petition Date (including, for the avoidance of doubt, restrictions pursuant to or authorized by the Intercreditor Agreement (as defined in the Tranche B Loan Agreement)), and (d) restrictions in the Credit Documents.

6.4 Restrictions on Subsidiary Distributions. Create or otherwise cause or suffer to exist or become effective any consensual encumbrance or restriction of any kind on the ability of any Subsidiary of any Borrower to (a) pay dividends or make any other distributions on any of such Subsidiary’s Equity Interests owned by such Borrower or any other Subsidiary of Borrower, (b) repay or prepay any Indebtedness owed by such Subsidiary to such Borrower or any other Subsidiary of Borrower, (c) make loans or advances to such Borrower or any other Subsidiary of Borrower, or (d) transfer, lease, or sell any of its property or assets to such Borrower or any other Subsidiary of Borrowers.

Notwithstanding the foregoing, the preceding restrictions will not apply to encumbrances or restrictions existing under or by reason of (i) restrictions imposed by or authorized by the Intercreditor Agreement (as defined in the Tranche B Loan); (ii) agreements evidencing Indebtedness permitted by (A) Section 6.l(g) that impose restrictions on the property so acquired, and (B) Section 6.l(h) that impose restrictions only on Subsidiaries that are not Guarantors; (iii) any agreement or Equity Interest of a Person acquired by any Borrower or any of its Subsidiaries as in effect at the time of such acquisition (except to the extent such agreement was entered into or Equity Interests were incurred in connection with or in contemplation of such acquisition), which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person, or the property or assets of the Person, so acquired; provided that, in the case of Indebtedness, such Indebtedness was permitted by the terms of the agreement to be incurred; (iv) customary non-assignment provisions in contracts, leases, sub-leases and licenses entered into in the ordinary course of business; (v) purchase money obligations and Capital Lease Obligations that impose restrictions on the property purchased or leased of the nature described in Section 6.2(i); (vi) any agreement for the sale or other disposition of a Subsidiary that restricts distributions by that Subsidiary pending its sale or other disposition; (vii) Liens, including real


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property mortgages, permitted to be incurred pursuant to Section 6.2 that limit the right of the debtor to dispose of the assets subject to such Liens; (viii) provisions limiting the disposition or distribution of assets or property in joint venture agreements, asset sale agreements, sale-leaseback agreements, stock sale agreements and other similar agreements, which limitation is applicable only to the assets that are the subject of such agreements; and (ix) restrictions on cash or other deposits or net worth imposed by customers under contracts entered into in the ordinary course of business.

6.5 Investments. Make any Investment in any Person, except:

(a) (i) Investments in Cash and assets that were Cash Equivalents when such Investments were made and (ii) Investments in the nature of cash collateral made to secure obligations described in Section 6.2(d) incurred in the ordinary course of business;

(b) equity Investments owned as of the Closing Date in any Subsidiary;

(c) Investments by and among a Borrower and Guarantors;

(d) Investments described in Schedule 6.6 and existing on the Petition Date;

(e) Investments received in compromise or resolution of (A) obligations of trade creditors or customers that were incurred in the ordinary course of business of a Borrower or any of its Subsidiaries, including pursuant to any plan of reorganization or similar arrangement upon the bankruptcy or insolvency of any trade creditor or customer; or (B) litigation, arbitration or other disputes;

(f) Investments consisting of purchases and acquisitions of inventory or supplies or the granting of non-exclusive licenses of Intellectual Property pursuant to joint marketing arrangements with other Persons, in each case in the ordinary course of business;

(g) Liens permitted pursuant to Section 6.2; and

(h) any Investments received in exchange for providing management and other related services and/or in exchange for the assumption of liabilities.

6.6 Financial Covenants. Except as specifically waived in writing by the Lender in its sole discretion, (a) Beginning with the delivery of the initial Budget Variance Report and tested, as of the last day of each applicable Two-Week Test Period commencing with the last day of the first Two-Week Test Period ending after the Closing Date, for such Two-Week Test Period (i) the negative variance (as compared to the Operative Approved Cash Flow Forecast) of the actual aggregate operating cash receipts of the Credit Parties shall not exceed 15% and (ii) the positive variance (as compared to the Operative Approved Cash Flow Forecast) of the aggregate operating disbursements (excluding professional fees) made by the Credit Parties shall not exceed 15% and (b) beginning with the delivery of the third Budget Variance Report, as of the last day of each applicable Four-Week Test Period commencing with the last day of the first Four-Week Test Period ending after the Closing Date, for such Four-Week Test Period, (i) the negative variance (as compared to the Operative Approved Cash Flow Forecast Forecast) of the actual aggregate operating cash receipts of the Credit Parties shall not exceed 10% and (ii) the positive variance (as


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compared to the Operative Approved Cash Flow Forecast) of the aggregate operating disbursements (excluding professional fees) made by the Credit Parties shall not exceed 10% (such variance that does not breach this covenant, the “Permitted Variance”).

6.7 Fundamental Changes; Disposition of Assets. Merge or consolidate, liquidate, wind-up, transfer all or substantially all of its assets, or dissolve itself (or suffer any liquidation or dissolution), or, in the case of any Borrower or any Subsidiary of a Borrower, consummate an Asset Sale, except:

(a) any Subsidiary of a Borrower may be merged with or into or liquidate or dissolve into (or transfer all or substantially all of its assets to) such Borrower or any Credit Party that is a Subsidiary of such Borrower: provided, that (i) in the case of such a merger, if such Borrower is a party to such merger then such Borrower shall be the continuing or surviving Person, (ii) if such Borrower is not a party to such merger or transfer but a Credit Party that is a Subsidiary is a party to such merger or transfer, then a Credit Party that is a Non-Specified Guarantor shall be the continuing or surviving Person of such merger or transferee; provided that, if any Capital Stock of any Subsidiary party to any merger referred to in this clause (a) constitutes Collateral, the Capital Stock of the surviving entity of such merger shall constitute Collateral to the same extent;

(b) sales or other dispositions of assets that do not constitute Asset Sales;

(c) sales, licenses, abandonments, or other dispositions of Intellectual Property that is immaterial and no longer used in or necessary for the conduct of the business;

(d) sales, transfers, or other dispositions of assets with respect to any Debtor pursuant to any order of the Bankruptcy Court, in form and substance reasonably satisfactory to Lender, permitting a de minimis asset disposition without further order of the Bankruptcy Court, so long as the proceeds thereof are applied in accordance with Section 2.11, if applicable; and

(e) sales, transfers, or other dispositions of assets with respect to any Debtor to Potential Purchaser pursuant to an Acceptable Confirmation Order, so long as the proceeds thereof are applied in accordance with Section 2.11; provided further that, for the avoidance of doubt, Lender shall be granted a Lien on the proceeds of such Sale.

6.8 Sales and Lease-Backs. Become or remain liable as lessee or as a guarantor or other surety with respect to any lease of any property (whether real, personal or mixed), whether now owned or hereafter acquired, which such Person (a) has sold or transferred or is to sell or to transfer to any other Person (other any other Credit Party that is not a Guarantor), or (b) intends to use for substantially the same purpose as any other property which has been or is to be sold or transferred by such Person to any Person (other a Borrower or any of its Subsidiaries) in connection with such lease.

6.9 Transactions with Affiliates. Enter into or permit to exist any transaction (including the purchase, sale, lease, or exchange of any property or the rendering of any service) with any Affiliate of a Borrower (each, an “Affiliate Transaction”) unless the Affiliate Transaction is on terms, taken as a whole, that are no less favorable to such Borrower or the relevant Subsidiary than those that would have been obtained in a comparable transaction by such


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Borrower or such Subsidiary with an unrelated Person; provided, the foregoing restriction shall not apply to:

(a) any employment agreement, consulting agreement, severance agreement, employee benefit plan, officer or director indemnification agreement or any similar arrangement entered into by any Borrower or any of its Subsidiaries in effect on the Closing Date and made in accordance with the Operative Approved Cash Flow Forecast (subject to Permitted Variances)

(b) any assignment of assets into CEC DB by Affiliates thereof for no consideration; and

(c) payment of reasonable and customary fees and reimbursements of expenses (pursuant to indemnity arrangements or otherwise) of officers, directors, employees, or consultants of any Borrower or any of its Subsidiaries and made in accordance with the Operative Approved Cash Flow Forecast (subject to Permitted Variances).

6.10 Conduct of Business. From and after the Closing Date, engage in any business other than Permitted Business, except to such extent as would not be material to a Borrower and its respective Subsidiaries taken as a whole.

6.11 Amendments or Waivers of Organizational Documents. Agree to any material amendment, restatement, supplement or other modification to, or waiver of, any of its Organizational Documents after the Closing Date that is materially adverse to Lender without in each case obtaining the prior written consent of Lender to such amendment, restatement, supplement, or other modification or waiver.

6.12 Fiscal Year. Change its Fiscal Year-end from December 31.

6.13 Subrogation. No Credit Party shall, and no Credit Party shall permit any of its Subsidiaries to, assert any right of subrogation or contribution against any other Debtors until the Payment in Full in cash of all the Obligations (other than contingent indemnity obligations with respect to then unasserted claims).

6.14 Draws. Make any Draw unless each of the following conditions have been satisfied on or prior to the date of such Draw (unless waived by Lender):

(a) on such date, both immediately prior to and after giving effect to such Draw, no Default or Event of Default shall have occurred or be continuing; and

(b) the amount of the Draw shall be deposited in the Controlled Agreement, which is subject to a DACA.

6.15 Additional Bankruptcy Matters. No Credit Party shall, and no Credit Party shall permit any of its Subsidiaries to, without Lender’s prior written consent, do any of the following:

(a) use any portion or proceeds of the Loans or the Collateral, or disbursements set forth in the Operative Approved Cash Flow Forecast, for payments or purposes that would violate the terms of the Interim Order or the Final Order;


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(b) incur, create, assume, suffer to exist, or permit any other superpriority administrative claim which is pari passu with or senior to the claim of Lender against any Credit Party, except for the Carve Out or as otherwise expressly permitted by the Orders;

(c) assert, join, investigate, support, or prosecute any claim or cause of action against Lender (in their capacities as such), unless such claim or cause of action is in connection with the enforcement of the Credit Documents against Lender;

(d) enter into any agreement to return any of its inventory to any of its creditors for application against any pre-petition Indebtedness, pre-petition trade payables or other pre-petition claims under Section 546(c) of the Bankruptcy Code or allow any creditor to take any setoff or recoupment against any of its pre-petition Indebtedness, prepetition trade payables or other pre-petition claims based upon any such return pursuant to Section 553(b)(1) of the Bankruptcy Code or otherwise if, after giving effect to any such agreement, setoff or recoupment, the aggregate amount applied to pre-petition Indebtedness, pre-petition trade payables and other pre-petition claims subject to all such agreements, setoffs and recoupments since the Petition Date would exceed $10,000;

(e) seek, consent to, or permit to exist, without the prior written consent of Lender, any order granting authority to take any action that is prohibited by the terms of this Agreement, the Interim Order, the Final Order or the other Credit Documents or refrain from taking any action that is required to be taken by the terms of this Agreement, the Interim Order, the Final Order or any of the other Credit Documents;

(f) subject to the terms of the Orders and subject to Section 8, object to, contest, delay, prevent, or interfere with in any material manner the exercise of rights and remedies by Lender with respect to the Collateral following the occurrence of an Event of Default, including without limitation a motion or petition by Lender to lift an applicable stay of proceedings to do the foregoing (provided that any Credit Party may contest or dispute whether an Event of Default has occurred in accordance with the terms of the Orders); or

(g) except as expressly provided or permitted hereunder (including, without limitation, to the extent pursuant to any “first day” or “second day” orders complying with the terms of this Agreement) or, with the prior consent of Lender, make any payment or distribution to any non-Debtor Affiliate or insider of any Debtor outside of the ordinary course of business or as otherwise contemplated in the Operative Approved Cash Flow Forecast (subject to Permitted Variances).

