FOR THE DISTRICT OF DELAWARE In re: Chapter...

IN THE UNITED STATES BANKRUPTCY COURTFOR THE DISTRICT OF DELAWARE

In re: Chapter 11

iPic-Gold Class Entertainment, LLC, et al.,l Case No. 19-11739 (LSS)

Debtors. ~ (Jointly Administered)

Re: Docket No. 15, 48

Objection Deadline: September 4, 2019 at 4:00 p.m. (ET)Hearing Date: September 11, 2019 at 11.:00 a.m. (ET)

NOTICE OF ENTRY OF INTERIM ORDER: (A) AUTHORIZING DEBTORS INPOSSESSION TO (I) OBTAIN POSTPETITION FINANCING PURSUANT TO U.S.C. §§

1Q5, 362, 363, AND 3b4, (II) GRANT LIENS AND SUPERPRIORITY CLAIMS TOPOSTPETITION LENDERS PURSUANT TO 11 U.S.C. § 364; (III) USE CASH

COLLATERAL, AND (IV) PROVIDE ADEQUATE PROTECTION TO PREPETITIONCREDIT PARTIES, (B) MODIFYING AUTOMATIC STAY PURSUANT TO ll U.S.C. §§361, 362, 363, AND 364; AND (C) SCHEDULING FINAL HEARING PURSUANT TOBANKF2UPTCY RULES 4001(B) AND (C) AND LOCAL BANKRUPTCY RULE 4001-2

TO: (a) the Office of the U.S. Trustee for the District of Delaware; (b) counsel for the DIPLenders and Pre-Petition Credit Parties; (c) the Debtors' thirty largest unsecured creditorson a consolidated basis; (d) any party of record that has asserted a lien in the Debtors'assets; (e) the U.S. Securities &Exchange Commission; (~ the Internal Revenue Service;and (g) any party that has requested notice pursuant to Bankruptcy Rule 2002.

PLEASE TAKE NOTICE that on August 5, 2019, the above-captioned debtors

and debtors in possession (collectively, the "Debtors") each filed a voluntary petition for relief

under chapter 11 of title 11 of the United States Code with the Clerk of the United States

Bankruptcy Court for the District of Delaware (the "Bankruptcy Court").

PLEASE TAKE FURTHER 1~10TICE that on August 5, 2019, the Debtors filed

the Debtors' Motion foN Interim and Final Orders: (A) AuthoNizing DebtoNs in Possession to (I)

Obtain Postpetition Financing Pursuant to 11 U.S. C. ~~ 105, 362, 363, and 364, (II) Grant Liens

The Debtors in these chapter 11 cases, along with the last four digits of each Debtor's federal tax identificationnumber, as applicable, are: iPic Entertainment Inc. (9582); iPic-Gold Class Entertainment, LLC (4684); iPic GoldClass Holdings LLC (6315); iPic Media LLC (0150); iPic Texas, LLC (N/A); and Delray Beach Holdings, LLC(1035). The Debtors' principal place of business is 433 Plaza Real, Suite 335, Boca Raton, FL 33432.

Case 19-11739-LSS Doc 65 Filed 08/07/19 of 4

and SuperpNiority Claims to Postpetition Lenders Pursuant to 11 U.S.C. ~,~ 364; (III) Use Cash

Collateral, and (IV) Provide Adequate Protection to PNepetition Credit PaNties, (B) Modifying

Ai~tornatic Stay Pursuant to I1 U.S. C. ,~,~ 361, 362, 363, and 364; and (C) Scheduling Final

Hearing Pzrrsuant to Bankruptcy Rules 4001 (b) and (c) and Local Bankruptcy Rule 4001-2 (the

"Motion") [Docket No. 15] with the Bankruptcy Court. A copy of the Motion is attached hereto

as Exhibit 1.

PLEASE TAKE FURTHER NOTICE that the Debtors presented certain first-

day motions at a hearing before the Honorable Laurie Selber Silverstein at the Bankruptcy Court

on August 6, 2019. The Bankruptcy Court granted interim relief on the Motion and entered the

Interim Order: (A) AuthoNizing Debtors In Possession to (I) Obtain Postpetition Financing

Pursuant to U.S. C. ,~~ 105, 362, 363, and 364, (II) Grant Liens and Superpriority Claims to

Postpetition LendeNs Pursuant to 11 U.S.C. ss 364; (III) Use Cash Collateral, and (IV) Provide

Adequate Protection to PNepetition CNedzt Parties, (I3) Modifying Automatic Stay Pzi~suant to 11

U.S. C. ~~' 361, 362, 363, and 364; and (C) Scheduling Final Hearing Pursuant to BankNuptcy

Rules 4001 (b) and (c) and Local Bankruptcy Rule 4001-2 (the "Interim Order") [Docket No. 48],

attached hereto as Exhibit 2.

PLEASE TAKE FURTHER NOTICE that any response or objection to the

entry of a final order with respect to the relief sought in the Motion must be filed with the

Bankruptcy Court on or before September 4, 2019 at 4:00 p.in. (Eastern ti~Yie).

PLEASE TAKE FURTHER NOTICE that at the same time, you must also

serve a copy of the response or objection upon: (i) the Debtors, iPic-Gold Class Entertainment,

LLC, 433 Plaza Real, Suite 335, Boca Raton, FL 33432-3945, Attn: Hamid Hashemi and Paul

Safran, Esq.; (ii) proposed counsel for the Debtors, Pachulski Stang Ziehl &Jones LLP, 919 N.

DOGS DE2248861 39566/002


Market Street, 17th Floor, Wilmington, DE 19801, Attn: Peter J. Keane, Esq.

([email protected]) and Pachulski Stang Ziehl &Jones LLP, 10100 Santa Monica Blvd.,

13th Floor, Los Angeles, CA 90067, Attn: Jeffrey N. Pomerantz, Esq.

([email protected]); (iii) counsel to the committee of unsecured creditors (if any); (iv)

counsel for the Pre-Petition Agent and DIP Lenders, Burr &Forman LLP, 420 North 20th Street,

Suite 3400, Birmingham, Alabama 35203, Attn: Derek F. Meek, Esq. ([email protected]); (v)

the Office of the United States Trustee, 844 King Street, Suite 2207, Lockbox 35, Wilmington,

Delaware 19801, Attn: Benjamin A. Hackman, Esq. ([email protected]); and (vi)

any other party that has filed a request for notices with the Court.

PLEASE TAKE FURTHER NOTICE THAT IF YOU FAIL TO RESPOND IN

ACCORDANCE WITH THIS NOTICE, THE COURT MAY GRANT THE FINAL RELIEF

REQUESTED BY THE MOTION WITHOUT FURTHER NOTICE OR HEARING.

PLEASE TAKE FURTHER NOTICE THAT A HEARING TO CONSIDER

THE PiNAL RELIEF SOUGHT IN THE MOTION WILL BE HELD ON SEPTEMBER 11,

2019 AT 11:00 A.M. (EASTERN TIME) BEFORE THE HONORABLE LAURIE SELBER

SILVERSTEIN, UNITED STATES BANKRUPTCY COURT JUDGE, AT THE UNITED

STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE, 824 NORTH

MARKET STREET, 6TH FLOOR, COURTROOM NO. 2, WILMINGTON, DELAWARE

I~~:~I~

DOCS DE224886.1 39566/002


Dated: August 7, 2019 PACHULSKI STANG ZIEHL &JONES LLP

/s/ Petef~ J. KeaneJeffrey N. Pomerantz (CA Bar No. 143717)Debra L Grassgreen (CA Bar No. 169978)Peter J. Keane (DE Bar No. 5503)919 N. Market Street, 17th FloorP.O. Box 8705Wilmington, DE 19899 (Courier 19801)Telephone: (302) 652-4100Facsimile: (302) 652-4400E-mail: [email protected]

dgrassgreen@pszj law. [email protected]

Proposed Attorneys foN Debtor s and Debtors inPossession

DOCS DE224886,1 39566/002


Ex~iibit 1

DOCS DE224886.1 39566/002

Case 19-11739-LSS Doc 65-1 Filed 08/07/19 Page 1 of 115

IN THE UNITED STATES BANKRUPTCY COURTFOR THE DISTRICT OF DELAWr~iI2~

In re:

iPic-Gold Class Entertainment, LLC, et al.,'

Debtors.

Chapter 11

Case No. 19-11739 (~

(Joint Administration Requested)

Il~E13TQRC' I~IQ'I'IrJN I+()It ~NTEI~IM ~N1~ FINAi- ~R~F_.~5; (Al ~1U'1_'H~I~i7,T1V?C=

DEBT0~2S IN POSSESSION TO (I) OBTAIN POSTPETI'I'ION FINE~NCI11e11GPURSUANT TO 11 U.S.C. §§ 105, 362, 363, AND 364, (II) GRANT LIENS A1~TD

SUPERPI2IORITY CLAIMS TO POSTPETITION LENDERS PURSUANT TO 11 U.S.C.§§ 364; (III) USE CASH COLLATERAL, AND (IV) PROVIDE ADEQUATEPROTECTION TO PREPETITION CREDIT PARTIES, (B) lYIODIFYING

f~UTO1~IE~TIC STAY PURSUANT TO ll U.S.C. §§ 361, 362, 363, ~~ND 364; AND(C) SCHEDULI\TG FINAL HEARING PURSUANT TO BANKRUPTCYRULES 4001(B) AND (C) AND LOCAL BANKRUPTCY RULE 4001-2

iPic-Gold Class Entertainment, LLC and its affiliated debtors, as debtors and

debtors in possession (collectively, the "Debtors"), hereby submit this motion (this "Motion") for

entry of an interim order ("Interim Order")2 substantially in the form attached hereto as

Exhibit A, and following a final hearing to be set by the Court (the "Final Hearing"), entry of a

final order (the "Final Order" and collectively with the Interim Order', the "Orders"), pursuant to

sections 105(a), 362, 363, and 364 of chapter 11 of title 11 of the United States Code, 11 U.S.C.

§§ 101, et seq. (the ̀ Banlcruptc~") and Rule 4001 of the Fede~~al Rules of Bai~lcr~uptey

Procedure (the ̀ Banla-uptc~es") and Local Rule 4001-2: (a) authorizing the Debtors to incur

postpetition debt and to use cash collateral, (b) grantii7g liens and superpriority claims in favor of

~ "I"lie Debtors in these chapter l 1 cases, along with the IasY four digits of each Debtor's federal tax ide»tification

number, ~s applicable, are: iPic I?ntertai~unent Inc. (9582); iPic-Gold Class Entertainment, LLC (4684); iPic Gold

Class Holdings LLC (6315); iPic Media LLC (0150); iPic Texas, LLC (N/A); and Deh-ay Beach Holdings, LLC

(1035). The Debtors' principal place of busif~ess is 433 Plaza Real, Suite 335, Boca Raton, FL 33432.

'- Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the lnteriin

Order.

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the DIP Lenders (as defined below), (c) providing adequate protection to the Pre-Petition Credit

Parties (as defined below), (d) modifying the automatic stay, (e) scheduling a final hearing, and

(fl granting related relief.

Overview

The Debtors commenced these cases in order to maximize going concern

value for the benefit of all stakeholders. The Debtors intend to conduct a marketing and sale

process through these chapter 11 cases that will preserve jobs and yield distributions to their

creditors. However, the Debtors need financing and access to cash collateral in order to maintain

operations and facilitate the Debtors' ongoing sale and restructuring process.

2. As of the Petition Date, the Debtors had approximately $205 million in

outstanding secured principal obligations under the Pre-Petition Credit Agreement (as defined

below). By this Motion, the Debtors seek authority to consummate a DIP Facility (as defined

below) with the DIP Lenders on the terms set forth in the DIP Loan Agreement (as defined

below), consisting of new revolving loans in an amount up to $16 million. The proceeds of the

DIP Facility will be used to pay (a) postpetition operating expenses and other working capital

requirements of the Debtors, (b) costs and expenses incurred in administering these cases; and

(c) interest and fees (including professional fees and expenses) due under the DIP Loan

Documents (as defined below). Thet~e is no roll-up of the Pre-Petition Debt (as defined below)

contemplated under the DIP Facility.

The DIP Facility presents these estates with the best economic terms

available and provides the Debtors with adequate liquidity to maintain operations in the ordinary

rocs sr~:io~,i~.~


course and satisfy ongoing administrative expenses associated with these cases. Accordingly, by

this Motion, the Debtors seek the entry of the Interim Order and the Final Order, inter alicz:

authorizing the, Debtors to obtain post-petition financing from the Teachers'Retirement System of Alabama, a body corporate of the State of Alabama created

under Section §§ 16-25-1 et seq., of the Alabama Code ("TRSA"), and the

Etnployees' Retirement System of Alabama, a body corporate of the State of

Alabama created under Section §§ 16-25-1, et seq., of the Alabama Code( B̀RSA," together with TRSA, each a "DIP Lender," and collectively, the "DIP

Lenders"j, consisting via 5u~erprioriiy, secui°cci i°evaiving c~=eciii ia~ i iy ire iiieprincipal amount of up to $16,000,000 (the "DIP Facility99) to be used for generalworking capital and liquidity purposes, including the payment of Administrative

Expenses as described herein and in that certain Debtor-In-Possessioia Loan c~nd

Security Agreement, dated August 5, 2019, by and among the DIP Lenders, as

Lenders, and the Debtors, as Borrower (substantially in the form attached to the

Motion, together with all schedules, exhibits and annexes thereto, and as any time

amended, the "DIP Loan Agreement"), in substantially the form attached hereto

as Exhibit B, of which amount $10,500,000 will be available under the DIP

Facility on an interim basis (the "Interim Amount Limit") during the Interim

Period (as defined below), on the terms and conditions set forth in the DIP Loan

Documents (as defined in the DIP Loan Agreement) and in the Interim Order;

b. authorizing the Debtors to execute and enter into the DIP Loan Documents and toperform all such other and further acts as may be required in connection with the

DIP Loan Documents;

c. authorizing the Debtors to use proceeds of the DIP Facility solely as expressly

permitted in the DIP Loan Documents and in accordance with the Interim

Order;

d. granting automatically perfected (i) priming security interests in and liens on allof the DIP Collateral (as defined below) solely with respect to the Pre-Petition

Debt and the Pre-Petition Collateral (as defined below) and (ii) non-priming

security interests in and liens on all DIP Collateral upon which there are either

pre-existing permitted senior liens or no ire-existing liens, to the DIP Lenders to

the extent provided herein, and granting supeipriority administrative expense

status to the DIP Obligations (as defined below);

authorizing the Debtors ~o use Cash Collateral (as defined below), subject to the

Interim Amount Liinit during the Interim Period;

f. providing adequate protection to the Pi-e-Petition Lender (as defined below) to tl~e

extent of any diminution in value of its interests in the DIP Collateral (as definedbelow) and subject to the Carve-Out (as defined below);

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g. authorizing the Debtors to pay the principal, interest, fees, expenses,

disbursements, and other amounts payable under the DIP Loan Documents as

such amounts become due and payable;

h. vaclting and modifying the automatic stay pursuant to Section 362 of the

Bankruptcy Code to the extent necessary to implement and effectuate the terms

and provisions of the Interim Order and the other DIP Loan Documents;

subject only to and effective upon entry of the Final Order, waiving the

Debtors' ability to surcharge against collateral pursuant to Section 506(c) of the

Bankruptcy Code;

scheduling a final hearing (the "Final Hearing") to consider entry of the Final

Order, and in connection therewith, giving and prescribing the manner of notice

of the Final Hearing on the Motion; and

k. granting the Debtors such other and further relief as is just and proper.

4. An immediate and ongoing need exists for the Debtors to obtain the DIP

Facility in order to permit, among other things, the orderly continuation of the operation of their

business, to maintain business relationships with vendors, suppliers and customers, to pay

payroll obligations, and to satisfy other working capital, development, and operational needs so

as to maximize the value of their respective businesses and assets as debtors in possession under

chapter 11 of the Bankruptcy Code. The Debtors do not have sufricient available

resources of working capital to operate their businesses in the ordinary course without post-

petition financing. The Debtors' ability to maintain business relationships with vendors and

customers, to pay employees, and otherwise to fund operations is essential to the Debtors'

viability and to the preservation of the going concern value of their business pending a sale of

their assets or other restructuring.

Jurisdiction and Venue

This Cotu~t has jurisdiction over this matter pursuant to 28 U.S.C. §§ 157

and 1334 and the A~77encled St~aiidi~~g Order ofXefei~ence fro» tl2e United S'zates District Cozrrt

4DOGS 51=:101519.3


fof~ the District of Delaware, dated February 29, 2012. This matter is a core proceeding within

the meaning of 28 U.S.C. § 157(b)(2), and the Debtors confirm their consent pursu~int to Local

Rule 9013-1(~ 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.

"6. The statutory predicates for the relief sought herein are sections 105(a),

362, 363, and 364 of the Bankruptcy Code, Bankruptcy Rule 4001, and Local Rule 4001-2.

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

Bacic~round

7. On the date hereof (the "Petition Date"), each of the Debtors filed with

this Court a voluntary petition for relief under chapter 11 of the Bankruptcy Code. Concurrently

herewith, the Debtors have filed a motion with this Court requesting joint administration of the

Debtors' chapter 11 cases (the "Cases") for procedural purposes only. The Debtors are operating

their business and managing their properties as debtors and debtor's in possession pursuant to

sections 1107(x) and 1108 of the Bankruptcy Code. Nn request has been made for the

appointment of a trustee or an examiner in these cases, and no off"ieial committee has yet been

appointed by the Office of the United States Trustee.

The factual bacicgroitnd regarding the Debtors, including their current and

historical business operations and the events precipitating the chapter 11 filing, is set forth in

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detail in the Deelcaration of Dczvid M. Baker isz Support of First Day Pleaclin~s (the "First Day

Declaration") filed concurrently herewith and fully incorporated herein by reference.

Relevant Factual Back6round

A. The Debtors' On~oin~ Business

9. The Debtors are a leading provider ofpolished-casual dining in a luxury

theater auditorium enviromnent. The Debtors are one of the largest combined movie theater and

restaurant entertainment destinations with locations that provide a luxurious movie-going

experience at an affordable price. The Debtors provide customers with high-quality, chef driven

culinary and mixology in unique destinations that include premium movie theaters, restaurants

and lounges.

10. The Debtors currently operate 123 screens at 161ocations in 9 states, with

an additiona121ocations under construction, and have executed leases for an additional9 sites in

California, Georgia, Virginia, Washington, Connecticut, New York, Texas and Florida. In

addition, the Debtors applied for licenses to operate theaters in Saudi Arabia.

11. The Debtors continue to pursue a disciplined new store growth strategy in

both new and existing markets where they may achieve consistent high store revenues and

attractive store-level cash-on-cash returns. As of the Petition Date, the Debtors employed

approximately 240 full time and 1,770 part-time employees.

12. The Debtors commenced these cases in order to preserve value for their'

stakeholders. The Debtors intend to conduct a marketing and sale process through these cases

with the goal of preserving jobs and maximizing recoveries to creditors.

6DOGS SP:Ipl~19.3


B. Prepetition Secured Debt

13. Pursuant to that certain Secoizd Amended cznd Restated Master Loc~n~ cuzd

Security Agreement dated February 1, 2018, as amended by Modification Agreement dated June

22, 2018, as further amended by Second Modification Agreement dated June 29, 2018, as further

amended by Third Modification Agreement dated March 4, 2019 (as so amended, the "Pre-

Petition Loan Agreement"), by and among iPic-Gold Class Entertainment, LLC, iPic Gold Class

Holdings, LLC, iPic Texas, LLC, iPic Media, LLC, Delray Beach Holdings, LLC, and Bay

Colony Realty, LLC,3 collectively, the "Pre-Petition Obligors"),4 TRSA, as administrative and

collateral agent (together, the "Pre-Petition Agent"), and TRSA and ERSA, as Lenders (the "Pre-

Petition Lenders," and collectively with the Pre-Petition Agent, the "Pre-Petition Credit

Parties"), made a term loan facility available to the Pre-Petition Obligors in an aggregate

principal amount not to exceed $225,828,169. The Pre-Petition Loan Agreement, together with

any other agreement, note, instrument, guaranty, mortgage, fixture filing, deed of trust, financing

statement, pledge, assignment, and other document executed at any time in connection therewith,

in each case as the same maybe amended, modified, restated or supplemented from time to time,

are hereinafter referred to collectively as the "Pre-Petition Loan Documents").

14. Pursuant to certain of the Pre-Petition Loan Documents, each of the Pre-

Petition Obligors granted the Pre-Petition Agent, for the benefit of the Pre-Petition Credit Parties

and to secure such Pre-Petition Obligors' obligatiaris and indebtedness under the Pre-Petition

Loan Documents, first priority liens on and security interests in the Collateral (the "Pre-Petition

Bay Colony Realty, LLC was dissolved repetition and is i~ot a Debtor- in these proceedings.

`~ Debtor iPic Entertainment, Inc. is not a Pre-I'ctition Obligor and is not a party to the DIP Facility.

7DOGS SP: 101 ~ 19.3


Security Interests"), as defined in the Pre-Petition Loan Agreement and Collateral Documents

(hereafter, the "Pre-Petition Collateral")

15. As of the Petition Date, the Pre-Petition Obligors, jointly and severally,

were justly and lawfully indebted and liable under the Pre-Petition Loan Documents to the Pre-

Petition Credit Parties for term loans in the outstanding principal amount of $205,340,772 (the

"Pre-Petition Loans", and together with all other obligations of any Pre-Petition Obligor in

respect of indemnities, guaranties and other payment assurances given by any Pre-Petition

Obligor for the Uenefit ofPre-Petition Credit Parties, and all interest, fees, costs, legal expenses

and all other amounts heretofore or hereafter accruing thereon or at any time chargeable to any

Pre-Petition Obligor in connection therewith, collectively referred to as the "Pre-Petition Debt").

16. Substantially all cash, securities or other property of the Pre-Petition

Obligors (and the proceeds therefrom) as of the Petition Date, including, without limitation, all

amounts on deposit or maintained by any Pre-Petition Obligor in any account with any Pre-

Petition Credit Parry or any bank or other depository institution (each a "Depository Institution"),

was subject to rights of setoff or to valid, perfected, enforceable first-priority liens under the Pre-

Petition Loan Documents and applicable law, and is included in the Pre-Petition Collateral, and

therefore the Pre-Petition Obligors' cash balances are cash collateral of the Pre-Petition Credit

Parties within the meaning of Section 363(a) of tl~e Bankruptcy Code. All such cash (including,

without limitation, all proceeds of Pre-Petition Collateral and all proceeds of property

encumbered by liens and security interests granted under the Interim Order), is refet7~ed to herein

as "Cash Collateral."

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C. Backarouud to Proposed DIP Facility

17. Prior to the Petition Date, the Debtors recognized a need for further

outside financing and began the process of considering potential funding sources. The Debtors,

through their advisors, discussed with various third parties the opportunity to provide financing

to the Debtors, but no alternative funding proposals were provided to the Debtors.

18. Separately, the Debtors performed due diligence regarding the

reasonableness of the terms proposed for the DIP Facility by the DIP Lenders, including by

comparing such teens to other debtor-in-possession credit facilities provided in the marketplace.

Based on such analysis, the Debtors believe that the DIP Facility is provided on reasonable

market terms. The DIP Lenders are unwilling to provide financing to the Debtors on an

unsecured or subordinated basis.

19. After careful review of their financing options, the Debtors concluded that

the DIP Lenders' proposed terms would allow the Debtors to meet their goals and provide the

Debtors with sufficient liquidity on the best available economic terms. Through the DIP Loan

Documents, the Debtors will continue to have access to sufficient liquidity for their ongoing

operations as well as to provide confidence to vendors and employees that the Debtors will be

able to consummate a going concern sale or other restructuring. All negotiations with the DIP

Lenders were conducted at arms' length and in good faith. The outcome of such negotiations is

the DIP Loan Agreement pending before this Court.

20. The Debtors now seek to move forward with the proposed :DIP Facility on

the terms set forth in the DIP Loan Documents. Subject to this Court's approval, the Debtors

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intend to draw on the DIP Facility in order to satisfy the Debtors' ongoing working capital needs

through their restructuring process.

Concise Statement of Relief Requested

2L In accordance with Bankruptcy Rule 4001(b) and Local Rule 4001-2,

below is a summarys of the terms of the proposed financing and use of cash collateral:

BORI20WERS: Debtors (excluding iPic Entertaimnent, Inc.)

DIP LENDERS: Teachers' Retirement System of Alabama and the Employees'Retirement System of Alabama

DIP FACILITY /

USE OI' PROCEEDS $16,000,000 supeipriority priming secured debtor-in-possessionfinancing facility, consisting of a revolving loan facility to be used forgeneral working capital and liquidity put~poses. For purposes of theInterim Order, the Debtors' borrowing authority under the DIP Facilityshall be capped at the Interim Amount Litnit of $10,500,000.

The Debtors also shall be authorized to use Cash Collateral inaccordance with the Budget. There is no roll-up of the Pre-Petition Debtcontemplated under the DIP Facility.

BUDGET: The "Budget" shall mean the thirteen-week cash flow budget in the formattached as Exhibit 1 to the Interim Order (including any updates theretoapproved by the DIP Lenders). Any changes or updates to the Budgetshall be subject to approval of the DIP Lenders, in their sole discretion.

TERm7NATION DATE: The "Tei7nination Date" means the earliest to occur of (i) the expiration

of ninety (9U) days after the Petition Date, (ii) the date upon which theDIP Lenders elect to tei7ninate the Availability Period and accelerate theObligations in accordance with Section 7.2 of the DII' Loan Agreementfollowing the occun-ence and continuance of an Event of Default, and(iii) the Closing Date, or such later date as to which the DIP Lenders mayexpressly agree in writing in their sole discretion.

5 The summaries and descripCions of the terms and conditions for the proposed financing and use of cash collateral

and the provisions of the lnterim Order set forth in this Motion are intended solely for informational pw-poses to

provide the Court and parties in interest with a» overview of the si~mificant terms Yhereof. Tl~e swnmaries and

descriptions are q~ialified in their e~~Tirery by the proposed Interim Order and the DIP Loan Docwnents. In tl~e event

there is any conflict between this Motion and the Interim Order or the DIP Loan Documents, tl~e Interim Order a~7d

tl~e DIP Loan Docwnents will control in all respects.

lUROCS SI :101519.3


INTEREST /TEES: Rate: 10.5% per annum. Accruing interest shall be payable monthly.

No principal amortization required pending occun~ence of theTermination Date.

Commitment Fee: 2.00%. Payable upon entry of the Interii7i Order.

DETAULT INTEREST: 2.00% above contract rate.

SECURITY: All of each Debtor's pre-petition and post-petition real and personal

property, including, without limitation, all of each Debtor's cash,

accounts, inventory, equipment, fixtures, general intangibles, documents,

itlstt-uinents, chattel paper, deposit accounts, letter-of-credit rights,commercial tort claims, investment property, intellectual property, real

property and leasehold interests, contract rights, and books and records

relating to any assets of such Debtor- and all proceeds (including, without

limitation, insurance proceeds) of the foregoing, whether such assets

were in existence on the Petition Date or' were thereafter created,acquired or arising and wherever located (all such real and personal

property, including, without limitation, all Pre-Petition Collateral and the

proceeds thereof, being collectively hereinafter referred to as the "DIP

Collateral"), and (iii) that such security interests and liens have the

priorities hereinafter set forth. Notwithstanding the foregoing, pending

entry of the Final Order, the DIP Collateral shall not include a lien upon

and security interest in any of Debtors' claims and causes of actionpursuant to Sections 502(d), 544, 545, 547, 548, 549, 550, 551 and 553

of the Bankruptcy Code ("Avoidance Claims") or any proceeds or other

property ("Avoidance Proceeds") recovered in connection with thesuccessful prosecution, settlement or collection of any AvoidanceCiaims.

As security for Debtors' payment and performance of ail DIPObligations, each DIP Lender shall have and is hereby granted valid,

binding, enforceable, non-avoidable and automatically and properly

perfected security interests in and liens upon all of the DIP Collateral,

subject to the provisions in Paragraph 9(d) (collecrively, the "DIP

Liens") and in the priorities set forth herein. Subject to the provisions of

Paragraph 26 of the Interim Order and the Carve-Out and any break-up

fees and expense reimbursement obligations of the Debtors approved by

the Court with respect to the APA (as defined in the llIP LoanAgreement), the DIY Liens shall be:

(a) Unencumbered Proper-tY. Pursuant to Section 364(c)(2) of theBankruptcy Code, valid, binding, continuing, enforceable, fullyperfected, first priority senior liens on, and security interests in, all

DIP Collateral that is not otherwise subjecC to valid, perfected,enforceable and unavoidable liens on the Petition Date, 03• to any

valid, perfected and unavoidable interests in such property arising

out of liens arising subsequent to the Petition Date as pei7nitted bysection 546(b) of the Bankruptcy Code.

DOGS Si=:lO15I9.3


(b) Liens Junior to Certain Other Liens. Pursuant to Section 364(c)(3)of the Bankruptcy Code, junior only to valid, binding, perfected andunavoidable interests of any other parties arising out of liens, if any,on such property existing iimnediately prior to the Petition Date thatwere senior in priority Yo the liens of the Pre-Petition Credit Parties,or to any valid, perfected and unavoidable interests in such propertyarising out of liens arising subsequent to the Petition Date aspermitted by section 546(b) of the Bankruptcy Code that are seniorin priority to the liens of the Pre-Petition Credit Parties.

(c) Priming DIP Liens. Pursuant to Section 364(d)(1) of the BankruptcyCode, valid, binding, continuing, enforceable, fully perfectedsPEt~r•ity inte~•ests in anc~ liens un~n the DTP Coll~ter~1; which se~i~i•ity

intet-ests and liens shall be prior and senior in all respects to (i) thesecm~ity interests and liens in favor ofPre-Petition Credit Partieswith respect to the Pre-Petition Collateral, and (ii) the AdequateProtection Liens (as defined below) with respect to the Pre-PetitionCollateral.

(d) Liens Senior to Certain Other Liens. The DIP Liens and theAdequate Protection Liens, aside from the Caive-Out and unless theAdequate Protection Liens are successfully challenged pursuant toParagraph 26 of the InteriYn Order, shall not be (i) subject orsubordinate to (A) any lien or security interest that is avoided andpreserved for the benefit of any Debtor or its estate under Section551 of the Banlciuptcy Code, (B) any liens or secm~ity interestsgranted by any Debtor to other persons or entities, or (C) anyintercompany or affiliate liens or security interests of the Debtors;(ii) subordinated to oi- made pari passe with any other lien orsecurity interest under Section 363 or 364 of the Bankruptcy Code orotherwise; or (iii) subject to Sections 510, 549 or 550 of theBankruptcy Code. In no event shall any person or entity who pays(or, through the extension of credit to any Debtor, causes to be paid)any of the DIP Obligations or the obligations and indebtedness of thePre-Petition Credit Parties, be subrogated, in whole or in part, to anyrights, remedies, claims, privileges, liens or security interests grantedto or in favor of, or conferred upon, any DIP Lender by the terms ofany DIP Loan Documents or the Interim Order unless such person orentity contemporaneously causes Full Payment of the Pre-PetitionDebt owed to such DIP Lender to be made.

SuPEIiPRIORI7'Y: All DIP Obligations shall constitute joint and several allowedsupeipriority claims (the "Superiority Claims") against each Debtor(without the need to file any proof of claim) pursuant to Section364(c)(1) of the Banla-uptcy Code having priority in right of paymentover• all oflie3- obligations, liabilities and indebtedness of each Debtor,whether now in existence or hereafter incurred by any Debtor, and overany and all administrative expenses of the kind specified in sections503(b) and 507(b) of tl~e Bankruptcy Code, and over any and alladministrative expenses or- other claims arising under Sections 105, 326,328, 330, 331, 503(a), 503(b), 506(c) (subject to entry of the Final Oi-der

12DOGS 51=:101519.3


approving the gt-ant), 507, 546(c), 552(b) 726, 1113 or 1114 of theBankruptcy Code. Such Supeipriority Claims shall for purposes ofSection 1129(a)(9)(A) of the Bankruptcy Code be consideredadministrative expenses allowed under Section 503(b) of the BankruptcyCode and shall be payable from and have recourse to all pre-petition andpost-petition property of Debtors and all proceeds thereof; provided,however, that the Superpi•iority Claims shall be subject to the Carve-Out(as defined below) and any break-up fees and expense reimbursementobligations of the Debtors approved by the Court with respect to theAPA (as defined in the DIP Loan Agreement); provided, however, that tothe extent Adequate Protection Claims that are entitled to supeipriorityadministrative status are payable out of Avoidance Claims and1a~~01~~??CP Prpr~PLlc~ ciich pavm~nt ghall hP giih~P~t tp ~ntiv of the Firl~l

Order.

CARVE-OUT: Notwithstanding anything in the Interim Order, any DIY LoanDocuments, any Pre-Petition Loan Documents, or any other order of thisCourt to the contrary, the DIP Obligations, the DIP Liens andSuperpriority Claims in favor of the DIP Lenders, the AdequateProtection Liens in favor- of the Pre-Petition Agent, the AdequateProtection Claims in favor of the Pre-Petition Credit Parties, and the Pre-Petition Debt and the Pre-Petition Security Interests in favor of the Pre-Petition Credit Parties shall be subject and subordinate in all respects tothe payment of the following Carve-Out. As used in the Interim Order,the "Carve-Out" means the suin of (a) all fees required to be paidpursuant to 28 U.S.C. § 1930(a)(6) and any fees payable to the Clerk ofthe Bankruptcy Court, (b) all of the reasonable fees and expenses fromtime to time incui-~-ed by each Professional retained by the Debtors andthe Colninittee (amounts set forth in the Budget are specific to eachProfessional and may be rolled over to subsequent weeks), including anyfees earned by PJ Solomon Securities, LLC ("PJS") as investment bankerfor the Debtors that are approved by this Court, that are (i) incun•ed priorto the date of delivery of a Default Notice (as defined below) (except inthe case of any fees earned by PJS, which shall be included in the Carve-Out whenever incurred), and (ii) included in an approved Budget (exceptin the case of any fees earned by PJS, which shall be included in theCalve-Out in the amount approved by this Court), and (c) a maximum of$250,000 for all of the reasonable fees and expenses from time to timeincui-~-ed by Professionals retained by Borrower (otherthan YJS, which isaddressed above) that are incu~~•ed fi-om and after the date of delivery ofa Default Notice; provided, that nothing in this Interim Order shall beconstrued to impair the ability of any party to object to the fees,expenses, reimbursements or compensation of any Professional, whetheror not in excess of the coverage provided by the Calve-Out. In no eventshall tl~e Cave-Out, or the funding of the DIP Loans to satisfy the Carve-Out, t•esult~ in any i-educCion in the amount of the DII' Obligations os- thePre-Petition Debt. Prior to the date of delivery of a Default Notice: (A)an amount sufficient to pay the Gaive-Out for Professional Fees inay befunded by the Debtar-s on a weekly basis into a t~i•ust account held byDebtors' counsel (the °`Professional Fee 1"rust Account') in accordancewith the approved Budget, (B) the Debtors shall be permitted to borrow

13ROCS SI:lUI5i93


under the DIP Loan Agreement to fund the Professional Fee TrustAccount in the amounts contemplated under clause (b) above, and (C)the Debtors shall be permitted to pay, fi-arn the Professional Pee TrustAccount, as and when the same may become due and payable, theallowed Professional Fees of each Professional. Following the date ofdelivery of a Default Notice, the Debtors shall be per-~nitted to fund theProfessional Fee Trust Account in the amount of $250,000 contemplatedunder clause (c) above. All amounts funded by the Debtors to theProfessional Fee Trust Account shall continue to constitute DIPCollateral. Any excess amounts remaining in the Professional Fee TrustAccount after payment of the Carve-Out for Professionals shall berefunded to the Debtors and shall remain DIP Collateral.