SECTION 7. GUARANTY

7.1 Guaranty of the Obligations. The Guarantors jointly and severally hereby irrevocably and unconditionally guaranty to Lender the due and punctual Payment in Full of all Obligations when the same shall become due, whether at stated maturity, by required prepayment, declaration, acceleration, demand, or otherwise (including amounts that would become due but for


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the operation of the Automatic Stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. § 362(a)) (collectively, the “Guaranteed Obligations”).

7.2 Payment by Guarantors. Guarantors hereby jointly and severally agree, in furtherance of the foregoing and not in limitation of any other right which Lender may have at law or in equity against any Guarantor by virtue hereof, that upon the failure of any Borrower to pay any of the Guaranteed Obligations when and as the same shall become due, whether at stated maturity, by required prepayment, declaration, acceleration, demand, or otherwise (including amounts that would become due but for the operation of the automatic stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. §362(a)), Guarantors will upon demand pay, or cause to be paid, in Cash, Lender an amount equal to the sum of the unpaid principal amount of all Guaranteed Obligations then due as aforesaid, accrued and unpaid interest on such Guaranteed Obligations (including interest which, but for a Borrower’s becoming the subject of a case under the Bankruptcy Code, would have accrued on such Guaranteed Obligations, whether or not a claim is allowed against such Borrower for such interest in the related bankruptcy case) and all other Guaranteed Obligations then owed to Lender as aforesaid.

7.3 Liability of Guarantors Absolute. Each Guarantor agrees that its obligations hereunder are irrevocable, absolute, independent, and unconditional and shall not be affected by any circumstance which constitutes a legal or equitable discharge of a guarantor or surety other than Payment in Full of the Guaranteed Obligations. In furtherance of the foregoing and without limiting the generality thereof, each Guarantor agrees as follows:

(a) this Guaranty is a guaranty of payment when due and not of collectability. This Guaranty is a primary obligation of each Guarantor and not merely a contract of surety;

(b) Lender may enforce this Guaranty upon the occurrence, but only during the continuance, of an Event of Default notwithstanding the existence of any dispute between the Debtors and Lender with respect to the existence of such Event of Default;

(c) the obligations of each Guarantor hereunder are independent of the obligations of the Borrowers and the obligations of any other guarantor (including any other Guarantor) of the obligations of the Borrowers, and a separate action or actions may be brought and prosecuted against such Guarantor whether or not any action is brought against the Borrowers or any of such other guarantors and whether or not the Borrowers are joined in any such action or actions;

(d) payment by any Guarantor of a portion, but not all, of the Guaranteed Obligations shall in no way limit, affect, modify or abridge any Guarantor’s liability for any portion of the Guaranteed Obligations which has not been paid. Without limiting the generality of the foregoing, if Lender is awarded a judgment in any suit brought to enforce any Guarantor’s covenant to pay a portion of the Guaranteed Obligations, such judgment shall not be deemed to release such Guarantor from its covenant to pay the portion of the Guaranteed Obligations that is not the subject of such suit, and such judgment shall not, except to the extent satisfied by such


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Guarantor, limit, affect, modify or abridge any other Guarantor’s liability hereunder in respect of the Guaranteed Obligations;

(e) Lender, upon such terms as it deems appropriate, without notice or demand and without affecting the validity or enforceability hereof or giving rise to any reduction, limitation, impairment, discharge, or termination of any Guarantor’s liability hereunder, from time to time may (i) renew, extend, accelerate, increase the rate of interest on, or otherwise change the time, place, manner, or terms of payment of the Guaranteed Obligations; (ii) settle, compromise, release, or discharge, or accept or refuse any offer of performance with respect to, or substitutions for, the Guaranteed Obligations or any agreement relating thereto and/or subordinate the payment of the same to the payment of any other obligations; (iii) request and accept other guaranties of the Guaranteed Obligations and take and hold security for the payment hereof or the Guaranteed Obligations; (iv) release, surrender, exchange, substitute, compromise, settle, rescind, waive, alter, subordinate or modify, with or without consideration, any security for payment of the Guaranteed Obligations, any other guaranties of the Guaranteed Obligations, or any other obligation of any Person (including any other Guarantor) with respect to the Guaranteed Obligations; (v) enforce and apply any security now or hereafter held by or for the benefit of Lender in respect hereof or the Guaranteed Obligations and direct the order or manner of sale thereof, or exercise any other right or remedy that Lender may have against any such security, in each case as Lender in its discretion may determine consistent herewith or any applicable security agreement, including foreclosure on any such security pursuant to one or more judicial or nonjudicial sales, whether or not every aspect of any such sale is commercially reasonable, and even though such action operates to impair or extinguish any right of reimbursement or subrogation or other right or remedy of any Guarantor against any other Credit Party or any security for the Guaranteed Obligations; and (vi) exercise any other rights available to it under the Credit Documents; and

(f) this Guaranty and the obligations of Guarantors hereunder shall be valid and enforceable and shall not be subject to any reduction, limitation, impairment, discharge or termination for any reason (other than Payment in Full of the Guaranteed Obligations (other than contingent indemnity obligations not then due and payable), including the occurrence of any of the following, whether or not any Guarantor shall have had notice or knowledge of any of them: (i) any failure or omission to assert or enforce or agreement or election not to assert or enforce, or the stay or enjoining, by order of court, by operation of law or otherwise, of the exercise or enforcement of, any claim or demand or any right, power or remedy (whether arising under the Credit Documents at law, in equity or otherwise) with respect to the Guaranteed Obligations or any agreement relating thereto, or with respect to any other guaranty of or security for the payment of the Guaranteed Obligations; (ii) any rescission, waiver, amendment, or modification of, or any consent to departure from, any of the terms or provisions (including provisions relating to events of default) hereof, any of the other Credit Documents, or any agreement or instrument executed pursuant thereto, or of any other guaranty or security for the Guaranteed Obligations, in each case whether or not in accordance with the terms hereof or such Credit Document or any agreement relating to such other guaranty or security; (iii) the Guaranteed Obligations, or any agreement relating thereto, at any time being found to be illegal, invalid or unenforceable in any respect; (iv) the application of payments received from any source (other than payments received pursuant to the other Credit Documents or from the proceeds of any security for the Guaranteed Obligations, except to the extent such security also serves as collateral for indebtedness other than the Guaranteed Obligations) to the payment of indebtedness other than the Guaranteed Obligations,


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even though Lender might have elected to apply such payment to any part or all of the Guaranteed Obligations; (v) Lender’s consent to the change, reorganization, or termination of the corporate structure or existence of any Borrower or any of its respective Subsidiaries and to any corresponding restructuring of the Guaranteed Obligations; (vi) any failure to perfect or continue perfection of a security interest in any collateral which secures any of the Guaranteed Obligations (subject to the limitations set forth in the Collateral Documents); (vii) any defenses, set-offs, or counterclaims which a Borrower may allege or assert against Lender in respect of the Guaranteed Obligations, including failure of consideration, breach of warranty, payment, statute of frauds, statute of limitations, accord and satisfaction and usury; and (viii) any other act or thing or omission, or delay to do any other act or thing, which may or might in any manner or to any extent vary the risk of any Guarantor as an obligor in respect of the Guaranteed Obligations.

7.4 Waivers by Guarantors. Each Guarantor hereby waives, to the extent permitted by applicable law, for the benefit of Lender: (a) any right to require Lender, as a condition of payment or performance by such Guarantor, to (i) proceed against any Borrower, any other guarantor (including any other Guarantor) of the Guaranteed Obligations or any other Person, (ii) proceed against or exhaust any security held from any Borrower, any such other guarantor or any other Person, (iii) proceed against or have resort to any balance of any deposit account or credit on the books of Lender in favor of any Credit Party or any other Person, or (iv) pursue any other remedy in the power of Lender whatsoever; (b) any defense arising by reason of the incapacity, lack of authority or any disability or other defense of any Borrower or any other Guarantor including any defense based on or arising out of the lack of validity or the unenforceability of the Guaranteed Obligations or any agreement or instrument relating thereto or by reason of the cessation of the liability of any Borrower or any other Guarantor from any cause other than Payment in Full of the Guaranteed Obligations; (c) any defense based upon any statute or rule of law which provides that the obligation of a surety must be neither larger in amount nor in other respects more burdensome than that of the principal; (d) any defense based upon Lender’s errors or omissions in the administration of the Guaranteed Obligations, except behavior which amounts to bad faith; (e) (i) any principles or provisions of law, statutory or otherwise, which are or might be in conflict with the terms hereof and any legal or equitable discharge of such Guarantor’s obligations hereunder, (ii) the benefit of any statute of limitations affecting such Guarantor’s liability hereunder or the enforcement hereof, (iii) any rights to set-offs, recoupments, and counterclaims, and (iv) promptness, diligence, and any requirement that Lender protect, secure, perfect, or insure any security interest or lien or any property subject thereto; (f) notices, demands, presentments, protests, notices of protest, notices of dishonor, and notices of any action or inaction, including acceptance hereof, notices of default hereunder, any agreement or instrument related thereto, notices of any renewal, extension, or modification of the Guaranteed Obligations or any agreement related thereto, notices of any extension of credit to any Borrower and notices of any of the matters referred to in Section 7.3 and any right to consent to any thereof; and (g) any defenses or benefits that may be derived from or afforded by law which limit the liability of or exonerate guarantors or sureties, or which may conflict with the terms hereof.

7.5 Guarantors’ Rights of Subrogation, Contribution, Etc. Until the Guaranteed Obligations (other than contingent obligations under general indemnification provisions as to which no claim is pending) shall have been Paid in Full, each Guarantor hereby waives, to the extent permitted by law, any claim, right or remedy, direct or indirect, that such Guarantor now has or may hereafter have against any Borrower or any other Guarantor or any of its assets in


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connection with this Guaranty or the performance by such Guarantor of its obligations hereunder, in each case whether such claim, right or remedy arises in equity, under contract, by statute, under common law or otherwise and including (a) any right of subrogation, reimbursement or indemnification that such Guarantor now has or may hereafter have against any Borrower with respect to the Guaranteed Obligations, (b) any right to enforce, or to participate in, any claim, right or remedy that Lender now has or may hereafter have against any Borrower, and (c) any benefit of, and any right to participate in, any collateral or security now or hereafter held by Lender. In addition, until the Guaranteed Obligations (other than contingent obligations under general indemnification provisions as to which no claim is pending) shall have been Paid in Full, each Guarantor shall withhold exercise of any right of contribution such Guarantor may have against any other guarantor (including any other Guarantor) of the Guaranteed Obligations, including any such right of contribution as contemplated by Section 7.2. Each Guarantor further agrees that, to the extent the waiver or agreement to withhold the exercise of its rights of subrogation, reimbursement, indemnification, and contribution as set forth herein is found by a court of competent jurisdiction to be void or voidable for any reason, any rights of subrogation, reimbursement or indemnification such Guarantor may have against any Borrower or against any collateral or security, and any rights of contribution such Guarantor may have against any such other guarantor, shall be junior and subordinate to any rights Lender may have against such Borrower, to all right, title, and interest Lender may have in any such collateral or security, and to any right Lender may have against such other guarantor. If any amount shall be paid to any Guarantor on account of any such subrogation, reimbursement, indemnification, or contribution rights at any time when all Guaranteed Obligations (other than contingent obligations under general indemnification provisions as to which no claim is pending) shall not have been finally and Paid in Full, such amount shall, to the extent possible under applicable law, be held in trust for Lender and shall forthwith be paid over to Lender to be credited and applied against the Guaranteed Obligations, whether matured or unmatured, in accordance with the terms hereof.

7.6 Subordination of Other Obligations. Any Indebtedness of any Borrower or any Guarantor now or hereafter held by any Guarantor (the “Obligee Guarantor”) is hereby subordinated in right of payment to the Guaranteed Obligations, and any such Indebtedness collected or received by the Obligee Guarantor after an Event of Default has occurred and is continuing shall, to the extent permitted by applicable law, be held in trust for Lender and shall forthwith be paid over to Lender to be credited and applied against the Guaranteed Obligations but without affecting, impairing or limiting in any manner the liability of the Obligee Guarantor under any other provision hereof.

7.7 Continuing Guaranty. This Guaranty is a continuing guaranty and shall remain in effect until all of the Guaranteed Obligations (other than contingent obligations under general indemnification provisions as to which no claim is pending) shall have been Paid in Full. Each Guarantor hereby irrevocably waives, to the extent permitted by applicable law, any right to revoke this Guaranty as to future transactions giving rise to any Guaranteed Obligations.

7.8 Authority of Guarantors or Borrower. It is not necessary for Lender to inquire into the capacity or powers of any Guarantor or any Borrower or the officers, directors or any agents acting or purporting to act on behalf of any of them.


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7.9 Financial Condition of Each Borrower. Any Credit Extension may be made to the Borrowers or continued from time to time, without notice to or authorization from any Guarantor regardless of the financial or other condition of any Borrower at the time of any such grant or continuation. Lender shall not have any obligation to disclose or discuss with any Guarantor its assessment, or any Guarantor’s assessment, of the financial condition of each Borrower. Each Guarantor has adequate means to obtain information from each Borrower on a continuing basis concerning the financial condition of each Borrower and its ability to perform its obligations under the Credit Documents, and each Guarantor assumes the responsibility for being and keeping informed of the financial condition of each Borrower and of all circumstances bearing upon the risk of nonpayment of the Guaranteed Obligations. Each Guarantor hereby waives, to the extent permitted by applicable law, and relinquishes any duty on the part of Lender to disclose any matter, fact or thing relating to the business, operations or conditions of a Borrower now known or hereafter known by Lender.

7.10 Bankruptcy, Etc.

(a) So long as any Guaranteed Obligations remain outstanding (other than contingent obligations under general indemnification provisions as to which no claim is pending or reasonably foreseeable), no Guarantor shall, without the prior written consent of Lender, commence or join with any other Person in commencing any bankruptcy, reorganization, or insolvency case or proceeding of or against any Borrower or any other Guarantor. The obligations of Guarantors hereunder shall not be reduced, limited, impaired, discharged, deferred, suspended, or terminated by any case or proceeding, voluntary or involuntary, involving the bankruptcy, insolvency, receivership, reorganization, liquidation, or arrangement of any Borrower or any other Guarantor or by any defense which any Borrower or any other Guarantor may have by reason of the order, decree, or decision of any court or administrative body resulting from any such proceeding.

(b) Each Guarantor acknowledges and agrees that any interest on any portion of the Guaranteed Obligations which accrues after the commencement of any case or proceeding referred to in clause (a) above (or, if interest on any portion of the Guaranteed Obligations ceases to accrue by operation of law by reason of the commencement of such case or proceeding, such interest as would have accrued on such portion of the Guaranteed Obligations if such case or proceeding had not been commenced) shall be included in the Guaranteed Obligations because it is the intention of Guarantors and Lender that the Guaranteed Obligations which are guaranteed by Guarantors pursuant hereto should be determined without regard to any rule of law or order which may relieve a Borrower of any portion of such Guaranteed Obligations. Guarantors will permit any trustee in bankruptcy, receiver, debtor in possession, assignee for the benefit of creditors or similar Person to pay Lender, or allow the claim of Lender in respect of, any such interest accruing after the date on which such case or proceeding is commenced.

(c) In the event that all or any portion of the Guaranteed Obligations are paid by a Borrower, the obligations of Guarantors hereunder shall continue and remain in full force and effect or be reinstated, as the case may be, in the event that all or any part of such payment(s) are rescinded or recovered directly or indirectly from Lender as a preference, fraudulent transfer, or


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otherwise, and any such payments which are so rescinded or recovered shall constitute Guaranteed Obligations for all purposes hereunder.

7.11 Discharge of Guaranty Upon Sale of Guarantor. If all of the Equity Interests of any Guarantor or any of its successors in interest hereunder shall be sold or otherwise disposed of (including by merger or consolidation) in accordance with the terms and conditions hereof, then the Guaranty of such Guarantor or such successor in interest, as the case may be, hereunder shall automatically be discharged and released without any further action by Lender or any other Person effective as of the time of such Asset Sale.

SECTION 8. EVENTS OF DEFAULT

8.1 Events of Default. If any one or more of the following conditions or events shall occur:

(a) Failure to Make Payments When Due. Failure by the Borrowers to pay (i) when due any amount of principal of any Loan, whether at stated maturity, by acceleration, by mandatory prepayment or otherwise; or (ii) any interest on any Loan or any fee or any other amount due hereunder and such payment is not made within one (1) Business Day after the date due; or

(b) Default in Other Agreements. (i) Failure of any Credit Party or any of their respective Subsidiaries to pay when due any principal of or interest on or any other amount, including any payment in settlement, payable in respect of one or more items of Indebtedness (other than Indebtedness referred to in Section 8.1(a), and other than any Prepetition Debt) with an aggregate principal amount of Ten Thousand Dollars ($10,000) or more, in each case beyond the grace period, if any, provided therefor; or (ii) breach or default by any Credit Party with respect to any other material term of (1) one or more items of Indebtedness (other than any Prepetition Debt) in the individual or aggregate principal amounts referred to in clause (ii) above or (2) any loan agreement, mortgage, indenture or other agreement relating to such item(s) of Indebtedness, in each case beyond the grace period, if any, provided therefor, if the effect of such breach or default is to cause, or to permit the holder or holders of that Indebtedness (or a trustee on behalf of such holder or holders), to cause, that Indebtedness to become or be declared due and payable (or subject to a compulsory repurchase or redeemable) prior to its stated maturity or the stated maturity of any underlying obligation, as the case may be; provided further that this clause (b) shall not apply to (i) secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness, if such sale or transfer is permitted hereunder and (ii) any Indebtedness if the sole remedy of the holder thereof in the event of the non-payment of such Indebtedness or the non-payment or nonperformance of obligations related thereto is to convert such Indebtedness into Equity Interests and cash in lieu of fractional shares; provided, further, that an Event of Default under this clause (b) shall no longer be deemed to exist or to be continuing if it has been remedied or has been waived by the holders of such Indebtedness prior acceleration of the Loans pursuant to this Section 8.1; or

(c) Breach of Certain Covenants. Failure of any Credit Party, to perform or comply with any term or condition contained in (i) Section 2.3, Section 5.23, or Section 5.24, (ii) Section 5.l(f)(i), Section 5.2 (with respect to the Borrowers), Section 5.17, Section 5.18, Section 5.19, Section 5.20, or Section 6, or (iii) Section 5.l(m), Section 5.l(n), Section 5.l(o), Section 5.l(p),


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Section 5.l(q), or Section 5.15 and, in the case of clause (ii) or (iii) (but not clause (i) which shall be immediate) such failure shall have continued for ten (10) days; or

(d) Breach of Representations, Etc. Any representation, warranty, certification, or other statement of fact made or deemed made by any Credit Party in any Credit Document shall be false in any material respect as of the date made or deemed made; or

(e) Other Defaults Under Credit Documents. Any Credit Party shall default in the performance of or compliance with any term contained herein or any of the other Credit Documents other than any such term referred to in any other paragraph of this Section 8.1, such default shall not have been remedied or waived within thirty (30) days after receipt by the Borrowers of notice from Lender of such default; or

(f) Involuntary Bankruptcy; Appointment of Receiver, Etc. In each case, (i) a court of competent jurisdiction shall enter a decree or order for relief in respect of any Subsidiary of a Borrower that is not a Debtor in an involuntary case under any Debtor Relief Laws now or hereafter in effect, which decree or order is not stayed; or any other similar relief shall be granted under any applicable federal or state law; or (ii) an involuntary case shall be commenced against any of Subsidiary of a Borrower that is not a Debtor, under any Debtor Relief Laws now or hereafter in effect; or a decree or order of a court having jurisdiction in the premises for the appointment of a receiver, liquidator, sequestrator, trustee, custodian or other officer having similar powers over any Subsidiary of a Borrower that is not a Debtor, or over all or a substantial part of its property, shall have been entered; or there shall have occurred the involuntary appointment of an interim receiver, trustee, or other custodian of any Subsidiary of a Borrower that is not a Debtor for all or a substantial part of its property; or a warrant of attachment, execution or similar process shall have been issued against any substantial part of the property of any Subsidiary of a Borrower that is not a Debtor, and any such event described in this clause (f) shall continue for sixty (60) days without having been dismissed, bonded or discharged; or

(g) [Reserved.]