CREDIT BID: Following entry of the Final Order and subject to the requirements ofsection 363(k) of the Bankruptcy Code, but without prejudice to anysuccessful challenge brought prior to the Challenge Deadline, the DIPLenders and the Pre-Petition Credit Parties shall each have the right tocredit bid, individually or on a combined basis, up to the full amount ofthe applicable outstanding DIP Obligations and Pre-Petition Debt (asapplicable), in each case including any accrued interest or other agreedcharges, in any sale of the DIP Collateral (or any part ther•eo fl or Pre-Petition Collateral (or any part thereo fl, as applicable, without the needfor fm-ther Court order authorizing same, and whether such sale iseffectuated through Section 363 or 1129 of the Bankruptcy Code, by aChapter 7 trustee under Section 725 of the Bankruptcy Code, orotherwise. For the avoidance of doubt, without prejudice to anysuccessful challenge brought prior to the Challenge Deadline, no plan ofreorganization or liquidation, nor any motion in connection with a sale ofany Debtor's assets under Section 363 of the Bankruptcy Code, in any ofthese Chapter 11 Cases shall seek to limit or otherwise restrict the rightof Pre-Petition Agent or the DIP Lenders to credit bid for all oi- any partof the Pre-Petition Collateral or DIP Collateral.

CONDITIONS: Customary conditions for financings of this type, as set forth in ArticleIV of the DIP Loan Agreement.

REPS/WARxANTTEs: Customary representations and warranties for financings of this type, asset forth in Article V of the DIP Loan Agreement.

COv~NnNTsNA1tIAlvCCs: Customary affirmative and negative covenants for financings of thistype, as set forth in Articles VI of the DIP Loan Agreement.

In addition, commencing on the first Wednesday following the end of thefourth (4th) Loan Week and continuing on Wednesday of each weekthereafter, the Debrors ai-e required to deliver to the DII' Lenders (i) acon7pal-ison of actual to budgeted results of operations for the precedingfom~ (4) Loan Weeks, and (ii) a repo3-t of all income and expense varianceon a line-item basis for the preceding four- (4) Loan Weeks (the"Variance Report"). If any Variance Report shall indicate that theDebtors' cumulative net cash flow for tl~e trailing four' (4) Loan Weeksshall be less than ninety peT-cent (90%) of the amount of net cash flow

14uocs sr:ioisi~.~


projected in the Approved Budgets) covering such period (negative

variance of 10% or less being "Pe~-~nitted Variance" hereunder), then an

Event of Default shall be deemed to exist at the option of DIP Lenders;

provided that the DIP Lenders may, in their sole discretion, waive any

violation of the Permitted Variance limit set forth herein or authorize the

Debtors to exceed the Permitted Variance by written notice to the

Debtors (each a "Permitted Variance Exception").

EvENTs OF DEFAULT: Customary events of default for financings of this type, as set forth in

Article VII of the DIP Loan Agreement.

Specifically, the DIP Loan Agreement requires the Debtors' to employ a

chief rest~l~~tu~~ing officer reasonably acceptable to Lender. The DIP

Loan Agreement also imposes certain milestones on the Debtors as

follows:

(a) Subject to the Bankruptcy Court's availability, an order approving

bid procedures in a foi7n acceptable to Lender shall not have been

entered by the Bankruptcy Court on or before the date that is thirty

(30) days after the Interim Order, or such later date as tnay be agreed

to in writing by Lender in its sole discretion. The order approving

bidding procedures shall provide for bids to be received on or before

October 11, 2019, and the auction to occur on October 17, 2019.

(b) Subject to the Bankruptcy Court's availability, the Bankruptcy Court

approval of the sale shall not have been entered by the Bankruptcy

Court on or before OctoUer 25, 2019, or such later date as may be

agreed to in writing by Lender in its sole discretion.

(c) Subject to the Bankruptcy Court's availability, the sale transaction

shall not have closed on or before ninety (90) days after the Petition

Date, or such later date as inay be agreed to in writing by Lender in

its sole discretion.

REMEllIEs: Upon the occurrence and continuance of an Event of Default, and

following the expirarion of any applicable cure period set far-th in the

DIP Loan Agreement, (a) the DIP Lenders may file with the Coma and

serve upon the Debtors, counsel for the Debtors, counsel for- the

Comn7ittee and the U.S. Trustee a written notice (a "Default Notice")

desc~~ibing the Events of Default that exist, in which event effective five

(5) business days thereafter (the "Default Notice Period"), the DIP

Lenders shall be fully authorized, in their sole discretion, to demand

payment of all DIP Obligations, and hold and apply any balances in any

accounts of the Debtors to the payment or cash collateralization of any of

the DIP Obligations, subject to payment of the Calve-Out; and (U) each

DIP Lender- end the I're-Petition Agent shall be deemed to have received

complete relief from the automatic stay imposed by Section 362(a) of the

Bankruptcy Code with respect to all of the Collateral, effective following

the expiration of tine Default Notice period, unless the Court determines

otherwise after an expedited hearing. Upon the effectiveness of any

relief from the automatic stay granted or deemed to have been granted

15DOGS SI~:101>IJ.3


and subject to payment of the Caive-Out, the DIP Lenders and the Pre-Petition Agent may enforce their respective DIP Liens, the Pre-PetitionSecurity Interests, and the Adequate Protection Liens, as applicable, withrespect to the DIP Collateral, take all other actions and exercise all otherremedies under the DIP Loan Documents, the Pre-Petition LoanDocuments and applicable law that inay be necessary or deemedappropriate to collect any of its DIP Obligations and/or the Pre-PetitionDebt, proceed against or realize upon all or any portion of the Collateralas if these Chapter 11 Cases or any superseding Chapter 7 case was notpending, and otherwise enforce any of the provisions of the InterimOrder. The DIP Lenders shall provide for cash payment of the Carve-

Out fi-oin the proceeds of the DIP Collateral before any sums are paid tothe I~TP T Pn~l~rs fi•~ir ~Uch nrpFeec~S,

STIPULATIONS/`'VAIVERs: Subject to standard challenge rights of parties in interest, the Debtors(including iPic Entertaimnent, Inc.) will stipulate under the Interim Orderand the Final Order that the Pre-Petition Debt constitutes the legal, valid

and binding obligations of the Pre-Petition Obligors that is properlysecured by the Pre-Petition Collateral and is enforceable against them,and no portion of the Pre-Petition Debt is subject to avoidance,recharacterization, reduction, set off, offset, counterclaim, cross-claim,recoupment, defenses, disallowance, impaii7nent, recovery,subordination or any other challenges pursuant to the Bankruptcy Codeor applicable nonbankruptcy law or regulation by any person or entity.The Debtors will also release all claims against the Pr•e-Petirion Credit

Parties, subject to the challenge rights of parties in interest. TheCommittee's investigation budget is limited to $25,000.

In addition, the Interim Order and Final Order will include customarywaivers, including the waiver of the autornatic stay in connection withthe DIP Lenders' enforcement of remedies following an Event ofDefault, and subject to enhy of the Final Order, the waiver of anysm~charge of costs or expenses with respect to the DIP Lenders' or Pre-Petition Credit Parties' interest in the DIP Collateral under section 506(e)of the Banla•uptcy Code, provided that the following administrativeexpenses are fully funded by the Debtors consistent with the Budget: (a)the Calve-Out and (b) all expenses that are accrued and unpaid throughthe date of an Event of Default under the line items in the Budgetdesignated as "Payroll Costs," "Sales Taxes" and "PACA/PASAClaims." Subject to entry of the Final Order, in no event will the DIPLenders or I're-Petition Credit Parties be subject to the equitable doctrine

of "marshaling" or any similar doch•ine with respect to the DIPCollateral.

ADEQUATE 1'ROT~CTtON: As adequate protection for' any Collateral Diminution suffered by anyPre-Petition Credit Party, the Pre-Petition Agent is entitled, pw~suant toSections 105, 361, 363(e) and 364 of tl~e B~nki•uptey Code, to adequateprotection of its interests in the Pre-Petition Collateral in an amountequal to the Collateral Diminution (the "Adequate Protection Claims").As used in the Interim Oz•deT•, "Collateral Diminution" shall mean anamount equal (and limited) to the aggregate diminllt~ion of the fall•

16noes si:iois~~~.~


market value of any of the Pre-Petition Collateral (including CashCollateral) from and after the Petition Date for any reason provided for' inthe Bankruptcy Code, including, without limitation, any such diminutionresulting from the Caive-Out, the use of Cash Collateral, the priming ofthe Pi-e-Petition Agent's security interests in and liens on the Pre-PetitionCollateral by the DIP Liens pursuant to the DIP Loan Documents and theInterim Order, the depreciation, sale, loss or use by any Debtor (or anyother decline in value) of such Pre-Petition Collateral, the atrlount of anyfees and expenses paid to retained professionals in these Chapter• 11Cases, in accordance with the Budget, and the imposition of theautomatic stay pursuant to Section 362 of the Bankruptcy Code. The

Pre-Petition Agent is hereby granted, subject to the Caive-Out and the

,•;bht~ E,f thjrr~ Y3rtjPg Y_•P~eryPrl iinrlgi• Pai•agi•atnh ~Ci a„~1 Solely tQ the

extent of any Collateral Diminution, the following for the benefit of Pre-Petition Credit Parties:

(a) Adequate Protection Liens. The Pre-Petition Agent, for the benefit

of the Pre-Petition Credit Parties, is hereby granted (effective andperfected upon the date of the Interim Order and without thenecessity of the execution by any Debtor of security agreements,pledge agreements, mortgages, financing statements or otheragreements) valid, perfected replacement security interests in andliens on all of the DIP Collateral (the "Adequate Protection Liens").The Adequate Protection Liens on DIP Collateral shall be junior andsubordinate only to the DIP Liens, the Carve-Out, and any break-up

fees and expense reimbursement obligations of the Debtors approvedby the Court with respect to the APA (as defined in the DIP LoanAgreement). The Adequate Protection Liens shall not be subject toSections 506(c) (effective upon entry of the Final Order), 510, 549,or 550 of the Bankruptcy Code, and unless otherwise ordered by theCourt, no lien avoided and preserved for the benefit of any estatepursuant to Section 510 of the Bankruptcy Code shall be made paripasse with or senior to any Adequate Protection Liens.

(b) Priority of Adequate Protection Claims. The Adequate ProtectionClaims, if any, will be allowed as superpriority adminisri-ative claimspursuant to Sections 503(b) and 507(b) of the Bankruptcy Code,which, subject to the Superpriority Claims, the Carve-Out, and anybreak-up fees and expense reimbursement obligations of the Debtorsapproved by the Court with respect to the APA (as defined in the

DIP Loan Agreement), shall have priority in payment over any andall administrative expenses of the kinds specified or ordered pursuant

to any provision of the Bankruptcy Code, including, withoutlimitation, Sections 105, 326, 328, 330, 331, 503(b), 506(c) (subject

to entry of the Final Order), 507(x), 507(b), 546, 726, 1113 oz- 1114

of the Banln-uptcy Code, which shall at all tunes be senior to therights of each Debtor, and any successor n-ustee or any creditor inthese Chapter- 11 Cases or any subsequent proceedings under• theBankruptcy Code, provided, holvever•, that the Adequate ProtectionClaims entitled t~o supeipriority administrative status shall oi11y be

17DpCS S1=:IQ1519.3


payable out of Avoidance Claims and Avoidance Proceeds subject toentry of the Final Order.

(c) Fees and Expenses of Professionals for Pre-Petitiari Credit Parties.As additional adequate protection, the Debtors shall pay (i) thereasonable and documented professional fees and expenses(including, but not limited to, the fees and disbursements of counsel,third-party consultants, financial advisors, and auditors) payable toor- incurred by any Pre-Petition Credit Party under and pursuant tothe Pre-Petition Loan Documents arising prior to the Petition Date,and (ii) on a cui7~ent basis, the reasonable and docmnentedprofessional fees and expenses (including, but not limited to, the feesanc~ clisburse,nents ~f cou~seL third-party consultants; includingfinancial consultants, and auditors) payable to or incurred by anyPre-Petition Credit Party under and pursuant to the Pre-Petition LoanDocuments arising on or subsequent to the Petition Date, in eachcase in compliance with the Budget. At the option of the Pre-Petition Credit Parties, all such amounts may be added to the Pre-Petition Debt in lieu of cun~ent payment thereof by the Debtors.

INDEMNI~'ICAT7oN: Each Debtor generally agrees to indemnify the DIP Lenders and theirrespective related parties with respect to the DIP Facility.

Disclosures

22. Pursuant to Bankruptcy Rule 4001 and Local Rule 4001-2, a debtor in

possession seeking authority to use cash collateral or obtain financing must disclose the presence

and location of certain provisions contained in the documentation evidencing the cash collateral

usage or financing. The debtor in possession must also justify the inclusion of such provisions.

Set forth below are the disclosures required in accordance with such rules:

a. Local Rule 4001-2(a)(i)(A) requires a debtar- to disclose whether' it hasgranted cross-collateralization to a prepetition secured creditor in connection with thedebtor's cash collateral usage or additional financing. The proposed Interim Order

does not provide for tl~e granting of cross-collateralization protection to anyprepetition secured creditor.

b. Local Rule 4001-2(a)(i)(B) and Bankruptcy Rule 4001(c)(1)(B)(iii) and(viii) require the disclosure of provisions or findings of fact that (i) bind the estate or

other parties in interest with respect to the validity, per-fection ar~ amount of a securedcreditor's prepetition lien or (ii) the waiver of claims against the secured creditor withoutfirst giving parties in interest at least seventy-five (75) days from the entry of the orderand the Committee at least sixty (60) days from the date of its formation to investigate

18rocs sr: i o i s i ~~.~


such matters. The proposed Interim Order contains stipulations and waivers in

favor of the Pre-Petition Credit Parties, subject to a challenge period for any

committee or other party in interest by no later than (a) with respect to a creditors'

committee (if appointed), sixty (60) calendar days from the appointment of such

committee, and (b) seventy-five (75) calendar days after entry of the Interim Order,

subject to further extension by written agreement of the secured parties. Interim

Order ¶26(b).

c. Local Rule 4001-2(a)(i)(C) and Bankruptcy Rule 4001(c)(1)(B)(x) require

the disclosure of provisions that seek to waive a debtor's rights without notice under

section 506(c) of the Bankruptcy Code. The proposed Interim Order provides,

JUIJ~CI,I I.V G111.1 ~' Vl 1.11E 1'lil nl il~~licl ~ 1.11a~ ulG ~1~ Lc~ii~~'~a uiiu iii a, I~a,~i ~,it ti Q'iia

Credit Parties are entitled to a waiver of the surcharge provisions of section 506(c)

of the Bankruptcy Code. Interim Order ¶16.

d. Local Rule 4001-2(a)(i)(D) and Bankruptcy Rule 4001(c)(1)(B)(xi)

requires disclosure of provisions that immediately grant to the prepetition secured

creditor liens on the debtor's claims and causes of action arising under sections 544, 545,

547, 548 and 549 of the Bankruptcy Code. The proposed Interim Order provides,

subject to entry of the Final Order, that Avoidance Claims and Avoidance Proceeds

are included in the DIP Collateral. Interim Order ¶6(e).

e. Local Rule 4001-2(a)(i)(E) requires disclosure of provisions that deem

prepetition secured debt to be postpetition debt or use postpetition loans from a

prepetition secured creditor to pay dart or all of that secured creditor' prepetition debt

(other than as provided in section 552(b) of the Banl~-uptcy Code). Not applicable.

There is uo roll-up of the Pre-Petition Debt contemplated under the DIP Facility.

£ Local Rule 4001-2(a)(i)(F) requires disclosure of provisions that provide

disparate tt-eatment for the professionals retained by a creditors' committee from those

professionals retained by the debtor with respect to a professional fee carve-out. The

pt~oposed Interim Order does not provide for disparate treatment for committee

professionals, aside from projecting lower fees for committee professionals than

Debtor professionals in the Budget.

g. Local Rule 4001-2(a)(i)(G) requires disclosure of provisions that provide

for the priming of any secured lien without the consent of that lienholder. The proposed

Interim Order does not provide for the priming of any secured lien without the

consent of that lienholder.

h. Local Rule 4001-2(a)(i)(H) requires disclosure of provisions that seek to

affect the Court's power to consider the equities of the case under 11 U.S.C. § 552(b)(1).

The proposed Interim Order provides, subject to entry of tl~e Final Order, that the

DIP Lenders and the Pre-Petition Credit Parties are entitled to a waiver of the

equity of tl~e case provisions of section 552(b)(1) of the Bankruptcy Code. Interim

Order ¶14.

19rocs sr:io~si~~.3


i. Bankruptcy Rule 4001(c)(1)(B)(ii) requires disclosure of the provision of

adequate protection or priority for claims arising prior to the commencement of the case.

The proposed Interim Order provides that the Pre-Petition Credit Parties will be

granted adequate protection, in the form of replacement liens and superpriority

claims (junior in all cases to the DIP Facility and the Carve-Out), to the extent of

any diminution in the value of the Pre-Petition Collateral as of the Petition Date.

Interim Order ¶13.

j. Bankruptcy Rule 4001(c)(1)(B)(iv) requires disclosure of provisions that

constitute a waiver or modification of the automatic stay. The proposed Interim Order

describes the modification of the automatic stay to the extent necessary to

:mN:e:re::~ ~h~ In~e.::~: ~: ~Qr. I::~EPI~.T~ (l}~rlPr ~~.5.

k. Bankruptcy Rule 4001(c)(1)(B)(vii) requires disclosure of provisions that

waive or modify the applicability of nonbankruptcy law relating to the perfection of a lien

on property of the estate. The proposed Interim Order includes provisions that

provide for the automatic perfection and validity of the DIP Liens without the

necessity of any further filing or recording under the laws of any jurisdiction.

Interim Order ¶20.

Need for Financing and Use of Cash Collateral

23. The Debtors have an urgent and immediate need for access to funds

available under the DIP Facility and the use of the Cash Collateral. Such funding is necessary in

order for the Debtors to have sufficient liquidity to operate their business, satisfy their vendor

and customer obligations, and pay their employees. Without immediate access to the DIP

Facility and Cash Collateral, the Debtors would be forced to terminate operations and liquidate

their assets, which would put numerous employees out of wo7-lc and irreparably daYnage the

Debtors' efforts to maintain going concern value. Accordingly, the Debtors strongly urge the

Court to authorize the DIP Facility and continued use of Cash Collateral on the terms

contemplated herein, initially on an interim basis and, following a final hearing, on a final basis.

2UDOGS SF:101519.3


Basis for Relief

A. The Debtors Should Be Permitted to Obtain Postpetition Financing Pursuant to

Section 364(c) of the Bankruptcy Code

24. Section 364(c) of the Bankruptcy Code requires a finding, made after

notice and a hearing, that the debtors seeking postpetition financing on a secured basis cannot

"obtain unsecured credit allowable under section 503(b)(1) of [the Bankruptcy Code] as an

administrative expense." 11 U.S.C. § 364(c).

25. In evaluating proposed postpetition financing under section 364(c) of the

Bankruptcy Code, courts perform a qualitative analysis and generally consider similar factors,

including whether:

a. unencumbered credit or alternative financing without superpriority

status is available to the debtor;

b. the credit transactions are necessary to preserve assets of the estate;

c. the terms of the credit agreement are fair, reasonable, and

adequate;

d. the proposed financing agreement was negotiated in good faith and

at arm's-length and entry thereto is an exercise of sound and

reasonable business judgment and in the best interest of the

debtors' estate and its creditors; and

e. the proposed financing agreement adequately protects the

prepetition secured parties.

See, e.g., Iiz re Agz~ca Assoc., 123 B.R. 192 (Bal~lzr. E.D. Pa. 1991) (applying the first three factors

in malting a determination under section 364(c)).

21DOGS SF:I01519.3


26. For the reasons discussed below, the Debtors satisfy the standards required

to obtain postpetition financing in these cases on a secured superpriority basis as to the DIP

Collateral under sections 364(c)(1), (2), and (3) of the Bankruptcy Code.

B. The Debtors Were Unable to Obtain Financing on 11~Iore Favorable Terms

27. Under current circumstances, the Debtors are not able to obtain alternative

financing from outside parties on an unsecured or junior secured basis.

28. As outlined above, the Debtors engaged in a prepetition marketing process

in order to obtain debtor-in-possession financing. The DIP Lenders offered the best available

economic proposal under the circumstances. The DIP Lenders are unwilling to lend into the DIP

Facility except on a fully secured and first priority basis as to the Collateral.

29. The Debtors respectfully submit that their efforts to obtain postpetition

financing therefore satisfy the standard required under section 364(c) of the Bankruptcy Code.

See, e.g., ha re Slzy Valley, hzc., 100 B.R. 107, 113 (Bankr. N.D. Ga. 1988) (where few lenders

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").

C. The Proposed Financing is ~lecessary to Maximize

the Value of the Debtors' Estates

30. The Debtors seek to use the proceeds of the DIP Facility for general

working capital purposes in accordance with the Budget and in order to allow the Debtors to

maximize value tlu-ough a going concern sale process oz' other restructuring. The DIP Facility

represents the best economic alternative for a new debtor-in-possession lending arrangement.

22DOGS SF:101519.3


31. Without immediate access to the DIP Facility, the Debtors would be

forced to terminate operations and liquidate their assets, which would put all of the Debtors'

dedicated employees and various vendors at risk and irreparably damage the Debtors' efforts to

maintain going concern value and to consummate a sale or other restructuring that would

maximize value for the benefit of all constituents. Accordingly, the Debtors strongly urge the

Court to authorize the DIP Facility on the terms contemplated herein.

D. The Terms of the Proposed Financing are Fair, Reasonable, and Appropriate

32. In considering whether the terms of post~etition financing are fair and

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

the potential lender. In re Farrrzlanc~ Indus., Inc., 294 B.R. 855, 886 (Bankr. W.D. Mo. 2003);

see also Uf~secured Creditors' Comm. Mobil Oil Corp. v. First Nat'l Banlz &Trust Co. (h~ re

Ellis2gsen MacLean Oil Co.), 65 B.R. 358, 365 (W.D. Mich. 1986) (a debtor may have to enter

into hard bargains to acquire funds).

33. The terms of the DIP Loan Agreement were negotiated in good faith and

at arm's-length between the Debtors and the DIP Lenders, resulting in an agreement that is

designed to pet~rnit the Debtors to maximize the value of their assets and to effectuate an orderly

going concern sale or other restructuring process. The Debtors submit that the proposed teens of

the DIP Facility are fair, reasonable, and apps-opriate under the circumstances. See, e.g., Bray v.

She~zc~ndocalz Fed. Sciv. c~ncl Loan Ass 'i2 (ha re Snowshoe Co.), 789 F.2d 1085, 1088 (4th Cir. 1986)

(stating that section 364(4) of the Bankruptcy Code imposes no duty to seek credit from every

23rocs sr:io~s~~~.3


possible lender); Iiz re Westeriz Pacific ~iYli~zes, Irzc., 223 B.R. 567 (Banlcr. D. Colo. 1997)

(authorizing postpetition financing that would preserve the value of the debtor's assets).

E. Entry Into the Proposed I'inancin~ Reflects the Debtors' Sound Business Judgment

34. A debtor's decision to enter into a postpetition lending facility under

section 364 of the Bankruptcy Code is governed by the business judgment standard. See, e.g.,

Trans World Airlines, Ifzc. v. Ti^avelers b2t'l AG (In re TYans World Airlines, hzc.), 163 B.R. 964,

974 (Banlcr. D. Del. 1994) (approving postpetition credit facility because such facility

"reflect[ed] sound and prudent business judgment"); In re Ames Dept StoYes, Inc., 115 B.R. 34,

38 (Banlcr. S.D.N.Y. 1990) (financing decisions under section 364 of the Bankruptcy Code must

reflect a debtor's business judgment).

35. Bankruptcy courts routinely accept a debtor's business judgment on many

business decisions, including the decision to borrow money. See, e.g., Group oflT~st. h2vestors v.

Chicago, Mil., St. P. & Pc~c., 318 U.S. 523, 550 (1943) (holding that decisions regarding

assumption or rejection of leases are left to the business judgment of the debtor), I7Z l~e Simaslio

Procl. Co., 47 B.R. 444, 449 (D. Colo. 1985) ("[b]usiness judgments should be left to the board

room and not to this Court"). Further, one court has noted that "[m]ore exacting scrutiny

[of the debtors' business decisions] would slow the administration of the debtor's estate and

increase its cost, interfere with the Banla-uptcy Code's provision for private control of

administt~ation of the estate, and threaten the court's ability to control a case impartially."

Richn~oncll.,easii~g Co. v. Capital Bcanlc, N.A., 762 F.2d 1303, 1311 (5th Cir. 1985).

24rocs sr:~o~si~.~


36. Bankruptcy courts generally will defer to a debtor in possession's business

judgment regarding the need for and the proposed use of funds, unless such decision is arbitrary

and capricious, In re Curlew VczlleyAssocs., 14 B.R. 506, 511-13 (Bankr. D. Utah 1981); see

also Trczns World Airlines, Iizc., 163 B.R. at 974 (approving interim loan, receivables facility and

asset-based facility based upon prudent business judgment of the deUtor), and generally will not

second-guess a debtor in possession's business decisions involving "a business judgment made

in good faith, upon a reasonable basis, and within the scope of his authority under the Code."

Curlew Valley, 14 B.R. at 513-14 (footnotes omitted).

37. For the reasons set forth above, the Debtors' sound business judgment

clearly supports approval of the DIP Facility in order to allow the Debtors to gain access to

needed financing and thereby maximize value for all constituents through a going concern sale or

other restructuring process.

F. Section 363 of the Bankruptcy Code Authorizes

the Debtors' Use of Cash Collateral

38. Section 363(c)(2) of the Bankruptcy Code provides that adebtor- in

possession may not use cash collateral unless (A) each entity that has an interest in such cash

collateral provides consent, or (B) the court approves the use of cash collateral after- notice and a

heating. See 11 U.S.C. § 363(c). Section 363(e) of the Bankruptcy Code provides that, "on

request of an entity that has an interest in property used ... or proposed to be used ... by the

[debtor- in possession], the court ...shall prohibit or condition such use ... as is necessary to

provide adequate protection of such interest." 11 U.S.C. ~ 363(e).

25vocs si~:~oisiy.~


39. Here, the Debtors seek authority to use the Cash Collateral pursuant to the

Budget and on terms consistent with the proposed Interim Order.

40. Bankruptcy Rule 4001(b) permits a court to approve a debtor's request for

use of cash collateral during the 14-day period following the filing of a motion requesting

authorization to use cash collateral, "only ... as is necessary to avoid immediate and irreparable

harm to the estate pending a final hearing." Bankruptcy Rule 4001(b)(2). In examining requests

for interim relief under this rule, courts apply the same business judgment standard applicable to

other business decisions. See, e.g., ha re SiTnczslzo Prodz~ction Co., 47 B.R. 444, 449 (D. Colo.

1985); see also h2 Ye Afnes Dept Stores Inc., 115 B.R. 34, 38 (Banlcr. S.D.N.Y. 1990). After the

14-day period, the request for use of cash collateral is not limited to those amounts necessary to

prevent harm to the debtor's business.

41. As previously noted, in order to continue to operate their business and

maintain going concern value as part of an ongoing orderly sale or other restructuring process,

the Debtors require access to the DIP Facility and the use of Cash Collateral. Such use will

provide the Debtors with the necessary funds to fully honor all of their ongoing obligations to

employees, vendors, and customers and allow the Debtors to maximize going concern value.

The Debtors' goal is to make this bankruptcy process as seamless as possible from the

perspective of the Debtors' employees, vendors, and customers.

42. Absent access to Cash Collateral, the Debtors would face immediate and

irreparable harm. The Debtors" business would be shut down and their assets liquidated, which

would result in the teiznination of numerous employees and loss of going concel7i vahte at the

26rocs sr=:ioisi~.~


expense of the Debtors' stakeholders. Thus, immediate access to Cash Collateral is essential to

the Debtors' continued viability and ability to successfully reorganize through a going concern

sale or other restructuring process.

G. Interim Order and Final Hearin

43. Pursuant to Bankruptcy Rules 4001(b)(2) and 4001(c)(2), the Debtors

request that the Court set a date for the Final Hearing that is as soon as practicable, and fix the

time and date prior to the final hearing for parties to file objections to the Motion.

44. The urgent need to preserve going concet-n value, and avoid immediate

and irreparable harm to all of the Debtors' estates, makes it imperative that the Debtors be

authorized to access the DIP Facility and use Cash Collateral, pending the Final Hearing, in

order to continue their operations and to allow the Debtors to administer their cases. Without the

ability to make draws under the DIP Facility and use Cash Collateral, the Debtors would be

unable to meet their ongoing obligations and would be unable to fund their working capital

needs, thus causing irreparable harm to the Debtors and the value of these estates. Accordingly,

the Debtor's respectfully request that, pending the hearing nn a Final Order, the Interim Order be

approved in all respects and that the terms and provisions of the Interim Order be implemented

and be deemed binding and that, after the Final Hearing, the Final Order be approved in all

respects and the teens and provisions of the Final Order be implemented and be deemed binding.

Notice of Motion

45. The Debtors will provide notice of this Motion to the following parties, oz'

their counsel, if lazown: (a) the Office of the United States Trustee; (b) couizsel for the DIP

27DOGS S1 :101519.3


Lenders and Pre-Petition Credit Parties; (c) the Debtors' thirty largest unsecured creditors on a

consolidated basis; (d) any party of record that has asserted a lien in the Debtors' assets; and (e)

all parties who have filed a notice of appearance and request for service of papers pursuant to

Bankruptcy Rule 2002. As the Motion is seeking "first day" relief, within two business days of

the hearing on the Motion, the Debtors will serve copies of the Motion and any order entered

respecting the Motion as required by Local Rule 9013-1(m). The Debtors submit that, in light of

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

Notice with Respect to Final I~earin~

46. No trustee, examiner or statutory committee has been appointed in these

Cases. Pursuant to Bankruptcy Rule 4001, the Debtors respectfully request that they be

authorized to provide notice of the Final Hearing by serving a copy of this Motion, together with

the Interim Order, by hand or overnight mail or courier service (or for those set up to receive

electronic transmissions, by electronic transmission), upon the following parties, or their counsel,

if known: (a) the Office of the United States Trustee; (b) counsel for the DIP Lender and Pre-

Petition Credit Parties; (c) the Debtors' thirty largest unsecured creditors on a consolidated basis;

(d) any party of record that has asserted a lien in the Debtors' assets; and (e) all parties who have

filed a notice of appearance and request for service of papers pursuant to Bankruptcy Rule 2002.

The Debtors respectfully request that such notice is sufficient and ~~equest that this Court find that

no further notice of the Final Hearing and Final Order' is required.

28rocs sr:ioisi~.3


No Prior Request

47. No prior request for the relief requested herein has been made to this or

any other court.

WHEREFORE, the Debtors request entry of the Interim Order and the Final

Order under sections 105, 362, 363, and 364 of the Bankruptcy Code, Bankruptcy Rule 4001 and

Local Rule 4001-2: (a) authorizing the Debtors to incurpostpetition debt and to use cash

collateral, (b) granting liens and superpriority claims in favor of the DIP Lenders, (c) providing

adequate protection to the Pre-Petition Credit Parties, (d) modifying the automatic stay, (e)

scheduling a final hearing, and (~ granting related relief.

Dated: August 5, 2019 PACHULSKI STANG ZIEHL &JONES LLP

/s/Peter J. Keane

Jeffrey N. Pomerantz (CA Bar No. 143717)Debra I. Grassgreen (CA Bar No. 169978)Peter J. Keane (DE Bar No. 5503)

919 N. Market Street, 17`" FloorP.O. Box 8705Wilmington, DE 91899 (Courier 19801)Telephone: (302) 652-4100Facsimile: (302) 652-4400E-mail: [email protected]

[email protected]@pszjlaw.com

Proposed Attorneys, for Debtors a~~d Debtors iizPossessio~~

29rocs sr:io~siy.3


EXHIBIT A

Proposed Interim Order

DOGS SP: 101 > i )3


IN THE UNITED STATES BANKRUPTCY COURTFOR THE DISTRICT OF DEL~~"VARE

In re: Chapter 11

iPic-Gold Class Entertainment, LLC, et c~l.,~ Case No. 19-11739 (~


I~I'T~I2IIl~I ORDER: ~:~; aUTH~I~I~IN~ L~E~'T~Rc TN PnccZ.Ccj~N ~(l

(I) OBTf~IN POSTPETITION FINANCII~TG PURSUANT TO 11 U.S.C. §§ 105, 362,363, AND 364, (II) GRANT LIEi~1S AND SUPERPRIORITY CLAIMS TO

POSTPETITION LENDERS PURSUf'~NT TO 11 U.S.C. §§ 364; (III) USE CASHCOLLATERAL, AND (IV) PROVIDE ADEQUATE PROTECTION TOPREPETITION CREDIT PARTIES, (B) MODIFYING r~UTOMATICSTAY PURSUANT TO 11 U.S.C. §§ 361, 362, 363, AND 364; AND

(C) SC~IEDULING FINAL HEARING PURSUANT TO BE~NI~RUPTCYRULES 4001(B) AND (C) AND LOCE~L BANKRUPTCY RULE 4001-2

This matter is before the Court on the Motion (the "Motion") of IPIC-GOLD

CLASS ENTERTAINMENT, LLC ("IPIC Entertainment"), IPIC GOLD CLASS HOLDINGS

LLC ("IPIC Holdings"), IPIC TEXAS, LLC ("IPIC Texas"), IPIC MEDIA, LLC ("IPIC

Media"), and DELRAY BEACH HOLDINGS, LLC ("Delray Beach" and collectively with IPIC

Entertainment, IPIC Holdings, IPIC Texas, and IPIC Media, the "Debtors")~ in these chapter 11

cases (the "Chapter 11 Cases"), requesting entry of an interitn order (this "Interim Order") and a

final order (the "Final Order") pursuant to Sections 105, 361, 362, 363(c), 363(e), 364(c)(1),

364(c)(2), 364(c)(3), 364(d)(1), and 364(e) of Title 11 of the United States Code (as amended,

the ̀ Bankruptcy Code") and Rules 2002, 4001, and 9014 of the Federal Rules oP Bankruptcy

~ The Debtors in these chapter 11 cases, along with the last fo~n~ digits of each Debtors federal tax identification

number, as applicable, are: iPic-Gold Class Entertainment, LLC (4684); iPic I3ntertai~unent Inc. (9582); iPic Gold

Class Holdings LLC (6315); iPic Media, LLC (0150); iPic Texas, LLC (N/A); and Delray Beach Holdings, LLC

(1035). Tl~e Debtors' principal place of business is 433 Plaza Real, Suite 335, Boca Katon, FL 33432.