(h) Judgments and Attachments. Any judgment, order or decree for the payment of money involving in the aggregate at any time an amount in excess of $25,000, except as set forth on Schedule 8.1(h), (to the extent not covered by independent, third party insurance that has not denied coverage in writing) shall be entered or filed against any Borrower or any of its Subsidiaries (which, in the case of the Debtors only, arose following the Petition Date) or any of their respective assets and shall remain undischarged, unvacated, unbonded, or unstayed for a period of sixty (60) days; or

(i) Dissolution. Any order, judgment, or decree shall be entered against any Credit Party decreeing the dissolution or split up of such Credit Party and such order shall remain undischarged or unstayed for a period in excess of thirty (30) days; or

(j) Employee Benefit Plans. There shall occur one or more ERISA Events which individually or in the aggregate results in or would reasonably be expected to result in a Material Adverse Effect; or

(k) Change of Control. A Change of Control shall occur; or


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(l) Guaranties, Collateral Documents and other Credit Documents. At any time after the execution and delivery thereof, (i) any material portion of a Guaranty for any reason, other than the satisfaction in full of all Obligations (other than contingent indemnity obligations), shall cease to be in full force and effect (other than in accordance with its terms or in connection with a transaction permitted by Section 6.7) or shall be declared to be null and void or any Guarantor shall repudiate its obligations thereunder, (ii) any portion of this Agreement or any material Collateral Document or any Order ceases to be in full force and effect (other than by reason of a release of Collateral in accordance with the terms hereof or thereof or the satisfaction in full of the Obligations (other than contingent indemnity obligations) or in connection with a transaction permitted by Section 6.7) or shall be declared null and void, or Lender shall not have or shall cease to have a valid and perfected First Priority Lien (to the extent required by the Pledge and Security Agreements or set forth in the Orders), subject to Permitted Liens, in any material portion of the Collateral in which Lender is meant to have a Lien purported to be covered by the Collateral Documents or the Orders with the priority required by the Orders, in each case for any reason other than the failure of Lender to take any action within its control, or (iii) any Credit Party shall contest the validity or enforceability of any Credit Document or any Order in writing or repudiate or rescind (or purport to repudiate or rescind) or deny in writing that it has any further liability, including with respect to future advances by Lender, under any provision of any Credit Document to which it is a party or shall contest the validity or perfection of any Lien in any Collateral purported to be covered by the Collateral Documents or any Order;

(m) PSA Termination. The PSA is terminated for any reason by the Debtors, Lender (as such term is defined in the PSA) for any reason, or modified, amended or waived in any manner materially adverse to Lender without the prior consent of Lender.

(n) Cases. There occurs any of the following in the Cases:

(i) the bringing of a motion or taking of any action by any of the Credit Parties or any Subsidiary, or any Person claiming to act by or through any Credit Party or any Subsidiary (A) to grant any Lien other than Liens permitted pursuant to Section 6.2 upon or affecting any Collateral, (B) to use cash collateral of Lender under section 363(c) of the Bankruptcy Code without the prior written consent of Lender, except as provided in the Interim Order or Final Order, or (C) that could result in an event or outcome materially adverse to Lender, their interest in the Collateral or their rights and remedies hereunder or under any other Credit Documents;

(ii) the entry of an order in any of the Cases confirming a Reorganization Plan that is not an Acceptable Plan;

(iii) (A) the entry of an order amending, supplementing, staying, vacating or otherwise modifying the Interim Order or the Final Order in any material respect without the written consent of Lender, the filing of a motion for reconsideration with respect to the Interim Order or the Final Order, or the Interim Order or the Final Order shall otherwise not


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be in full force and effect, or (B) any Credit Party or any Subsidiary shall fail to comply with the Orders in any material respect;

(iv) the allowance of any claim or claims under Section 506(c) of the Bankruptcy Code or otherwise against, Lender or any of the Collateral;

(v) (A) the appointment of a trustee, receiver or an examiner (other than a fee 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 Lender’s consent of all or substantially all of the Debtors’ assets either through a sale under Section 363 of the Bankruptcy Code, through a confirmed Reorganization Plan in the Cases or otherwise that does not result in Payment in Full in cash of all of the Obligations under this Agreement at the closing of such sale or initial payment of the purchase price or effectiveness of such Reorganization Plan, as applicable;

(vi) the dismissal of any Case, or the conversion of any Case 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 Case under Section 1112 of the Bankruptcy Code or otherwise or the conversion of the Cases to Chapter 7 of the Bankruptcy Code;

(vii) any Credit Party shall file a motion seeking, or the Bankruptcy Court shall enter an order granting relief from or modifying the Automatic Stay (A) to allow any creditor to execute upon or enforce a Lien on any Collateral, (B) approving any settlement or other stipulation not approved by Lender (which approval shall not be unreasonably withheld) with any secured creditor of any Credit Party providing for payments as adequate protection or otherwise to such secured creditor, (C) with respect to any Lien on or the granting of any Lien on any Collateral to any federal, state or local environmental or regulatory agency or authority, or (D) permit other actions that would have a Material Adverse Effect on the Debtors or their estates (taken as a whole);

(viii) the commencement of a suit or an action (but not including a motion for standing to commence a suit or an action) against Lender and, as to any suit or action brought by any Person other than a Credit Party or a Subsidiary, officer or employee of a Credit Party, the continuation thereof without dismissal for thirty (30) days after service thereof on Lender, where such suit or action asserts or seeks by or on behalf of a Credit Party, a claim or any legal or equitable remedy that would (x) have the effect of invalidating, subordinating or challenging any or all of the Obligations or Liens of Lender to any other claim, or (y) have a Material Adverse Effect on the rights and remedies of Lender or the collectability of all or any portion of the Obligations (other than a challenge as to whether an Event of Default has, in fact, occurred and is continuing);

(ix) 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;

(x) the entry of an order in the Cases terminating or modifying the exclusive right of any Credit Party to file a Chapter 11 plan pursuant to Section 1121 of the Bankruptcy Code;


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(xi) the failure of any Credit Party to perform in all material respects any of its obligations under the Acceptable Confirmation Order or the Sale Order or to perform in any material respect its obligations under any order of the Bankruptcy Court approving bidding procedures;

(xii) the existence of any claims or charges, or the entry of any order of the Bankruptcy Court authorizing any claims or charges, other than the Obligations in, or as otherwise permitted under the applicable Credit Documents or permitted under the Orders, entitled to superpriority administrative expense claim status in any Case pursuant to Section 364(c)(l) of the Bankruptcy Code pari passu with or senior to the claims of Lender under this Agreement and the other Credit Documents, or there shall arise or be granted by the Bankruptcy Court (A) any claim having priority over any or all administrative expenses of the kind specified in clause (b) of Section 503 of the Bankruptcy Code or clause (b) of Section 507 of the Bankruptcy Code (other than the Carve-Out) or (B) any Lien on the Collateral having a priority senior to or pari passu with the Liens and security interests granted herein, except, in each case, as expressly provided in the Credit Documents or in the Orders then in effect (but only in the event specifically consented to by Lender), whichever is in effect;

(xiii) the Interim Order (prior to the Final Order Entry Date) or, on and after entry thereof, the Final Order shall cease to create a valid and perfected Lien on the Collateral or to be in full force and effect, shall have been reversed, modified, amended, stayed, vacated, or subject to stay pending appeal, in the case of modification or amendment, without prior written consent of Lender);

(xiv) an order of the Bankruptcy Court shall be entered denying or terminating use of cash collateral by the Credit Parties;

(xv) an order materially adversely impacting the rights and interests of Lender under the Credit Documents, as reasonably determined by Lender in good faith, shall have been entered by the Bankruptcy Court or any other court of competent jurisdiction;

(xvi) any Credit Party shall challenge, support or encourage a challenge of any payments made to Lender with respect to the Obligations, or without the consent of Lender, the filing of any motion by the Credit Parties seeking approval of (or the entry of an order by the Bankruptcy Court approving) adequate protection to Lender, that is inconsistent with an Order;

(xvii) without Lender’s consent, the entry of any order by the Bankruptcy Court granting, or the filing by any Credit Party or any of its Subsidiaries of any motion or other request with the Bankruptcy Court (in each case, other than the Orders and motions seeking entry thereof or permitted amendments or modifications thereto) seeking, authority to use any cash


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proceeds of any of the Collateral without the consent of Lender or to obtain any financing under Section 364 of the Bankruptcy Code other than the Credit Documents;

(xviii) any Credit Party or any person on behalf of any Credit Party shall file any motion seeking authority to consummate a sale of assets (constituting Collateral or otherwise) outside the ordinary course of business and not permitted hereunder;

(xix) any Credit Party shall make any payment (whether by way of adequate protection or otherwise) of principal or interest or otherwise on account of any pre-petition Indebtedness or payables other than payments permitted under this Agreement to the extent authorized or required by one or more “first day” or “second day” orders or any of the Orders (or other orders with the consent of Lender) and consistent with the Operative Approved Cash Flow Forecast (subject to Permitted Variances);

(xx) without the Lender’s consent, any Credit Party or any Subsidiary thereof shall file any motion or other request with the Bankruptcy Court seeking (A) to grant or impose, under Section 364 of the Bankruptcy Code or otherwise, liens or security interests in any Collateral, whether senior, equal or subordinate to Lender’s liens and security interests; or (B) to modify or affect any of the rights of Lender under the Orders or the Credit Documents and related documents by any plan of reorganization confirmed in the Cases or subsequent order entered in the Cases;

(xxi) the filing by any of the Credit Parties of a Reorganization Plan other than an Acceptable Plan;

(xxii) any Credit Party or any Subsidiary thereof shall take any action in support of any matter set forth in this Section 8.l(n) or any other Person shall do so and such application is not contested in good faith by the Credit Parties and the relief requested; or

(xxiii) failure to satisfy the milestones or any condition of the milestones set forth in Section 5.17 (unless waived by Lender).

8.2 Rights and Remedies Upon an Event of Default. In addition to the remedies available under the DIP Orders, the automatic stay provisions of section 362 of the Bankruptcy Code shall be vacated and modified to the extent necessary to permit Lender to enforce all of its rights under the applicable DIP Documents and DIP Orders and take any or all of the following actions, at the same or different time, in each case without further order or application of the Bankruptcy Court: (a) immediately upon the occurrence of an Event of Default, declare (i) the termination, reduction, or restriction of any further DIP Commitment to the extent any such DIP Commitment remains, (ii) all DIP Obligations to be immediately due, owing, and payable, without presentment, demand, protest, or other notice of any kind, all of which are expressly waived by the Credit Parties, notwithstanding anything in the DIP Order or in any DIP Document to the contrary, and (iii) the termination of the applicable DIP Documents as to any future liability or obligation of Lender (but, for the avoidance of doubt, without affecting any of the DIP Liens or the DIP Obligations), (b) upon the occurrence of an Event of Default and the giving of three (3) days’ prior written notice (which shall run concurrently with any notice required to be provided under the DIP Documents) (the “Remedies Notice Period ”) via email to counsel to the Debtors,


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Creditors’ Committee (if any), counsel to Lender and the U.S. Trustee, unless the Bankruptcy Court orders otherwise during the Remedies Notice Period after a hearing, (i) whether or not the maturity of any of the DIP Obligations shall have been accelerated, proceed to protect, enforce, and exercise all rights and remedies of Lender under the DIP Documents, DIP Orders, or applicable law, whether for the specific performance of any covenant or agreement contained in any such DIP Document or any instrument pursuant to which such DIP Obligations are evidenced, and, if such amount shall have become due, by declaration or otherwise, proceed to enforce the payment thereof or any other legal or equitable right of Lender, including, but not limited to, by suit in equity, action at law or other appropriate proceeding, including, without limitation, (A) commencing judicial or nonjudicial foreclosure proceedings against the Collateral, (B) accepting the Collateral in partial or full satisfaction of the Obligations in accordance with applicable law, (C) enforcing the Lender’s security interest in the Collateral by means of one or more public or private sales thereof, (D) exercising any or all of the rights of a secured party pursuant to applicable law, and (E) commencing judicial or nonjudicial proceeding for specific performance of any covenant or agreement contained in the Credit Documents, and (ii) withdraw consent to the Credit Parties’ continued use of Cash Collateral and exercise all other rights and remedies provided for in the DIP Documents and under applicable law with respect to the DIP Collateral; provided, that no such notice shall be required for any exercise of rights or remedies to block or limit withdrawals from any bank accounts that are a part of the Collateral (including, without limitation, by sending any control activation notices to depositary banks pursuant to any control agreement). All rights, powers, and remedies of the Lender in connection with each of the Credit Documents or DIP Orders may be exercised at any time or from time to time, are cumulative and not exclusive, and shall be in addition to any other rights, powers or remedies provided by law or equity.

8.3 Application of Funds. On the Maturity Date, subject to the terms of the Orders, and after the exercise of remedies provided for in Section 8.1 and any amounts received on account of the Obligations shall be applied by Lender in the following order:

(a) First, to payment of that portion of the Obligations constituting fees, indemnities, expenses and other amounts (including any fee, as well as fees, charges and disbursements of counsel to Lender and amounts payable under Section 2.13) payable to Lender;

(b) Second, to payment of that portion of the Obligations constituting interest on the Loans and other Obligations;

(c) Third, to payment of that portion of the Obligations constituting unpaid principal of the Loans;

(d) Fourth, to payment of any remaining Obligations; and

(e) Last, the balance, if any, after all of the Obligations have been indefeasibly Paid in Full, to the Borrowers or as otherwise required by law;

(f) provided, that the application to the Obligations of amounts received in respect of the Collateral is expressly subject to the priorities set forth in the Interim Order (and,


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when entered, the Final Order), and all such amounts shall first be allocated in accordance with such priorities.

8.4 Application of Collateral Proceeds. On the date of each prepayment made in accordance with Section 2.11 and on the Maturity Date, subject to the Orders, and after the exercise of remedies provided for in Section 8.1, any Collateral or proceeds thereof received on account of the Obligations shall be applied by Lender in the following order:

(a) First, to payment of that portion of the Obligations constituting fees, indemnities, expenses and other amounts (including any fees, charges and disbursements of counsel to Lender) payable to Lender;

(b) Second, to payment of that portion of the Obligations constituting interest on that portion of the Term Loans and interest on other Obligations (other than the Roll-Up Obligations);

(c) Third, to payment of that portion of the Obligations constituting unpaid principal of the Term Loans and principal of other Obligations (other than the Roll-Up Obligations);

(d) Fourth, to payment of any remaining Obligations with respect to the Term Loan Facility;

(e) Fifth, to payment of that portion of the Obligations constituting interest on that portion of the Roll-Up Loans and interest on other Obligations;

(f) Sixth, to payment of that portion of the Obligations constituting unpaid principal of the Roll-Up Loans;

(g) Seventh, to payment of any remaining Obligations with respect to the Roll-Up Facility;

(h) Eighth, to payment of any remaining Obligations; and

(i) Last, the balance, if any, after all of the Obligations have been indefeasibly Paid in Full, to the Borrowers or as otherwise required by law.

8.5 Collateral Documents and Guaranty.

(a) Right to Realize on Collateral and Enforce Guaranty. Anything contained in any of the Credit Documents to the contrary notwithstanding, but at all times subject to the Bankruptcy Court and the Orders, each Borrower and Lender hereby agree that (i) all powers, rights and remedies hereunder and under any of the other Credit Documents (other than Collateral Documents) may be exercised solely by Lender in accordance with the terms hereof or thereof, and all powers, rights and remedies under the Collateral Documents may be exercised solely by Lender in accordance with the terms thereof, and (ii) in the event of a foreclosure or similar enforcement action by Lender on any of the Collateral pursuant to a public or private sale or other disposition (including, without limitation, pursuant to Section 363(k), Section 1129(b)(2)(a)(ii) or


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otherwise of the Bankruptcy Code), Lender (except with respect to a “credit bid” pursuant to Section 363(k), Section 1129(b)(2)(a)(ii) or otherwise of the Bankruptcy Code,) may be the purchaser or licensor of any or all of such Collateral at any such sale or other disposition and Lender shall be entitled, for the purpose of bidding and making settlement or payment of the purchase price for all or any portion of the Collateral sold at any such sale or disposition, to use and apply any of the Obligations as a credit on account of the purchase price for any collateral payable by Lender at such sale or other disposition.

(b) Release of Guarantees, Termination of this Agreement. Notwithstanding anything to the contrary contained herein or any other Credit Document, when all Obligations (other than contingent indemnity obligations that are not due and payable) have been Paid in Full, the guarantees made herein shall automatically terminate and, upon request of the Borrowers, Lender shall take such actions as shall be required to terminate this Agreement and to release all guarantee obligations provided for in any Credit Document. Any such release of guarantee obligations shall be deemed subject to the provision that such guarantee obligations shall be reinstated if after such release any portion of any payment in respect of the Obligations guaranteed thereby shall be rescinded or must otherwise be restored or returned upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of any Borrower or any Guarantor, or upon or as a result of the appointment of a receiver, intervenor or conservator of, or trustee or similar officer for, any Borrower or any Guarantor or any substantial part of its property, or otherwise, all as though such payment had not been made.

SECTION 9. MISCELLANEOUS

9.1 Notices.

(a) Notices Generally. Any notice or other communication herein required or permitted to be given to a Credit Party or Lender, shall be sent to such Person’s address as set forth on Appendix A or in the other relevant Credit Document, and in the case of Lender, the address as indicated on Appendix A or otherwise indicated by Lender in writing. Except as otherwise set forth in paragraph (b) below, each notice hereunder shall be in writing and may be personally served or sent by telefacsimile, email or United States mail or courier service and shall be deemed to have been given when delivered in person or by courier service and signed for against receipt thereof, upon receipt of telefacsimile, or three Business Days after depositing it in the United States mail with postage prepaid and properly addressed; provided, no notice to Lender or the Borrowers shall be effective until received by such Person.

(b) Electronic Communications.

(i) Notices and other communications to Lender hereunder may be delivered or furnished by electronic communication (including e-mail and Internet or intranet websites) pursuant to procedures approved by Lender. Lender or the Borrowers may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it, provided that approval of such procedures may be limited to particular notices or communications. Unless Lender otherwise prescribes, (1) notices and other communications sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgment from the intended recipient (such as by the “return receipt


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requested” function, as available, return e-mail or other written acknowledgment), provided that if such notice or other communication is not sent during the normal business hours of the recipient, such notice or communication shall be deemed to have been sent at the opening of business on the next Business Day for the recipient, and (2) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its e-mail address as described in the foregoing clause (i) of notification that such notice or communication is available and identifying the website address therefor.

(ii) Each Credit Party understands that the distribution of material through an electronic medium is not necessarily secure and that there are confidentiality and other risks associated with such distribution and agrees and assumes the risks associated with such electronic distribution, except to the extent caused by the willful misconduct or gross negligence of Lender, as determined by a final, nonappealable judgment of a court of competent jurisdiction.

(iii) Any notice of Default or Event of Default may be provided by telephone if confirmed promptly thereafter by delivery of written notice thereof.

9.2 Expenses. The Borrowers agrees to pay, within thirty (30) days of written request (or on the Closing Date, in the case of amounts required to be paid in order to satisfy the condition in Section 3.1(1)) (a) all the actual, reasonable and documented out-of-pocket costs and expenses (including any costs and expenses in connection with seasoning of the Loans on the Closing Date) of Lender incurred in connection with the negotiation, preparation, and execution of the Credit Documents and any consents, amendments, waivers, or other modifications thereto; (b) all the costs of furnishing all opinions by counsel for each Borrower and the other Credit Parties; (c) subject to the conditional cap in Section 3.1(j) hereof, the reasonable, actual, and documented out-of-pocket fees, expenses and disbursements of (i) Steptoe & Johnson, as primary counsel to Lender and (ii) The Majorie Firm LTD as counsel to Lender, in each case, in connection with the negotiation, preparation, execution, and administration of the Credit Documents and any consents, amendments, waivers, or other modifications thereto and any other documents or matters requested by the Borrowers in connection with the enforcement (whether through negotiations, legal proceedings, or otherwise) of this Agreement, the notes and the other documents to be delivered hereunder, including, without limitation, all fees and expenses of counsel lender in connection with the enforcement of rights under this subsection (c), including, for the avoidance of doubt, in connection with the Cases (limited, in the case of counsel under this clause (c)(ii) (in addition to counsel expressly specified above), to one firm of outside local counsel for Lender in any applicable jurisdiction as to which Lender reasonably determined local counsel is appropriate, and one specialty counsel Lender with respect to each subject matter as to which Lender reasonably determines specialty counsel is appropriate; provided, that if Lender has been advised by counsel that there is an actual or reasonable likelihood of a conflict of interest, Lender may retain its own counsel; (d) all the actual costs and reasonable and documented out-of-pocket expenses of creating, perfecting, recording, maintaining, and preserving Liens in favor of Lender, including filing and recording fees, expenses and taxes, stamp or documentary taxes, search fees, title insurance premiums; (e) all (i) the actual and reasonable and documented out-of-pocket costs, fees, expenses and disbursements of any auditors, accountants, consultants, or appraisers, and (ii) the actual and reasonable and documented out-of-pocket costs, fees, expenses, and disbursements of a financial advisor to Lender; (f) all the actual and reasonable and documented out-of-pocket costs and reasonable expenses of Lender (including the reasonable and documented out-of-pocket fees,


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expenses and disbursements of any appraisers, consultants, advisors and agents employed or retained by Lender and its counsel) in connection with the custody or preservation of any of the Collateral; and (h) all documented out-of-pocket costs and expenses, including reasonable and documented out-of-pocket attorneys’ fees and costs of settlement, incurred by Lender in preserving or enforcing any Obligations of or in collecting any payments due from any Credit Party hereunder or under the other Credit Documents by reason of such Event of Default (including in connection with the sale, lease or license of, collection from, or other realization upon any of the Collateral or the enforcement of the Guaranty) or in connection with any refinancing or restructuring of the credit arrangements provided hereunder in the nature of a “work-out” or pursuant to any insolvency or bankruptcy cases or proceedings. Except as specifically provided in this Section 9.2, this Section 9.2 shall not apply to Taxes, which are the subject to Section 2.13).