Debtor iPic EnCertainment, I~~c. is not a party to the Dll' I=acility (as defied below)

ROCS SF:I01590.7 39566/901


Procedure (as amended, the "Bankruptcy Rules"), and Rule 4001-2 of the Local Rules of

Bankruptcy Practice and Procedure for the United States Bankruptcy Court for the District

of Delaware (as amended, the "Local Bankruptcy Rules"):

(1) authorizing the Debtors to obtain post-petition financing from the Teachers'

Retirement System of Alabama, a body corporate of the State of Alabama created under Section

§§ 16-25-1 et seq., of the Alabama Code ("TRSA"), and the Employees' Retirement System of

Alabama, a body corporate of the State of Alabama created under Section §§ 16-25-1, et seq., of

the Alabama Code ("ERSA," together with TRSA, each a "DIP Lender," and collectively, the

"DIP Lenders"), consisting of a superpriority, secured revolving credit facility in the principal

amount of up to $16,000,000 (the "DIP Facility") to be used for general working capital and

liquidity purposes, including the payment of Administrative Expenses as described herein and in

that certain Debtor-hz-Possession Locziz aJzcl Security AgYeemeizt, dated August 5, 2019, by and

among the DIP Lenders, as Lenders, and the Debtors, as Borrower (substantially in the form

attached to the Motion, together with all schedules, exhibits and annexes thereto, and as any time

amended, the "DIP Loan Agreement"), of which amount $10,500,000 will be available under the

DIP Facility on an interim basis (the "Interim Amount Limit") during the Interim Period (as

defined below), on the terms and conditions set forth in the DIP Loan Documents (as defined in

the DIP Loan Agreement) end in this Interim Order;

(2) authorizing the Debtor's to execute and enter into the DIP Loan Documents

and to perform all such other and further acts as may be required ii7 connection with the DIP

Loan Documents;

(3) authorizing the Debtors to use proceeds of the DIP I'aciliry solely as expressly

peinlitted in the DIP Loan Documents and in accordance with this Interim Order;

2DOGS SP: 101590.7 39566/001


(4) granting automatically perfected (i) priming security interests in and liens on

all of the DIP Collateral (as defined below) solely with respect to the PY~e-Petition Debt and the

Pre-Petition Collateral (as defined below) and (ii) non-priming security interests in and liens on

all DIP Collateral upon which there are either pre-existing permitted senior liens or no pre-

existing liens, to the DIP Lenders to the extent provided herein, and granting superpriority

administrative expense status to the DIP Obligations (as defined below);

(5) authorizing the Debtors to use Cash Collateral (as defined below), subject to

the Interim Amount Limit during the Interim Period;

(6) providing adequate protection to the Pre-Petition Lender (as defined below) to

the extent of any diminution in value of its interests in the DIP Collateral (as defined below) and

subject to the Carve-Out (as defined below);

(6) authorizing the Debtors to pay the principal, interest, fees, expenses,

disbursements, and other amounts payable under the DIP Loan Documents as such amounts

become due and payable;

(7) vacating and modifying the automatic stay pursuant to Section 362 of the

Bankruptcy Code to the extent necessary to implement and effectuate the terms and provisions of

this Interim Order and the other DIP Loan Documents;

(8) subject only to and effective upon entry of the Final Order, waiving the

Debtors' ability to surcharge against collateral pursuant to Section 506(c) of the Bankruptcy

Code;

(9) scheduling a final hearing (the "Final Hearing") to consider entry of the Final

Order, and in connection therewith, giving and prescribing the manner of notice of the Final

Hearing on the Motio7i; and

3DOGS S1=:101590.7 3)566/001


(10) granting the Debtors such other and further relief as is just and proper.

Based upon the Court's review of the Motion, the exhibits attached

thereto, the Deelc~ratioiz of David M. Balzer in Support of First Day MotiolZs, sworn to as of

August 5, 2019 (the "First Day Declaration"), and all matters brought to the Court's attention at

the interim hearing, which was held on August [~, 2019, pursuant to Bankruptcy Rules

4001(b)(2) and (c)(2) (the "Interim Hearing"), and after due deliberation and consideration, and

good and sufficient cause appearing therefor,

IT IS HEREBY FOUND, DETEIZi~'IINED, AND ADJUDGED, that:3

1. Disposition. The Motion is hereby GRANTED, as and to the extent

provided herein. Any and all objections to the relief requested in the Motion, to the extent not

otherwise withdrawn, waived, or resolved by consent at or before the Interim Hearing, and all

reservations of rights included therein, are hereby OVERRULED and DENIED.

2. Jurisdiction; Core Proceeding. This Court has jurisdiction over these

Chapter 11 Cases, this Motion, and the parties and property affected hereby pursuant to 28

U.S.C. ~§ 157(b) and 1334. This is a "core" proceeding pursuant to 28 U.S.C. § 157(b)(2).

Venue is proper before this Court pursuant to 28 U.S.C. §§ 1408 and 1409.

3. Service of Motion and Notice of Interim Hearin. The Debtors have

caused to be served a notice of the Motion and the Interim Hearing, including a copy of the

proposed Interim Order and Budget (as defined below), by electronic mail, telecopy

tt~ansinission, hand delivery, overnight courier or first class United States mail upon the Office of

the United States Trustee (the "U.S. Trustee"), the consolidated 30 largest unsecured creditors of

the Debtor's, the Iizternal Revenue Service, all parties who have filed requests prior to the date of

' The findings and conclusions set forth herein constitute this Coiu-t's findings of fact and conclusions of

law p~n-suant to Bankruptcy Rule 7052, made applicable to this proceeding p~u-s~iant to Bankruptcy Rule 9014.

4DOGS SP:101590.7 39566/001


service for notices under .Rule 2002 of the Bankruptcy Rules, and all parties known by a Debtor

to hold or assert a lien on any asset of a Debtor. The foregoing notice of the Motion, as it relates

to this Interim Order and the Interim Hearing, is appropriate, due and sufficient under- the

Bankruptcy Code, the Bankruptcy Rules, and the Local Bankruptcy Rules, including, without

limitation, Sections 102(1) and 364 of the Bankruptcy Code and Banlcnlptcy Rule 4001(b), (c)

and (d), and that no further notice of the relief sought at the Interim Hearing and the relief

granted herein is necessary or required.

4. Petition Date. On August 5, 2019 (the "Petition Date"), each of Debtors

filed with the Court its respective voluntary petition for relief under chapter 11 of the Bankruptcy

Code, and each is continuing to manage its properties and to operate its business as a debtor-in-

possession pursuant to Sections 1107 and 1108 of the Bankruptcy Code. No trustee or examiner

has been appointed for any Debtor herein.

5. Debtors' Stipulations. Without prejudice to the rights of any other party

(but subject to the limitations thereon contained in Paragraph 26 below), each Debtor',

including Debtor iPic Entertainment, Inc., adtnits, stipulates, acknowledges and agrees as

follows:

a. Pre-Petition Loan Documents. Pursuant to that certain Seco~~r~

A~7~encled crracl Restcatec~ Master Loca~z caiz~ Seczri~ity Agreef~zei2t dated February 1, 2018, as

amended by Modification Agreement dated Tune 22, 2018, as further amended by Second

Modification Agreement dated June 29, 2018, as fiirther amended by Third Modification

Agreement dated March 4, 2019 (as so amended, the "Pre-Petition Loan Agreement"), by and

among IPIC-GOLD CLASS ENTERTAINMENT, LLC, IPIC GOLD CLASS HOLDINGS LLC,

1PIC TEXAS, LLC, IPIC MEDIA, LLC, DELRAY BEACH HOLDINGS, LLC, and BAY

5DOCS SF:10159Q7 39566/001


COLONY REALTY, LLC,4 collectively, the "Pre-Petition Obli~"), TRSA, as administrative

and collateral agent (together, the "Pre-Petition Agent"), and TRSA and ERSA as Lenders (the

"Pre-Petition Lenders," and collectively with the Pre-Petition Agent, the "Pre-Petition Credit

Parties"), made a term loan facility available to the Pre-Petition Obligors in an aggregate

principal amount not to exceed $225,828,169. The Pre-Petition Loan Agreement, together with

any other agreement, note, instrument, guaranty, mortgage, fixture filing, deed. of trust, financing

statement, pledge, assignment, and other document executed at any tirne in connection therewith,

in each case as the same may be amended, modified, restated or- supplemented from time to time,

are hereinafter referred to collectively as the "Pre-Petition Loan Documents").

b. Pre-Petition Collateral. Pursuant to certain of the Pre-Petition

Loan Documents, the Pre-Petition Obligors granted the Pre-Petition Agent, for the benefit of the

Pre-Petition Credit Parties and to secure such Pre-Petition Obligors' obligations and

indebtedness under the Pte-Petition Loan Documents, first priority liens on and security interests

in (the "Pre-Petition Security Interests") the Collateral, as defined in the Pre-Petition Loan

Agreement and Collateral Documents (hereafter, the "Pre-Petition Collateral").

c. Pre-Petition Obli at~ons. As of the Petition Date, the Pre-Petition

Obligors, jointly and severally, were justly and lawfully indebted and liable under the Pre-

Petition Loan Documents to the Pre-Petition Credit Parties fot- tei7n loans in the outstanding

principal amount of $205,340,772 (the "Pre-Petition Loans", and together with all other

obligations of any Pre-Petition Obligor in respect of indemnities, guaranties and other payment

assurances given by any Pre-Petition Obligor for the benefit of Pre-Petition Ct-edit Parties, and

all interest, fees, costs, legal expenses and all other amounts heretofore or' hereafter accruing

4 Bay Colony Kealty, LLC was dissolved prepetition and is i~ot a Debtor iu these proceedings.

6rocs sr:iois~o.~ 3~s~vioo~


thereon or at any time chargeable to any Pre-Petition Obligor in connection therewith,

collectively refen-ed to as the "Pre-Petition Debt"). Each Debtor acknowledges and stipulates

that: (i) the Pre-Petition Debt is due and owing to the Pre-Petition Credit Parties without any

defense, offset, recoupment or counterclaim of any kind; (ii) the Pre-Petition Debt constitutes the

legal, valid and binding obligation of each Pre-Petition Obligor, enforceable in accordance with

its terms;- (iii) and none of the Pre-Petition Debt or any payments made to any Pre-Petition Credit

Party or applied to the obligations owing under any Pre-Petition Loan Document prior to the

Petition Date is subject to avoidance, subordination, re-characterization, recovery, attack, offset,

counterclaim, defense or Claim (as defined in the Bankruptcy Code) of any kind pursuant to the

Bankruptcy Code or applicable non-bankruptcy law.

d. Cash Collateral. Substantially all cash, securities or other property

of the Pre-Petition Obligors (and the proceeds thet-efi-om) as of the Petition Date, including,

without limitation, all amounts on deposit or maintained by any Pre-Petition Obligor in any

account with any Pre-Petition Credit Party or any bank or other depository institution (each a

"Depository Institution"), was subject to rights of setoff oz- to valid, perfected, enforceable first-

priority liens under' the Pre-Petition Loan Documents and applicable law, and is included in the

Pre-Petition Collateral, and therefore the Pre-Petition Obligors' cash balances are cash collateral

of the Pre-Petition Credit Parties within the meaning of Section 363(a) of the Bankruptcy Code.

All such cash (including, without limitation, all pi-oceeds of Pre-Petition Collateral and all

proceeds of pt-operty encumbered by liens and security interests granted under this Interim

Order-), is referred to herein as "Cash Collateral."

e. Releases. Subject to Paragraph 26 below, the DeUtors hereby

absolutely, unconditionally and irrevocably waive, discharge and release each of the Pre-Petition

7uocs sr:~o~s~o.~~<~s~~~iooi


Credit Parties of and from any and all "Claims" (as defined in the Bankruptcy Code),

counterclaims, actions, debts, accounts, causes of action (including, without limitation, causes of

action in the nature of "lender liability"), defenses or setoff rights that any of them may have

against any Pre-Petition Credit Party or any of the respective present and former predecessors,

successors, assigns, affiliates, members, partners, managers, current and former equity holders,

officers, agents, employees, attorneys and affiliates of any Pre-Petition Credit Party which arise

out of or in any manner relate to any of the Pre-Petition Loan Documents or any acts, inaction, or

transactions thereunder, whether known or unknown, disputed or undisputed, at law or in equity,

including, without limitation, (i) any re-characterization, subordination, avoidance or other claim

arising under' or pursuant to section 105 or chapter 5 of the Bankruptcy Code or under' any other

similar provisions of applicable state law, federal law or municipal law and (ii) any right or basis

to challenge or object to the amount, validity or enforceability of the applicable Pre-Petition Debt

or any payments made on account of the applicable Pre-Petition Debt, or the validity,

enforceability, priority or non-avoidability of the applicable Pre-Petition Security Interests

securing the applicable Pre-Petition Debt.

f. Need for Financing. An immediate and ongoing need exists for the

Debtors to obtain the DIP Facility in order to permit, among other things, the orderly

continuation of the operation of their business, to maintain business relationships with vendors,

suppliers and customers, to pay payroll obligations, and to satisfy other working capital,

development, and operational needs so as to maximize dle value of their respective businesses

and assets as debtors in possession under chapter 11 of the Banla-uptcy Code. The Debtors

do not have sufficient available resources of working capital to operate their businesses in the

ordinary course without host-petition ~rinancing. The Debtors' ability to continue growth,

8DOGS SF.101590.7 39566/001


maintain business relationships with vendors and customers, to pay employees, and otherwise to

fund operations is essential to the Debtors' viability and to the preservation of the going concern

value of their businesses pending a sale of their assets.

6. Findings Re a~rdin~ the DIP Facility.

a. Good Cause. Good cause h1s been shown for the entry of this

Interim Order and authorization for the Debtors to incur DIP Obligations pursuant to the DIP

Loan Agreement and use Cash Collateral as hereinafter provided up to the Interim Amount Limit

during the Interim Period. Each Debtor's need for financing of the type afforded by the DIP

Loan Agreement and the use of Cash Collateral is immediate and critical. Entry of this Interim

Order will preserve the assets of each Debtor's estate and its value and is in the best interests of

Debtors, their creditors and their estates. The terms of the proposed financing are fair and

reasonable, reflect each Debtor's exercise of business judgment, and are supported by reasonably

equivalent value and fair consideration.

b. Proposed DIP Facility. The Debtors have requested that the DIP

Lenders establish the DIP Facility pursuant to which the Debtors may obtain loans fi~om time to

time (the "DIP Loans", and collectively with all other debts, obligations, liabilities and

indemnities of the Debtors under the DIP Loan Documents, the "DIP Obli ate"), all in

accordance with and subject to the terms of the DIP Loan Docume~its, with all DIP Obligations

being secured by all real and personal property of the Debtors, wherever located and whether

created, acquired or arising prior to, on or after the Petition Date. The DIP Lenders are willing to

establish the DIP Facility upon the terilis and conditions set forth herein and in the DIP Loan

Agreement, substantially in the form attached to the Motion, and the other DIP Loan Documents.

9llocs sr:iois9o.~ ~9s~viooi


c. No Credit Available on More Favorable Terms. Despite diligent

efforts, the Debtors have been unable to obtain financing on more favorable terms from sources

other than DIP Lenders under the DIP Loan Documents and are unable to obtain adequate

unsecured credit allowable under Section 503(b)(1) of the Bankruptcy Code as an administrative

expense. The Debtors 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 granting priming liens under

Section 364(d)(1) of the Bankruptcy Code and the Superpriority Claims (as defined in Paragraph

10 below) under the terms and conditions set forth in this Interim Order and in the DIP Loan

Documents.

d. Budget. The Debtors have prepared and annexed to this Interim

Order as Exhibit 1 hereto a budget (as at any time amended or supplemented with the written

consent of the DIP Lenders, the "Budget") which sets forth, among other things, the projected

cash receipts and disbursements for the periods covered thereby and which the Debtors believe in

good faith to be realistic and achievable. The DIP Lenders are relying upon the Budget in

entering into the DIP Loan Agreement and Pre-Petition Credit Parties are relying upon the

Budget in consenting to the teens of this Interim Order. The Debtors shall provide the DIP

Lenders with an updated 13-week Budget commencing on the first Wednesday following the end

of the fourth (4th) Loan Weelc (as defined in the DIP Loan Agreement), and on each Wednesday

thereafter, which shall be subject to the approval requirements in the DIP Loan Documents.

Commencing on the first Wednesday following the end of the fourth (4th) Loan Week and

continuing on each Wednesday thereafter, the Debtors shall deliver to flee DIP Lenders (i) a

comparison of actual to budgeted results of operatiarls for the preceding four (4) Loan Weeks,

and (ii) a report of all income and expense variance on a line-item basis for the preceding four

lUDOGS S1~:101590.7 39566/001


(4) Loan Weeks. All references restricting the use of Cash Collateral and DIP Loan proceeds to

payment of amounts set forth in the Budget shall mean the most recent approved Budget,

subject to the "Permitted Variance" and "Permitted Variance Exception" (each as defined in

the DIP Loan Documents).

e. Certain Conditions to DIP Facility. The DIP Lenders' willingness

to make DIP Loans pursuant to the DIP Loan Documents, and the Pre-Petition Credit Parties'

willingness to allow Debtors to use Cash Collateral, is conditioned upon, among other things,

(i) the Debtors' obtaining Court approval of the DIP Loan Agreement and all DIP Obligations of

the Debtors and all rights and remedies of DIP Credit Parties thereunder; (ii) the Debtors'

provision of adequate protection for Pre-Petition Credit Parties' interests in the Pre-Petition

Collateral pursuant to Sections 361 and 363(e) of the Bankruptcy Code; and (iii) each DIP

Lender receiving, as security for the prompt payment of all DIP Obligations, a security interest in

and lien upon all of each Debtor's pre-petition and post-petition real and personal property,

including, without limitation, all of each Debtor's cash, accounts, inventory, equipment, fixtures,

general intangibles, documents, instruments, chattel paper, deposit accounts, letter-of-credit

rights, commercial tort claims, investment property, intellectual property, real property and

leasehold interests, contract rights, and books and records relating to any assets of such Debtor

and all proceeds (including, without limitation, insurance proceeds) of the foregoing, whether

such assets were in existence on the Petition Date or were thereafter created, acquired or arising

and wherever located (all such real and personal property, including, without limitation, all Pre-

Petition Collateral and the proceeds thereof, being collectively hereinafter refen-ed to as the "DIP

Collateral"), aild (iii) that such security interests and liens have the priorities hereinafter set forth.

Notwithstanding the foregoing, pending entry of the Final Order, the DIP Collateral shall not

DOGS SP:101590.7 39566/001


include a lien upon and security interest in any of Debtors' claims and causes of action pursuant

to Sections 502(d), 544, 545, 547, 548, 549, 550, 551 and 553 of the Blnlcruptcy Code

("Avoidance Claims") or any proceeds or other property ("Avoidance Proceeds") recovered in

connection with the successful prosecution, settlement or collection of any Avoidance Claims.

£ Interim Hearin. Pursuant to Bankruptcy Rules 4001(b)(2) and

(c)(2) and Local Bankruptcy Rule 4001-2, the Court has held the Interim Hearing and hereby

authorizes Debtors to use Cash Collateral and obtain DIP Loans during the period from the date

of entry of this Order through the date on which the final hearing on the Motion pursuant to

Bankruptcy Rules 4001(b)(2) and (c)(2) scheduled pursuant to Paragraph 32 of this Interim

Order is concluded (the "Interim Period"), for purposes specified in the initial Budget.

g. Finding of Good Faith. Based upon the record presented at the

Interim Hearing, the DIP Facility and the Debtors' use of Cash Collateral were negotiated in

good faith and at arm's-length between the Debtors, on the one hand, and the DIP Lenders and

Pre-Petition Credit Parties, nn the other. All of the DIP Obligations including, without

limitation, all DIP Loans made pursuant to the DIP Loan Agreement and all other liabilities and

obligations of any Debtors under this Interim Order owing to the DIP Lenders and the Pre-

Petition Credit Parties, as applicable, including the Debtors' use of Cash Collateral, shall be

deemed to have been extended by the DIP Lenders and the Pre-Petition Credit Parties in "good

faith," as such 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. The DIP Lenders and

the Pre-Petition Credit Parties shall be entitled to the fiill 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.

12DOCS SF:101~9U.7 39566/001


h. Immediate Entry. 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. Absent granting the interim relief sought by the Motion, each Debtor's estate

will be immediately and irreparably harmed pending the Final Hearing. The Debtors'

consummation of the DIP Facility in accordance with the terms of this Interim Order and the DIP

Loan Agreement and each Debtor's immediate access to Cash Collateral is in the best interest of

each Debtor's estate and is consistent with each Debtor's exercise of its fiduciary duties. Under

the circumstances, the notice given by the Debtors of the Motion and the Interim Hearing

constitutes due and sufficient notice thereof and complies with Bankruptcy Rules 4001(b) and (c)

and the Local Rules. No further notice of the relief sought at the Interim Hearing is necessary or

required.

7. Authorization of Interim Financing; Use of Proceeds.

a. The Court hereby authorizes and approves the Debtors' execution

and delivery of the DIP Loan Agreement in substantially the foi~n annexed to the Motion (with

such changes, if any, as were made prior to or as a result of the Interim Hearing or are otherwise

authorized to be made as amendments to the DIP Loan Agreement in accordance with this

Interim Order) and all DIP Loan Documents.

b. The Debtors are hereby authorized to borrow money pursuant

to the DIP Loan Documents, on the terms and subject to the conditions, lending fot~rnulae and

sub-limits set forth in any DIP Loan Document and this Interim Order, up to an aggregate

outstanding principal amount at any time not exceeding the sum of $10,500,000, plus applicable

interest, protective advances, expenses, lees and other charges payable in connection with such

DIP Loans, and to incur- any and all liabilities and obligations under the DIP Loan Documents

13DOCS SF:101590.7 3)66/001


and to pay all principal, interest, fees, expenses and other' obligations provided for under the DIP

Loan Documents (including any obligations, to the extent provided for in the DIP Loan

Documents, to indemnify the DIP Lenders).

c. No DIP Lender shall have any obligation or responsibility to

monitor any Debtor's use of the DIP Loans, and each DIP Lender may rely upon each Debtor's

representations that the amount of DIP Loans requested at any time, and the use thereof, are in

accordance with the requirements of this Interim Order, the DIP Loan Documents, and

Bankruptcy Rule 4001(e)(2).

d. No proceeds of any DIP Loan shall be used to (i) make any

payment in settlement or satisfaction of any pre-petition claim (excluding the Pre-Petition Debt)

or administrative claim (excluding the DIP Obligations), unless such payment is in compliance

with the Budget, permitted under the DIP Loan Documents, and separately approved by the

Court upon notice to, and no formal objection having been timely filed with the Court by, the

DIP Lenders; (ii) except as expressly provided or permitted hereunder, to make any distributions

not in compliance with the Budget, or as otherwise approved by the DIP Lenders, including

without limitation, to male any payment or distribution to any non-Debtor affiliate, equity

holder, or insider of any Debtor; or (iii) to make any payment otherwise prohibited by this

Interim Order.

8. Execution Delivery and Performance of DIP Loan Documents. The DIP

Loan Documents may be executed and delivered on behalf of each Debtor by any officer,

director, or agent of such Debtor, who by signing shall be deemed to represent himself or herself

to be duly authorized and empowered to execute the DIP Loan Documents for and on behalf of

such Debtor. The DIP Lenders shall be autl~or-ized to rely upon any such person's execution and

14rocs sr:iois~o.~>>>~~~ioo~


delivery any of the DIP Loan Documents as having been done with all requisite power and

authority so to do, and the execution and delivery of any of the DIP Loan Documents or

amendments thereto by any such person on behalf of such Debtor shall be conclusively presumed

to have been duly authorized by all necessary corporate, limited liability company, or other entity

action (as applicable) of such Debtor. Upon execution and delivery thereof, each of the DIP

Loan Documents shall constitute valid and binding obligations of each Debtor, enforceable

against each Debtor in accordance with their tennis for all purposes during its Chapter 11 Case,

any subsequently converted case of such Debtor under Chapter 7 of the Bankruptcy Code (each,

a "Successor Case"), and after the dismissal of its Chapter 11 Case with respect to those

provisions of the DIP Loan Documents which expressly survive the Termination Date and any

such dismissal. Subject to Paragraph 26 of this Interim Order, no obligation, payment, transfer

or grant of security under the DIP Loan Documents or this Interim Order- shall be stayed,

restrained, voidable, avoidable or recoverable under the Bankruptcy Code or under any

applicable non-bankruptcy law (including, without limitation, under Sections 502(d), 544, 548 or

549 of the Bankruptcy Code or under any applicable state Uniform Fraudulent Transfer Act,

Uniform Fraudulent Conveyance Act or similar statute or common law), or subject to any

defense, reduction, setoff, recoupment or counterclaim. In furtherance of the provisions of

Paragraph 7 of this Interim Order, each Debtor is authorized to do and perform all acts; to make,

execute and deliver all instruments and documents (including, without limitation, security

agreements, pledge agreements, mortgages, deeds of trust, deeds to secure debt, financing

statements, amendments, waivers, consents, other modifications, and intellectual property

filings); and to pay all reasonably fees, costs and expenses in each case as may be necessary or,

in the opinion of either- DIP Lender, desirable to give effect to any of the terms and conditions of

15DOCS SI=:101 790.7 39566/001


the DIP Loan Documents, to validate the perfection of the DIP Liens (as defined below), or as

may otherwise be required or contemplated by the DIP Load Documents.

9. DIP Liens. As security for Debtors' payment and performance of all DIP

Obligations, each DIP Lender shall have and is hereby granted valid, binding, enforceable, non-

avoidable and automatically and properly perfected security interests in and liens upon all of the

DIP Collateral, subject to the provisions in Paragraph 9(d) (collectively, the "DIP Liens") and in

the priorities set forth herein. Subject to the provisions of Paragraph 26 hereof and the Carve-

Out and any break-up fees and expense reimbursement obligations of the Debtors approved by

the Court with respect to the APA (as defined in the DIP Loan Agreement), the DIP Liens shall

be:

a. Unencumbered Property. Pursuant to Section 364(c)(2) of the

Banl~-uptcy Code, valid, binding, continuing, enforceable, fully perfected, first priority senior

liens on, and security interests in, all DIP Collateral that is not otherwise subject to valid,

perfected, enforceable and unavoidable liens on the Petition Date, or to any valid, perfected and

unavoidable interests in such property arising out of liens arising subsequent to the Petition Date

as pei~rnitted Uy section 546(b) of the Bankruptcy Code.

U. Liens Junior to Certain Other Liens. Pursuant to Section 364(c)(3)

of the Bankruptcy Code, junior only to valid, binding, perfected and unavoidable interests of any

other parties arising out of liens, if any, on such property existing immediately prior to the

Petition Date that were senior in priority to the liens of the Pre-Petition Credit Parties, or to any

valid, perfected and unavoidable interests in such property arising out of liens arising subsequent

to the Petition Date as permitted by section 546(b) of the Bankruptcy Code that are senior in

priority to the liens of the Pre-Petition Credit Parties.

16~~ocs sr:iois<~a~3~svbioo~


c. Priming DIP Liens. Pursuant to Section 364(d)(1) of the

Bankruptcy Code, valid, binding, continuing, enforceable, fully perfected security interests in

and liens upon the DIP Collateral, which security interests and liens shall be prior and senior in

all respects to (i) the security interests and liens in favor of Pre-Petition Credit Parties with

respect to the Pre-Petition Collateral, and (ii) the Adequate Protection Liens (as defined below)

with respect to the Pre-Petition Collateral.

d. Liens Senior to Certain Other Liens. The DIP Liens and the

Adequate Protection Liens, aside from the Carve-Out and unless the Adequate Protection Liens

are successfully challenged pursuant to Paragraph 26 below, shall not be (i) subject or

subordinate to (A) any lien or security interest that is avoided and preserved for the benefit of

any Debtor or its estate under Section 551 of the Bankruptcy Code, (B) any liens or security

interests granted by any Debtor to other pet-sons or entities after the Petition Date, or (C) any

intercompany or affiliate liens or security interests of the Debtors; (ii) subordinated to or made

pc~ri pcassu with any other- lien or security interest under Section 363 or 364 of the Bankruptcy

Code or otherwise; or (iii) subject to Sections 510, 549 or- 550 of the Bankruptcy Code. In no

event shall any person or entity who pays (or, through the extension of credit to any Debtor,

causes to be paid) any of the DIP Obligations or the obligations and indebtedness of the Pre-

Petition Credit Parties, be subrogated, in whole or in part, to any rights, remedies, claims,

privileges, liens or security interests granted to or' in favor of, or conferred upon, any DIP Lender

by the terms of any DIP Loan Documents or this Interim Order unless such person or entity

contemporaneously causes Full Payment of the Pre-Petition Debt owed to such DIP Lender to be

made.'

' As Wised herein, the term "Full Payment," as applied to llIP Obligations or Pre-Petition Debt, shall mean full and

final payme~~t of such indebtedness in cash, the cash collateralization of any contingent obligations as and to the

17DOGS SP:101 X90.7 39566/001


10. Superpriority Claims. All DIP Obligations shall constitute joint and

several allowed supetprioi~ity claims (the "Superiority Claims") against each Debtor (without the

need to file any proof of claim) pursuant to Section 364(c)(1) of the Bankruptcy Code having

priority in right of payment over all other obligations, liabilities and indebtedness of each Debtor,

whether- now in existence or hereafter incurred by any Debtor, and over any and all

administrative expenses of the kind specified in sections 503(b) and 507(b) of the Bankruptcy

Code, and over any and all administrative expenses or other claims arising under Sections 105,

326, 328, 330, 331, 503(a), 503(b), 506(c) (subject to entry of the Final Order approving the

grant), 507, 546(c), 552(b) 726, 1113 or 1114 of the Bankruptcy Code. Such 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 shall be

payable from and have recourse to all pre-petition and post-petition property of Debtors and all

proceeds thereof; provided, however•, that the Superpriority Claims shall be subject to the Carve-

Out (as defined below) and any break-up fees and expense reimbursement obligations of the

Debtors approved by the Court with respect to the APA (as defined in the DIP Loan Agreement);

and pirovicled, however, that to the extent Adequate Protection Claims that ate entitled to

superpriority administrative status are payable out of Avoidance Claims and Avoidance

Proceeds, such payment shall be subject to entry of the Final Order.

11. Repayment. The DIP Obligations shall be due and payable, and shall be

paid, as and when provided in the DIP Loan Documents end as provided herein, without offset or

counterclaim. Without limiting the generality of the foregoing, in no event shall any Debtor be

extent required by the applicable loan documents, termination of any coinmillnents to lend under any of tl~e

applicable loan documents, expiration of the Challenge Deadline (as defnied below) without a challenge having

been timely asserted, and, in the case of the DIP Obligations, terminatio~~ of the DIP Facility.

18DOGS 51=:101 90.7 39766/001


authorized to offset or recoup any amounts owed, or allegedly owed, by any Pre-Petition Credit

Party or any DIP Lender to any Debtor or any of its respective subsidiaries or affiliates against

any of the DIP Obligations without the prior written consent of each Pre-Petition Credit Party or

DIP Lender that would be affected by any such offset or recoupment, and no such consent shall

be implied from any action, inaction or acquiescence by any Pre-Petition Credit Party or DIP

Lender.

12. Use of Cash Collateral. The Debtors are authorized, by this Interim Order,

subject to the terms and conditions of the DIP Loan Documents and the Interim Order, to use all

Cash Collateral, including, without limitation, any Cash Collateral on which the Pre=Petition

Credit Parties hold a lien, to fund any post-petition cost or expense incurred by the Debtors to the

same extent that the use of DIP Loan proceeds would be permitted to fund such cost or expense

under the terms of the DIP Loan Agreement and subject to the Budget; provided, however, that

no Cash Collateral shall be used in a manner that would be a Prohibited Purpose (as cie~ned

herein). The Debtors' right to use Cash Collateral, other than the Carve-Out, shall terminate

automatically on the Termination Date as defined in the DIP Loan Agreement. Notwithstanding

the foregoing, the Debtors' right to use Cash Collateral shall immediately terminate without

notice from the DIP Lenders or the Pre-Petition Credit Parties at the time that any Debtor has

actual knowledge of the existence of an Event of Default if the Debtors fail to promptly notify

the DIP Lenders and the Pre-Petition Credit Parties of such Event of Default. Prior to the

Termination Date, the Debtors and the DIP Lenders and/or Pre-Petition Credit Parties shall

negotiate in good faith regarding the terms of the Debtors' continued use of Cash Collateral to

wind-down the estates.

1)rocs sr:iois~~o.~~~s~vioo~


13. Adequate Protection ofPre-Petition Credit Parties. As adequate protection

for any Collateral Diminution (as defined below) suffered by any Pre-Petition Credit Party, the

Pre-Petition Agent is entitled, pursuant to Sections 105, 361, 363(e) and 364 of the Bankruptcy

Code, to adequate protection of its interests in the Pre-Petition Collateral in an amount equal to

the Collateral Diminution (the "Adequate Protection Claims"). As used in this Interim Order,

"Collateral Diminution" shall mean an amount equal (and limited) to the aggregate diminution

of the fair market value of any of the Pre-Petition Collateral (including Cash Collateral) from

and after the Petition Date for any reason provided for in the Bankruptcy Code, including,

without limitation, any such diminution resulting from the Carve-Out, the use of Cash Collateral,

the priming of the Pre-Petition Agent's security interests in and liens on the Pre-Petition

Collateral by the DIP Liens pursuant to the DIP Loan Documents and this Interim Order, the

depreciation, sale, loss or use by any Debtor (or any other- decline in value) of such Pre-Petition

Collateral, the amount of any fees and expenses paid to retained professionals in these Chapter

11 Cases, in accordance with the Budget, and the imposition of the automatic stay pursuant to

Section 362 of the Bankruptcy Code. The Pre-Petition Agent is hereby granted, subject to the

Carve-Out and the rights of third parties preserved under Paragraph 26 and solely to the extent of

any Collateral Diminution, the following for the benefit of Pre~Petition Credit Parties:

a. Adequate Protection Liens. The Pre-Petition Agent, for the benefit

of the Pre-Petition Credit Parties, is hereby granted (effective and perfected upon the date of this

Interim Order and without the necessity of the execution by any Debtor of security agreements,

pledge agreements, inoi-tgages, financing statements or other agreements) valid, perfected

replacement security interests in and liens on all of the DTP Collateral (the "ndec~uate Protection

Liens"). The Adequate Protection Liens on DIP Collateral shall be junior and subordinate only

2UDOGS SP:101590.7 39566/001


to the DIP Liens, the Carve-Out, and any break-up fees and expense reimbursement obligations

of the Debtors approved by the Court with respect to the APA (as defined in the DIP Loan

Agreement). The Adequate Protection Liens shall not be subject to Sections 506(c) (effective

upon entry of the Final Order), 510, 549, or 550 of the B~nlauptcy Code, and unless otherwise

ordered by the Court, no lien avoided and preserved for the benefit of any estate pursuant to

Section 510 of the Bankruptcy Code shall be made pczri passu with or senior to any Adequate

Protection Liens.

b. Priority of Adequate Protection Claims. The Adequate Protection

Claims, if any, will be allowed as superpriority administrative claims pursuant to Sections 503(b)

and 507(b) of the Bankruptcy Code, which, subject to the Superpriority Claims, the Carve-Out,

and any break-up fees and expense reimbursement obligations of the Debtors approved by the

Court with respect to the APA (as defined in the DIP Loan Agreement), shall have priority in

payment over any and all administrative expenses of the kinds specified or ordered pursuant to

any provision of the Bankruptcy Code, including, without limitation, Sections 105, 326, 328,

330, 331, 503(b), 506(c) (subject to entry of the Final Order), 507(a), 507(b), 546, 726, 1113 or

1114 of the Bankruptcy Code, which shall at all times be senior to the rights of each Debtor, and

any successor trustee or any creditor in these Chapter 11 Cases or any subsequent proceedings

under the Banla-iiptcy Code, provided, I2oweve~~, that the Adequate Protection Claims entitled to

superpriority administrative status shall only be payable out of Avoidance Claims and Avoidance

Proceeds subject to entry of the Final Order.

c. Fees and E~enses of Professionals for Pre-Petition Credit Parties.