9.3 Indemnity.

(a) In addition to the payment of expenses pursuant to Section 9.2, each Credit Party agrees to indemnify, pay and hold harmless, Lender and its Affiliates and each of its and its Affiliates’ respective officers, partners, members, directors, trustees, advisors, employees, attorneys, agents, sub-agents and controlling persons (each, an “Indemnitee”), from and against any and all Indemnified Liabilities; provided, no Credit Party shall have any obligation to any Indemnitee hereunder with respect to any Indemnified Liabilities (i) to the extent such Indemnified Liabilities resulted from the gross negligence, bad faith or willful misconduct of such Indemnitee, (ii) arises out of or is in connection with any claim, litigation, loss or proceeding not involving an act or omission of any Credit Party or any of Credit Party’s related parties and that is brought by an Indemnitee against another Indemnitee or (iii) resulted from material breach by such Indemnitee of the terms of this Agreement or any other Credit Documents, as determined by a final, non-appealable judgment of a court of competent jurisdiction (collectively, the “Excluded Damages”). To the extent that the undertakings to indemnify, pay and hold harmless set forth in this Section 9.3 (other than any Excluded Damage) may be unenforceable in whole or in part because they are violative of any law or public policy or are otherwise unavailable to any Indemnitee or are insufficient to hold such Indemnitee harmless, the applicable Credit Party shall contribute to the amount paid or payable by such Indemnitee as a result of such Indemnified Liabilities in such proportion as is appropriate to reflect the relative economic interests of (A) such Credit Party and its affiliates, shareholders, partners, members or other equity holders on the one hand and (B) such Indemnitee on the other hand in the matters contemplated by this Agreement as well as the relative fault of (1) such Credit Party and its affiliates, shareholders, partners, members or other equity holders and (2) such Indemnitee with respect to such Indemnified Liabilities and any other relevant equitable considerations. Promptly after receipt by any Indemnitee of notice of its involvement in any action, proceeding or investigation, such Indemnitee shall, if a claim for indemnification in respect thereof is to be made against the Credit Parties under this Section 9.3, notify the Borrowers of such involvement. Failure by such Indemnitee to so notify the Borrowers shall not relieve any Credit Party from its obligation to indemnify such Indemnitee under this Section 9.3 except to the extent that such Credit Party suffers actual prejudice as a result of such failure, and shall not relieve any Credit Party from its obligation to provide reimbursement and contribution to such Indemnitee. With respect to an Indemnitee hereunder in the event of any action or proceeding brought by a third party, the Borrowers shall be entitled, but not required, to assume the defense of any such action or proceeding with counsel reasonably satisfactory to the Indemnitee. Upon assumption by the Borrowers of the defense of any such action or proceeding, the Indemnitee shall have the right


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to participate in such action or proceeding and to retain its own counsel but the Borrowers shall not be liable for any legal expenses of other counsel subsequently incurred by the Indemnitee in connection with the defense thereof unless (x) the Borrowers have agreed to pay such fees and expenses, (y) the Borrowers have failed to employ counsel reasonably satisfactory to the Indemnitee in a timely manner and Borrower has been advised in writing of such circumstance by the Indemnitee, or (z) the Indemnitee advises the Borrowers in writing that the Indemnitee has been advised by counsel that there are actual or potential conflicting interests between the Borrowers and the Indemnitee, including situations in which there are one or more legal defenses available to the Indemnitee that are different from or additional to those available to the Borrowers; provided, however, that the Borrowers shall not, in connection with any one such action or proceeding or separate but substantially similar actions or proceedings arising out of the same general allegations, be liable for the fees and expenses of more than one separate firm of attorneys at any time for all Indemnitees, except to the extent that local counsel, in addition to its regular counsel, is required in order to effectively defend against such action or proceeding. The Borrowers shall not consent to the terms of any compromise or settlement of any action or proceeding defended by the Borrowers in accordance with the foregoing without the prior written consent of the Indemnitee unless such compromise or settlement (A) includes an unconditional release of the Indemnitee from all liability arising out of such action and (B) does not include a statement as to or an admission of fault, culpability or a failure to act, by or on behalf of any Indemnitee. No Credit Party shall be required to indemnify any Indemnitee for any amount paid or payable by the Indemnitee in the settlement of any action, proceeding or investigation without the written consent of the Borrowers, which consent shall not be unreasonably withheld, conditioned or delayed; provided that the foregoing indemnity will apply to any such settlement in the event that the Borrowers were expressly offered the ability to assume the defense of the action that was the subject matter of such settlement and elected not to so assume. The reimbursement, indemnity and contribution obligations of the Credit Parties under this paragraph will be in addition to any liability which the Credit Parties may otherwise have, and will be binding upon and inure to the benefit of any successors, and assigns of the Credit Parties and the Indemnitees. Notwithstanding anything in this Agreement or any other Credit Document to the contrary, the Credit Parties shall not be required to indemnify Lender or other Indemnitee hereunder for any matter, claim, fees, costs or expenses arising in Lender’s or Indemnitees’, as applicable, capacity (A) in any role in connection with the Prepetition Revolving Credit Agreement or (C) in any role in connection with the Cases (other than as Lender hereunder).

(b) To the extent permitted by applicable law, no party hereto shall assert, and each party hereto hereby waives, any claim against each other party hereto and their respective Affiliates and their and their Affiliates’ respective officers, partners, members, directors, trustees, advisors, employees, attorneys, agents, sub-agents or controlling parties, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) (whether or not the claim therefor is based on contract, tort or duty imposed by any applicable legal requirement) arising out of, in connection with, as a result of, or in any way related to, this Agreement or any Credit Document or any agreement or instrument contemplated hereby or thereby or referred to herein or therein, the transactions contemplated hereby or thereby, any Loan or the use of the proceeds thereof or any act or omission or event occurring in connection therewith, and each party hereto hereby waives, releases and agrees not to sue upon any such claim or any such damages, whether or not accrued and whether or not known or suspected to exist in its favor; provided that nothing contained in this Section 9.3(b) shall limit any Credit Party’s indemnification


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obligations set forth in Section 9.3 to the extent such special, indirect, consequential or punitive damages are included in any third party claim in connection with which such Indemnitee is entitled to indemnification hereunder.

(c) Each Credit Party also agrees that neither Lender nor its respective Affiliates nor their Affiliates’ respective officers, partners, members, directors, trustees, advisors, employees, attorneys, agents, sub-agents or controlling parties will have any liability based on its exclusive or contributory negligence or otherwise to any Credit Party or any person asserting claims on behalf of or in right of any Credit Party or any other person in connection with or as a result of this Agreement or any Credit Document or any agreement or instrument contemplated hereby or thereby or referred to herein or therein, the transactions contemplated hereby or thereby, any Loan or the use of the proceeds thereof or any act or omission or event occurring in connection therewith, in each case, except in the case of any Credit Party to the extent that any losses, claims, damages, liabilities or expenses incurred by such Credit Party or its affiliates, shareholders, partners or other equity holders have been found by a final, non-appealable judgment of a court of competent jurisdiction to have resulted from the gross negligence or willful misconduct of Lender or its Affiliates or their or their Affiliates’ respective officers, partners, members, directors, trustees, advisors, employees, attorneys, agents, sub-agents or controlling parties in performing the services or its express obligations under this Agreement or any Credit Document or any material breach by Lender of the terms hereof or thereof; provided, however, that in no event will Lender or its respective Affiliates or its Affiliates’ respective officers, partners, members, directors, trustees, advisors, employees, attorneys, agents, sub-agents or controlling parties have any liability for any indirect, consequential, special or punitive damages in connection with or as a result of Lender’s or its respective Affiliates’ or its respective Affiliates’ officers’, partners’, members’, directors’, trustees’, advisors’, employees’, attorneys’, agents’, sub-agents’ or controlling parties’ activities related to this Agreement or any Credit Document or any agreement or instrument contemplated hereby or thereby or referred to herein or therein.

9.4 Set-Off. Subject to the Orders and the final sentence of Section 8.1, in addition to any rights now or hereafter granted under applicable law and not by way of limitation of any such rights, upon the occurrence and during the continuance of any Event of Default Lender is hereby authorized by each Credit Party at any time or from time to time, without notice to any Credit Party or to any other Person, any such notice being hereby expressly waived, to set off and to appropriate and to apply any and all deposits (general or special, including Indebtedness evidenced by certificates of deposit, whether matured or unmatured, but not including trust accounts) and any other Indebtedness at any time held or owing by Lender to or for the credit or the account of any Credit Party against and on account of the obligations and liabilities of any Credit Party to Lender hereunder, and under the other Credit Documents, including all claims of any nature or description arising out of or connected hereto, or with any other Credit Document, irrespective of whether or not (a) Lender shall have made any demand hereunder or (b) the principal of or the interest on the Loans or any other amounts due hereunder shall have become due and payable pursuant to Section 2 and although such obligations and liabilities, or any of them, may be contingent or unmatured.

9.5 Amendments and Waivers. No amendment, modification, termination or waiver of any provision of the Credit Documents, or consent to any departure by any Credit Party therefrom, shall in any event be effective without the written concurrence of Lender and the Borrowers. Notwithstanding anything herein to the contrary, Lender may, without the consent of


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Lender, (a) waive, amend or modify any provision in any Collateral Document, or consent to a departure by any Credit Party therefrom, to the extent Lender determines that such waiver, amendment, modification or consent is necessary in order to eliminate any conflict between such provision and the terms of this Agreement and (b) waive, amend or modify any provision in this Agreement, or consent to a departure by any Credit Party therefrom, to the extent Lender determines that such waiver, amendment, modification, or consent is necessary in order to eliminate any conflict between such provision and the terms of the Orders. Any waiver or consent shall be effective only in the specific instance and for the specific purpose for which it was given. No notice to or demand on any Credit Party in any case shall entitle any Credit Party to any other or further notice or demand in similar or other circumstances. Any amendment, modification, termination, waiver or consent effected in accordance with this Section 9.5 shall be binding upon Lender at the time outstanding, each future Lender and, if signed by a Credit Party, on such Credit Party.

9.6 Successors and Assigns.

(a) This Agreement shall be binding upon the parties hereto and their respective successors and assigns and shall inure to the benefit of the parties hereto and the successors and assigns of Lender. No Credit Party’s rights or obligations hereunder nor any interest therein may be assigned or delegated by any Credit Party without the prior written consent of Lender (except in the case of any such assignment or delegation as a result of any merger or consolidation or liquidation or amalgamation or otherwise permitted by Section 6.7). Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby and, to the extent expressly contemplated hereby, Affiliates of Lender and other Indemnitees) any legal or equitable right, remedy or claim under or by reason of this Agreement. Lender shall have the right at any time to sell, assign, or transfer all or a portion of its rights and obligations under this Agreement, including all or a portion of its Loans owing to it or other Obligations

(b) In addition to any other assignment or participation permitted pursuant to this Section 9.6 Lender may assign, pledge and/or grant a security interest in all or any portion of its Loans, the other Obligations owed by or to Lender to secure obligations of Lender including any Federal Reserve Bank as collateral security pursuant to Regulation A of the Board of Governors and any operating circular issued by such Federal Reserve Bank: provided, that Lender shall be relieved of any of its obligations hereunder as a result of any such assignment and pledge, and provided further, that in no event shall the applicable Federal Reserve Bank, pledgee or trustee, be considered to be a “Lender” or be entitled to require the assigning Lender to take or omit to take any action hereunder.

9.7 Independence of Covenants. 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 would otherwise be within the limitations of, another covenant shall not avoid the occurrence of a Default or an Event of Default if such action is taken or condition exists.

9.8 Survival of Representations, Warranties and Agreements. All representations, warranties and agreements made herein shall survive the execution and delivery hereof and the


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making of any Credit Extension. Notwithstanding anything herein or implied by law to the contrary, the agreements of each Credit Party set forth in Sections 9.2, 9.3, and 9.4 shall survive the payment of the Loans and the termination hereof.

9.9 No Waiver; Remedies Cumulative. No failure or delay on the part of Lender in the exercise of any power, right, or privilege hereunder or under any other Credit Document shall impair such power, right, or privilege or be construed to be a waiver of any default or acquiescence therein, nor shall any single or partial exercise of any such power, right, or privilege preclude other or further exercise thereof or of any other power, right, or privilege. The rights, powers, and remedies given to Lender hereby are cumulative and shall be in addition to and independent of all rights, powers, and remedies existing by virtue of any statute or rule of law or in any of the other Credit Documents. Any forbearance or failure to exercise, and any delay in exercising, any right, power, or remedy hereunder shall not impair any such right, power or remedy or be construed to be a waiver thereof, nor shall it preclude the further exercise of any such right, power, or remedy.

9.10 Termination. A Subsidiary shall automatically be released from its obligations under the Credit Documents upon the Payment in Full of the Obligations and/or consummation of any transaction permitted by this Agreement as a result of which such Subsidiary is not a Subsidiary of a Borrower; provided that, if so required by this Agreement, Lender shall have consented to such transaction and the terms of such consent shall not have provided otherwise. Any security interest and Liens created under the Collateral Documents shall be automatically released upon Payment in Full of the Obligations and/or any sale or other transfer by any Credit Party of any Collateral that is permitted under this Agreement (other than a sale or other transfer to a Credit Party).

9.11 Marshalling; Payments Set Aside. Lender shall not be under any obligation to marshal any assets in favor of any Credit Party or any other Person or against or in payment of any or all of the Obligations. To the extent that any Credit Party makes a payment or payments to Lender, or Lender enforces any security interests or exercises any right of setoff, and such payment or payments or the proceeds of such enforcement or setoff or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside and/or required to be repaid to a trustee, receiver or any other party under any Bankruptcy Law, any other state or federal law, common law or any equitable cause, then, to the extent of such recovery, the obligation or part thereof originally intended to be satisfied, and all Liens, rights and remedies therefor or related thereto, shall be revived and continued in full force and effect as if such payment or payments had not been made or such enforcement or setoff had not occurred.

9.12 Severability. In case any provision in or obligation hereunder or under any other Credit Document shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality


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and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby.

9.13 Headings. Section headings herein are included herein for convenience of reference only and shall not constitute a part hereof for any other purpose or be given any substantive effect.

9.14 APPLICABLE LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER (INCLUDING, WITHOUT LIMITATION, ANY CLAIMS SOUNDING IN CONTRACT LAW OR TORT LAW ARISING OUT OF THE SUBJECT MATTER HEREOF AND ANY DETERMINATIONS WITH RESPECT TO POSTJUDGMENT INTEREST) SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK AND (TO THE EXTENT APPLICABLE) THE BANKRUPTCY CODE, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF THAT WOULD RESULT IN THE APPLICATION OF ANY LAW OTHER THAN THE LAW OF THE STATE OF NEW YORK AND (TO THE EXTENT APPLICABLE) THE BANKRUPTCY CODE.

9.15 CONSENT TO JURISDICTION. SUBJECT TO CLAUSE (E) OF THE FOLLOWING SENTENCE, ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY PARTY ARISING OUT OF OR RELATING HERETO OR ANY OTHER CREDIT DOCUMENTS, OR ANY OF THE OBLIGATIONS, SHALL BE BROUGHT IN THE BANKRUPTCY COURT, AND IF THE BANKRUPTCY COURT DOES NOT HAVE (OR ABSTAINS FROM) JURISDICTION, ANY FEDERAL COURT OF THE UNITED STATES SITTING IN THE BOROUGH OF MANHATTAN OR, IF THAT COURT DOES NOT HAVE SUBJECT MATTER JURISDICTION, IN ANY STATE COURT LOCATED IN THE CITY AND COUNTY OF NEW YORK. BY EXECUTING AND DELIVERING THIS AGREEMENT, EACH PARTY, FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, IRREVOCABLY (A) ACCEPTS GENERALLY AND UNCONDITIONALLY THE EXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS (OTHER THAN WITH RESPECT TO ACTIONS BY ANY AGENT IN RESPECT OF RIGHTS UNDER ANY COLLATERAL DOCUMENT GOVERNED BY LAWS OTHER THAN THE LAWS OF THE STATE OF NEW YORK OR WITH RESPECT TO ANY COLLATERAL SUBJECT THERETO); (B) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS; (C) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO THE APPLICABLE PARTY AT ITS ADDRESS PROVIDED IN ACCORDANCE WITH SECTION 9.1; (D) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (C) ABOVE IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER THE APPLICABLE PARTY IN ANY SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT; AND (E) AGREES THAT AGENTS AND LENDERS RETAIN THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST ANY CREDIT PARTY IN THE COURTS OF ANY OTHER


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JURISDICTION IN CONNECTION WITH THE EXERCISE OF ANY RIGHTS UNDER ANY SECURITY DOCUMENT OR THE ENFORCEMENT OF ANY JUDGMENT.

9.16 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING HEREUNDER OR UNDER ANY OF THE OTHER CREDIT DOCUMENTS OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION OR THE LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. EACH PARTY HERETO ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS AGREEMENT, AND THAT EACH WILL CONTINUE TO RELY ON THIS WAIVER IN ITS RELATED FUTURE DEALINGS. EACH PARTY HERETO FURTHER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SECTION 9.16 AND EXECUTED BY EACH OF THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS HERETO OR ANY OF THE OTHER CREDIT DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE LOANS MADE HEREUNDER. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

9.17 Confidentiality. Lender shall hold confidential all non-public information regarding the Borrowers and their respective Subsidiaries, Affiliates and their businesses obtained by Lender pursuant to the requirements hereof in accordance with Lender’s customary procedures for handling confidential information of such nature, it being understood and agreed by the Borrowers that, in any event, Lender may make (a) disclosures of such information to Affiliates of Lender and to their or their Affiliates’ respective officers, directors, partners, members, employees, legal counsel, independent auditors, and other advisors, experts or agents who need to know such information and on a confidential basis (and to other Persons authorized by Lender to organize, present or disseminate such information in connection with disclosures otherwise made in accordance with this Section 9.17) (it being understood and agreed that the Persons to whom such disclosure is made will be informed of the confidential nature of such information and who have agreed to treat such information confidentially), (b) disclosures of such information reasonably required by any bona fide or potential assignee, transferee or participant in connection with the contemplated assignment, transfer, or participation of any Loans or any participations therein or by any direct or indirect contractual counterparties (or the professional advisors thereto) to any swap or derivative transaction relating to the Borrowers and their obligations (provided, such assignees, transferees, participants, counterparties and advisors are advised of and agree to


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be bound by either the provisions of this Section 9.17 or other provisions at least as restrictive as this Section 9.17), (c) disclosure to any rating agency when required by it; provided that, prior to any disclosure, such rating agency shall undertake in writing to preserve the confidentiality of any confidential information relating to Credit Parties received by it from Lender, (d) disclosure on a confidential basis to the CUSIP Service Bureau or any similar agency in connection with the issuance and monitoring of CUSIP numbers with respect to the Loans, (e) disclosures in connection with the exercise of any remedies hereunder or under any other Credit Document, (f) disclosures made pursuant to the order of any court or administrative agency or a judicial, administrative, or legislative body or committee or in any pending legal or administrative proceeding, or otherwise as required by applicable law or compulsory legal process (in which case such Person agrees to inform such Borrower promptly thereof to the extent not prohibited by law), (g) disclosures made upon the request or demand of any regulatory or quasi-regulatory authority purporting to have jurisdiction over such Person or any of its Affiliates (in which case such Person agrees to inform the such Borrower promptly thereof to the extent not prohibited by law), (h) disclosures of information received by such Person on a non-confidential basis from a source (other than a Borrower or any of the Borrower’s Affiliates, advisors, members, directors, employees, accountants, attorneys, agents, or other representatives) not known by such Person to be prohibited from disclosing such information to such Person by a legal, contractual or fiduciary obligation, (i) disclosures of such information to the extent that such information is publicly available or becomes publicly available other than by reason of improper disclosure in violation of this Section 9.17, (j) disclosures to the extent that such information was already in such Person’s possession (and disclosure by such Person is not otherwise prohibited by a contractual obligation) or is independently developed by such Person (from information not otherwise prohibited from being disclosed pursuant to a separate contractual obligation), and (k) disclosures for purposes of establishing a “due diligence” defense. In addition, Lender may disclose the existence of this Agreement and the information about this Agreement to market data collectors, similar services providers to the lending industry, and service providers to Lender in connection with the administration and management of this Agreement and the other Credit Documents.

9.18 Usury Savings Clause. Notwithstanding any other provision herein, the aggregate interest rate charged with respect to any of the Obligations, including the Default Rate and all charges or fees in connection therewith deemed in the nature of interest under applicable law shall not exceed the Highest Lawful Rate. If the rate of interest or Default Rate (determined without regard to the preceding sentence) under this Agreement at any time exceeds the Highest Lawful Rate, the outstanding amount of the Loans made hereunder shall bear interest at the Highest Lawful Rate until the total amount of interest due hereunder equals the amount of interest which would have been due hereunder if the stated rates of interest set forth in this Agreement had at all times been in effect. In addition, if when the Loans made hereunder are repaid in full the total interest due hereunder (taking into account the increase provided for above) is less than the total amount of interest which would have been due hereunder if the stated rates of interest set forth in this Agreement had at all times been in effect, then to the extent permitted by law, the Borrowers shall pay to Lender an amount equal to the difference between the amount of interest paid and the amount of interest which would have been paid if the Highest Lawful Rate had at all times been in effect. Notwithstanding the foregoing, it is the intention of Lender and the Borrowers to conform strictly to any applicable usury laws. Accordingly, if Lender contracts for, charges, or receives any consideration which constitutes interest in excess of the Highest Lawful Rate, then


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any such excess shall be cancelled automatically and, if previously paid, shall at Lender’s option be applied to the outstanding amount of the Loans made hereunder or be refunded to Borrower.

9.19 Effectiveness; Counterparts; Orders Control. This Agreement shall become effective upon the execution of a counterpart hereof by each of the parties hereto and receipt by the Borrowers and Lender of written notification of such execution and authorization of delivery thereof. This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument. Delivery of an executed counterpart of a signature page of this Agreement by facsimile or in electronic format (i.e., “pdf” or “tif”) shall be effective as delivery of a manually executed counterpart of this Agreement. This Agreement shall become effective on the date the conditions set forth in Section 3.1 have been satisfied. In the event of any conflict between the provisions of this Agreement and those of any other Credit Document, the provisions of this Agreement shall control. To the extent that any specific provision hereof is inconsistent with any of the Orders, the Interim Order or Final Order (as applicable) shall control.