As additiarial adequate protection, the Debtors shall pay (i) the reasonable and documented

professional fees and expenses (including, but not limited to, the fees and disbursements of

21DOCS Sl=: ] 01590.7 39566/00


counsel, third-party consultants, financial advisors, and auditors) payable to or incurred by any

Pre-Petition Credit Party under and pursuant to the Pre-Petition Loan Documents arising prior to

the Petition Date, and (ii) on a current basis, the reasonable and documented professional fees

and expenses (including, but not limited to, the fees and disbursements of counsel, third-party

consultants, including financial consultants, and auditors) payable to or incurred by any Pre-

Petition Credit Party under and pursuant to the Pre-Petition Loan Documents arising on or

subsequent to the Petition Date, in each case in compliance with the Budget. At the option of the

Pre-Petition Credit Parties, all such amounts may be added to the Pre-Petition Debt in lieu of

current payment thereof by the Debtors. Notwithstanding the foregoing, no payments shall be

made by the Debtors on account of any professional fees and expenses of aPre-Petition Credit

Party until each relevant professional has provided copies of its fee and expense statements to the

U.S. Trustee and counsel to any official committee appointed in the Debtors' case (the

"Committee") reasonably contemporaneously with the delivery of such fee and expense

statements to the Debtors. Such statements need not be submitted in the form of a fee

application or comply with U.S. Trustee fee guidelines, but shall contain reasonable detail as to

the number of hours worked and applicable hourly rates, but may be redacted to the extent

necessary to delete any information subject to attorney-client privilege, any infot~mation

constituting attorney work product or any other confidential information, and the provision of

such invoices shall not constitute any waiver of the attorney-client privilege or any benefits of

the attorney work product doctrine. The U.S. Trustee, any Committee or any other party in

interest may object to the reasonableness of the fees, costs and expenses included in any

professional fee invoice subi7~itted hereunder, provided that, any such objectioi7 shall be forever

waived and barred unless (i) it is filed with this Court and served oii counsel to the parties

22DOCS SF:101590.7 39~6G/(~01


seeking reimbursement no later than ten (10) days after the objecting parties receive such

applicable professional lee invoice, and (ii) it describes with particularity the items and

categories of fees, costs and expenses that at-e subject to the objection and it provides for a

specific basis for the objection to each such item of category of fees, costs and expenses;

provided, howeveY, that the Debtors shall pay all amounts that are not subject of any objection

within ten (10) days of the objection deadline. Any hearing on an objection to any payment of

any fees, costs and expenses of such professionals shall be limited to the reasonableness of the

particular items or categories of fees, costs, and expenses which are the subject to such objection.

Notwithstanding the foregoing, immediately upon entry of this Interim Order, the Debtors are

authorized to pay all reasonable and documented fees, costs and out-of-pocket expenses of the

DIP Lenders and the Pre-Petition Credit Parties incurred on or prior to the date of entry hereof.

d. Reservation of Rim. Nothing herein shall be deemed to be a

waiver by any Pre-Petition Credit Party of its right to request additional or further protection of

its interests in any Pre-Petition Collateral, to move for relief from the automatic stay, to seek the

appointment of a trustee or examiner for any Debtor or the conversion or dismissal of any of

these Chapter 11 Cases, or to request any other relief in these cases; nor shall anything herein or

in any of the DIP Loan Documents constitute an admission by aPre-Petition Credit Party

regarding the quantity, quality ar value of any DIP Collateral securing the Pre-Petition Debt ar'

constitute a finding of adequate protection with respect to the interests of Pre-Petition Agent in

any DIP Collateral. Pre-Perition Credit Parties shall be deemed to have reserved all eights to

assert entitlement to the ~~rotections and benefits of Section 507(b) of the Banla~u~tcy Code in

coruicction with any use, sale, encumbering oz' other disposition of any of the DIP Collateral, to

23DOGS SP:101590.7 3) 66/001


the extent that the protection afforded by this Interim Order to Pre-Petition Agent's interests in

any DIP Collateral proves to be inadequate.

14. Payments Free and Clear. Any and all payments or proceeds remitted (a)

to the DIP Lenders or (b) subject only to the potential challenges by third-parties as permitted but

limited by Paragraph 26 below, to Pre-Petition Agent on behalf of any Pre-Petition Credit Party,

in each case pursuant to the provisions of this Interim Order or any subsequent order of this

Court, shall be 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 entry of the Final Order approving the grant) or the

"equities of the case" exception of 552(b) of the Bankruptcy Code (subject to entry of the Final

Order).

15. Fees and Expenses of Estate Professionals. Subject to the terms of the

DIP Loan Agreement and the Budget, for so long as no Event of Default has occurred, each

Debtor is authorized to use DIP Loans to pay such compensation and expense reimbursement

(collectively, "Professional Fees") of professional persons (including attorneys, financial

advisors, accountants, investment bankers, claims and/or noticing agents, appraisers, and

consultants) retained by any Debtor with Court approval or as an ordinary course professional

(the "Debtors Professionals") ar the Committee wifli Court approval (the "Committee

Professionals," collectively with the Debtors Professionals, the "Professionals"), to the extent

that such compensation and expense reimbursement is allowed and approved by the Court, other

than with respect to ordinary course professionals of the Debtors (including through any interim

compensation p7-ocedures approved by the Court); proviclecl, however, that, notwithstanding

anything herein ar in any other orde3- of this Court to the contrary, no proceeds of any DIP Loans

24DOGS S7~:101590.7 3)566/001


or any Cash Collateral shall be used to pay Professional Fees incurred for any Prohibited Purpose

(as defined below).

16. Section 506(c) Claims. Effective upon entry of the Final Order, no costs

or expenses of administration shall be imposed upon any DIP Lender, any Pre-Petition Credit

Party or any of the DIP Collateral pursuant to Section 506(c) of the Bankruptcy Code or

otherwise without the prior written consent of such DIP Lender or Pre-Petition Credit Party, and

no such consent shall be implied from any action, inaction or acquiescence by any DIP Lender or

Pre-Petition Credit Party, provided that the following administrative expenses are fully funded

by the Debtors consistent with the Budget: (a) the Carve-Out and (b) all expenses that are

accrued and unpaid through the date of an Event o~ Default under the line items in the Budget

designated as "Payroll Costs," "Sales Taxes" and "PACA/PASA Claims."

17. Carve-Out. Notwithstanding anything in this Interim Order, any DIP Loan

Documents, any Pre-Petition Loan Documents, or any other order of this Court to the contrary,

the DIP Obligations, the DIP Liens and Superpriority Claims in favor of the DIP Lenders, the

Adequate Protection Liens in favor of the Pre-Petition 1~gent, the Adequate Protection Claims in

favor of the Pre-Petition Credit Parties, and the Pre-Petition Debt and the Pre-Petition Security

Interests in favor- of the Pre-Petition Credit Parties shall be subject and subordinate in all respects

to the payment of the following Carve-Out. As used in this Interim Order, the "Carve-Out"

means the sum of (a) all fees required to be laid pursuant to 28 U.S.C. § 1930(a)(6) and any fees

payable to the Clerk of the Bankruptcy Court, (b) all of the reasonable fees and expenses from

time to time incun~ed by each Professional retained ~by the Debtors and the Committee (amounts

set forth in the Budget are specific to each Professional and Inay be rolled over to subsequent

weeks), including any fees earned by PJ Solomon Securities, LLC ("PJS") as investment banker

25ROCS S1 :101590.7 39566/001


for the Debtors that are approved by this Court, that are (i) incurred prior to the date of delivery

of a Default Notice (as defined below) (except in the case of any fees earned by PJS, which shall

be included in the Carve-Out whenever incurred), and (ii) included in an approved Budget

(except in the case of any fees earned by PJS, which shall be included in the Carve-Out in the

amount approved by this Court), and (c) a maximum of $250,000 for all of the reasonable fees

and expenses from time to time incurred by Professionals retained by Borrower (other than PJS,

which is addressed above) that are incurred from and after the date of delivery of a Default

Notice; provided; that nothing in this Interim Order shall be construed to impair the ability of any

party to object to the fees, expenses, reimbursements or compensation of any Professional,

whether or not in excess of the coverage provided by the Carve-Out. In no event shall the Carve-

Out, or the funding of the DIP Loans to satisfy the Carve-Out, result in any reduction in the

amount of the DIP Obligations or the Pre-Petition Debt. Pt~ior to the date of delivery of a Default

Notice: (A) an atnount sufficient to pay the Carve-Out for Professional Fees may be funded by

the Debtors on a weekly basis into a trust account held by Debtors' counsel (the "Professional

Fee Trust Account") in accordance with the approved Budget, (B) the Debtors shall be permitted

to borrow under the DIP Loan Agreement to fund the Professional Fee Trust Account in the

amounts contemplated under clause (b) above, and (C) the Debtors shall be permitted to pay,

from the Professional Fee Trust Account, as and when the same may become clue and payable,

the allowed Professional Fees of each Professional. Following the date of delivery of a Default

Notice, the Debtors shall be permitted to fund the Professional Fee Trust Account in the amount

of $250,000 contemplated under clause (c) above. All amounts funded by the Debtors to the

Professional Fee Trust Account shall continue to constitute DIP Collateral. Any excess amounts

26ROCS SI=:Ib1590.7 39566/001


remaining in the Professional Fee Trust Account after payment of the Carve-Out for

Professionals shall be refunded to the Debtors and shall remain DIP Collateral.

18. Excluded Professional Fees. Notwithstanding anything to the contrary in

this Interim Order, neither the Carve-Out, nor the proceeds of the DIP Facility in any respect,

including without limitation any DIP Loans, Cash Collateral ar DIP Collateral, shall be used to

pay any Professional Fees or any other fees or expenses incurred by any Professional in

connection with any of the following (each a "Prohibited Purpose"): (a) objecting to or

contesting the validity or enforceability of this Interim Order, any DIP Obligations or Pre-

Petition Debt, provided that the Committee may spend up to $25,000 (the "Investigation

Budget") for the fees and expenses incurred in connection with the investigation of, but not the

litigation, objection or any challenge to, any Pre-Petition Security Interest, Pre-Petition Debt, or

Pre-Petition Loan Documents; (b) asserting or prosecuting any claim or cause of action against

any DIP Lender or any Pre-Petition Credit Party, other than to enforce the terms of the DIP

Facility or this Interim Order; (c) seeking to modify any of the rights granted under this Interim

Order to any DIP Lender or any Pre-Petition Credit Party; or (d) objecting to, contesting,

delaying, preventing or interfering in any way with the exercise of rights and remedies by any

DIP Lender or Pre-Petition Credit Party with respect to any DIP Collateral or Pre-Petition

Collateral after the occurrence and during the continuance of an Event of Default, provided that

the Debtors may contest or dispute whether an Event of Default has occurred and shall be

entitled to any notice provisions provided in this Interim Order.

19. Preservation of Rights Granted Under This Interim Order.

a. Protection frarn Subsequent Financing. The7-e shall not be

entered in any of these Chapter ll Cases or in any Successor Case any order that authorizes the

27ROCS 51=:1015)Q7 39566/001


obtaining of credit or the incurrence of indebtedness by any Debtor (or any trustee. or examiner)

that is (i) secured by a secut-ity interest, mortgage or collateral interest or lien on all or any part of

the DIP Collateral that is equal or senior to the DIP Liens or (ii) entitled to priority

administrative status that is equal or senior to the Superpriority Claims granted to DIP Lenders

herein; provided, however, that nothing herein shall prevent the entry of an order that specifically

provides for-, as a condition to the granting of the benefits of clauses (i) or (ii) above, the Full

Payment of all of the DIP Obligations, in the manner required by the DIP Loan Agreement, from

the proceeds of such credit or indebtedness, and the termination of any funding commitments

under the DIP Facility.

b. Ri . h~ Upon Dismissal, Conversion or Consolidation. If any of the

Chapter 11 Cases are dismissed, converted or substantively consolidated with another case, then

neither the entry of this Interim Order nor the dismissal, conversion or substantive consolidation

of any of the Chapter' 11 Cases shall affect the rights or remedies of any DIP Lender under the

DIP Loan Documents or the rights or remedies of any DIP Lender or Pre-Petition Credit Party

under this Interim Order, and all of the respective rights and remedies hereunder and thereunder

of each DIP Lender and each Pre-Petition Credit Party shall remain in full force and effect as if

such Chapter 11 Case had not been dismissed, converted, ar substantively consolidated. Unless

and until Full Payment of all DIP Obligations and Adequate Protection Claims has occurred, it

shall constitute an Event o~ Default if any Debtor seeks, or if there is entered, any order

dismissing any of the Chapter 11 Cases. If an of-des' dismissing any of the Chapter 11 Cases is at

any time entered, such order shall provide (in accordance with Sections 105 and 349 of the

Bankruptcy Code) that (i) the Superpriority Claims, the Adequate Protection Claims, the DIP

Liens and the Adequate Protection Liens shall continue in full force and effect and shall maintain

28llOCS S1=:101590.7 39.566/001


their priorities as provided in this Interim Order until Full Payment of all DIP Obligations and

all Adequate Protection Claims, (ii) such Superpriority Claims, Adequate Protection Claims, DIP

Liens and Adequate Protection Liens shall, notwithstanding such dismissal, remain binding on

all parties in interest, (iii) the other rights granted by this Interim Order shall not be affected,

including the rights granted by Paragraph 26 of this Interim Order, and (iv) 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. Survival of Interim Order. The provisions of this Interim Order,

and any actions taken pursuant hereto, shall survive the entry of and shall govern with respect to

any conflict with any order that may be entered confirming any plan of reorganization or

liquidation in any of the Chapter 11 Cases or any Successor Case.

d. No Discharge. None of the DIP Obligations shall be discharged by

the entry of any order confirming a plan of reorganization or liquidation in any of these Chapter

11 Cases and, pursuant to Section 1141(d)(4) of the Bankruptcy Code, each Debtor has waived

such discharge.

e. Credit Bid Rim. Following entry of the Final Order and subject

to the requirements of section 363(k) of the Banlcru~tcy Code, but without prejudice to any

successful challenge brought prior to the Challenge Deadline, the DIP Lenders and the Pre-

Petition Credit Parties shall each have the right to credit bid, individually or on a combined basis,

up to the full amount of the applicable outstanding DIP Obligations and Pre-Petition Debt (as

applicable), in each case including any accrued interest or other agreed charges, in any sale of the

DIP Collateral (or any part thereo f or Pre-Petition Collateral (or any part thereof), as applicable,

without the need for further Court order authorizing same, and whether such sale is effectuated

29DOGS 51:101590.719566/QO1


through Section 363 or 1129 of the Banlcnlptcy Code, by a Chapter 7 trustee under Section 725

of the Bankruptcy Code, or otherwise. For the avoidance of doubt, without prejudice to any

successful challenge brought prior to the Challenge Deadline, no plan of reorganization or

liquidation, nor any motion in connection with a sale of any Debtor's assets under Section 363 of

the Bankruptcy Code, in any of these Chapter 11 Cases shall seek to limit or otherwise restrict

the right of Pre-Petition Agent or the DIP Lenders to credit bid for all or any part of the Pre-

Petition Collateral or DIP Collateral.

£ No Marshaling. Subject to entry of the Final Order, in no event

shall any DIP Lender or Pre-Petition Credit Party be subject to the equitable doctrine of

"marshaling" or any similar doctrine with respect to any DIP Collateral, and in no event shall

any DIP Liens be subject to any pre-petition or post-petition lien or security interest that is

avoided and preserved for the benefit of any Debtor's estate pursuant to Section 551 of the

Baiilcriiptcy Code.

g. No Requirement to File Claim for DIP Obligations or Pre-Petition

Debt. Notwithstanding anything to the contrary contained in any prior or subsequent order of the

Court, including, without limitation, any bar date order establishing a deadline for the filing of

proofs of claim entitled to administrative expense treatment under Section 503(b) of the

Bankruptcy Code, no DIP Lender shall be required to file any proof of claim with respect to any

of the DIP Obligations and no Pre-Petition Credit PaY-ty shall be required to file any prooF of

claim with respect to any Pre-Petition Debt, all of which shall be due and payable in accordance

with the DIP Loan Documents and the Pre-Petition Loan Documents, as applicable, without the

necessity of filing any such proof of claim; and the failure to file any such proof of claim shall

not affect the validity ar' enforceability of any of the DIP Loan Dociunents or Pre-Petition Loan

30DOCS SF:IOI590.7 39566/001


Documents, or prejudice or otherwise adversely affect any rights, remedies, power's or privileges

of any DIP Lender under any of the DIP Loan Documents, any Pre-Petition Credit Party under

any of the Pre-Petition Loan Documents, or any DIP Lender or Pre-Petition Credit Party under

this Interim Order.

20. Automatic Perfection of Liens. The DIP Liens, and subject to the third

party challenge rights in Paragt~aph 26, the Adequate Protection Liens, shall be deemed valid,

binding, enforceable and duly perfected upon entry of this Interim Order. Neither any Pre-

Petition Credit Party nor any DIP Lender shall be required to file any UCC-1 financing

statements, mortgages, deeds of trust, security deeds, notices of lien or any similar document or

take any other action (including taking possession of any of the DIP Collateral) in order to

validate the perfection of any DIP Liens or the Adequate Protection Liens, but all of such filings

and other actions are hereby authorized by the Court. The DIP Lenders shall be deemed to have

"control" over all deposit accounts for all purposes of perfection under the Uniform Commercial

Code. If the Pre-Petition Agent or the DIP Lenders shall, in their discretion, choose to file or

record any such mortgages, deeds of trust, security deeds, notices of lieu, or UCC-1 financing

statements, or take any other action to evidence the perfection of any part of the DIP Liens or' the

Adequate Protection Liens, each Debtor and its respective officers are authorized to execute any

docwnents or instruments as the Pre-Petition Agent or DIP Lenders shall request, and all such

documents and instruments shall be deemed to have been filed or r'ecor'ded at the time and on the

date of entry of this Interim Order. Any Pre-Petition Creclit Party or DIP Lender may, in its

discretion, file a certified copy of this Interim Order in any filing office in any jurisdiction in

which any Debtor is organized or' has or maintains any DIP Collateral or an office, and each

Tiling office is directed to accept such certified copy of this Interim Order for filing and

31DOGS SF: 101590.7 39566/001


recording. Any provision of any lease, license, contract or other agreement that requires the

consent or approval of one ox more counterparties or requires the payment of any fees or

obligations to any governmental entity, in order for a Debtor to pledge, grant, sell, assign or

otherwise transfer any such interest or the proceeds thereof is hereby found to be (and shall be

deemed to be) inconsistent with the provisions of the Bankruptcy Code and shall have no force

and effect with respect to the transactions granting the DIP Lenders a security interest in and lien

on such interest, or the proceeds of any assignment and/or sale thereof by any Debtor,

accordance with the terms of the applicable DIP Loan Documents and this Interim Order.

21. Reimbursement of Expenses. All reasonable costs and expenses incurred

by the DIP Lenders in connection with (a) the negotiation and drafting of any DIP Loan

Documents or any amendments thereto, (b) the preservation, perfection, protection and

enforcement of any DIP Lender's rights hereunder or under any DIP Loan Documents, (c) the

collection of any DIP Obligations, or (d) the monitoring of these Chapter 11 Cases, including,

without limitation, all filing and recording fees and reasonable fees and expenses of attorneys,

accountants, consultants, financial advisors, appraisers and other professionals incurred by a DIP

Lender in connection with any of the foregoing, whether any of the foregoing were incut~red prior

to or after the Petition Date, shall form a part of the DIP Obligations owing to such DIP Lender'

and shall be paid by Debtors (without the necessity of filing any application with or obtaining

further order from the Court) in accordance with the terms of the applicable DIP Loan

Documents. Notwithstanding the foregoing, no paytnents shall be made by the Debtors on

account of any professional fees and expenses of a DII' Lender until each relevant professional

has provided copies of its fee and expense statements to the U.S. Trustee and counsel to any

32DOGS SP:101590.7 3)56G/001


Committee reasonably contemporaneously with the delivery of such fee and expense statements

to the Debtors consistent with the procedures set forth in Paragraph 13(d) of this Interim Order.

22. Amendments to DIP Loan Documents. The Debtors and DIP Lenders are

hereby authorized to implement, in accordance with the terms of the applicable DIP Loan

Documents and without further order of the Court, any amendments to and modifications of any

of such DIP Loan Documents on the following conditions: (a) the amendment or

modification must not constitute a material change to the terms of such DIP Loan Documents,

(b) copies of the amendment or modification must be served upon counsel for the Committee

(and, prior to the. appointment of a Committee, upon the Debtors' consolidated 30 largest

unsecured creditors), the U.S. Trustee, and other interested parties specifically requesting such

notice, and (c) notice of the amendment must be filed with the Court. Any amendment or

modification that constitutes a material change, to be effective, tnust be approved by the Court.

For purposes hereof, a "material change" shall mean a change to a DIP Loan Document that

operates to shorten the DIP Facility or the maturity of the DIP Obligations, to increase

the aggY-egate amount of the commitments of DIP Lenders under- the DIP Facility, to increase the

rate of interest other than as currently provided in or contemplated by the DIP Loan Documents,

to add specific Events of Default, ar to enlarge the nature and extent of remedies available to a

DIP Lender following the occurrence of an Event of Default. Without limiting the generality of

the foregoing, any amendment of a DIP Loan Document to postpone or extend any date or

deadline therein (including, without limitation, the expiration of the term of the DIP Facility)

shall not constitute a "material change" and lnay be effectuated by Debtot-s and the DIP Lenders

without the need for further approval of the Court.

33DOGS SF:101>90.7 39566/001


23. Events of Default; Remedies.

a. Events of Default. The occurrence of any "Event of Default"

under (and as defined in) the DIP Loan Agreement shall constitute an Event of Default under this

Interim Order.

b. Default Remedies. Upon the occurrence and continuance of an

Event of Default, and following the expiration of any applicable cure period set forth in the DIP

Loan Agreement, (a) the DIP Lenders may file with the Court and serve upon the Debtors,

counsel for the Debtors, counsel for the Committee and the U.S. Trustee a written notice (a

"Default Notice") describing the Events of Default that exist, in which event effective five (5)

business days thereafter (the "Default Notice Period"), the DIP Lenders shall be fully authorized,

in their sole discretion, to demand payment of all DIP Obligations, and hold and apply any

balances in any accounts of the Debtors to the payment or cash collateralization of any of the

DIP Obligations, subject to payment of the Carve-Out; and (b) each DIP Lender and the Pre-

Petition Agent shall be deemed to have received complete relief from the automatic stay imposed

by Section 362(a) of the Bankruptcy Code with respect to all of the Collateral, effective

following the expiration of the Default Notice period, unless the Court determines otherwise

after an expedited hearing. Upon the effectiveness of any relief from the automatic stay granted

or deemed to have been granted and subject to payment of the Carve-Out, the DIP Lenders and

the Pre-Petition Agent may enforce their respective DIP Liens, the Pre-Petition Security

Interests, and the Adequate Protection Liens, as applicable, with respect to the DIP Collateral,

take all other actions and exercise all other remedies under the DIP Loan Documents, the Pre-

Petition Loan Documents and applicable law that may be necessary ar deemed appro~~riate to

collect any of its .DIP Obligations and/or the Pre-Petition Debt, proceed against or realize upon

34rocs sr:~ou~o.~~<~s~,~roo~


all or any portion of the Collateral as if these Chapter 11 Cases or any superseding Chapter 7

case was not pending, and otherwise enforce any of the provisions of this Interim Order. Any

delay or failure to exercise rights and remedies by the DIP Lenders or Pre-Petition Agent under

the DIP Loan Documents or this Interim Order shall not constitute a waiver of such DIP Lender

or Pre-Petition Agent's rights hereunder, thereunder or othet-wise, unless any such waiver is

pursuant to a written instrument executed in accordance with the terms of the DIP Loan

Agreement. In furtherance of Paragraph 17 above, the DIP Lenders shall provide for cash

payment of the Carve-Out from the proceeds of the DIP Collateral before any sums are paid to

the DIP Lenders from such proceeds.

c. Rights Cumulative. The rights, remedies, powers and privileges

conferred upon DIP Credit Parties pursuant to this Interim Order shall be in addition to and

cumulative with those contained in the applicable DIP Loan Documents.

24. Loan Administration.

a. Continuation of Pre-Petition Procedures. All pre-petition cash

management practices and procedures of the Debtors, including any lockbox and/or blocked

depository bank account arrangements, to the extent approved by the Court by separate order,

shall continue without interruption after the commencement of the Chapter 11 Cases, and shall

be deemed effective for the benefit of the DIP Lender.

b. Inspection Rights. Representatives of each DIP Lender shall be

authorized, with reasonable prior notice to Debtors, to visit the business premises of any Debtor

and its subsidiaries during regular business hours to (i) inspect any Collateral, (ii) inspect and

rnalce copies of any books and records of any Debtor, and (iii) verify oz' obtain supporting details

35rocs sr-:iais~o.~~~s~~ioo~


concerning the financial information to be provided by any Debtor hereunder or under any of the

DIP Loan Documents, and the Debtors shall facilitate the exercise of such inspection rights.

c. DIP Lenders' Right to Retain Professionals. Each DIP Lender

shall be authorized to retain attorneys, appraisers, consultants, auditors, field examiners and

financial advisors, at Debtors' expense, which attorneys, appraisers, consultants, auditors,

field examiners and financial advisors shall be afforded reasonable access to the Collateral

and each Debtor's business premises and records, during normal business hours, for purposes of

monitoring the businesses of Debtors, verifying each Debtor's compliance with the terms of the

DIP Loan Documents and this Interim Order, and analyzing or appraising all or any part of the

Collateral. All such amounts payable to or incurred under this clause (c) shall be payable in

accordance with Paragraph 21 above.

25. Modification of Automatic Stay. The automatic stay provisions of Section

362 of the Bankruptcy Code are hereby modified and lifted to the extent necessary to implement

the provisions of this Interim Order and the DIP Loan Documents, thereby permitting the DIP

Lenders and Pre-Petition Agent to receive collections and proceeds of Collateral for application

to the DIP Obligations and the Pre-Petition Debt as and to the extent provided herein, to file or

recard any UCC-1 financing statements, mortgages, deeds of trust, security deeds and other

instruments and documents evidencing or validating the perfection of the DIP Liens or Adequate

Protection Liens, and to enforce the DIP Liens and Adequate Protection Liens as and to the

extent authorized by this Interim Order.

26. Eflect of Stipulations on Third Parties; Deadline for Challenges.

a. Each Debtor's admissions, stipulations, agreements and releases

contained in this Interim Order, i~7cluding, without limitation, those contained its Paragraph 5 of

36DOGS SP:101~90.7 39i66/Q01


this Interim Order, shall be binding upon such Debtor and any successor thereto (including,

without limitation any Chapter 7 trustee or Chapter 11 trustee or examiner appointed or elected

for such Debtor) under all circumstances and for all purposes.

b. Each Debtor's admissions, stipulations, agreements and releases

contained in this Interim Order, including, without limitation, those contained in Paragraph 5 of

this Interim Order, shall be binding upon all other parties in interest (including, without

limitation, any Committee) under all circumstances and for all purposes unless (i) the Committee

or another party in interest (subject in all respects to any agreement or applicable law that may

limit or affect such entity's right or ability to do so) having requisite standing has timely and

properly filed an adversary proceeding ar contested matter by no later than the Challenge

Deadline (A) objecting to or challenging the amount, validity, perfection, enforceability priority

or extent of the Pre-Petition Debt or any Pre-Petition Credit Party's Liens, or (B) otherwise

asserting any defenses, claims, causes of action, counterclaims or offsets against any Pre-Petition

Credit Party or its respective agents, affiliates, subsidiaries, directors, officers, representatives,

attorneys or advisors, and (ii) the Court rules in favor of the plaintiff in any such timely and

properly filed adversary proceeding or contested matter. As used herein, the term "Challenge

Deadline" means the date that is the later of (i) in the case of a party in interest with requisite

standing other than the Committee, seventy-five (75) days after entry of this Interim Order, (ii) in

the case of any Committee, sixty (60) days after the filing of notice of appointment of a

Coimnittee (and subject to the Investigation Budget), (iii) any such later date agz•eed to in writing

by the Pre-Petition Credit Parties, in their sole discretion, and (iv) any such later date ordered by

the Court for the cause shown after notice and an opportunity to be heard, provided that such

37DOGS SF:101590.7 39~G6/001


order is entered before the expiration of any applicable period as set forth in clauses (i) through

(iii) of this sentence.

c. If no adversary proceeding or contested matter is timely and

properly filed as of the applicable Challenge Deadline against a Pte-Petition Credit Party or the

Court does not rule in favor of the plaintiff in any such proceeding, then in these Chapter 11

Cases and in any Successor Case each Debtor's admissions, stipulations, agreements and releases

contained in this Interim Order, including, without limitation, those contained in Paragraph 5 of

this Interim Order, shall be binding on all parties in interest. If any such adversary proceeding or

contested matter is properly filed by the applicable Challenge Deadline, each Debtor's

admissions, stipulations, agreements and releases contained in this Interim Order, including,

without limitation, those contained in Paragraph 5 of this Interim Order, shall nonetheless remain

binding and preclusive on such party, except to the extent that such admissions, stipulations,

agreements and releases were expressly challenged in such adversary proceeding or contested

matter and the party bringing such challenge prevails on the merits. Nothing contained in this

Interim Order shall vest or confer any person or entity, including any Committee, standing or

authority to pursue or commence any such adversary proceeding or contested matter.

d. Notwithstanding anything else contained in this Interim Order, if

an adversary proceeding or' contested matter is timely and properly filed as of the applicable

Challenge Deadline against aPre-Petition Credit Party, the entity prosecuting that timely

adversary proceeding or motion can, if successful, challenge the adequate protection provided

with respect to any lien avoided and payments n7ade to any Pre-Petition Credit Parry and all of

the provisions regarding Adequate Protection Claims and Adequate Protection Liens in this

Order are qualified by this reservation of the rights of third parties. If the Adequate Protection

38DOGS SF:Ip1590.7 3)766/001


payments made exceed the amount of adequate protection to which any Pre-Petition Credit Party

is entitled, that excess shall be applied to that Pre-Petition Credit Party's allowed secured claim.

27. Debtors' Waivers. At all tunes during the Chapter ll Cases, and whether

or not an Event of Default has occurred, the Debtors irrevocably waive any right that they may

have to seek authority (i) until Full Payment of all DIP Obligations and Pre-Petition Debt, to

obtain post-petition loans or other financial accommodations pursuant to Section 364(c) or (d) of

the Bankruptcy Code, other than from the DIP Lenders on the terms and conditions set forth

herein; (ii) to challenge the application of any payments authorized by this Interim Order

pursuant Section 506(b) of the Banlc~-uptcy Code; (iii) to propose or support a plan of

reorganization or liquidation that does not provide for the indefeasible payment in full and

satisfaction of all DIP Obligations, and, subject to entry of the Final Order, all Pre-Petition Debt

on or before the effective date of such plan; (iv) to challenge that any security interests, claims or

liens arising on account of intercompany transactions are junior and subordinate to all DIP

Obligations and Pre-Petition Security Interests; or (v) to seek relief under the Bankruptcy Code,

including, without limitation, under Section 105 of the Bankruptcy Code, to the extent any such

relief would in any way restrict or impair the rights and remedies of any DIP Lender or any Pre-

Petition Credit Party as provided in this Interim Order or any of the DIP Loan Documents, as

applicable, or a DIP Lender's exercise of such rights or remedies.

28. Service of Interim Order. Promptly after the entry of this Interim Order,

Debtors shall snail, by first class mail, a copy of this Interim Orden, the Motion (and all exhibits

attached to the Motion), and a notice of the Final Dearing, to (without duplication) counsel foi-

the DIP Lenders and Pre-Petition Agent, the U.S. Trustee, counsel for the Committee (or, if the

Committee has not been formed and selected counsel as of the entry of this Interim Order, then

39DOGS Sl :101590.7 39566/001


the Debtors' consolidated 30 largest unsecured creditors), the Internal Revenue Service, all

parties who have filed requests for notices under Rule 2002 of the Bankruptcy Rules prior to the

time of such service, and all parties known by a Debtor to hold or assert a lien on any assets of a

Debtor, and shall file a certificate of service regarding same with the Clerk of the Court. Such

service shall constitute good and sufficient notice of the Final Hearing. and the relief sought by

the Debtors pursuant to the proposed Final Order.

29. No Deemed Control. In determining to make any DIP Loan under the DIP

Facility, or in exercising any rights or remedies as and when permitted pursuant to this Interim

Order, any Final Order- or the DIP Loan Documents, no DIP Lender and no Pre-Petition Credit

Party shall be deemed to he in control of any Debtor or its operations or to be acting as a

"responsible person," "managing agent" or "owner or operator" (as such terms are defined in the

United States Comprehensive Environmental Response, Compensation and Liability Act, 29

U.S.C. §§ 9601, et seq., as amended, or any similar state or' federal statute) with respect to the

operation or management of such Debtor.

30. Exculpation. Nothing in this Interim Order', the DIP Loan Documents, or

any other document related to the DIP Facility shall in any way be construed or interpreted to

impose or allow the imposition upon any DIP Lender or any Pre-Petition Credit Party any

liability for any claims arising from the pre-petition or post-petition activities of any Debtor in

the operation of its business or in connection with its restructuring efforts. So long as a DIP

Lender or Pre-Petition Credit Party complies with its obligations under the applicable DIP Loan

Documents and its obligations, if any, under this Interim Order and applicable law (i) such DIP

Lender or I're-Petition Credit Party shall not, in any way or' manner, be liable or responsible For'

(E1) the safel<ee~ing o~f the Collateral, (B) any loss or damage thereto occurring or arising in any

40DOGS SF: 101 X90.7 39566/ 01


manner or fashion from any cause, (C) any diminution in the value thereof, or (D) any act or

default of any carrier, servicer, bailee, custodian, forwarding agency or other person or entity;

and (ii) all risk of loss, damage or destruction of the Collateral shall be borne by the Debtors.

31. Binding Effect Successors and Assigns. The provisions of the DIP Loan

Documents and this this Interim Order, including all findings herein (subject to Paragraph 26 of

this Interim Order) shall be binding upon all parties in interest in these Chapter 11 Cases,

including, without limitation, the DIP Lenders and Debtors and their respective successors and

assigns (including any Chapter 11 trustee hereafter appointed for the estate of any Debtor, any

Chapter 7 trustee appointed or elected in a Successor Case, any examiner appointed pursuant to

Section 1104 of the Bankruptcy Code, or any other fiduciary appointed as a legal representative

of any Debtor or with respect to the property of the estate of any Debtor), and shall inure to the

benefit of DIP Lenders and their respective successors and assigns. In no event shall any DIP

Lender or Pre-Petition Credit Party have any obligation to make DIP Loans to, or permit the use

of the Collateral (including Cash Collateral) by, any Chapter 7 trustee, Chapter ll trustee or

similar responsible person appointed or elected for the estate of any Debtor.

32. Final Hearing. The Final Hearing to consider entry of the Final Order

shall be held at _:00 o'clock _.m., prevailing Eastern time on , 2019, at Courtroom

United States Ban,lcruptcy Court, 824 Market Street North, Wilmington, Delaware

19801. The Final Hearing may be adjourned or postponed without further notice except as may

be announced in open Court or posted on the Court's docket. If any or all of the provisions of

this Interim Order are modified, vacated or stayed as the result of any Objection (as defined

below) timely filed aild asserted at the Final Hearing, then, without limiting the provisions of

Paragraph 26 hereof, any DIP Obligations inctit7~ed prior to the effective date of such

41uocs sr:iois9o.~~~sv~i~oi


modification, vacation or stay shall be governed in all respects by the original provisions of this

Interim Order, and the DIP Lenders shall be entitled to the protections afforded under Section

364(e) of the Bankruptcy Code and to all the rights, remedies, privileges, and benefits, including,

without limitation, the DIP Liens and Superiority Claims granted herein and pursuant to the DIP

Loan Documents with respect to all such DIP Obligations.

33. Objection Deadline. If any party in interest shall have an objection to any

of the provisions of this Interim Order, any provisions of the DIP Loan Documents, or any

provisions of the proposed Final Order (collectively, an "Objection"), such party may assert such

Objection at the Final Hearing, if a written statement setting forth the basis for such Objection is

filed with the Court and concurrently served so as to be received on or before :00 _.m.,

prevailing Eastern time on , 2019, by the following: (a) the Ofrice of the United States

Trustee, 844 King Street, Suite 2207, Lockbox 35, Wilmington, Delaware 19801; (b) counsel for

tl~e Debtors, Jeffrey N. Pomerantz, Pachulski Stang Ziehl &Jones LLP, 10100 Santa Monica

Blvd, 13th Floor, Los Angeles, California, 90067-4003 and Peter J. Keane, Pachulslci Stang

Ziehl & Jones LLP, 919 N. Market Street, 17r~' Floor, Wilmington, Delaware 19801; and (c)

counsel for the Pre-Petition Agent and DIP Lenders, Derelc F. Meelc, Burr &Forman LLP, 420

North 20°i Street, Suite 3400, Birmingham, Alabama 35203. If an objecring party shall fail to

appear at the Final Hearing and assert the basis for such Objection before the Court, such

Objection shall be deemed to have been waived and abandoned by such objecting party.

34. Insurance. To the extent the Pre-Petition Agent is listed as mortgagee,

loss payee or additional insured under any Debtors insurance policies, the DIP Lenders shall

also deemed to be the loss payee, mortgagee or additional insured under such Debtor's insurance

42DOGS SI : I OI ~9Q.7 39566/001


policies and shall act in that capacity and distribute any proceeds recovered or received in respect

of any such insurance policies.

35. Effectiveness; Enforceability. This Interim Order shall constitute findings

of fact and conclusions of law and shall take effect and be fully enforceable nti~fzc pro tunc to the

Petition Date immediately upon entry hereof. Notwithstanding Bankruptcy Rules 4001(a)(3),

6006(d), 7062, or 9014 of the Bankruptcy Rules or any other Bankruptcy Rule, or Rule 62(a) of

the Federal Rules of Civil Procedure, this Interim Order shall be valid, take full effect, and be

enforceable immediately upon entry hereof; there shall be no stay of execution or effectiveness

of this Interim Order; and any stay of the effectiveness of this Interim Order that might otherwise

apply is hereby waived for cause shown.

36. Retention of Jurisdiction. The Bankruptcy Court shall retain jurisdiction

to 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 Debtor notwithstanding the

terms or provisions of any such Chapter 11 plan or any order confirming any such Chapter 11

plan.

37. Inconsistencies. To the extent of any inconsistencies or' conflicts between

this Interim Order and the DIP Loan Documents, this Interim Order shall govern.

Dated: August , 2019Wilmington, DE

UNITED STATES BANKRUPTCY JUDGE

43ROCS S1 :101 X90.7 39566/001


EXHIBIT 1

BUDGET

DOCS 51=:1015)0.7 39566/001


iPic

Entertainment, Inc

.DIP Cash Flow Forecast

(USC 000'sJ

Actual/Forecast-->

Forecast

Fore

cast

Forecast

Forecast

Fore

cast

Fo

reca

st

Fore

cast

Fo

reca

st

Forecast

Forecast

Forecast

Forecast

Forecast

Week Number-->

12

34

56

78

9'10

11

12

13

Tn1'~t.:

Week Start Date -->

08/0

2/19

08/0

9!19

08/1

6/19

08/23/19

08/3

0/19

09/0

6/19

09/1

3/19

09/20/19

09!2

7/19

10/0

4/19

10/1

1/19

10/1

8/19

10!2

5/19

E)~?

.'~i

;:t1

Week End Date-->

08/08/19

08/1

5/19

08/2

2/19

08/29/19

09/0

5/19

09!12!19

09/1

9!19

09/26/19

10/0

3/19

10/'10/19

10!1

7/19

10/2

4/19

10/3

1/19

~t ui3

i;9

Operational Re

ceip

ts3,042

2,748

2,716

2,324

2,616

2,510

2,654

2,217

2,608

3,546

3,133

3,272

2,707

3C,O

~J~

Oper

atio

nal Disbursements

Payr

oll Costs

(2,1

35)

-(2

,082

)-

(2.1

43)

-(1

,993

)-

(2,1

43)

-(2,046)

-(2

,099

)(1A;6Ai3`

SG&A

-(333)

(98)

(185)

(258)

(225)

(98)

(185)

(960)

(200)

(141)

(185)

(190)

- ,. (3

,G5'

%jFilm Rent21

--

(586)

(478)

(473)

(404)

(455)

(437)

(462)

(386)

(454)

(617)

(545)

~i5

,2~3

7;Cinema Operations -Rent &CAM

-(1

,714

)-

-(1

,714

)-

--

(1,7

14)

--

--

<;7,.142.?

Cinema Operations

-(1

,078

)(750)

(848)

(798)

(842)

(736)

(829)

(812)

(922)

(815)

(818)

(818)

ti ~~:s

.,i)~;

Othe

r-

(294)

(443)

(243)

(209)

(235)

(443)

(243)

(209)

(235)

(443)

(243)

(209)

(3,~

i4Jj

Tota

l Op

erat

iona

l Disbursements

(2,1

35)

(3,4

19)

(3,9

59)

(1.7

54)

(5,5

94)

(1,7

07)

(3,7

24)

(1,6

94)

(6,3

00)

(1,743)

(3,8

98)

(1.8

63)

(3,8

61)

{AM1

,6$1

1

Net Cash Flow from Operations

907

(671)

(1,2

43)

570

(2,978)

803

(1,0

70)

523

(3,6

92)

1,803

(765)

1,409

(1,1

54)

y~~

(5,5

57)

Restructuring

Restructuring Fees Escrow

(230)

(230)

(230)

(257)

(257)

(232)

(232)

(232)

(232)

(207)

(207)

(207)

(207)

X2;963}

Secured Lender Professional Fees

-(370)

--

(329)

--

-(263)

--

-(263)

£' s?f i,

US Tru

stee

Fees

--

--

--

--

--

--

251 1

{23?;

DIP Loan Interest and Fees

-(320)

--

(100)

~ -

--

(133)

--

--

(55~

~PACA/PASA Claims

-(1

,105

)-

(245)

--

--

--

--

--: !?.

3501

Crit

ical

Vendor Claims

-(2

,161

)(297)

(692)

--

--

--

--

-i';'5^'i

Utility Deposits

-(409)

--

--

--

--

--

-~4

u§ij

Other

CZ)

l5)

--

--

ls)

--

-CS

)-

-X17}

Total Restructuring

(231)

(4,600)

(527)

(7,195)

(687)

(232)

(237)

(232)

(629)

(207)

(212)

(207)

(722)

(~,!

31fl

~

Net Cash Flow

675

(5,270)

(1,7

69)

(624)

(3,6

65)

571

(1,3

07)

291

(4,320)

1,59

6(977)

1,202

(7,8

76)

~ (15,476)

Liquidity Summary

Begi

nnin

g Cash Balance

453

1,129

2,358

589

3,965

299

3,870

2,563

2,854

533

2,129

1,152

2,354

A53

Net Cash Flow

675

(5,2

70)

(1,7

69)

(624)

(3,6

65)

571

(1,3

07)

291

(4,3

20)

1,59

6(977)

1,202

(1,8

76)

(E5,476]

DIP Advances/(Paydowns)

-6,500

-4,000

-3,000

--

2,000

--

-500

16,000

Ending Cash Balance

1,129

2,35

8589

3,965

299

3,870

2,563

2,854

533

2,129

1,152

2,354

977

- 977

DIP Loan Commitment

16,000

16,000

16,000

16,000

16.000

16.000

16,000

16,000

16,000

16,000

16.000

16,000

16,000

~ 18.~Ott

DIP Ava

ilab

ili,

y16,000

9,500

9,500

5,500

5,500

2,500

2,500

2,500

500

500

500

500

Tota

l Av

aila

ble Liquidity (Cash +DIP)

17,129

11,858

10,OS9

9,465

5,799

6,370

5,063

5,354

1,033

2,62

91,652

2,854

977

977

Funded DIP Facility - BO?

--

6,500

6.500

10,500

10,500

13,500

13,500

13,500

15,500

15,500

15,500

15,500

+ Advances

-6,500

-4,000

-3,000

--

2,000

--

-500

;r.~;:*,

- lFaydowns)

--

--

-

Funded DIP Facility - EOP

-6,500

6,500

10,500

10,500

13,500

13,500

13,500

15,500

15,500

15,500

15,500

16,000

1G,00~


iPic

Entertainment, Inc

.Pr

ofes

sion

al Fees Schedule

(USD G00's)

Ar!uaU Fnrer .ct --

> Fn

reca

.ci

Fnre

ca.c

i Fnreca ci

Fnrerast

Pore

ca.s

t Fnrerast

Fnre

rast

Forecast

Forecast

Fole

Cast

Fo

~eCa

st

Fo~eCast

FOI'BCBSt

Week Number-->

12

34

56

78

910

1112

13

"'~;

t"fA

L.

Week Start Date -->

08/02/9

08/0

9/19

08/16/19

08/2

3/19

08/30!19

09/06/19

09/1

3/19

09/2

0/19

09/2

7/19

10/0

4/19

10/1

1/19

10!1

8!19

10/25/19

0810

2!19

Week End Date -->

08/08/19

08/1

5/19

08/2

2!19

08!29/19

09/0

5/19

09/12/19

09/1

9/19

09/26/19

10/0

3/19

10/1

0/19

10/1

7!19

10/2

4/19

10/3

1/19

10!3

1199

Restructuring Fees Escrow

7

Debtor Counsel (PSZJ)

(105)

(105)

(105j

(105)

(105)

(80)

(80)

(80)

(80)

(55)

(55)

(55)

(55)

~ {1,005)

Debt

or CRO

(59)

(59)

(59)

(59)

(59)

(59)

(59)

(59)

(59)

(59)

(59)

(59)

(59)

;

Debtor FA

(25)

(25)

(25)

(25)

(~25)

(25)

(25)

(25)

(25)

(25)

(25)

(25)

(25)

UCC Counsel

--

-(15)

(15)

(15)

(15)

(15)

(15)

(15)

(15)

(15)

(15)

(i5D!

UCC FA

--

-(13)

(13)

(13)

(13)

(13)

(13)

(13)

(13)

(13)

(13)

' ̀-3

Investment Banker

(29)

(29)

(29)

(29)

(29)

(29)

(29)

(29)

(29)

(29)

(29)

(29)

(29)

.'3'S.:

Noticing &Claims Agent

(72)

(12)

(12)

(12)

(12)

(12)

(12)

(12)

(12)

(12)

(12)

(12)

(12)

~ (355}

Tota

l Restructuring Fees Escrow

(230)

(230)

(230)

(257)

(257)

(232)

(232)

(232)

(232)

(207)

(207)

(207)

(207)

(2,9

63)

Secured Lender Professional Fees

Secured :.ender Counsel

-(270)

--

(209)

--

-(167)

--

-(167)

(873)

Secured Lender FA

-(100)

--

(120)

--

-(96)

--

-(96)

(113)

Tota

l Secured Lender Pro

fess

iona

l Fees

(370)

-(329)

(263)

(263)

(1,2

26)


EYHIBIT B

DIP I,o~n ~greeme~xt

DOGS 51=:1015193


llEBTOR-IN-POSSESSION LOAN AND SECURITY AGR~EMEi~TT

THIS DEBTOR-IN-POSSESSION LOAN AND SECURITY AGREEMENT (this

"~~reement"), is made and effective as of the 5th day of August, 2019 (the "Effective Date"), by and

among IPIC-GOLll CLASS F.NTERTAII~TMENT, LLC, a Delaware limited liability company, IPIC

GOLD CLASS HOLDINGS LLC, a Delaware limited liability company, IPIC TEXAS, LLC, a Texas

limited liability company, Il'IC MEDIA, LLC, a Florida limited liability company, and DELRAY

1~EACH HOLDINGS, LLC, a Florida limited liability company (individually and collectively as more

particularly described below, ̀Borrower"), TEACHERS' RETIREMENT SYSTEM OF ALABAMA,

a body corporate of the State of Alabama created under §§ 16-25-1 et seq., of the Alabama Code

("TRSA"), and EMPLOYEES' RETIREMENT SYSTEM OF ALABAMA, a body corporate of the

State of Alabama created under §§ 36-27-1, et seg., of the Alabama Code ("ERSA", and together withTUc n „u;.>;u 11 ,,•7 CO>>~C~'.V~ly uS :::^„•~ r~artirnlarly rlPcni•ihPri help}u "T.Pn[j~r"~i i~vn~ iii i v i u?xii`y' u.. y t,... .....»_.... _~ ~ ~.

RECITALS:

On August 5, 2019 (the "Petition Date"), Bon-ower and certain of its Affiliates filed voluntary

petitions for relief under Title I1 of the United States Code (as now or hereafter in effect, or any

successor thereto, the ̀ Banla•uptcy Code"), in the United States Bankruptcy Court for the District of

Delaware (the ̀ Bankruptcy Court"), such cases being jointly administered under- Case No. 19-[_~-

[ ], and are collectively referred to herein as the "Case", and such debtors continue to operate their

businesses and manage their properties as debtors and debtors-in-possession pursuant to Sections 1107

and 1108 of the Bankruptcy Code.

Borrower has requested that Lender provide asenior- secured super priority debtor-in-possession

credit facility to Boi-~~ower in an aggregate principal amount not to exceed $16,000,000 for the purposes

set forth herein, and Lender is willing to do so on the te~7ns and conditions set forth herein.

Each debtor comprising Borrower acknowledges that it will receive substantial direct and indu-ect

benefits by reason of the snaking of the loans and other financial accommodations provided in this

Agreement.

To provide for the security and repayment of all obligations of any kind of Boi7-ower hereunder

and under the other DIP Loan Documents (as herein defined), Borrower will provide to Lender- the Liens,

status and protection set forth in the Interim DIP Order and the Final DIP Order (each as herein defined).

In consideration of the mutual covenants and agreements herein contained, the parties hereto

covenant and agree as follows:

ARTICLF, ONE -DEFINITIONS

1.1 Definitions. In addition to the terms defined elsewhere in this 1lgreeinent or' in any Exhibit oi•

Schedule hereto, when used in this Agreement, the following te~7ns shall have the following respective

meanings (such meanings shall be equally applicable to the singular and plw-al forms of the terms used, as

the context requires):

"Administrative Expenses" shall collectively mean, to the extent approved by the Bankruptcy

Court if such approval is required under the Bankruptcy Code, (i) all fees payable pursuant to 28 U.S.L. ~

1930, (ii) all fees and expenses incun~ed by T3on~ower's Professionals, (iii) all fees and expenses incu~7-ed

by Professionals retained by die Committee, (iv) the actual and necessary costs and expenses involved in

pi•eseiving the bankruptcy estates of Borrower, including wages, salaries and other• general administrative

DOCS SI :101591.7 39%61001


expenses incui-~-ed by Boi-~-ower, (v) all fees and expenses of the notice and claims agent in the Case, (vi)

all fees and expenses of the United States Trustee (the "US Trustee"), and (vii) all such other expenses

incui7•ed by Bon•ower as may be pei7nitted by the Bankruptcy Code or approved by the Bankruptcy Court.

"Advance" means each disbursement of DIP Loan proceeds made, or deemed to have been made,

in accordance with this Agreement.

"Affiliate" shall have the ineatung set forth in the Bankruptcy Code.

"APA" means a definitive written asset purchase agreement in form and substance reasonably

acceptable to Lender between Borrower and a prospective purchaser pursuant to which substantially all

Property of Boi-~-ower will be sold pursuant Section 363 of the Bankruptcy Code. As used herein, the~~i~ nPA ghall :r:Pwn anal _nr~i~~r ag tha ~nntPxt may t~~niiirP (il an initial APA between ~OtTOWeT anC~ H

"stalking horse" bidder, and (ii) any replacement thereof with an APA on substantially equivalent terms

between Borrower and the winning bidder (or backup bidder) chosen at the Auction; provided that no

APA shall include any break-up fees or expense reimbursement provisions unless approved by Lender in

its sole discretion.

"Approved Budget" means Borrower's operating budget as submitted to and approved by Lender

from time to time pursuant to Section 2.9 of this Agreement. The initial Approved Budget is attached

hereto as Exhibit A.

"Auction" has the meaning set forth in the definition of Sale Procedures Order.

"Availability Period" means the period during which Advances of the DIP Loan shall be available

hereunder, which period shall commence upon the entry of the Interim Order and end on the Tei7nination

Date.

`Boi7-owei" means each of the borrower parties identified in the preamble to this Agreement

severally and individually, and all of the bo~7-ower parties identified in the preamble to this Agreement

jointly and collectively, it being the intention of the parties that the teen ̀ Borrower" shall for all purposes

mean and refer to each such party, niuzatis n7.utandis, with full and equal force and effect on both an

individual and collective basis.

`Borrower's Business" means the business of developing, owning and operating first class

upscale cinema facilities for' the screening of f lms and other media, which feature 40 to 52 seat

auditoriums, full recline seating, food and beverage service including alcoholic beverages available

before, during and after film screenings, and up to a 200 seat restaurant.

`Boi7•ower's Representative" means the CRO or any other• authorized person reasonably

acceptable to Lender to cominunicaTe with Lendet~ in matters pertaining to this Agreement.

"Business Day" means any day other than a Saturday, Sunday or z•ecognized holiday on which

commercial banks in Alabama are authorized o~- required ro be closed for business.

"Capitalized Lease" means any lease of Property by a Person as lessee which, as deterulined in

accordance with GAAP, is required t~o be capitalized on the balance sheet of such Person.

"Capitalized Lease Obligations" of any Person means, as of the date of any detei-~nination tl~ei•eof,

the amount at which t~l~e aggregate rental obligations due and Yo become due under- all Capitalized Leases

2rocs sr:iois~i.~ 3~s~~~iooi


under which such Person is a lessee would be reflected as a liability on a balance sheet of such Person as

determined in accordance with GAAI'.

"Carve Out" shall have the meaning set forth in the Financing Orders.

"Change in Control" means (i) an event or series of events as a result of which any "person" or

"group" (as such tei-~ns are used in Sections 13(d)(3) and 14(d) of the Exchange Act) is or becomes,

directly or indirectly, the "beneficial owner-" (as defined in Rules 13d-3 and 13d-5 under the Exchange

Act, whether or not applicable) of more than 50% of the combined voting power of the then outstanding

securities entitled to vote generally in elections of directors, managers or trustees, as applicable, of

Boi7-ower or any successor entity ("Votin Sg tock"), (ii) the completion of any consolidation with or

merger of Boi7-ower into any other Person, or any sale, conveyance, tt•ansfer or lease by Borrower of all or~,µh~tu;;t:wll~ wll of :t~ a~ePte to any PP,-cnn~ nr anv m~rgc~r of any other Person into Borrower in ~ Single

transaction or series of related transactions, and, in the case of any such transaction or series of related

transactions, the outstanding coininon stock of Bon-ower is changed or exchanged as a result, unless the

stockholders of Boi7-ower immediately before such transaction own, directly or• indirectly, immediately

following such transaction, at least 51% of the combined voting power of the outstanding voting

securities of the Person resulting from such transaction in substantially the same proportion as their

ownership of the Voting Stock immediately before such transaction, or (iii) the occurrence of any event

whereby less than a majority of the Board of Directors of Bon-ower shall be pet~sons who were serving in

such capacity on the Effective Date.

"Closing Date" means the date upon which a sale pursuant to Section 363 of the Bankruptcy

Code shall be consummated pursuant to the Sale Order to the winning bidder (or backup bidder) chosen at

the Auction.

"Collateral" shall have the meaning set forth in Section 3.1 of this Agreement.

"Committee" means any statutory committee appointed by the Bankruptcy Court in the Case.

"Credit Amount" means a principal amount of $16,000,000 and No/100 Dollars

($16,000,000.00), in DIP Loan proceeds available to be advanced to Borrower pursuant to this

Agreement.

"CRO" means a chief restructuring officer reasonably acceptable to Lender', it being

acknowledged that William J. Nolan of FTI Consulting, shall be deemed to be acceptable to Lender•.

"CRO Scope" means the scope of authority granted to the CRO under his or her engagement with

Borrower, which shall at all times include tl~e following, subject to the review and supervision of

Boi1-owei's board of directors, managers, or members, as applicable: (i) the CRO shall be endowed with

such corporate authority as would customarily be exercised by an executive officer of a corporation, (ii)

the CRO shall bear general responsibility for the day-to-day management and oversight of the business

operarions and affairs of Borrower, (iii) the CRO shall bear• priinaiy 1•esponsibility for preparation and

submission of all Proposed Budgets and other financial reporting under this Agreement, (iv) the CRO

shall bear priinaiy responsibility for assuring that Bo~rowei• operates in compliance with the teiYns of this

Agi-eeinent and all orders of tl~e Bankruptcy Court. Foi• the avoidance of doubt, absent express authority

of Bon-owei's board of directors, n~anagei•s, oi- meil~bei•s, the CRO shall not have authority to: (x) hire

and fire Boi7•ower's employees and representatives, (y) execute contracts or agree~nent~s on behalf of

Borrower, or (z) consunvnate a sale of assets or ofl~er resCructw•ing on behalf of Bon•ower.

rocs sr:iois~i.~3~sv~>>ooi


"Default' means the occul7-ence or existence of any event, circumstance, state of facts or

condition which, but for the giving of any required notice, the expiration of any applicable grace or cure

period or the satisfaction of any other condition precedent, would constitute an Event of Default

hereunder.

"Default Rate" means a fixed rate of interest equal to twelve and one-half percent (12.50%) per

annum.

"DIP Loan" means the credit facility made available to Boi7-ower pursuant to the terms of this

Agreement and the Financing Orders in an aggregate outstanding principal amount not exceeding the

Credit AinounY.

«T1TP T ~µn T~~riti~n Pntc~~ mP~n~ thjc AQ~1'PPTI'1 P.il Y~ t}1P nTP T.nan NntP~ t}1 P_, ~P_.('.71Y1rV ~L1C11Ylletlr$ a_17 C1

all other agreements, documents and instruments heretofore, now or hereafter delivered to Lender in

connection with or pursuant to this Agreement, all as the same may fi-orn tune to tune be amended,

modified, extended or renewed.

"DIP Loan Note" means that certain Promissory Note of even date herewith evidencing the DIP

Loan and payable by Bon-ower to Lender in a principal amount equal to the Credit Amount.

"Distribution" in respect of any Person means (a) dividends or other disri•ibutions of cash, equity

interests, assets or other property on or in respect of any shares of stock, membership interest or other

equity interest in such Person; and (b) the redemption, repw•chase or other acquisition of any shares of

stock, membership interest or other equity interest in such Person or of any wan~ants, rights or other

options to purchase any such stock, ineinbership interest or other equity interest (except when solely in

exchange for such stock, membership interest or other equity interest).

"Dollars" and "$" means legal tender of the United States of America.

"Environmental Law" means any federal, state oi- local statute, law, rule, regulation, order,

consent decree, judgment, pei-~nit, license, code, deed restriction, common law, treaty; convention,

ordinance or other governmental requirement, domestic or foreign, relating to public health, safety or the

environment, including, without limitation, those relating to releases, discharges or- emissions to air,

water, land or groundwater, to the use of groundwater, to the use and handling of polychlorinated

biphenyls or asbestos, to the disposal, treatment, storage or management of hazardous or solid waste,

hazardous substances or crude oil, or any fraction thereof, to exposure to toxic or hazardous materials, to

the handling, transpol-tation, discharge or release of gaseous oz- liquid hazardous substances, in each case

applicable to any of the Propet-ty owned, leased or operated by Bon-ower or- any Subsidiary or the

operation, construcrion or• inodif cation of any such Property, including, without limitation, the following:

the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended by

the Superfund Amendments and Reauthorization Act of 1986, the Solid Waste Disposal Act, as amended

by the Resource Conservation and Recovery Act of 1976 and Hazardous and Solid Waste ~nendments of

1984, the Hazardous Materials ̀ Transportation Act, the Federal Water Pollution Garltrol Act, as amended

by the Clean Water Act of 1976, the Safe Drinking Water Control Act, the Clean Air Act of 1966, the

Toxic Substances Control Act of 1976, the Occupational Safety and Health Act of 1977, the Emergency

Planning and Commtmity Right-to-I~iow Act of 1986, the National environmental Policy Act of 1975,

the Oil Pollution pct of 1990, and any amendments to these laws and any rules and regulations

promulgated theremider.

4llocs sr:io~s>>.~3<~sr~viooi


"ERISA" means the Employee Retirement Income Security Act of 1974, as amended, and any

successor statute of similar import, together with the regulations thereunder, in each case as in effect from

time to time.

"Event of Default" has the meaning ascribed thereto in Section 7.1 of this Agreement.

`Exchange Act" means the Securities Exchange Act of 1934, as amended, and the rules and

regulations promulgated by the Securities Exchange Commission.

"Excluded Assets" means those Properties of Borrower with respect to which no Lien shall be

granted to Lender as security for the Obligations except as described in this definition. The Excluded

Assets shall be comprised solely of (i) the Carve Out, (ii) any inter-company claims between or among, as~' t~~ u„ „~ X11 ,•~~~~.~g thgrPnf anr3 (iiil env fni_m of Prn»erty with rP~nPCt tO which theaYYiiCuva~,~ vii'v'VJv, ~.., ~. y > ~---i ~ r--v r

creation of a Lien is prohibited by applicable law, but only so long as such prohibition remains in effect

and specifically excluding any proceeds thereof received by Boi-~-ower.

"Final Order" means an order of the Bankruptcy Court, satisfactory to Lender in its sole

discretion, approving the DIP Loan Documents and granting the Superpriority Claiin status and Liens

described in Article 3 of this Agreement, which Final Order (i) shall have been entered upon an

application or motion of Boi-~-ower satisfactory in foi7n and substance to Lender in all material respects,

on such prior notice to such parties as may in each case be entitled to notice under the Bankruptcy Code,

(ii) shall be in full force and effect, and (iii) shall not have been stayed, reversed, modified or atnended in

any respect; and, if the Final Oi-der is the subject of a pending appeal in any respect, neither the making of

any Advances nor the performance by Borrower of any of its obligations hereunder or under the DIP

Loan Documents or under any other instrument or agreement referred to herein shall be the subject of a

presently effective stay pending appeal.

"Financing Orders" means, collectively, the Interim Order and the Final Order.

"First Dam Orders" means all orders entered by the Bankruptcy Court based upon the first-day

motions filed by Borrower in the Case on the Petition Date or within three (3) days thereafter.

"Fixed Rate" means a fixed rate of interest equal to ten and one-half percent (10.50%) per annum.

"GAAP" means the consistent application of such generally accepted accounting principles as

may then be applicable in the United States of America.

"Indebtedness" means, with respect to any Person, without duplication, all indebtedness,

liabilities and obligations of such Person including, without limitation, all (i) obligations of such Person

for- bor7~owed money or for the deferred purchase price of Property or services (including, without

limitation, all notes payable and all obligations evidenced by bonds, debentures, notes or other sunilar

instruments), (ii) obligations secured by any Lien on, or payable out of the proceeds of production from,

any Property or assets owned by such Person, whether or not such Person has assumed or- become liable

for- the payment of such obligations, (iii) indebtedness, liabilities and obligations of third parties,

including joint ventures and partnerships of which such Person is a venturer or general partner, recourse

to which may be had against such Person, (iv) obligations created or arising under any conditional sale or

other title retention agreement with respect to Property acquired by such Person, notwithstanding the fact

that the rights and remedies of the seller, lender oi• lessor unde3- such agreement in the event of default are

limited to repossession or sale of such Property, (v) Capitalized Luse Obligations of such Person, (vi) all

accounts payable of such Person, (vii) all indebtedness, liabilities and obligations of such Person undei-

rocs sr:iois<~i.~3~s~,r~iooi


guarantees or endorsements, and (viii) all obligations of such Person, contingent or otherwise, relative to

the face amount of letters of credit (as may be reduced pursuant to their terms), whether or• not drawn.

"Interim Order" means an interim order of the Bankruptcy Court approving the DIP Loan to be

made by Lender upon the entry of the Interim Order in accordance with this Agreement, as the same may

be amended, restated, supplemented or otherwise modified from tune to tune with the express written

consent of Lender, and granting the Superpriority Claim status and Liens described in Article 3 of this

Agreement, which Interim Order (i) shall be in full force and effect, and (ii) shall not have been stayed,

reversed, or, without Lender's consent, modified or amended in any respect; and, if the Interim Order is

the subject of a pending appeal in any respect, neither the snaking of any Advances nor the performance

by Boi-~-ower of any of its obligations hereunder or under the DIP Loan Documents or under any other

insh-uinent or agreement refen-ed to herein shall be the subject of a presently effective stay pendingµ1l1"1 P',l 1

"Investment" means any investment by Borrower in any Person, whether payment therefor is

made in cash, in kind, or in equity interests of Boi7-ower, and whether such investment is by acquisition of

equity interests or Indebtedness, or by loan, advance, transfer of property out of the ordinary course of

business, capital contribution, equity or profit shat-ing interest, extension of credit on terms other than

those noi7nal in the ordinary course of business, guaranteeing ar otherwise becoming liable (contingently

or otherwise) in respect of the Indebtedness of any Person, or otherwise.

"Investment Banker" means an investment banking firm satisfactory to Lender (it being

understood that PJ Solomon Securities, LLC is satisfactory) retained by Borrower to market substantially

all Property of Bon-ower for sale pursuant to Section 363 of the Bankruptcy Code.

"IRS Code" means the Internal Revenue Code of 1986, as amended, and any successor statute of

similar import, together with the regulations thereunder, in each case as in effect from time to time.

References to sections of the IRS Code shall be construed to also refer to any successor sections.

"Lender" means each of the lender parties identified in the preamble to this Agreement severally

and individually, and all of the bo~7-ower parties identified in the preamble to this Agreement jointly and

collectively, it being the intention of the parties that the term "Lender" shall for- all purposes mean and

refer to each such party, i~7utatis mutandis, with full and equal force and effect on both an individual and

collective basis.

"Lien" means any interest in Property securing an obligation owed to, or a claim by, a Person

who is not the owner of such Property, whether' such interest is based on common law, statute or contract,

including, without limitation, any security interest, mortgage, deed of trust, deed to secure debt,

hypothecation, prior claim, right of retention, right in rem, pledge, assignment, judgment lien, deemed

h~ust or other lien or encumbrance of any kind or natw-e whatsoever, any conditional sale or n-ust receipt,

and any consignment or bailment for security purposes. The term "Lien" shall include reservations,

exceptions, encroachments, easements, servitudes, rights-of-way, covenants, conditions, restrictions,

leases and other title exceptions and encumbrances affecting Property.

"Loan Week" means each calendar week fi-om and after the Petition Date.

"Material Adverse Effect" means a n~atei•ial adverse effect on the Pt•operties, rights, duties,

obligations, liabilities, business, operations, income, condiCion oi- prospects (financial or• otherwise) of

Bon-ower, or on any Liens or other rights granted to Lender under the DIP Loan Documents or the

Financing Orders; provided, however, that the commencement and il~aintenance of the Case shall not, in

DOGS SI~~:101591.7 39566/001


and of themselves, be deemed as having a Material Adverse Effect, but any future event which i7iaterially

worsens the effect of any such matters shall not be excluded from resulting in a Material Adverse Effect.

"Obli atg ions" means, without duplication, any and all present and future Indebtedness (including,

without limitation, principal of the DIP Loan, interest thereon, fees, collection costs and expenses,

attorneys' fees and other agreed charges under the DIP Loan Documents), liabilities and obligations of

Boi7•ower evidenced by or arising under or in connection with this Agreement or- any other DII' Loan

Document, whether direct or contingent, due or to become due or now existing or hereafter arising.

"Operating Account" means Boi7-ower's general demand deposit account acceptable to Lender, or

such other debtor in possession operating account as may be opened by Borrower at the direction of the

Bankruptcy Court.

"Per-~nitted Liens" means any of the following: (a) Liens for property taxes and assessments or

govermnental charges or levies, provided that payment thereof is not then required by Subsection 6.1(c)

of this Agreement; (b) (i) deposits to secure the performance of bids, tenders, trade contracts or leases

(other• than Capitalized Leases) or to secure statutory obligations, surety or appeal bonds or other Liens of

like general nature incurred in the ordinary course of business and not in connection with the borrowing

of money or the acquisition of inventory or other Property, and (ii) Liens (other than any Liens imposed

by ERISA) arising in the ordinary course of business or incidental to the ownership of Properties and

assets (including Liens in connection with worker's compensation, unemployment insurance and other•

like laws, can~ier's, mechanic's, tnaterialmen's, repaii7nen's, vendor's, warehousemen's and attorneys'

liens and statutory landlords' liens); provided in each case that payment thereof is not then required by

Subsection 6.1(d) of this Agreement; (c) Survey exceptions, issues with regard to the merchantability of

title, easements or reservations, or rights of others for rights-of-way, servitudes, utilities and other similar

purposes, or zoning or other restrictions as to the use of real properties, which could not reasonably be

expected to have a Material Adverse effect; (d) Liens pet7nitted by Lender in writing; (e) Liens on

Properties in respect of judgments or awards, the Indebtedness with respect to which is pet7nitted by

Subsection 6.2(a)(iv); and (flPre-Petition Liens in favor of Lender under the Pre-Petition Loan

Documents.

"Person" means any natural person or recognized legal entity of any kind whatsoever, including,

without limitation, any individual, sole proprietorship, partnership, joint venture, host, trustee,

unincorporated organization, association, corporation, limited liability company, insritution, entity or

government (whether national, federal, state, county, city, municipal or otherwise including, without

limitation, any instrumentality, division, agency, body or department thereof .

"Pei7nitted Variance" has the meaning set forth in Subsection 2.9(b) of this 1~greement.

"Permitted Variance Exception" has the meaning set forth in Subsection 2.9(b) of this

Agreement.

"Post-Petition." means that the event or thing so described accrued, arose, attached, was created or

otherwise came into existence on or after the Petition Date.

"Pre-Petition" means that the event or thing so described accrued, arose, attached, was c1•eateci or

otherwise came into existence prior to tl~e Petition Date.

"Pre-Petition Collateral" means all Property of I3oirower which was, as of the Petition Date,

subject to a valid and perfected Lien in favor Lender as security for• the Pi-e-Petition Loans.

DOGS 51~:101591.73956G/001


"Pre-Petition Loan Documents" collectively means (i) that certain Second mended and Kestated

Master Loan and Security Agreement dated Feb~uaiy 1, 2018, as amended by Modification Agreement

dated June 22, 2018, as further amended by Second Modification Agreement dated June 29, 2018, as

further amended by Third Modification Agreement dated March 4, 2019, by and among Borrower,

Lender and certain other signatories therein identified (the "Pre-Petition Loan Agreement"), (ii) all "Loan

Documents" as such term is defined in the Pre-Petition Loan Agreement, (iii) all other Pre-Petition

instruments, documents and agreements evidencing or securing the Pre-Petition Loan, and (iv) all Pre-

Petition amendizlents, modifications, supplements or restatements of any of the foregoing.

"Pre-Petition Loan" means the Indebtedness owing to Lender evidenced or secured by the Pre-

Petition Loan Documents.

~~P • f ~~;~.,,al~" rnaanc the attr,rr,P~~c a~rnnntantc financial arivicni•c and other nr•nfe~~icinal

consultants retained by any Person to provide representation or advice in connection with the Case,

Borrower's Business, the DIP Loan, the DIP Loan Documents, the Collateral, any sale transaction or any

other transaction contemplated hereby or thereby; provided that in the case of Bon-ower such term shall

refer only to Professionals retained Post-Petition by Bon-ower or the Committee pursuant to order of the

Bankruptcy Court.

"Property" means any interest of any kind whatsoever in any form of tangible or intangible

property, asset, right, claim, benefit or entitlement, whether real, personal or mixed, and which shall

include the Collateral with respect to Boi~ower.

"Restricted Investment" means any Investment, or the incun-ence of any liability to make any

expenditure for an Inveshnent, other than (i) Investments made Pre-Petition, (ii) Investments permitted by

the First Day Ordet•s or any other order of the Bankruptcy Court approved by Lender, and (iii)

Investments in ally Subsidiaries of Borrower existing on the Effective Date.

"Sale Motion" means, collectively, one or more motions filed by Borrower in the Case in form

and substance reasonably acceptable to Lender as Lender shall reasonably deem necessary or appropriate

in order to effectuate the auction sale of substantially all of Borrower's Property (other than Excluded

Assets or assets t•ejected pursuant to the terms of the APA) pursuant to Section 363 of the F3ankr-uptcy

Code.

"Sale Order" means, collectively, one or more orders of the Bankruptcy Court in foiin and

substance reasonably acceptable to Lender entered pursuant to the Sale Motion (i) approving the sale of

substantially all of Borrower's Property to the winning bidder chosen at the Auction pursuant ro the APA

submitted by such winning bidder, (ii) approving the back-up bidder chosen at the Auction and the APA

submitted by such back-up bidder, and (iii) authorizing cousuimnation of the transactions contemplated

thereby.

"Sale Procedures Order" means, collectively, one or more orders of the Bankruptcy Court in form

and substance 1-easonably satisfactory to bender entered pursuant to the Sale Motion approving (i) sales

and bidding procedures pursuant to Section 363 of the Bankruptcy Code for the solicitation of offers to

purchase Borrower's Property, (ii) the conduct of an auction for the sale of substantially all of Borrower's

Property in the event of receipt of any such offers (the "Auction"), (iii) if no "stallcing horse" bidder is

then in place, the fo177~ of the AI'A against which bids will be taken, and (iv) authorizing Lender to credit

bid the Indebtedness owing under t~l~e Pre-Petition Loan Documents and the DIP Loan Documents on a

combined basis at the Auction (Lender's "Credit I3id Rights").

"Security Documents" shall have tl~e meaning set forTh in Section 3.3(b) of this Agreement

llocs sr:iois~i.~3~sv~~ooi


"Subsidiary" means (a) any corporation of which more than twenty percent (20%) of the issued

and outstanding capital stock entitled to vote for the election of directors is at the tune owned directly or

indirectly by Boi-~-ower and/or any one or more Subsidiaries, or (b) any partnership, limited liability

company, business trust, or any other similar entity of which more than twenty percent (20%) of the

voting interests is at the time owned directly or indirectly by Borrower and/or any one or rnore

Subsidiaries.

"Su~erpriority Claim" means, subject to the Carve Out and the tei7ns of the Financing Orders, a

claim against Borrower in the Case that is a supeipriority Administrative Expense claim having priority

over any and all Administrative Expenses, diminution claims and all other claims, now existing or

hereafter- arising, of any kind whatsoever including, without limitation, any and all AdministrativeFvY~n~P~ ~f rhP l;;n~l ~in,Prifi_Pri ;,, CP~t;~nc 5Q3lhl anti 5p7(hl of the R~nki-untcy Code, and any and all

Administrative Expenses or other claims arising under Sections 105, 326, 328, 330, 331, 503(b), 506(c),

507(a), 507(b), 726, 1113 or 1114 of the Bankruptcy Code, whether or not such claims or expenses may

become secured by a judgment lien or other non-consensual lien, levy or attachment.

"Termination Date" means the earliest to occur of (i) the expiration of ninety (90) days after the

Petition Date, (ii) the date upon which Lender shall elect to tei7ninate the Availability Period and

accelerate the Obligations in accordance with Section 7.2 of this Agreement following the occui7-ence and

continuance of an Event of Default, and (iii) the Closing Date, or such later date as to which Lender- may

expressly agree in writing in its sole discretion.

"Variance Report" has the meaning set forth in Subsection 2.9(b) of this Agreement.

L2 Accounting Terms and Detei7ninations. Except as otherwise specified herein, all

accounting tei-~ns used herein shall be intet-preted, all accounting detei7ninations hereunder shall be made,

and all financial statements required to be delivered hereunder shall be prepared in accordance with

GAAP as in effect from time to time, applied on a basis consistent (except for changes accompanied by a

concurrence from Boi~-ower's independent certified public accountants) with the most recent audited

financial statements of Borrower delivered to Lender.

1.3 Certain Matters of Construction. The teens "herein," "hereof' and "hereunder" and othej-

wor-ds of similar import refer to this agreement as a whole and not to any particular section, paragraph or

subdivision. Any pronoun used shall be dee3ned to cover all genders. In the coinputarion of periods of

trine from a specified date to a later specified date, the word "from" means "from and including" and the

words "td' and "until" each means "to but excluding". Article and section headings, tables of contents

and lists of exhibits or schedules appear• as matters of convenience only and shall not affect the

interpretation of this Agreement. All references to statutes and related regulations shall include any

amendments of wine and any successor statutes and regulations. All references to any of the DIP Loan

Documents shall include any and all ainendinent or modifications thereto and any and all restatements,

extensions or renewals thereof fill references to any Person shall mean and include the successors and

permitted assigns of such Person. All references to "including" and "include" shall be understood to

mean "including, without limitation". All references to the time of day shall mean the time of day on the

day in question in Montgon7ery, Alabama, unless otherwise expressly provided in this Agreement. All

references to any Property of I3ozrower shall mean and include all Property of Borrower's estate. A

Default shall be deemed to exist and shall "continue" or be "continuing" at all times during the period

commencing on the date that such Default occurs and ending on the date that such Default is either

waived in writing by Lender or is cured by Borrower within any period of cure expressly provided in this

Agreement; an Event of Default shall exist and shall "continue" or be "continuing" at al] times

Does sr:iois~i.~3~s~~ioo~


commencing on the date such went of Default occurs and ending (if at all) on the date that such Event of

Default has been waived (permanently or temporarily) in writing by Lender.

ARTICLE T`VO -THE DIP LOA\T

2.1 Advances of the DIP Loan. Subject to the tei7ns and conditions set forth in this

Agreement, and so long as no Default or Event of Default has occur7-ed and is continuing, during the

Availability Period Lender shall make Advances to Boi7-ower from tirne to time in an aggregate principal

amount at any one time outstanding not to exceed the Credit Amount. Advances of the Credit mount

inay be boi-~-owed, repaid and re-borrowed by Borrower on a revolving basis during the Availability

Period.

<,.? i TSB ̂ f P.^C~~~S

(a) Operating Expenses. Advances shall be available exclusively for the purpose of funding

working capital costs and expenses set forth in the Approved Budget including, without limitation (i)

Post-Petition costs and expenses related to the continued operation of Bon-ower's Business in the ordinary

course and consistent with past practices, as set forth in the Approved Budget, (ii) fees, costs and

expenses incun-ed in connection with the administration of the DIP Loan as provided in this Agreement,

and (iii) Administrative Expenses incui7ed by Bon-ower in connection with the Case.

(b) Protective Advances. Notwithstanding any contrary provision herein set forth, Lender

shall at all times have the right, but not the obligation, to fund Advances to or for the benefit of Bon-ower

in excess of amounts required under the Approved Budget, or in excess of the limitations set forth in this

Section 2.2, if deemed necessary or appropriate by Lender. Nothing herein shall limit the right of Lender

to make such Advances as may from time to time be necessary for the protection and preservation of the

Collateral.

(c) Restricted Use of Proceeds. Notwithstanding anything to the conti~aiy contained herein

oi- in the Approved Budget, in no event shall proceeds of the DIP Loan be used to pay any Administrative

Expenses incurred in connection with the assertion of or joinder in any claim, counterclaim, action,

contested matter, objection, defense or other proceeding, the purpose of which is to seek or the result of

which would be to obtain any order, judgment, declaration, or similar- relief (a) invalidating, setting aside,

avoiding or subordinating, in whole or in part, any of the Obligations or the Liens in any of the Collateral

granted to Lender under this Agreement or the Financing Orders, (b) declaring any of the DIP Loan

Documents to be invalid, not binding or unenforceable in any respect, (c) preventing, enjoining, hindering

or otherwise delaying Lender's enforcement of any of the DIP Loan Documents or any realization upon

any Collateral (unless such enforcement or realization is in direct violation of an explicit provision in any

of the Financing Orders), (d) declaring any Liens granted or purported to be granted under any of the DIP

Loan Doeurnents to have a priority other than as set forth in Section 3.6 of this Agreement, or (e)

objecting to the amount or method of calculation by Lender of any of the Obligations; provided, however,

that if a Committee is appointed, cash collateral of Lender and, if needed, proceeds of the DIP Loan may

be used by such Committee to pay its fees and expenses incurred in connection with the investigation of

Lenders' claims and pre-petition liens up to the maximum alnount of $50,000, and provided that any such

investigation is commenced within the challenge pe3•iod set forth in, and otherwise complies with, the

Final Order. Nothing in this Subsection 22(e) shall be construed to waive Lender's right to object to any

requests, motions oz' applications made in or filed with the Banla~uptcy Court, including any applications

for interim oz• final allowances of Professional fees and expenses or other Administrative Expenses.

(d) Limitation on Advances. Notwithstanding any contrary provision of this Agreement,

Borl•ower shall not 1-equest any Advance hereunder which would result in Bor-i-owei•'s cas1~ position over

lUDOGS SP:101591.7 3ISGG/001


the ensuing two (2) week period, as reasonably projected by the CRO after payment of all budgeted

expenses, exceeding an average daily balance of $2,500,000.

2.3 Draw Requests; Representations. Borrower shall be entitled to not more than two (2)

Advances each calendar month. Each request for an Advance shall be submitted to Lender not less than

five (5) Business Days prior to the date upon which funding of such Advance is sought by Bor7-ower, and

shall be in the form of the Notice of Borrowing attached hereto as Exhibit B. Each request for an

Advance shall be deemed to constitute Bort•ower's contemporaneous representation and wai7-anty (i) that

on the date of, and after giving effect to, such Advance, no Default or Event of Default has occurred and

is continuing; and (ii) that on the date of, and after giving effect to, such Advance, all of the

representations and warranties of Borrower contained in this Agreement and the other DIP Loan

Documents are true and correct in all respects as if made on and as of the date of such Advance (except torhP PXtPnt that ~„~.h ,•Pr,•P~P„tat;nn~ anel warranties ex»ressly a-elate solely to an earlier date; in which case

such representations and wai-~-anties shall have been true and co~7-ect on and as of such earlier date); and

(iii) that such Advance is in accordance with, and will be used to fund costs and expenses of Boi7-owei- set

forth in, the Approved Budget. Notwithstanding anything to the contrary herein provided, no Advance

shall be made during the last five (5) Business Days in September. Each Notice of Boi7-owing must be

submitted in compliance with the provisions of Section 8.7 hereof with a contemporaneous transmission

by e-mail to each of [email protected] and [email protected].

2.4 Deliver~of Advances. Each Advance shall be delivered to Borrower by wire transfer to

the Operating Account pursuant to wiring instructions set forth in the Notice of Boi~•owing.

2.5 DIP Loan Note. The DIP Loan, all Advances thereof, and all interest accruing thereon,

shall be evidenced by and payable in accordance with this Agreement and the DIP Loan Note.

2.6 Interest. Prior to the occun-ence of an Event of Default, the outstanding principal balance

of the DIP Loan shall bear simple interest at the Fixed Rate. Upon the occurrence of any Event of

Default, and for as long as the same shall remain outstanding, at the option of Lender all Obligations of

Borrower shall bear interest at the Default Rate. All intet-est accruing on the DIP Loan or on any other

Obligation hereunder shall be computed on the basis of a year of 360 days and paid for the actual number

of days elapsed (including the first day but excluding the last day).

2.7 Tenn, Pavinents and Maturity.

(a) All interest accruing on the outstanding principal balance of the DIP Loan shall be due

and payable in an-ears on each successive monthly anniversary of the date of entry of the Interim Order.

No interim payments of principal will be required prior to the Termination Date.

(b) All Obligations of Boi7•ower shall be due and payable in full, without notice or demand,

on the Termination Date. Upon the maturity (whether by acceleration or otherwise) of any of the

Obligations, subject to Section 73 and the terms of the Financing Orders, Lender shall be entitled to

immediate payment of such Obligations without fut-dlei• application to or order of the Bankiliptcy Court;

provided, however, that amotmts necessary to fund the Carve Out shall be retained by Bon•ower in the

Operating Account, with any excess to be retuned to Lender by Boi7•owei• upon the entry of a final decree

closing the last banla•uptcy case commenced by a Borrower.

(c) The outstanding principal balance of the DIP Loan inay be prepaid by Boi-~•ower at any

time and from time to time, in whole or in part, without premium or penalty.

llROCS SP:I01591.7 39566/001


(d) All payments shall first be applied to accrued and unpaid interest, with any balance

remaining then being applied in reduction of principal.

2.8 Commirinent Fee. In consideration of the extension of credit evidenced hereby,

Borrower shall pay to Lender a cominitinent fee in an amount equal to two hundred basis points (2.00%)

of the Credit Amount ($320,000). Said commitment fee shall be included in the Approved Budget and

deemed fully earned and non-refundable on the date of entry of the Interim Order, and shall be due and

payable by Boi-~-ower on the Tei-~nination Date.

2.9 Submission and A~roval of Budgets; Variance Reports.

(a) Proceeds of the DIP Loan will be advanced in accordance with, and for the purposes setfn,-th in tha Anm•nvPrl Rn~laat ~nmmPnnino nn the first Wer~ne~cl2v fcillnwinu the Pntl cif the fpt~rth (4tYtl

Loan Week, and on each Wednesday thereafter, Borrower shall submit to Lender a rolling 13-week

update of the prior Approved Budget (each, a "Proposed Budget") showing the projected cash needs of

Boi7-ower for the applicable periods. Such budget, and any interim changes thereto, shall be subject to

review and approval by Lender in its sole discretion before being deemed an Approved Budget hereunder,

and shall include, at a ininiinuin, Boi-~-ower's good faith projection of all payroll costs and costs to be paid

under- operating expenses, general and administrative expenses, debt service payments, adequate

protection payments, Administrative Expenses and other expenses to be incurred by Borrower for the

applicable period, together with an aging of accounts receivable, projected cash receipts and estimate of

gross and net operating income for the applicable period. Upon approval of any Proposed Budget, the

same shall constitute the Approved Budget hereunder, but until such Proposed Budget shall have been

approved, the prior Approved Budget shall continue in full force and effect.

(b) Commencing on the first Wednesday following the end of the fotn-th (4th) Loan Week

and continuing on Wednesday of each week thereafter, Borrower shall deliver to Lender (i) a comparison

of actual to budgeted results of operations for the preceding four (4) Loan Weeks, and (ii) a report of all

income and expense variance on a line-item basis for' the preceding four (4) Loan Weeks in a foi7n to be

agreed upon (the "Variance Report"). If any Variance Report shall indicate that Borrower's cumulative

net cash flow for the hailing four (4) Loan Weeks shall be less than ninety percent (90%) of the amount

of net cash flow projected in the Approved Budgets) covering such period (negative variance of 10% or

less being "Pei7nitted Variance" hereunder), then an went of Default shall be deemed to exist at the

option of Lender; provided that Lender may, in its sole discretion, waive any violation of the 1'ei7nittecl

Variance limit set forth herein or authorize Bon•ower to exceed the Permitted Variance by written notice

to Boi7•ower (each a "Permitted Variance Exception").

2.10 Effect on Pre-Petition Loan Documents. Borrower hereby reaffi-~ns its obligations under'

the Pre-Petition Loan Documents. Upon entry of the Interim Order, the Pre-Petition Loan Documents and

all liens and security interests granted thereby in the Pre-Petieion Collateral shall continue iu full force and

effect, but Boii•ower shall have no obligation to perfoi7n any of the covenants set forth in the Pre-Petition

Loan Documents except as inay otherwise be set forCh herein or in any order of the Bankruptcy Court, it

being the intention of the parties that this Agreement and the Financing Orders shall henceforth control

the lending relationship between Borrower and Lender.

AR7'ICL~ TH12EE - S~CURI1'Y

3.] Gi•a»t of Security Interest As security for- the prompt satisfaction of all Obligations,

subject to the tEnns of the Financing Oi-de3•s, Bori•owei• hereby grants, bargains, sells, conveys, mortgages,

assigns, transfers, sets over and delivers to Lender, and grvlts to Lender a continuing lien upon and

securiCy interest in, all right, title and interest of Bo~7~ower in and to all Property of I3orrower of every

12DOGS SI:101591.`I395GG/001


kind, nature and description, wherever located and whether now owned oz• hereafter acquired, other than.

the Excluded Assets (collectively, the "Collateral"). Por the avoidance of doubt, and by way of

explanation and noY limitation, the Collateral shall include:

(a) All of Borrower's Property which is or may be subject to Article 9 of the

Uniform Commercial Code, together with all replacements therefor, additions and accessions thereto, and

proceeds (including, but without limitation, insurance proceeds) and products thereof, including, without

limitation, the following (each as defined by the Uniform Commercial Code):

(1) Accounts (including, without limitation, notes, drafts, acceptances, letters

of credit, and other rights to payment);

(21 Chattel Parser:

(3) Commercial Tort Claims;

(4) Deposit Accounts;

(5) Documents;

(6) Equipment;

(7) General Intangibles;

(8) Goods;

(9) Instruments;

(10) Inventory;

(ll) Investment Property;

(12) Letter-of-Credit Rights;

(13) Payment Intangibles;

(14) Software;

(15) Supporting Obligations;

(16) Kights as seller of Goods and rights to z-eturned or repossessed Goods;

(17) All existing and future leases and use agreements of personal property

entered into by Borrower as lessor with other Pez-sons as lessees, including without limitation the

right ro receive and collect all rentals and other- monies, including secul-ity deposits, at auy time

payable under such leases and agreements;

(18) All existing and future leases and use agreements of personal property

entered into by Boi7•ower as lessee with other Persons as lessors, including without limitation the

leasehold interest of Boi-i•owe3- in such pi-opei-ty, and all options to purchase such property or to

extend any such lease or agreement;

13llOCS SI~:101591.7395GG/001


(19) All Fixtures of Borrower;

(20) All moneys of Borrower and all hank accounts, deposit accounts, lock

boxes and other accounts in which such moneys inay at any tune be on deposit or held and all

investments or securities in which such moneys may at any time be invested and all certificates,

instruments and documents from time to time representing or evidencing any of the same;

(21) All claims of Boi-~-ower in any pending litigation and claims for any

insurance proceeds; and

(22) All Records pertaining to any of the Collateral (provided that Boi7ower

shall be entitled to retain true and correct codes of all such Records in the event that Lender at

anv tune takes possession thereofl.

(b) All real Property rights or interests now owned or hereafter acquired by

Borrower, whether leasehold, fee or mixed, and all contingent remainders and rights of reversion.

(c) All (i) tradenames, trademarks, tt-adeinark registrations, trademark applications,

patents, patent applications, copyrights, trade secrets, and other intellectual property of Borrower and all

continuations, divisions, renewals or reissues thereof, (ii) all income, royalties, damages and payments

now or hereafter due or payable with respect thereto including, without limitation, damages and payments

for past or future infi-ingeinents thereof, (iii) the right to sue for past, present and future infringements

thereof, and (iv) all rights corresponding thereto throughout the world.

(d) All claims or• causes of action that constitute property of Boirowei-'s bankruptcy

estate under- Section 541 of the Bankruptcy Code including, without limitation, claims and causes of

action under Chapter 5 of the Bankruptcy Code.

(e) Any and all other Property of Bon•ower of any kind, nature, or description

whether or not identified in any one or more of the Security Documents.

(fl All interest, dividends, proceeds, products, rents, royalties, issues and profits of

any of the Property described above and all notes, certificates of deposit, checks and other instruments

from time to time delivered to or otherwise possessed by Lender for or on behalf of Borrower in

substitution for oi• in addition to any of said property.

(g) All Pre-Petition Collateral.

32 Identification of Collateral. No submission by Borrower to Lender of a schedule or other

particular identification of Collateral shall be necessary to grant to Lender a Lien upon or to vest in

Lender security title to and a security interest in each and every item of Collateral now existing or

hereafter created or acquired, but rather such Lien, security title and security interest shall vest in Lender

immediately upon the creation or acquisition or any item of Collateral hereafter created or acquired,

without the necessity for any other or further action by any Bon-ower oi• by Lender.

33 Perfection and Maintenance of Liens.

(a) Pursuant t~o t}~e tei7ns of the Financing Orders, the Liens of Lender in and to all Collateral

described herein oi- n1 any other- Secu3-iry Document shall be perfected automatically and without further•

action by Lender or Borrower. No filing or registration of any kind shall be required in order to perfect

the Liens granted herein ot- in any other Security Document. Nevertheless, Lender nay elect, from an

14i>ocs sr:iois9i.~ 3~s~~iooi


abundance of caution and in order to remove uncertainty, to file or record all such financing statements,

mortgages, deeds of trust, deeds to secuY•e debt, security agreements, fixture filings, assigmnents,

memoranda or other instruments or evidences of perfection as Lender may deem appropriate, and no such

filing or recording shall in any manner- alter, diminish or otherwise limit the automatic perfection of all

Liens granted by the Financing Orders.

(b) In order to further evidence and perfect the security interest of Lender in the Collateral,

Bon-ower agrees that it shall execute and deliver to Lender- all such mortgages, deeds of trust, deeds to

secure debt, assigmnents, pledge agreements, security agreements, affidavits, certificates, documents and

insri-uments with respect to the Collateral as Lender inay from tune to tune request (collectively referred

to herein as the "Security Documents").

;~~ Rn:-,-n~x,P,• a„thn,•i?Pc T.Pn~l~r to pr•PparP and rPr_.nre~ nt• file all s»ch notices or instt•~~t~ents

of perfection as may be necessary or desirable, in the sole discretion of Lender, to establish, perfect and

maintain Lendet-'s Lien upon the Collateral including, without limitation, Uniform Commercial Code

financing statements (collectively referred to herein as the "Perfection Documents").

(d) Bon-ower hereby appoints Lender as its true and lawful attorney-in-fact (without

requiring Lender to act as such), which power shall be coupled with an interest and in-evocable, to prepare

and record or file any Security Documents or Perfection Documents, and to perform all other• acts that

Lender deems appropriate, to establish, perfect, maintain and continue Lender's Lien upon the Collateral

and to protect and preserve the Collateral.

3.4 Costs of Perfection. Borrower shall pay, or reimburse Lender upon demand for the

payment of, all costs, expenses and taxes of any kind or character incui-~-ed in connection with filing or

recording the Security Documents or the Perfection Documents in such jurisdictions as Lender may

designate. All such costs and expenses may be funded through Advances hereunder in Lender's sole

discretion.

3.5 Further Assurances. Upon t-equest by Lender, Borrower will make, execute and deliver

or cause to be made, executed and delivered to Lender and, where appropriate, cause to be recorded or

filed, as applicable, and from time to time thereafter to be re-recorded oi- refiled, as applicable, at such

time and in such offices and places as shall be deemed necessary by Lender, any and all such instruments

of further assurance, certificates and other documents as may, in the reasonable opinion of Lender, be

necessary or desirable in order to effectuate, complete, or perfect, or to continue and preserve, the

operation and effect of this Agreement and the Security Documents.

3.6 P~•iority of Liens. Bon-ower hereby covenants, represents and warrants that, upon entry of

the Financing Orders and in accordance with the Financing Orders, the Obligations and the Liens against

the Collateral secm•ing the Obligations shall, subject Yo the Calve-Out (i) be Supei-priority Clauns other

than in respect of the Excluded Assets, and (ii) pursuant to Section 364(d)(1) of the Bankruptcy Code,

constitute perfected first priority pruning Liens on all Collateral which shall prime any Liens existing on

the Petition Date under the Pre-Petition Loan Documents.

3.7 No Discharge; Survival of Claims. I3orrower agrees that (i) its Obligations hei•eundei• and

under fhe other DIP Loan Documents shall not be discharged by the envy of an order• eonfiilning any

reorganization plan, dismissing the Case or converting the Case to a case under Chapter 7 of the

Banki-upCcy Code (and Bon-o~uer, pursuant Co Section l l41(d)(4) of the Bankruptcy Code, hereby waives

any such discharge with respect to such Obligations), and (ii) flee Supeipi•ioi•ity Claims granted to Lender

pursuanT to tl~e Financing Orders and described in Article Thi-ee of this Agreement and the Liens granted

to Lender pursuant to the Financing Orders and described in Article Three of this Agreement shall not be

DOGS S1 :101591.7 395GGi001

15


affected in any manner by the entry of an order confirming any reorganization plan, disrnissing the Case

or converting the Case to a case under Chapter 7 of the Bankruptcy Code.

ARTICLE FOUR -CONDITIONS TO ADVA\ACES

4.1 General Conditions. Unless otherwise indicated herein, prior to making any Advance

hereunder Lender shall be entitled, in its sole discretion, to require that any one or more of the following

requirerneuts be satisfied as of the date of such Advance (unless waived by Lender in its sole discretion):

(a) This Agreement and all other DIP Loan Documents, each duly authorized and executed,

shall have been delivered to Lender.

(hl Pi•inr t~ ,,,3k;r,g rhP ;,,;t;al A~1van~P, cei-ti_fi_ed conies of resolutions of Borrower; duly

adopted, which authorize the execution, delivery and performance of the DIP Loan Documents and

specifically identify Bon-ower's Representatives shall have been received by Lender.

(c) Prior to making the initial Advance, an incumbency certificate which shall identify by

name and title and bear the signatures of all of the officers of Boi7-ower executing any of the DIP Loan

Documents delivered at or prior to the closing shall have been received by Lender.

(d) All Security Documents required by Lender shall have been filed or recorded in such

offices as Lender shall direct, and all fees, taxes or other charges in connection with such filing or

recording shall have been paid. Lender confii-~ns that, as of the Effective Date, no Security Documents

are presently required.

(e) All information, approvals, documents ar other insri•uments as Lender may reasonably

request shall have been received by Lender.

(~ On the date of and immediately after giving effect to each Advance, no Default or Event

of Default shall have occui7-ed and be continuing.

(g) No change resulting in a Material Adverse Effect shall have occurred since the Effective

Date.

(h) Prior to making the initial Advance, all of the First Day Orders shall have been entered

by the Bankt-uptcy Court and shall be satisfactory in foi7n and substance ro Lender in its sole discretion.

(i) The Interim Order, and when required hereunder the Final Order-, shall have been entered

by the Bankruptcy Com-t and shall be satisfactory in form and substance to Lender in its sole discretion.

ARTICLE FIVE - REl'R~SENTATIONS AND WARRANTIES

Borrower hereby represents and warrants to Lender that:

5.1 Existence and Power. Borrower (i) is a legal business entity duly organized, validly

existing and in good standing under the laws of the jurisdiction of its organization set forth in the

preamble to this Agreement; (ii) has all requisite powers and all governmental and regulatory licenses,

authorizations, consents and approvals required to cai7y on 13ori•owei-'s Business as now conducted; and

(iii) is qualified ro transact business as a fot-eign entity in, and is in good standing under• the laws of, all

states in which it is required by applicable law Co maintain such qualification and good standing except

16rocs sr:iois~~i.~~~s~~iooi


for those states in which the failure to qualify or maintain good standing could not reasonably be expectedto have a Material Adverse Effect.

5.2 Authorization. The execution, delivery and performance of this Agreement and the otherDIP Loan Documents are within the powers of Borrower and, subject to entry of the Financing Orders,have been duly authorized by all necessary action of Bon-ower.

5.3 Governmental Approvals. Except far- the entry of the Interim Order (and, whereapplicable, the Final Order), no consent or approval of any govermnental agency or authority is requiredin connection with the execution, delivery and perfoi7nance by Bo17-ower of the DIP Loan Documents.

5.4 Binding Effect. Subject in each case to the enhy of the Interim Order (or, whereµr~r~lirahla the Fjnal (lr~~i•1 ali T~TP T.n3n T~nrn,~rnPntc tp ~n~hich it i.c a narty arP leoal valid ~nGl liinr~inu

obligations of Borrower, enforceable in accordance with their respective teens, and all future DIP LoanDocuments not executed contemporaneously with the execution of this Agreement, when executed anddelivered in accordance with this Agreement, will constitute the legal, valid and binding obligations ofBorrower, enforceable in accordance with their respective tei7ns.

5.5 ERISA. To the extent applicable, Boi-~-ower has fulfilled its obligations under theminimum funding standards of ERISA and the IRS Code with respect to each plan and is in compliancein all material respects with the presently applicable provisions of ERISA and the IRS Code, and has notincui7-ed any liability to the Pension Benefit Guaranty Corporation or to a plan under Title IV of ERISAwhich the failure to comply with could have a Material Adverse Effect.

5.6 No Defaults. Except as disclosed in a written notice from Borrower to Lender, Borroweris not in default in the pei-foiinance, observance or fulfillment of any (i) obligations, covenants orconditions contained in any indenture, agreement or other instrutnent to which it is a party, and whichcould have a Material Adverse effect, or (ii) judgment, order, writ, injunction, decree or decision of theBankruptcy Court o3• any other court, tribunal, arbiti-al board, government agency or authot-ity.

5.7 Liabilities, Liti ag tion. Except as disclosed or refei7~ed to in the roost recent financialstatements of Boi7-ower or other documentation delivered or disclosed to Lender, Boi7-ower has nomaterial (individually or in the aggregate) liabilities, direct or contingent, and Borrower has not receivedany written notice of any material (individually or in the aggregate) litigation, legal or administrativeproceeding, investigation or other action of any nature pending o~-, to the knowledge of Boi7-ower,threatened against or affecting Borrower.

5.8 Tax Payments. Except as disclosed in a written notice from I3oi7~ower to Lender,Borrower has filed all tax returns and reports with respect to which the failure to file could have aMaterial Adverse Effect, and has paid all taxes, assessments, fees and other governmental charges leviedupon Borrower or upon any Property owned by Bor•i•ower or upon any income of Boi7•ower, which are dueand payable, including interest and penalties, with respect to which the failure to pay could have aMaterial Adverse F~ffect, or has provided adequate reserves for the payment thereof.

5.9 Title to Property. Except as disclosed in a written notice fi~oin Boi7-ower to Lender,Bon•ower is the sole and absolute owner of, or has the legal right to use and occupy, all Property it claimsto own which is necessary for• I3on-ower to conduct Boi•rowei's Business free and clear of all Liens othei-than Pei7nitted Liens. l;xccpt as disclosed in a written notice from Borrower to LendEr, Borrower enjoyspeaceful and undisturbed possession in all material respects under all leases under which it is operating aslessee which are necessary for• the conduct of Borrower's Businesses fi-ee and clear of all Liens other thanPermitted Liens.

t~ocs Sr:iois~i.~3~st~r~iooi17


5.10 Compliance With Laws. Other than any non-compliance that would not, individually or

in the aggregate, reasonably be expected to have a Materially Adverse Effect, Borrower has complied in

all material respects with all laws, statutes, codes, acts, ordinances, orders, judgments, decrees,

injunctions, rules, regulations, certificates, franchises, pei-~nits, licenses, authorizations, directions and

requirements of all federal, state, county, municipal and other governments, agencies, departments,

divisions, commissions, boards, courts, authorities, officials and officers, domestic or foreign, including,

without limitation, (i) subject to any Bankruptcy Court orders limiting or conditioning such compliance,

all laws regarding the collection, payment, and deposit of employees' incorne, unemployment, social

security, sales, and excise taxes, (ii) all requirements of ERISA, (iii) all Environmental Laws, and (iv) all

laws pertaining to occupational safety and health.

S,1 1 R,~;•~1Pn~nmP A arP~mantc Rpi-rn~uPr i.c npt a pa1•ty to anv inrlPntiire~ aorPPrnPnt Or Other

instrument affecting Boi7-ower's Business or Bon-ower's Properties which could have a Material Adverse

Effect except as disclosed in the most recent balance sheet of Borrower delivered to Lender.

5.12 Subsidiaries. Borrower presently has no Subsidiaries (other than any Borrower which is

itself a Subsidiary of another Borrower).

5.13 Approved Budget. The Approved Budget as of the effective Date reflects, and each

Proposed Budget hereafter submitted by Borrower shall reflect, Borrower's good faith estimate and

projection of (i) all operating expenses to be incui7-ed by Borrower in the ordinary course of business,

consistent with past practices, and (ii) all Administrative Expenses to be incun•ed by Boi-~-ower in

connection with the Case, in each case during the periods covered thereby.

5.14 Investment Company. Boi7-ower is not (a) an "investment company" or a company

"controlled" by an "investment company," within the meaning of the Investment Company Act of 1940,

as amended; (b) a "holding company" or a "subsidiary company' of a "holding company" or an "affiliate"

of either a "holding company" or a "subsidiary company" within the meaning of the Public Utility

Holding Company Act of 1935, as amended; or (c) subject to any other federal or state law or regulation

which purports to restrict or regulate its ability to boi7-ow money.

5.15 Margin Stock. No proceeds of the DIP Loan will be used for the purpose of purchasing

or acquiring any "margin stock" within the meaning of Regulation U of the Board of Governors of the

Federal Reserve System or for any other• purpose which would be inconsistent with such Regulation U or

any other Regulations of such Board of Governors, or for any purposes prohibited by Requirements of

Law or by the tei-~ns and conditions of this Agreement or the other- DIP Loan Documents.

ARTICLE SIX -COVENANTS

6.1 Affiiinative Covenants of Borrower. At all times prior to payment ul full of the

Obligations, Bori•owei- covenants and agrees as follows:

(a) Notice of Default. Promptly upon, and in any event within three (3) Business Days of,

becoming aware of the occu3-i-ence of any event which constitutes a Default, I3o3-rowei- will deliver written

notice tl~el•eof to Lender- together• with a detailed statement by a responsible officer of Borrower• outlining

the steps being taken to cure such llefault.

(b) Compliance with Laws. To the extent the failure to comply could have a Material

Adverse effect, Boi7•ower will observe and comply with all laws, statutes, codes, acts, ordinances, o3-dei-s,

judgments, decrees, injunctions, rules, regulations, certificates, franchises, pei•inits, licenses,

18rocs sr:iois~~i.~3~>svvioo~


authorizations, directions and requirements of all federal, state, county, municipal and other governments,

agencies, departments, divisions, commissions, boards, courts, authorities, officials and officers, domestic

or foreign, including, without limitation, (i) subject to any Bankruptcy Court orders limiting or

conditioning such compliance, all laws regarding the collection, payment, and deposit of employees'

income, unemployment, social security, sales, and excise taxes, (ii) all applicable requirements of ERISA,

(iii) all applicable Environmental Laws, and (iv) all laws pertaining to occupational safety and health.

(c) Payment of Taxes. Boi7-ower~ will pay and discharge all Post-Petition taxes, assessments

and governtnental charges or levies unposed upon it, or upon its income and profits, prior to the date on

which penalties might attach thereto and all lawful claims which, if unpaid, might become a Lien upon

the assets of Borrower; provided, however, that Bon-oweY• shall not be required to pay and discharge any

such tax, assessment, charge, levy or claim so long as the legality thereof shall be contested in good faith~nrl by anrn•nrn•iat~ nrn~PPrlinuc ~nrl fnr which Ttlegt~ate nrOvist(~t1 71~ aCCpt'ClanCe with (if~AP has been~ rr-~r----~ r --a ~

made, except that Borrower shall pay or cause to be paid all such taxes, assessments and goveininental

charges forthwith upon the commencement of proceedings to sell, seize or collect any Property attached

as security therefor, unless such sale, seizure or collection is stayed by the filing of an appropriate bond.

(d) Payment of Claims. Borrower will promptly pay and discharge all Post-Perition (i) trade

accounts payable in accordance with usual and customary business practices, and (ii) claims for work,

labor oi• Ynaterials which if unpaid might become a Lien upon any of its Property or- assets; provided,

however, that Borrower shall not be required to pay any such account payable oz• claim the payment of

which is being contested in good faith and, if necessary, by appropriate proceedings and for which

adequate provision as determined in accordance with GAAP has been made, except that Borrower shall

pay or cause to be paid all such accounts payable and claims forthwith upon the cor7~inencement of

proceedings to foreclose any Lien which is attached as security therefor, unless such foreclosure is stayed

by the filing of an appropriate bond.

(e) Insurance. Bon~ower shall maintain, and shall cause each of its Subsidiaries to maintain,

with financially sound and reputable insurance companies, insurance on all its Properties in such amounts

and against such risks as Lender' shall reasonably require, which shall at least be equal to such coverage

and amounts as are usually insured against in the same general area by companies engaged in the same or

a similar business; provided, however, such requirements shall not exceed those set forth in the Pre-

Petition Loan Documents. All such insurance may be subject to reasonable deductible amounts.

Borrower shall deliver to Lender certificates) of insurance on the date hereof and upon the annual (or

other shorter period of time) renewal of such policies specifying the details of all insurance then in effect,

together with a certificate of an officer- of Borrower that all pr~iniuins then due have been paid. Borrower

shall notify Lender- immediately in writing of any material fire or other casualty to or accident involving

any of the Collateral, whether or not such fire, casualty or accident is covered by insurance. Borrower

shall notify promptly the insurance company and submit an appropriate claim and proof of claim to the

insurance company if any Collateral is damaged or destroyed by fire or other casualty. Borrower shall not

declare or ag3-ee with underwriters that any Collateral is a compromised, agreed, arranged or constructive

total loss without the prior written consent of Lender. All such policies of insm-ance shall cover the

interest of Lender as inortgag~e, loss payee or additional insured in accordance with the requirements of

the Pre-Petition Loan Documents.

(~ Maintenance of Property. Borrower- will at all times inaint~ain, protect and keep in good

repair-, working order and condition (ordinary wear and tear excepted), all Property necessary to the

operation of Borrower's Business.

noes sr:iois~~i.~3~~s~vrooi1J


(g) Maintenance of Intellechial Property. Boi7-ower will obtain or maintain in full force and

effect, all licenses, franchises, patents, trademarks, copyrights, intellectual property, permits,

authorizations and other rights as are necessary for the conduct of Borrower's Business.

(h) Existence. Borrower will do all things necessary to (i) preserve and keep in full force and

effect at all times its legal existence, and (ii) be duly qualified to do business in all jurisdictions where the

nature of its business or its ownership of Property requires such qualification except foi~ those

jurisdictions in which the failure to qualify could not reasonably be expected to have a Material Adverse

Effect.

(i) Notice of Claims. Promptly upon, and in any event within three (3) Business Days of,

becoming aware of any adverse claim herein described, Bon-ower shall provide written notice to Lenderof (il tli~ flan ~r of un~ Tian acrainct env Pi-nnFrty of Rns-rn}uPr ()1' ~11~ 1~}1 P_. P_.X7CrP_,1lCP_, pf ~11V Y7l~rEl'l al (ilSnllte

under any contract or agreement to which Borrower is a party, or (iii) the filing of any lawsuit by or

against Borrower, or (iv) the entry of any judgment against Borrower.

(j) Maintenance of Books and Records Consultations, Audits and Inspections, and

Reporting. Boi7-ower will maintain books and records in accordance with GAAP and in which full, true

and correct entries shall be made of all dealings and transactions in relation to its business and activities.

Bon-ower will, and it will cause each of its Subsidiaries to, pei-~nit Lender and Lender's Professionals to

discuss the affairs, finances and accounts of Borrower with the CRO and other' officers of Bon~ower and

its independent public accountants, all at such reasonable trines and as often as Lender inay request;

provided, however, that Boi7-ower shall not be required to permit Lender ar Lender's Professionals to

engage in any such discussions that would or, in Borrower's reasonable discretion, could result of in a

waiver of privilege with respect to any communications between Bon-ower and Borrower's Professionals.

Bon-ower will also permit inspection of its Properties, books and records by Lender (and any Person

appointed by Lender) during normal business hours and at other reasonable times. In general, Borrower

shall at all trines cooperate fully with Lender and Lender's Professionals in the delivery of any and all

such infor-~nation related to }3o~7-ower's Business or any Properties of Borrower- as may be reasonably

requested.

(k) Further- Assurances. Borrower will execute and deliver to Lender, at any trine and from

time to time, any and all further agreements, documents and instruments, and take any and all further

actions which may be required under' applicable law, or which Lender may from trine to time reasonably

request, in order to effectuate the transactions contemplated by this Agreement and the other DIP Loan

Documents.

(1) Use of Proceeds. I3oirower shall use the proceeds of the DIP Loan solely for the

purposes peiznitted by this Agreement.

(m) CRO. Boi-~•ower shall (a) retain and continue to retain the CRO under tei7ns of

engagement satisfactory to Lender-, (b) file a motion or application within three (3) days after the Petition

Date seeking Banlu-uptcy Court approval of the retention of the CRO ~~z~nc pro tcrrrc to the Petition Dare,

and (c) obtain Bankruptcy Court approval of tl~e retention of the CRO within thirty (30) days after the

Petition Date. At all times, I3oii•owei- shall vest the CRO with full operational authority and managerial

control t~o eai•iy out the CRO Scope. In addition, Borrower- shall cause the CRO to coimnunicate with and

meet with Lender as reasonably requested by Lender.

(n) Inveshnent Banker. Boi~•ower shall (a) retain and continue to retain the lnvestnlent

Banker- under tei-n~s of engagement satisfacfoiy to Lender, (b) f le a ~noCion oi- application within three (3)

days alter the Petit~iari Date seeking seek Bankruptcy Cotn-t~ approval of the retention of the Investme~lt

DOGS SF:1015)1.739566/001

20


Banker nLtnc pro tunc to the Petition Date, and (c) obtain Bankruptcy Court approval of the retention ofthe Investment Banker within thirty (30) days after the Petition Date. In addition, Borrower- shall causethe Investment Banker to meet with and commmiicate with Lender as reasonably requested by Lender.

6.2 Negative Covenants of Borrower. At all times prior to payment in full of the Obligations,Bon-ower covenants and agrees as follows:

(a) Limitation on Indebtedness. Borrower will not incur or be obligated on any Indebtednessother than: (i) obligations to Lender under the DIP Loan Documents; (ii) Indebtedness relating toemployee benefit plans; (iii) Indebtedness in respect of taxes, assessments, governmental charges orlevies and claims for labor, materials and supplies to the extent that payment therefor shall not then berequired to be made in accordance with this Agreement; (iv) Indebtedness in respect of judgments oraw~,•els (which ele, not constit~ite an Event of T~efaultl that have been in force fns• less than the ant~licableperiod for taking an appeal and for• which adequate provision as dete~7nined in accordance with GAAPhas been made so long as execution is not levied thereunder and in respect of which Boi-~-ower shall at thetrine in good faith be prosecuting an appeal or proceedings for review and a suspending appeal bond inthe full amount of such judgment or award shall have been obtained by Bon-ower with respect thereto; (v)current liabilities of Borrower incurred in the ordinary course of Borrower's Business or in connectionwith Borrower's prosecution of the Case and not incurred through (A) the bor7~owing of money, or (B) theobtaining of credit except for credit on an open account basis customarily extended and in fact extendedin connection with normal purchases of goods and services; (vi) endorsements for collection, deposits ornegotiation and wai7-anties of products or services, in each case incurred in the ordinary course ofbusiness; (vii) Indebtedness in respect of performance, surety or appeal bonds obtained in the ordinarycourse of Boi1-ower's Business; and (viii) Indebtedness existing as of the Petition Date.

(b) Consolidation, Merger, Sale of Assets, Dissolution, Etc. Except in connection with anytransaction approved by the Bankruptcy Court in connection with the Sale Procedures Order, Boi7-owerwill not (i) directly or indirectly merge into or with or consolidate with any other Person or pei7nit anyother Person to merge into or with or consolidate with it or (ii) sell, assign, lease, transfer, abandon orotherwise dispose of any of its Property, except for sales pei7nitted under this Agreement.

(c) Changes in Nature of Business. Boi7-ower will not engage in any business if, as a result,the general nature of the business which would then be engaged in by Borrower, considered as a whole,would be substantially changed from Borrower's Business.

(d) Change in Control. Borrower shall not allow any Change in Control to occur.

(e) Ownership of Subsidiaries. Borrower will not acquire or cause to be foi7ned anySubsidiaries.

(~ Liens. Except with respect to I'ermitYed Liens, Borrower will not inoi-tgage or encumberany of its Property oz' suffer any Liens to exist on any of its Property without the prior written consent ofLender.

(g) No Contest. Borrower will not contest the validity, legality, binding effect or priority ofthe Pre-Petition Loan Docuil~ents, the DIP Loan Documents or any Liens in favor of Lender upon theCollateral.

(l~) Restricted Invest~lnents. Boi7•ower will not, directly oi• indirectly, make or hold any Post-Petition Resti•ict~ed Investments.

21DOGS SF:1015I1 J 39566/001


(i) Critical Vendors. Borrower- will not pay any critical vendors for Pre-Petition claims

without (i) the prior written consent of Lender, which consent shall not be um-easonably withheld, and

(ii) an appropriate or~de~- from the Banla-uptcy Court. Notwithstanding the foregoing, Lender agrees that

Borrower shall be pei-~nitted to pay any Pre-Petition claims to critical vendors which are included in the

Approved Budget (subject to Permitted Variances and Pei7nitted Variance Exceptions) and authorized by

an appropriate order of the Bankruptcy Court.

(j) Change in CRO. Without the prior written consent of Lender, Borrower will not

terminate the CRO or in any manner• alter, diminish ar- limit the CRO Scope.

(k) Executive Compensation. Borrower shall not increase the gross compensation or benefits

paid to, for or• on behalf of any executive officer or senior management employee of Boi7-ower without the

Yi''^,' ~J~;«~i; ~~;i~~nt ~f T ~:~~i~,' ~,;~h~~h ,rnngPnt may hP arantrrl ni• ~x~ithhalrl in T.Pnr1P.r'~ cn1P r~icE.sPtipn,..., ~ J b_..._.

(1) Agreements. Bon-ower shall not contest or reject in the Case any Pre-Petition indenture,

contract, agi~eernent, lease or- other instrument which is necessary to the continued conduct of Borrower's

Business, other than as may be required by the APA.

(m) State of Or~anization~ Location of Chief Executive Office. Borrower shall not change its

state of organization, principal place of business or chief executive office, unless Bon-ower has obtained

Lender's prior written consent and has taken such action as is necessary to cause the security interest of

Lender in the Collateral to continue to be a first priority perfected security interest subject only to

Yei7nitted Liens.

(n) Other Borrowings. Boi-~-ower irrevocably waives any right it may have, and hereby

agrees that at no time shall it seek authority fi~otn the Bankruptcy Court (i) to obtain post-petition loans or

other financial accommodations pursuant to Section 364(c) or (d) of the Banla-uptcy Code other than the

DIP Loan on the tei7ns and conditions set forth herein, or (ii) to propose or support any plan ofreorganization or liquidation with respect to Borrower that does not provide for the indefeasible payment

in full and satisfaction of all Obligations.

ARTICLE SEVEN -EVENTS OT DEFAULT AND REMEDIES

7.1 The occurrence of any of the following events or- circumstances shall constitute an "Event

of Default" hereunder:

(a) Borrower shall fail to pay any Obligation within three (3) Business Days of the date upon

which such Obligation is due and payable.

(b) Any representation oi- wai-~•anty of Boi7-ower made in this Agt-eement, in any other DIP

Loan Document or in any certificate, agreement, instrument or statement furnished or made or delivered

pursuant hereto or thereto shall prove to have been untrue or' incorrect in any material respect (or in the

case of any t•epresentation or wai7-anty qualified by a materiality standard, in any respect) when made or

effected.

(c) I3oirower shall fail to perfoi7n or observe any term, covenant, condition or agreement

contained in this Agreement ar~ in any other DIP Loan Document, or if there shall at any time exist any

event, occul7•ence, condition oi• state of facts which constitutes a bi-each or violation of any tei7n,

covenant, condition or agreement contained in this Agreement oz' in any other DIP Loan Document and

Bo37~owei• shall riot lave cured such failure to pei•fonn or breach within ten (10) days after t}~e receipt of

notice of such failure to pei-far711 oi• breach from Lender; provided, however, that tl~er-e shall be no

22DOGS SP:I01591.7 39566/001


obligation of notice and no cure period with respect to any breach or violation of Subsections 62(g) or

6.2 n of this agreement, which shall constitute an immediate Event of Default.

(d) If there shall occur or exist any "Default" or "Event of Default" under-, and as defined in,any DIP Loan Document other than this Agreement and Borrower shall not have cured such "Default" or

"Event of Default" within any notice, grace or cure period specified with respect thereto in such other DIP

Loan Document.

(e) This Agreement or any other DIP Loan Document shall at any time for any reason (otherthan permitted cancellation by Lender) cease to be in full force and effect or shall be declared to be nulland void by a cow-t of competent jurisdiction, or if the validity or enforceability hereof ar thereof shall be

contested or denied by Borrower, or if the transactions contemplated hereunder or thereunder shall be~n„t~ctPrl by Rni•i•n~uPi~~ nt• if Rni7•nwPi• shall ~r_.piiriiatP nr ~1Pny any li~hility o1• ohlig2tion hei•euncler o~-

thereunder.

(~ If any enforcement action is brought against Borrower with respect to any Pr•e-Petition

Indebtedness in excess of $100,000 owing to any other creditor, and collection in respect of such action isnot effectively stayed by the automatic stay in the Case.

(g) If any judgment, decree, arbitration award or ruling shall be entered against Borrowerinvolving, in the aggregate, aPost-Petition liability (not paid or covered by insurance) of $100,000.00 or

snore and enforcement or collection in respect of such judgment, decree, award or ruling shall not havebeen vacated, paid, discharged, stayed or suspensively appealed within thirty (30) days fi-oin the entrythereof.

(h) The Case shall be dismissed or converted to a case under chapter 7 of the Bankruptcy

Code, or Borrower shall file a motion or other pleading seeking the dismissal of the Case under Section1112 of the Bankruptcy Code or otherwise; a trustee under chapter 7 or chapter 11 of the Bankruptcy

Code, a responsible officer or an examiner with enlarged powers relating to the operation of the business(powers beyond those set forth in Section 1106(a)(3) and (4) of the Bankruptcy Code) under Section

1106(b) of the Bankruptcy Code shall be appointed in the Case and the order appointing such trustee,

responsible officer or examiner shall not be reversed or vacated within thirty (30) days after the entry

thereof; or an application shall be filed by Boi-~-ower for- the approval of any other Supei-prioriry Claim(other than the Carve Out) in the Case which is paid passe with or- senior to the claims of Lender with

respect to the Collateral hereunder, or' there shall arise or be granted any such pars passe or senior

Superpriority Claim with respect to the Collateral.

(i) The Banla-uptcy Court shall enter an order or orders granting relief from the automztic

stay applicable under Section 362 of the Banlc~•uptcy Code to the holder or holders of any security interest

to pei7nit foreclosure (or the granting of a deed in lieu of foreclosure or the like) on any material portion

of the Collateral, or an order of the Bankruptcy Court shall be entered reversing, amending,supplementing, staying, vacating or otherwise modifying any Financing Order, as applicable.

(j) Except as permitted by the Financing Orders or the Fiz-st Day Orders, I3oi-rower shall

make any unauthorized payment (in cash, in kind or otheitivise) of any Pre-Petition Indebtedness (other

than indebtedness owing under- the Pre-Petition Loan Documents).

(k) Other than as permitted by the Calve-Out and subiecY to entry of the Final Order,Borrower (03- any successor in interest to Boi7•owei-, including, without limitation, any trustee in t11e Case)

shall assert any claim for Administrative Expenses against any of the Collateral pursuant to Section

506(e) of the Bankruptcy Code oi• otherwise.

23rocs sr:iais~i.~3~>s~~viooi


Date(1) Any change having a Material Adverse Effect shall have occui7•ed since the effective

(in) Subject to the Bankruptcy Court's availability, the Pinal Order shall not have beenentered by the Bankruptcy Court on or• before the date that is thirty (30) days after envy of the InterimOrder, or such later date as may be agreed to in writing by Lender in its sole discretion.

(n) Subject to the Bankruptcy Court's availability, an order approving bid procedures in afo~7n acceptable to Lender shall not have been entered by the Bankruptcy Court on or before the date thatis thirty (30) days after the Interim Order, or such later date as may be agreed to in writing by Lender inits sole discretion. The order approving bidding procedures shall provide for bids to be received on orhPfnre October 1 1, 2019, ~nei the auction to occur' nn October- 17; 2019.

(o) Subject to the Bankruptcy Court's availability, the Bankruptcy Court approval of the saleshall not have been entered by the Bankruptcy Court on or before October 25, 2019, or such later date asinay be agreed to in writing by Lender in its sole discretion.

(p) Subject to the Bankruptcy Court's availability, the sale transaction shall not have closedon or before ninety (90) days after the Petition Date, or such later date as may be agreed to in writing byLender- in its sole discretion.

(q) Borrower shall at any ritne be in material default of its obligations under any APA, theFinancing Orders, the Sale Order or any other orders of the Bankruptcy Court.

(r) f~ny APA shall be rescinded, terminated, repudiated, declared to be null and void by acourt of competent ,jurisdiction, or otherwise cease to be in full force and effect for any reason other thancancellation or default by the purchaser thereunder•.

(s) The sale ri-ansaction between Borrower and the successful bidder (or a successful back-upbidder) authorized by the Sale Order sale shall fail to close in accordance with its terms.

(t) The Bankruptcy Court shall enter any order the effect of which is to materially limit,restrict, curtail, reduce, suspend, stay or enjoin Lender's Credit Bid Rights.

(u) If any Variance Report shall reflect a negative variance exceeding the Pei-~nitted Variance(subject ro the effect of any Permitted Variance Exception granted by Lender).

(v) If Bon-ower shall challenge the application of any payments authorized by the FinancingOrders pursuant to Section 506(b) of the Bankruptcy Code.

(w) If Boi7-ower shall seek any 3-elief under the I3anla-uptcy Code including, withoutlimitation, Section 105 of the Bankruptcy Code, to the extent such relief would in any way restrict oi•impair the rights and remedies of Lender provided in the Financing Orders oi• in any DIP Loan Document.

7.2 Tei7i~ination and Acceleration. Upon the occurrence and during the existence of anyDefault, Lender- shall be under no obligation to fund any ndvance hereunder-. If an Event of Default shalllave occurred and is continuing, then without further order of or application to tl~e Bankruptcy Court, andwithout noCice t~o any Person, but subject to the tei7ils of the Financing Orders, Lender• may, in its sole andabsolute discretion, ternlinate the Availability Period and declare all Obligations to be immediately dueand payable, whereupon all of the Obligations shall become and be immediately due and payable, without

24~oCs sr:iois~i.~ 3<~sv~iooi


presentment, demand, protest or further notice of any kind, all of which are hereby expressly waived byBon-ower; provided, however, that upon the occurrence of any event described in Subsection 7.1(h) ofthis Agreement, the discretion of Lender to make Advances under this Agreement shall automaticallytei7ninate and all Obligations shall automatically become immediately due and payable, withoutpresentment, demand, protest or further notice of any kind, all of which are hereby expressly waived byBon•ower.

7.3 Remedies; Relief fi-oin Stay. Borrower acknowledges that, subject to the tei7ns of theFinancing Orders, Lender has been granted full and complete relief from stay to pursue any and allremedies to which it may be entitled, including the right to deYnand immediate possession of theCollateral and the Pre-Petition Collateral and to liquidate the same in the manner provided by applicablelaw, all without further order of or application to the Bankruptcy Court. Upon the occurrence of anyEvent of Default_ but subiect to the terms of the Financine Orders. Lender shall be entitled to the exerciseof any and all rights and remedies available to it under the DIP Loan Documents and the Pre-PetitionLoan Documents, at law or in equity. All such rights and remedies may be exercised successively orconcm7-ently in such order• and manner as Lender inay in its sole discretion elect, and no such electionshall constitute a waiver by Lender of any other right or remedy. Without limiting the generality of theforegoing, Lender inay, without notice, but subject to the terms of the Financing Orders, take any or all ofthe following actions at the same or different tunes:

(a) Cancel Lender's obligations arising under the DIP Loan Documents.

(b) Institute appropriate proceedings to specifically enforce performance of the terms andconditions of the DIP Loan Documents.

(c) Take iinrnediate possession of the Collateral.

(d) Appoint or seek appoinhnent of a receiver, without notice and without regard to thesolvency of Boi-~•ower or the adequacy of the security, for the purpose of preserving the Collateral,preventing waste, and to protect all rights accruing to Lender by virtue of this Agreement and the otherDIP Loan Documents. All reasonable expenses incurred in connection with the appointment of suchreceiver, oi- in protecting, preserving, or improving any Collateral shall be charged against the Boiz•owerand shall be secured by Lender's Liens hereunder•.

(e) Perfoi7n any and all of the duties and obligations and exercise all the rights and remediesof Bot7~owet- contained in any contracts of Boi-~-ower as fully as Boi7-ower could itself.

(fl Notify customers that Accounts have been assigned to Lender, demand and receiveinfoi7nation from customers with respect to Accounts, forward invoices to customers directing them tomake payments to Lender, collect all Accounts in Lender's or Borrower's name and take control of anycash or non-cash proceeds of Collateral.

(g) I'nforce payment of any Accounts, prosecute any action or proceeding with respect to anyAccounts, extend the tiule of payment of any Accounts, make allowances and adjustments with respectthereto and issue credits against Accounts in the name of Lender or Boz-rowei-.

(h) Settle, compromise, extend, 1-enew, release, terminate or discharge, in whole or in pa3-t,any Account or deal with i~he same as Lender• may deem advisable.

(i) Require Borrower to open all mail only in the presence of a representative of I.,euder,who may take thei•efi~om any remittance on Collatet•al.

25DOCS tiF:101S91.739566/001


(j) Exercise any and all rights and remedies of Borrower- under or in connection with anycontracts or otherwise in respect of the Collateral, including, without limitation, any and all rights of anyBot7-ower to demand or otherwise require payiYlent of any amount under-, or performance of any provisionof, any assigned agreement.

(k) Enter upon the premises of Borrower or any other place or places where any Collateral islocated and kept, and through self-help and without judicial process, without first obtaining a finaljudgment or giving Boi-~•ower notice and oppot•tunity for a hearing on the validity of Lender's claim,without any pre-seizure hearing as a condition to repossession through court action and without anyobligation to pay rent to Bon-ower, remove the Collateral therefrom to the premises of Lender or of anyagent of Lender, for such trine as Lender may desire, in order effectively to collect or liquidate the~nl l a tet•a 1

(1) Collect, receive, appropriate, repossess, foreclose upon and realize upon the Collateral, or'any part thereof, and to sell, lease, assign, give option or options to purchase, or sell or otherwise disposeof and deliver the Collateral (or contract to do so), or any part thereof, in one or more lots or parcels, atpublic or private sale or sales, at any exchange broker's board or at any of Lender's offices or elsewhere,at such prices as Lender may deem best, for cash or on credit oz' for future delivery without assumption ofany credit risk. Lender shall have the right upon any such public sale or sales, and to the extent permittedby law, to purchase the whole or any part of the Collateral so sold, free of any right or equity ofredemption, which equity of redemption Bon-ower hereby releases. Borrower waives all claitns,damages, and demands against Lender arising out of the repossession, retention or sale of the Collateral.

(m) Use, and permit any purchaser of any of the Collateral from Lender to use, withoutcharge, any intellectual property, promotional or advertising materials or other property of a similarnature which pertains to, or is included in, any of the Collateral, in advertising for sale, preparing for saleand selling any Collateral, and all of Borrower's rights under all licenses and all franchise agreementsshall inure to Lender's benefit.

(n) Send any written notice to Borrower required by law in the manner• set forth in thisAgreement; and any notice sent by Lender• in such manner at least ten (10) days (counting the date ofsending) prior to the date of a proposed disposition of the Collateral shall be deemed to be reasonablenotice (provided, however•, that nothing contained herein shall be deemed to require 10 days' notice if,under the applicable circumstances, a shorter period of tune would be allowed under applicable Law).

(o) Exercise, in addition to all other rights which it has under this Agreement or otherapplicable law, all of the rights and remedies of a secured party upon default ender the Unifoi7nCoinmei-cial Code or other applicable Law.

Borrower acknowledges that upon any sale or liquidation of the Collateral or the Pi•e-Petition Collateralpursuant to non-bankruptcy remedies under state law as permitted hereby, Lender shall be entitled (butshall not be required) to credit bid the Obligations hereunder- and the Indebtedness of Boi7-ower owingui7dei• the Pre-Petition Loan Documents on a combined basis in such order• and manner as Lender inayelect.

7.4 No Limitation on Rights and Remedies. The enumeration of the powers, rights andreilledies in this Article shall not be construed to limit the exercise thereof to such trine as an Event ofDefault occurs if, under applicable law oi• any other• provision of this Agreement or any other DIP LoanDocument, Lende3- has any of such powers, rights and remedies regardless of whether an Event of Defaulthas occurred, and any limitation contained herein o3• in any of the other DIP I_,oan Documents as to

~~DOGS SP:101591.7395G6/001


Lender's exercise of any power, right or remedy for a period of tune only during the continuance of anEvent of Default shall only be applicable at such time as Lender shall have actual knowledge that suchEvent of Default is no longer continuing and for a reasonable time thereafter as may be necessary forLender to cease the exercise of such powers, rights and remedies (it being expressly understood andagreed that until such time as Lender shall obtain such knowledge and after the expiration of suchreasonable time, Lender shall have no liability whatsoever for the commencement of or continuing

exercise of any such power, right or remedy).

7.5 Attorney-in-Fact. Subject to the terms of the Financing Orders, Bon-ower herebyconstitutes and appoints Lender, or any other Person whom Lender inay designate, as Borrower'sattorney-in-fact (such appointment being coupled with an interest and being ii7•evocable until Lender's

Liens and claims shall have been satisfied), at Boi-~-ower's sole cost and expense, to exercise any one ormore of the rights, powers or remedies set forth below at any time after the occurrence and during thecontinuance of an Event of Default (and all acts of such attorney-in-fact or designee taken pursuant to thisSection 7.5 are hereby ratified and approved by Bon~ower, and said attorney or designee shall not beliable for any acts or omissions nor for any error of judgment or mistake of fact or law):

(a) To take or to bring, in the name of Lender or in the mine of Borrower, all steps, action,suits or proceeding deemed by Lender necessary or desirable to effect collection of Accounts.

(b) To settle, adjust, compromise, extend, renew, discharge, tei-~ninate or release anyAccounts in whole ar in part.

(c) To settle, adjust or compromise any legal proceedings brought to collect any Accounts.

(d) To notify customers to make payments on the Accounts directly to Leader or to a

lockbox designated by Lender.

(e) To transmit to customers notice of Lender's interest in the Accounts and to demand and

receive from such customers at any time, in the name of Lender or of any Boi7•ower or of the designee ofLender, infoi7nation concerning the Accounts and the amounts owing thereon.

(fl To sell or assign any of the Collateral upon such terms, for such amounts and at such time

or times as Lender deems advisable, and to execute and deliver in the name of Boi7-ower any deeds, bills

of sale, assigmnents or• other instruments of transfer in connection therewith.

(g) To take control, in any manner, of any item of payment on, or proceeds of, Collateral.

(h) To prepare, fle and sign Boi7ower's name on any proof of claim in bankruptcy or similardocument against any customer of Borrower.

(j) To prepare, file and sign Bon~ower's name on any notice of lien, assigmnent or

satisfaction of lien or similar document in connection wide the Collateral.

(j) To sign oz- endorse the name of Bo~7•owei• upon any Chattel Paper, Document, Instrument,

invoice, Pi•eight bill, bill of lading, warehouse receipt or similar• document or agreement relating to theCollateral.

(lt) 1'o use the infoi~nation recorded on or contained in any daTa processing equipment andcomputer hardware and software relating to the Collateral to which Borrower has access.

~~DO(S SF:101591.7 39566/001


(1) To enter into contracts or agreements for the management of the Collateral and thefurther construction or• completion thereof as said attorney-in-fact or designee or Lender inay fi-oin time totime deem appropriate and charge any costs thereby incui-~-ed to Boi7-ower's account.

(m) To receive, take, endorse, assign and deliver in Lender's name or in the name ofBorrower any and all checks, notes, drafts and other instruments.

(n) To receive, open and dispose of all mail addressed to Borrower and to notify postalauthorities to change the address for the delivery thereof to such address as Lender may designate.

(o) To do all acts and things necessary, in Lender's discretion, to fulfill Borrower'sobligations under this Agreement and to otherwise can-y out the purposes of this Agreement.

ARTICLE EIGHT - MISCELLAi\'EOUS

8.1 No Waiver. No failure or delay by Lender in exercising any right, remedy, power orprivilege hereunder or under any other DIP Loan Document shall operate as a waiver thereof, nar~ shallany single or partial exercise thereof preclude any other or further exercise thereof or the exercise of anyother might, remedy, power or privilege. The remedies provided herein and in the other DIP LoanDocuments are cumulative and not exclusive of any remedies provided by law. Nothing herein containedshall in any way affect the right of Lender to exercise any statutory or cointnon law lien or right of setoff.

82 Right of Setoff. Upon the occui7-ence and during the continuance of any Event ofDefault, subject to the terms of the Financing Orders, Lender is hereby authorized at any time and fromtrine to trine, without notice to Borrower (any such notice being expressly waived by Bon-ower) and to thefullest extent pei7nitted by law, to setoff and apply any and all deposits (general or special, trine ordemand, provisional or final) at any time held by Lender and any and all other indebtedness at any timeowing by Lender to or for• the credit or account of Borrower against any and all of the Obligations. Therights of Lender under this Section 8.2 are in addition to any other rights and remedies (including, withoutlirnitation, other rights of setoff which Lender lnay have. Nothing contained in this Agreement or anyother DIP Loan Document shall impair the right of Lender to exercise any right of setoff or counterclaimit may have against Borrower and to apply the amount subject to such exercise to the payment ofindebtedness of any Boi-~-ower unrelated to this Agreement or the other DIP Loan Documents.

83 Costs and Expenses. Subject to the tei7ns of the Financing Orders, I3oirower shallreimburse Lender for all fees and expenses of any kind or character whatsoever reasonably incun•ed byLender in connection with the Case including, without limitation, fees and expenses of Lender'sProfessionals (including all fees payable to Houlihan Lokey Capital, Inc., in its capacity as financialadvisor pursuant to its engagement letter with Burr & Ponnan LLP) and fees and expenses in connectionwith (i) the negotiation and preparation of any of the DIP Loan Documents or any amendment or~modification thereto, (ii) the preparation of any motions, orders or other pleadings in the Case, (iii)responding to any requests for waiver, restructuring or forbearance with respect to the Obligations, (iv)the adminisn-ation of the DIP Loan Documents and the transactions contemplated thereby, (v) any actiontaken to perfect or maintain the perfection or priority of any Liens with respect to any of the Collateral,including any intangibles taxes, docuinentai-y stamp taxes or• other taxes oi• costs which may be payable inconnection therewith, (vi) any inspect~ior~s or audits conducted with respect to Barrower's books andrecords or any of the Collateral, (vii) any effort to verify, protect, preserve, or restore any of the Collateralor to collect, sell, liquidate or otherwise dispose of or realize upon any of the Collateral, (viii) anylitigation, contest, dispute, suit, proceeding oi• action (whether instituted by or against Lender, Bon•owe~-or any other Person) in any way arising nut of oi~ relating to any of the Collateral or the validity,perfection or priority of any Liens thereon, or to any of tl~e DIP Lo~ui Docunlent~s o3• tl~e validity,

28llOCS SI=:101591.7 3JSGG/001


allowance or amount of any of the Obligations, (ix) the protection or enforcement of any rights orremedies of Lender, and (x) any other action taken by Lender to enforce any of the rights or remedies ofLender-. All amounts chargeable to Borrower under this Section 8.3 shall constitute Obligations that aresecured by all of the Collateral and shall be payable to Lender on the Termination Date. The foregoingshall be in addition to, and shall not be construed to limit, any other provision of any of the DIP LoanDocuments regarding the reimbursement by Borrower of costs, expenses or liabilities suffered or incui7-edby Lender.

8.4 Environmental Indemnity. Subject to the terms of the rinancing Orders, Borrowerhereby agrees to indemnify Lender, and the shareholders, officers, directors, employees, agents andAffiliates of Lender (collectively, the "Indeinnitees"), and hold the Indemnitees harmless fi•om andagainst any and all losses, liabilities, damages, injuries, costs, expenses and claims of any and every kindwhatsoever (including; without limitation; reasonable court costs and attorneys' fees and exnensesl; whichat any time or from trine to tune may be paid, incurred or suffered by the Indetnnitees, with respect to oras a direct or indirect result of the violation by Borrower of any Enviromnental Laws; or with respect to,or as a direct or indirect result of the presence on or under, or the escape, seepage, leakage, spillage,discharge, emission oi• release fi~orn, properties owned or operated by any Boi7•ower of any hazardoussubstances or any other hazardous or toxic waste, substance or constituent or other- substance (including,without limitation, any losses, liabilities, damages, injuries, costs, expenses or claims asserted or arisingunder the Environmental Laws); and the provisions of and undertakings and indemnification set out inthis Section 8.4 shall survive the satisfaction and payment of the Obligations and the tei7nination of thisAgreement; provided that Borrower shall have no obligation to an Indemnitee hereunder with respect toindemnified liabilities arising fioin the gross negligence, willful misconduct, bad faith, or criminalmisconduct of that Indemnitee.

8.5 General Indemnity. In addition to the payment of expenses pursuant to Section 8.3,subject to the terms of the Financing Orders, Borrower hereby agrees to indemnify and pay theIndemnitees and hold the Indemnitees hai7nless from and against any and all other liabilities, obligations,losses, damages, penalties, actions, judgments, suits, claims, costs, expenses and disbursements of anykind or- nature whatsoever (including, without limitation, the reasonable fees and disbursements ofcounsel for such Indemnitees in connection with any investigative, administrative or judicial proceedingcommenced or- threatened, whether or not such Indemnitees shall be designated a parry thereto), that maybe imposed on, incui7•ed by or asserted against the Indemnitees, in any manner relating to or arising out ofthis Agreement, any of the other DIP Loan Documents or any other agreement, document or instrumentexecuted and delivered by Borrower in connection herewith or therewith, the statements contained in anycommitment letters delivered by Lender, the agreement of Lender to make the DIP Loan hereunder, or theuse or intended use of the proceeds of any Advance hereunder, and the management and operation ofBorrower's Business (collectively, the "Indemnified Liabilities"); provided that I3on-ower shall have noobligation to an Indemnitee hereunder with respect to Indemnified Liabilities arising from the grossnegligence, willful misconduct, bad faith, or criminal misconduct of that Indemnitee. To the extent thatthe undertaking to indemnify, pay and hold harmless set forth in the preceding sentence may beunenforceable because it is violative of any law or public policy, Borrower shall conh~ibute the maximumportion that it is permitted to pay and satisfy under applicable law to the payment and satisfaction of allIndemnified Liabilities incurred by the Indemnitees or any of them. The provisions of the undertakingsand indemnification set out in this Section 8.5 shall survive satisfaction and payment of the Oblibationsand the termination of this Agreement.

8.6 Authority to Act. Lender- dial] be entitled to act on any notices and instrucTions(telephonic or wz-itten) believed by Lenciei• in good faith to have been sent ar- delivered by any personidentifying himself as 13on-owei-'s Representative, regardless of whether such notice or inst~•uction was in

29noes sr:iois~i.~39svv/ooi


fact delivered by such person, and Boi-~-ower hereby agrees to indemnify Lender and hold Lenderharmless from and against any and all losses and expenses, if any, ensuing from any such action.

8.7 Notices. Any notice, request, demand, consent, confii7nation or other communicationhereunder shall be in writing and shall be deemed received (a) when personally delivered (to the Personor department if one is designated), (b) one (1) business day following the date deposited with Federal~xpi•ess, Airborne or other national oveniight courier, fees prepaid, or (c) three (3) days following thedate deposited with U.S. certified or registered snail, return receipt requested, postage prepaid, andaddressed in each such case to the parties at their• respective addresses set forth below or such other singleaddress as either party may designate in a written notice given as herein provided (except that a change ofaddress notice shall not be effective until actual receipt).

If to Borrower: iPic-Gold Class Entertainment, LLC433 Plaza Real, Suite 335Boca Raton, FL 33432Attn: General Counsel

with a copy to: Jeffrey PomerantzPachulski Stang Ziehl &Jones LLP10100 Santa Monica Blvd., 13t~' FloorLos Angeles, CA 90067Telephone: (310) 277-6910Facsimile: (310) 201-0760

If to Lender: c/o The Retirement Systems of Alabama201 South Union StreetMontgomery, AL 36130Attn: M. Hunter HarrellTelephone: (334) 517-7109Facsimile: (334) 517-7099

with a copy to: Jeff BakerBui7- & Foi-~nan LLP420 North 20th Street, Suite 3400Birmingham, AL 35203Telephone: (205) 458-5279Facsimile: (205) 244-5601

8.8 Governing Law. This Agreement shall be governed by and consti~ed in accordance withthe internal laws of the State of Alabama, without reference Yo principles of conflict of laws. Anydisputes arising hereunder shall be determined by the Bankruptcy Court.

8.9 Amendments and Waivers. Any provision of this Agreement or any of the other DIPLoan Documents may be amended or waived if; but only if, such amendment or waiver is in writing andis signed by both Borrower- and Lender.

8.10 Successors and Assigns. 1'he provisions of this Ag3-eement shall be binding upon andinure to the benefit of the parties hereto and their 1•espective successors and assigns, except that Borrowei-may not assign or otherwise transfer any of its rights or delegate any of its obligaCions under thisAgr•eeinent~.

30i>ocs sr:iois~i.~3<~s~~iooi


8.11 NO ORAL AGRErMENTS ENTIRE AGREEMENT. ORAL AGREEMEN`1 S ORCOMMITMENTS TO LF,'ND MONEY, EXTEND CKEDIT OR TO FORBEAR FROM ENFORCINGREPAYMENT OF A DEBT, INCLUDING PROMISES TO EXTEND OR RrNEW SUCH DEBT, ARENOT ENFORCEABLE. TO PROTECT BORROWER AND LENDER FROM MISUNDERSTANDINGOR DISAPPOINTMENT, ANY AGREEMENTS RrACH~D BY BORROWER AND LENDERCOVERING SUCH MATTERS ARE CONTAINED IN THIS AGREEMENT AND TI-~E OTHER DIPLOAN DOCUMENTS, WHICH COLLECTIVELY COMPRISE A COMPLETE AND EXCLUSIVESTATEMENT OF THE AGREEMENT BETWEEN BORROWER AND LENDER. THISAGREEMENT EMBODIES THE ENTIRE AGREEMENT AND UNDERSTANDING BETWEEN TI-IEPARTIES HERETO AND SUPERSEDES ALL PRIOR AGREEMENTS AND UNDERSTANDINGS(ORAL OR WRITTEN) RELATING TO THE SUBJECT MATTER HEREOF.

8.12 Severability. In the event any one or snore of the provisions contained in this Agreementshould be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of theremaining provisions contained herein shall not in any way be affected or impai2-ed thereby.

8.13 Counterparts; Electronic Delivery. This Agreement may be executed in any number ofcounterparts, each of which shall be deemed an original, but all of which together shall constitute one andthe same instrument. It shall not be necessary that all parties execute the same counterpart. Counterpartsof this Agreement or of any other DIP Loan Document may be executed and delivered by facsimile oremail transmission, and any such facsimile or email signature shall be deemed fully effective as anoriginal signature of the parry delivering the same.

8.14 Resurt-ection of the Obli ations. 'To the extent that Lender receives any payment onaccount of any of the Obligations, and any such payment or any part thereof is subsequently invalidated,declared to be fraudulent or preferential, set aside, subordinated or required to he repaid to a trustee,receiver or any other Person under any contract, bankruptcy act, state or federal law, common law orequitable cause, then, to the extent of such payment received, the Obligations or part thereof intended tohe satisfied and any and all Liens upon or pertaining to any Property or assets of Borrower and theretoforecreated or existing in favor of Lender as security for the payment of such Obligations shall be revived andcontinue in full force and effect, as if such payment had not been received by Lender and applied onaccount of the Obligations.

8.15 No Third Party Beneficiary. This Agreement is solely for the benefit of the parties and,except as specifically provided in Sections 8.4, 8.5, and 8.18 of this 1~greeinent, is not intended to Ue forthe benefit of any other Person except for any successor or assignee of Lender.

8.16 Independence of Covenants. All of the covenants contained in this Agreement and theother DIY Loan Documents shall be given independent effect so that if a particular action, event orcondition is prohibited by any one of such covenants, the fact that it would be pei7nitted by an exceptionto, or otherwise be in compliance within the pt-ovisions of, another covenant shall not avoid tl~eoccui-~-ence of a Default oY- Event of Default if such action is taken, such event occurs or such conditionexists.

8.17 Conflicting Provisions. In the event any of the tel7ns and provisions of this Agreementconflict with any teens and provisions contained in any other DIP Loan Document, the tel7ns andprovisions of this Agreement shall govern. In the event any of the tez7ns and provisions of thisAgreement conflict with any ternls and provisions contained in any Financing Oi•der, the terms andprovisions of such Financing Order• shaIl govern.

31rocs sr:iois<~i.~ 3~s~viooi


8.18 General Release of Claims. In consideration of the agreements of Lender set forth herein,and as a rnaterial inducement therefor, subject to entry of the Final Order, Borrower, for and on behalf ofitself and all those claiming by, through or under it including, without limitation, its bankruptcy estate(collectively, the "Releasing Parties"), does hereby remise, release and forever discharge Lender,Lender's Professionals, and their respective affiliates, parents, divisions, subsidiaries, successor's,predecessors; stockholders, officers, directors, agents, employees, successors, and assigns (collectively,the "Released Parties"), of and fi-oin any and all claims, demands, liabilities, actions and causes of actionof every kind or nature, whether known or unknown, suspected or unsuspected, contingent or matured,concealed, hidden, latent or patent, which may now exist or may in the past have existed, directly orindirectly, fioin the beginning of time through the Effective Date.

8.19 Waiver of Jui-y Trial. THE PARTIES HEREBY MUTUALLY WAIVE ANY RIGI~TTO TRIAL BY JiJRY ON ANY CLAIM; COUNTERCLAIM; SETOTF, DEMAl~'D; AC'I'IOi~T ORCAUSE OF ACTION ARISING OUT OF OR IN ANY ~'VAY PERTAI\TING OR RELATING TOTHIS AGREEMENT OR ANY OTHER DIP LOAN DOCUMENT, OR IN ANY WAYCOi~t~ECTED WITH OR PERTAIl\'ING OR RELATIt~'G TO OR INCIDENTAL TO ANYDEALIi~'GS OF THE PARTIES WITH RESPECT TO THIS AGREEMENT OR ANY OTHERDIP LOAN DOCUMENT, IhT ALL OF THE FOREGOING CASES WHETHER NOW EXISTI\TGOR HEREAFTER ARISING, ANll ~'VHETHER SOUNDING IN CONTRACT, TORT OROTHERWISE. THE PARTIES ACKNOWLEDGE THAT THE FOREGOII~TG WAIVER FORMSA MATERIAL PART OF THE CONSIDERATION R~C~IVED BY LENDER AS ANINDUCEMENT TO ENTER INTO THE DIP LOAN DOCUMENTS.

8.20 Lender AQent~ Sharing Ratios. For purposes of convenience, TRSA and ERSA herebyirrevocably appoint TRSA as the agent of Lender for purposes of exercising all rights of review, approval,consent or other• discretionary authority reserved to Lender hereunder. TRSA and ERSA herebyacknowledge and agree that their ownership percentages and sharing ratios with respect to the DIP Loan,the Obligations, the Collateral and all Liens therein shall be as follows: TRSA — 67.00%; ERSA —33.00%.

(No further text on this page. Signature page follows.)

32noes sr:iois9i.~3~~seviooi


IN WITNESS WHEREOT, the parties have caused this Agreement to be properly executed anddelivered as of the Effective Date.

130RItOWER:

IPIC-GOLD CLASS ENTERTAINMENT, LLC, a Delawarelimited liability company

CPrint Naine:Title:

IPIC GOLD CLASS HOLDINGS LLC, a Delaware limitedliability company

Print Name:Title:

IPIC TEXAS, LLC, a Texas limited liability company

C

Print Name:Title:

IPIC MEDIA, LLC, a Florida limited liability company

iPrint Name:Title:

DELRAY BEACH HOLDINGS, LLC, a Florida limited liabilitycompany

~y:Print Name:Title:

DOCS SF:101591.7 39566/001


LENllElt:

TEACHERS' RETIREMENT SYSTEM OF ALABAMA,a body corporate of the State of Alabama

M. Hunter Han-ell, Director of Private Placements

EMPLOYEES' RETIREMENT SYSTEM OFALABAMA, a body corporate of the State of Alabama

CM. Hunter Harrell, Director of Private Placements

DO('S SP:101591.7 3956(i/001


EXHIBIT A —APPROVED BUDGET

[To Be Attached]

DOGS SF:101591 J 395GG/001


EXIIIBIT B —1'~TOTICE OF BORRO`'VInTG

2019

By TedEx By Email

Teachers' Retirement System Of Alabama hunter.harrell(c~,rsa-al.~ov201 South Union Street rachel.daniels(a,rsa-al.govMontgarnery, AL 36130Attn: M. Hunter Hai7-ell

RE: Debtor• in Possession Loan and Security ~gz•~ement c~at~ei August , 2019, ley and a,,,~,ng iPTC'_GOLD CLASS Ei~TTERTAINMENT, LLC, a Delaware limited liability company, IPIC GOLDCLASS IIOLDI\TGS LLC, a Delaware limited liability company, IPIC TEXAS, LLC, a Texas limitedliability company, IPIC MEDIA, LLC, a Florida limited liability company, and DELRAY BEACHHOLDINGS, LLC, a Florida limited liability company (individually and collectively, "Boi7-ower"),TEACHERS' RETIREMENT T SYSTEM OT ALABAMA, a body corporate of the State of Alabamacreated under- §§ 16-25-1 et seq., of the Alabama Code ("TRSA"), EMPLOYEES' RETIREMENTSYSTEM UT ALABAMA, a body corporate of the State of Alabama created under §§ 36-27-1 et seg.,of the Alabama Code ("ERSA", and together with TRSA, individually and collectively, "Lender") (as atany time amended, the "DIY Loan Agreement")

Ladies and Gentlemen:

This Notice of Borrowing is delivered to you pursuant to Subsection 2.3(a) of the DIP LoanAgreement. Unless otherwise defined herein, capitalized tei7ns used herein shall have the meaningsattributable thereto in the DIP Loan Agreement. Borrower• hereby requests an Advance of DIP Loanproceeds as follows:

Principal Amount:Funding Date:Wiring Instructions:

Attached hereto is copy of the current Approved Budget supporting the amounts drawnhereunder, together with variance and reconciliation through the date of this request.

Boi7-ower hereby certifies that (i) on the date of, and after giving effect to, the Advance requestedhereby, no Default or Event of Default has occui-~-ed and is continuing; and (ii) on the date of, ai d aftergiving effect to, the Advance requested hereby, all of the representations and waii~anties of Bol-rowercontained in the DIP Loan Agreement and the other• DIP Loan Documents are true and correct in allrespects as if made on and as of the date of such Advance (except to the extent that such representationsand warranties expressly relate solely to an ear•liei- date, in which case such representations and warrantiesshall have been true and coi-i-ect on and as of such earlier date); and (iii) that such Advance is inaccordance with, end will be used to fund costs and expenses of Borrower set forth in, the ApprovedBudget; and (iv) all prior Advances lave been applied by Borrower in compliance with and for thepurposes set forth in the DIP Loan Agreement and the Notice of Borrowing pursuant to which tl~e same

rocs sr:iois~i.~3~~sv~~ooi


were disbursed. Borrower hereby ratifies and reaffirms all of the DIP Loan Documents and allObligations arising thereunder.

IN WITNESS WHEREOF, Boi-~•ower has caused this Notice of Bo37-owing to be executed anddelivered this day of , 2019.

IPIGGOLD CLASS ENTERTAINMENT, LLCIPIC GOLD CLASS HOLDINGS LLCIPIC TEXAS, LLCIPIC MEDIA, LLCDELRAY BEACH HOLDINGS, LLC

By:its:

DOGS SP:10159L7395GG/001


Exhibit 2


Case 19-11739-LSS Doc 48 Filed 08/06/19 Page 1 of 46

~N T~I~ UNITEl3 STATES BANKRYIPTCY COURTFOR THE llI~TItICT OI' DELAWA~2F

In re: (Chaptez• l 1

iPic-Gold Class Et~tertairunent, LLC, et al.,l ~ Case No. 19-11739 (LSS)


INTERIM ORDER: {A) AUTHORIZING DEBTORS ~N POSSESS70N TO(~) OBTAIN POSTP~TITION FINANCING PU~2SUANT TO 11 U.S.C. ~~ 105, 362,

363, A~TD 3G4, (r~) GRANT LIENS A.1~ID SUl'~RPRIORITY CLAIMS TOPOSTPETITION LENDERS PURSUANT TO ll U.S.C. §§ 364; {III) USA CASH

COLLATERAL, ANll (IV) PROV~D~ ADT,QUATE PROTECTION TOPR~PETITION CREDIT ~'ART~ES, (B) MODIFYING AUTnMATICSTAY PURSUANT TO l l U.S.C. §§ 361, 362, 363, AND 3G4; AND

(C) SCHEDULING FINAL HL+'ARING PURSUANT TO BANKRUPTCYRULES ~0{)1{B} A1~iD (C) AND LOCAL BANKRUPTCY RULE X001-2

This matter is before the Cot~z•t oz~ tl~e Motion (the "Motion") of IPIC:-GOLD

CLASS ENTERTAINMENT, LLC {"IPIC Entertain~nenY'), [YIC GOLD CL11SS HOLDINGS

LLC ("IPIC Holdings"), IPIC TEXAS, LLC ("IPIC Texas"), IPIC MEDIA, LLC ("IPIC Meclia"),

alid DELRAY BEACH ~-IOLDINGS, LI,C ("Delray Beach" ai~c~ collectively with IPIC

~z~Certainment, IPIC Holdizigs; IPIC Texas, and I~IC Media, the "llebtors")z iii these cllapter~ 11

cases (tl~e "Cha~~ter ] 1 Cases"), requesti~ig entry ot~ara iz~teaim order {this "Intez~ina Oz-der") and a

final order (the "Final 4z•der") puz~suant to Sections 105, 361, 362, 363(c), 363{e), 364(c)(1),

364(c)(2), 364(c)(3), 364(4)(].}, and 364(e) of Title I1 of the United States Code (as amended,

the "Banla~uptc~") and Rt~Ies 2002, 4dt)1, and 901~k of tl~e Federal Rtales of I3ar~•uptcy

~ The Debto~~s in these chaptea- 1 i cases, along with tl~e last fo~Er digits of each Debto~•'s federal tax identificationnumber, as appiical~le, are: iPic-Gold Class E~~tertainment, LL,C 0}684); iPic ~'ntex-tainmezit lr3c. (9582); iPic Goldglass I-Ioldings LLC (6315); iI'ic Media, t,I_,C (0150); iPic Texas, I,LC (N/A); and Deh•ay J3each Holdings, LLC

(1 Q35}. The Debtors' principal place of business is 433 Plaza deal, SuiPe 335, Boca Raton, FL 33432.

7 Debtor• i1'ic Eiltertai~m~ent, Tnc. is not a party to tl~e TRIP Facility (as defined l~elor~~}. ;-~~ ~~~2' ~~~- <'~ ~ ~ ̀~`~ ̀spE~ ( (,. ~$..

. Lb~{~7~i.k`n ~: 3~.~`.~ _'~k, —{'~! ~ a~ ~ f.~''~ssT{~ t~ ,9~.~ a'~.d'f- b a~•E,t,fh-~.8. ` ~ ci ~,~ i~C'"r ' E{.s.~'I~'1¢`~; S ~ L~f~:

DOGS SF:IOE590.1Q39~6G/Opl



Procedure (as amended, the ̀ Bax~c~•uptcv Rules"), arzcl Rule 40Q1-2 of t1~e Local Rules of

Bankruptcy Practice a7~d P7•ocedtire for tl~e Lhlited States I3a~~uptcy Court for t1~e District

of Delaware (as emended, the "Local Barikruptcv .Rules"):

(1} au~Iiorizing the Debtors to obtain pos#-petitio~a financing from the TeacheY•s'

Retirement System of Alabazxaa, a body co~po~~ate oi'tlie Stile olAlaba~na cre~Yted iuider Section

§§ 16-25-1 et seq., of the Alabama Code ("TRSA"), and tl~e Employees' Reeirement System of

Alabaz~~a, a body corporate of the State of Alabama created undez• Sectiozz §§ 16-25-1, et sey., o~

the Alabama Code ("ERSA," togetl~ez• with TRSA, each a "DIP Lender," and collectively, the

"DIP Lende~•s"), consisting of a superpriority, secured revolving credit facility in the principal

anzot~nt of up to $16,000,000 (tile "DIP facility") to be used fox• ge~ex•ax wozkiz~g capital az~d

liquidity purposes, z~aclttdin~ tl~e payment of Administrative Expenses as described herein and i1~

that cez'tain Debto~~-In-Possession Loan a~zd Securr'ty Agreement, dated August 5, 2019, by and

among t11e DIP Lenders, as Lex~dez~s, and tl~e Debtors, as Boazower {substantially in t~~e form

attached to the Motion, together with all schedules, exhibits and at~tiexes thereto, aild as any timeY

axnelided, the "DIP Lo~l A~reemen~"), of~ which a~nount~$~;5@4;d39A will be available ~lndex• the

I~IP Facility on an ir~terirr~ basis (the "Interim Amotmi Limit") ciurit~g the Interim Peiiocl {as

defined below), on il~e terms and conditio~ss set forth in the DIP Loaza Docun~ez~ts (as defined in

the DID' Loan Agreelne~lt) and ixa t~~zs Interim Qz•der;

(2} authorizing tl~e Debtors to execute and enter into the DIP Laa~1 DocLuneiats and

to pe~•forn~ all s~~ch other and Fut~tlier acTs as may be required irl co~anectian with the DIP Loaal

Docuineilts;

(3) autllorizinb the Debtors to use ~~roceeds of the DIP Facility solely as expressly

permitted in flee DI.~' I.,oan Documents azzd in acco~~dance ~~ith t]Iis IzatcX~it~z Order;

2noes sF:io~s~o.lo3s~s~~ioa~



{4} granting automatically perfected (i} priming sectuity interests izi and liens oi~ all

of the DIP Collateiai {as defined below} solely with respect to the Pre--PetitioY~ Dent ai3d the I're-

Petition► Collateral (as defined below} anti (ii) nozi-priz~~in~; security interests iz} anti liens on all

DiP Collateral upon which #here u'e either pre-existing pei7~litted senior 1ie11s or no pre-existing

liens, to the DIP Lenders to the extent provided herein, and granting superpriorit}~ administrative

expense status to the DIP Obligations {as defzned below);

(S) autl~arizing tl~e Debtors to ~zse Cash Collateral (as defined below), subject to tl~e

I~iterim Amount Limit during the If~terim Period;

(6) p~~ovidi~Zg adec~ttate pzotectzon to the Pz•e-Petitioia Lezadez• (as defined below) to

the exteiat of any ciiminutio~~ i~~ value of its interests in the DTP Collateral {as defiled below) atad

subject to the Carve-Out (as defneci below);

(6) authorizing the De~toi's to pay the pri~icipal, i~~terest, fees, expe~~ses,

dist~ursements, ai d other amounts payable under• the DIP L o all Documents as such a~noiuits

become due and payable;

(7) vacating a1~d modifying tl~e automatic stay pw•suant to Section 362 0#' tl~e

Bai~lcruptey Cocle to the extent z~eeessat•y to ilxaple~nent arld effectuate the terms and provisions of

this Izaterizn Oz't3er and the othea• DIl' .L,oan Documents;

(8} subject o~~ly to and eFfective t~po~i entry of the Tinal Ordea~, waiving the

Debtors' ability to surchazge agaizist collateral pursuac~t to Section 506(c) of the Ba1~•uptcy Code;

(9} sclled~aling a fia1a1 he~u~ing (the "I~iu~11l~,~uii7g") to consider ea~Yz•y of the Final

QI•der, atzd in col~lectio~i therewith, giving and ~~rescribii~g the manger of notice of the ~'iYial

Hearing on the Mot~~n; axed

{10) g~'anting the Debtors such othez• a1~d fi~t-tl~er relief as is just anti Z~roper.

3TJOCS SF:10J590.]Q39566/Of)[



Based upon the Court's review of the Motion, tae exl~xbifis attached thereto,

the Declm•alion of Dcrvzd M. Baker in Support of First I~a,~~ Nfntions, sworn to as of August

5, 2019 (tike "First Day Declaration"), and all i~~atters bz•ougl~t to the Cour`t`s attentio~l at the

intex'im heari2~g, which was Iaeld on August 6, 2019, pursuant to Ba1~la~uptcy Roles ~~001(b)(2)

and (c){2) (the "Interim Hearing"}, and ai'ter clue deliberation and consideration, and good and

sufficient cause app~a~~ing therefor,

IT IS HEREBY FOUND, DETERMIN~ll, AND ADJU!)UED, that:3

I. Disposition. Tlae Motio~~ is he~•eby G12ANTED, as and to the extent

provided herein. Any and all objections to the relief requested in t11e Motion, to the extent not

otl~e~~wise wiEhdrawn, waived, oz• z•esolved by consent at or Uefore the Intex•izn Hearing, and all

reservations of rights included therein, are l~ez•eby OV~RRUL~D and D~NI~D.

2. J~zz•isdiction; Core Proceeding. This Court loos jurisdiction over these

Chapter 11 Cases, this :Motion, and the patties and property affected hereby pursuazlt to 28 U.S.C.

§§ 157(b) and 133. TIZis is a "care" proceeciilig pu~~suai~t to 28 U.S.C. ~ I57(b)(2}. Venue is

proper before this Court ~ursuar~t to 28 U.S.C. §~ I~~OH and I409,

3. Service of Motiari ~tnc~ Notzce of~Iz~teX•i~n Hearin. The Debtors have caused

to be se~•ved a zaatice of tl~e Motion and the Interim Hearing, i~icludiz~g a copy of t11e }proposed

I~iterilil Order and Budget (as defined below), by elect~•onic u1ail, telecopy h•ansx~lission, land

delivery, overnight courier or first class United States mail upon the Office of tl~e United States

T~•i~stee (tl~e "U.S. Trustee"), tlae consolidated 30 largest ui~secu~•ed c~•editors of the Debtors, the

Internal Keve~iue Seavice, all parties who lave filed requests prior to the date of service Cor notices

zmder Kule 200? of the Bai~•uptcy Rules, ai~cl all parties laaow~7 by a Debtor to hold or assert a

"1'he fi3~dings and conclusions set Forth herein consCituie this Court's tindiilgs of fact and conclusiotZs of lawpursuant to Bankruptcy Rule 7052; made applicable to this proceedii7 ptu~suant to Bankruptcy Rule 90 ] 4.

~}

llOCS SP:IOJJJ0.10395(i(i/0(}]



lieu oza any asset of a llebto7•. "I'he foregoing rlatice of t11e Motion, as it relates to this Interim Orden•

a~~d the Interim Hearing, is appropriate, due gild sufficie~lt zmde~• the Bankruptcy Code, the

Bal~luuptey Rules, a~xd tlae ~,ocal Bankruptcy Rules, including, without linzitataox~, Sectio~as 102(1}

and 36~ of the Bankzuptcy Code acid Ba1~liptey Rule 4001(6}, (c) and {d), a~ici that no fi~i~the~•

~lotice of the relief sought at the Interim Hearing and the relief gra~ited herein is necessary or

required.

4. Petition Date. On A~i~~st S, 2019 (tile "Petition Date"}, each of Debtors

filed with t1~e Court its respective voluntary petition for relief under cl~a~tei' 11 of the Bank~~uptcy

Code, and each is continuing to ma~lage its properties aiad to operate its business as a debtor-in-

possession pursuaxzt to Sectzons I107 and 1108 of the Banlc~uptcy Cale. No trtistiee o~~ exazi~izaez~

has been appointed for any Deb#or ]leieiii.

5. Debtoz~s' Stipulations. Without pz~ejudzce to tk~e rights of azay otk~er party

{btrt subject to the limitations thereon contained in ~'aragraph 26 below), each Debtoz-,~~c~.~,~~~~g Debtor iPic Elitertainment, Inc., adzl~its, stzpulates, ackaaowledges axed ag~•ees as follows:

a. Pre-Petition Loan,,,_ Dec unellts. Pi~rstaant to that certain Second

An~encled and Re,stuted MasFer Loan and Seczrr•ity Agreement dated February 1, 2018, as vnended

by Modification Agreezaaezlt dated Ju~~e 22, 2018, as Earthen• anle7~ded b5~ Second Modification

Agz•eez~~ent dated Jane 29, 2018, as fii~-t11er amended by Third Modification Agreen-~e~lt dated

Mardi 4, 2019 (as so ameildecl, tl~e "P~-e-Petition Loan A~reelnent"), by anti amang~-~~ ~rt~~~

nt n CC ri.rTi,T?~, n ~.vT'~~"~-~'~~~`;-~~~-~~:~;fi"~'~"~'~~.~~~}"~T'~'~:~; ~~Z~~% ~~~~x~~f 3'~"~;~:,~.,~,i,rn-~;S ts~-~rv-z-c:~z~—z-i-r @ ~ ~ ~

~'-TC~--z~~ '-~r~~r;-I-F-,~-D.~~,~XZA=-YY-- ~~'?~ ~n~-.~~~~tz~;-~,r;F~~and I31~Y COLONY KT~LTY, LLC,a

collectively, the "Pre-Petition Obli tors"), TRSA, as adn~inistx~~iti~~e and collateral agent (to~etl~er,

`~ Bay Colony Realty, 1,.L.0 vas dissolved ~>repetition and is riot a Debtor in these proceedings.

51JOCS SP:10 t 590.10 39566/OD l



the "Pre-Petition A~"), and TRSA a~ld ERSA as Lenders (tl~e "Pre-Petition Lendez•s," and

collectively with the Pre-Petition Agent, t11e "Pre-.Petition Credit Parties"}, made a terns loan

facility available to the Pre-Petition Obligors in a~~ aggregate principal arnount not to e:;ceed

$225,828,169. The Pre-Petition I_.oa1i Agaeement, together with any other agreera~zet~C, dote,

inst~•umez~t, gtjaranty, mortgage, fixtuae cling, deed of trust, ~na~~ci~ag statement, pledge,

assig~unent, and other docume~~t executed at any tine in coimection therewith, in each case as the

sane may be ametlded, znocii~ed, aestatecl ax• supplez~aented fioin tir~ie to dine, az•e hereinafter

~•efe~•red to collectively as the "Pike-Petitioil_Loan Docunae~~ts").

b. ~'z•e--Petition Collateral. Pursuant to ce~•tain of tl~e Pr•e-Petitio~l Loan

Documents, the Pre-PetitioY; Obligors granted the P~•e-Petition Agent, for the benefit of the Pre-

Petition Credzt Paz•ties and to secure such Pre-Petition Obligors' obligations and indebtedness

under the Pre-Petition Laan Documents, ~z~st ~z~ioz•ity liens on and security intez•ests in (tile "Pre-

Petition Security Interests"} the Collateral, as defined izl the Pze-Petitiotl Load Agi•eemezzt aild

Collateral Documents (hereaftez•, tl~e "Pz•e-Petition Collateral").

c. ~'re--Petition Obli~atioiis. As of t ie Petition Date, tl~e Pz•e-Petition

Obligors, jointly and severally, wez•e justly and lawl'iilly indebted and liable under the pre-Petitzon

Loan Docuinet~ts to the Pie-Petition Credit I'azties for term Ioa~1s i~l the o~~tstanding principal

amotia~t of X205,340,7'72 (the "Pre-Petition Loans", acid togethez• with all other obligations of any

Pre-Petition Obligoz• i~z z~espect of izadezxinities, guaranties and other payment asstu•a~~ces given by

any Pi'e--.Petition Obligor for the benefit of ~'ze-Petition Credit P~u•ties, and all intex'est, £ees, costs,

legal expenses end atl other amolurts heretofore or he~•eaftex• ace~•uing tt~et~eon or at any tir~~e

chargeable to any Pre-Petition Obligc~z~ iii colulection theiewitli, collectively z~eferied to as tl~e "Pre-

Petition Debt"). Lach Debtor acl~nowlcdges and sti}nzlates tl~~at: (i) tl~e Pre-Petitit~n Debt is d ie

DOC:S SF:103590J039~GG/001



and owing to the Pre-Petition Credit Parties tn~ithout any defense, offset, recou~ment or

coul3terclai~n of a~1y kind; (ii) the ~'~~e-Petition Debt constitutes tl~e legal, valid anti bix~din~

obligation of eac1~ Pre-Petition Obliga~', enforceaUle in accordance with its terns; {iii) anc~ no~~e o~

the Pze-Peti#ion Debt or any payments made to any ~'re-Petition Credit P~-ty or applied to the

obligations owi~~g under any Pre-Petition Loan Docume~lt ~z•ior to the Petition Date is subject to

avoidance, subo~~dination, z~e-chaz•actei•izatio7i, recovery, attack, offset, cot~ntercIain~, defense or

Claim {as de~x~ed in the Baf~-~zptcy Code) of any kind pursuant to the Bat~•uptcy Code o~•

applicable non-ba~~~•uptey lavv.

d. Cash Collate~•al. St~bstacrtially all cash, sec~~rities or other pz~opex•ty

of the Pxe-Petition Obligors {arid the proceeds therefrom) as of the petition Date, including,

without li~nitatiotz, all amounts o~~ deposit oz~ ~~~aintaiY~ed by at~y P~•e-Petitio~~ Obligoz• i~l any

account witk~ atay Pi•e-Petition Credit l'ai'ty o~• a~ly bai~ic flr other depository institutian (each a

"Depository Institution"}, teas subject to rights of setoff oz to valzd, perfected, enfoaceable first-

priority 1i~ns undez• the :P~~e-Petition Loan I}ocuznents a~zd applicable law, alid is i~ici~ided in the

Pre-Petition Collateral, acid therefore the Pre-Petition Obligors' cash balances are cash collateral

of file Pre-Petition Credit 1'az•ties witl~rn the tnearling of Sectio7i 3G3(a} of the Banlnuptcy Code.

Alt such cash (i~cludi~lg, without limitatia~i, all proceeds ofPre--Petition Collateral quid aIl proceeds

of property e~~cun~t~e~•ed by liens a~1d security interests gz•anted undex• this I~Zterim Order•}, is referred

to herein as "Cash Collate~~al."

e. Releases. Subject to Paragraph 26 below, tl~e Pre-Petition Obligors

hereby absolutely, uncoi~ditioi~ally ant! irrevocably waive, clischa~•ge aiaci a~elease each of the Pre-

Petition Credit Parties of anc~ from a~iy a71d all "Claims" (as defiled iii t~~a ~Banla•u~tcy Code},

cou~aterclain~is, actio~is, debts, accoi~ts, causes of ae~tion (i~leludii~g, without limi~ta~tiorl, catilses of

7JOCS SF:101590.I(~395Gb/OOi



action izl the nature of "lender liability"), defenses or setoff rights that any of them may have

against qtly P1•e-Petition Credit Paz•ty or aiz~ of t~~e, respective present a~ld fay-;nez• predecessors,

successors, assig~~s, affiliates, members, partne~•s, ~xzanagez•s, c~~~•rexat and former eq~uty holders,

office~•s, agents, eanployees, attorneys and affiliates of an5~ Pre-Petition Cz•edit Pa~•ty which arise

out of or in any m~mler relate to any of the P~•e-Petition Loan Docuineiits or any acts, inaction, or

transactions thereunder, whether• known oz• uz~knowaa, disputed or undisputed, at law or in equity,

including, without limitation, {i) anp re-cliaracterizatio