9.20 PATRIOT Act. Lender hereby notifies each Credit Party that pursuant to the requirements of the PATRIOT Act, it is required to obtain, verify, and record information that identifies each Credit Party, which information includes the name and address of each Credit Party and other information that will allow Lender to identify such Credit Party in accordance with the PATRIOT Act.

9.21 [Reserved].

9.22 No Fiduciary Duty; Lender Counterparty. Lender and its Affiliates (collectively, solely for purposes of this paragraph, the “Lender”), may have economic interests that conflict with those of the Credit Parties, their stockholders and/or their affiliates. Each Credit Party agrees that nothing in the Credit Documents or otherwise will be deemed to create an advisory, fiduciary, or agency relationship or fiduciary or other implied duty between Lender, on the one hand, and such Credit Party, its stockholders or its affiliates, on the other. The Credit Parties acknowledge and agree that (a) the transactions contemplated by the Credit Documents (including the exercise of rights and remedies hereunder and thereunder) are arm’s-length commercial transactions between Lender, on the one hand, and the Credit Parties, on the other, and (b) in connection therewith and with the process leading thereto, (x) Lender has not assumed an advisory or fiduciary responsibility in favor of any Credit Party, its stockholders, or its affiliates with respect to the transactions contemplated hereby (or the exercise of rights or remedies with respect thereto) or the process leading thereto (irrespective of whether Lender has advised, is currently advising or will advise any Credit Party, its stockholders, or its Affiliates on other matters) or any other obligation to any Credit Party except the obligations expressly set forth in the Credit Documents and (y) Lender is acting solely as principal and not as the agent or fiduciary of any Credit Party, its management, stockholders, creditors, or any other Person. Each Credit Party acknowledges and agrees that it has consulted its own legal and financial advisors to the extent it deemed appropriate and that it is responsible for making its own independent judgment with respect to such transactions and the process leading thereto. Each Credit Party agrees that it will not claim that Lender has rendered advisory services of any nature or respect, or owes a


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fiduciary or similar duty to such Credit Party, in connection with such transaction or the process leading thereto.

SECTION 10. LEASEHOLD PROPERTY

10.1 Special Rights with respect to Leasehold Property.

(a) No Credit Party shall, nor shall it permit any of its Subsidiaries to, pursuant to Section 365 of the Bankruptcy Code, reject or otherwise terminate (including, without limitation, as a result of the expiration of the assumption period provided for in Section 365(d)(4) of the Bankruptcy Code to the extent applicable) (x) a Material Lease or (y) during the continuance of an Event of Default, Leasehold Property, in each case, without first providing thirty (30) days’ prior written notice to Lender (unless such notice provision is waived by Lender) during which time Lender shall be permitted to find an acceptable (in Lender’s good faith and reasonable discretion) replacement lessee (which may include Lender or its Affiliates) to whom such lease may be assigned. If a prospective assignee is not found within such thirty (30)-day notice period, the Credit Party may proceed to reject such lease. If such a prospective assignee is timely found, the Credit Parties shall (i) not seek to reject such lease, (ii) promptly withdraw any previously filed rejection motion, (iii) promptly file a motion seeking expedited relief and a hearing on the earliest court date available for purposes of assuming such lease and assigning it to such prospective assignee and (iv) cure any defaults that have occurred and are continuing under such lease unless the Borrowers and Lender agree that any such cure obligation is overly burdensome on the cash position of the Debtors with such agreement not to be unreasonably withheld; provided that this Section 10.1(a) shall not apply to Leasehold Property that is rejected on the effective date of an Acceptable Plan. For the avoidance of doubt, it is understood and agreed that on or prior to the thirtieth (30th) day prior to the Automatic Rejection Date, the Credit Parties shall have delivered (and hereby agree to deliver) written notice to Lender of each outstanding Leasehold Property that they intend to reject (including, without limitation, through automatic rejection on the Automatic Rejection Date, to the extent applicable) from and after the date of such notice (or, if applicable, notice that the Credit Parties will seek to extend the Automatic Rejection Date as provided in Section 365(d)(4) of the Bankruptcy Code); provided that if the Credit Parties fail to deliver any such notice to Lender prior to such date with respect to any Leasehold Property (or a notice indicating that such Leasehold Property shall not be rejected), the Credit Parties shall be deemed, for all purposes hereunder, to have delivered notice to Lender as of such date that it intends to reject such Leasehold Property.

(b) If an Event of Default shall have occurred and be continuing, Lender may exercise any Debtor’s rights pursuant to Section 365(f) of the Bankruptcy Code with respect to any Leasehold Property or group of Leasehold Property and, subject to the Bankruptcy Court’s approval after notice and hearing, assign any such Leasehold Property in accordance with Section 365 of the Bankruptcy Code notwithstanding any language to the contrary in any of the applicable lease documents or executory contracts. In connection with the exercise of such rights, Lender may (w) access the leasehold interests of the Credit Parties in any such Leasehold Property for the purposes of marketing such property or properties for sale, (x) find an acceptable (in Lender’s good faith and reasonable discretion) replacement lessee (which may include Lender or their its Affiliates) to whom a Leasehold Property may be assigned, (y) hold, and manage all aspects of, an auction or other bidding process to find such reasonably acceptable replacement lessee, and (z) in

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connection with any such auction, agree, on behalf of the Credit Parties and subject to Bankruptcy Court approval, to a breakup fee or to reimburse fees and expenses of any stalking horse bidder up to an amount not to exceed 3.00% of the purchase price of such Leasehold Property and may make any such payments on behalf of such Credit Party and any amount used by Lender to make such payments shall, at the election of Lender in its reasonable discretion and subject to satisfaction of the conditions in Sections 5.4 and 5.5, be deemed a borrowing of Term Loans hereunder. Upon receipt of notice that Lender elects to exercise its rights under this Section 10.1(b), the Credit Parties shall promptly file a motion seeking expedited relief and a hearing on the earliest court date available for purposes of assuming such Leasehold Property and assigning it to such assignee and cure any defaults that have occurred and are continuing under such Leasehold Property. Notwithstanding the foregoing, this Section 10.l(b) shall not apply to Leasehold Property that is rejected on the effective date of an Acceptable Plan. Notwithstanding anything to the contrary in this Section 10.1 (b), in no event shall any Leasehold Property be assigned to Lender without the express written consent of Lender in its sole discretion.

(c) If an Event of Default shall have occurred and be continuing, Lender shall have the right to direct any Debtor that is a lessee under a Leasehold Property to assign such Leasehold Property to Lender or its designee, on behalf of Lender, as collateral for the Obligations and to direct such Debtor lessee to assume such Leasehold Property to the extent assumption is required under the Bankruptcy Code as a prerequisite to such assignment. Upon receipt of notice that Lender elects to exercise its rights under this Section 10.1(c), the Credit Parties shall (i) promptly file a motion seeking expedited relief and a hearing on the earliest court date available for purposes of, if necessary, assuming such Leasehold Property and assigning it to Lender and (ii) cure any defaults that have occurred and are continuing under such Leasehold Property. Notwithstanding the foregoing, this Section 10.1(c) shall not apply to Leasehold Property that are rejected on the effective date of an Acceptable Plan. Notwithstanding anything to the contrary in this Section 10.l(c), in no event shall any Leasehold Property be assigned to Lender without the express written consent of Lender in its sole discretion.

(d) Any order of the Bankruptcy Court approving the assumption (but not the assignment) of any Leasehold Property shall specifically provide that the applicable Debtor shall be authorized to assign such Leasehold Property pursuant to Section 365(t) of the Bankruptcy Code subsequent to the date of such assumption designated by Lender.

(e) No Credit Party shall, nor shall it permit any of its Subsidiaries to, pursuant to Section 365 of the Bankruptcy Code, sell or assign a Leasehold Property without first providing fifteen (15) days’ prior written notice to Lender (unless such notice provision is waived by Lender) of any hearing in the Bankruptcy Court seeking approval of a sale or assignment, and Lender shall be permitted to credit bid forgiveness of some or all of the outstanding Obligations in respect of the Term Loan Facility (in an amount equal to at least the consideration offered by any other party in respect of such assignment) as consideration in exchange for any such Leasehold Property. In connection with the exercise of any of the Lender’s rights under Sections 101(b) and 10.1(c) to direct or compel a sale or assignment of any Leasehold Property, Lender shall be permitted to credit bid forgiveness of a portion of the Indebtedness (in an amount equal to at least the


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consideration offered by any other party in respect of such sale or assignment) outstanding under the Term Loans in exchange for such Leasehold Property.

If any Credit Party is required to cure any monetary default under any Leasehold Property under this Section 10.1, or otherwise in connection with any assumption of such Leasehold Property pursuant to Section 365 of the Bankruptcy Code, and such monetary default is not cured within five (5) Business Days of the receipt by such Credit Party of notice from Lender under Sections 10.l(a), (b) or (c) or any other notice from Lender requesting the cure of such monetary default, then Lender may, but shall not be obligated to, cure any such monetary default on behalf of such Credit Party and any such payments shall, at the election of Lender in its reasonable discretion and subject to satisfaction of the conditions in Section 3.3, be deemed a borrowing of Term Loans hereunder.

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their respective officers thereunto duly authorized as of the date first written above.

CEC DEVELOPMENT BORROWER, LLC

By: _____________________________ Name: Title:

CEC RENEWABLE ASSETS, LLC

By: _____________________________ Name: Title:

CEC RENEWABLE ASSETS DEVELOPMENT, LLC

By: _____________________________ Name: Title:

FCS ADVISORS LLC D/B/A BREVET CAPITAL, as Lender

By: _______________________________ Name: Title:


GUARANTORS: CLEAN ENERGY COLLECTIVE, LLC

By: _____________________________

Name: Title:

ENERGY EQUIPMENT LIMITED

By: _____________________________ Name: Title:

CLEAN ENERGY COMMUNITY HOLDCO 1, LLC

By: _____________________________ Name: Title:

CLEAN ENERGY CAPITAL, LLC

By: _____________________________ Name: Title:

CE SERVICES, LLC

By: _____________________________ Name: Title:

CEC DEVELOPMENT, LLC

By: _____________________________ Name: Title:


CEC SOLAR HOLDINGS MA, LLC

By: _____________________________ Name: Title:

CEC SOLAR FUND 4 LLC

By: _____________________________ Name: Title:

CEC SOLAR HOLDING DE, LLC

By: _____________________________ Name: Title:

GROUP 1 SOLAR HOLDINGS LLC

By: _____________________________ Name: Title:

RENEWABLE HOLDINGS 1, LLC

By: _____________________________ Name: Title:

RENEWABLE SUN MANAGEMENT CO., LLC

By: _____________________________ Name: Title:


RENEWABLE SUN, LLC

By: _____________________________ Name: Title:

RENEWABLE HOLDINGS TE 1, LLC

By: _____________________________ Name: Title:
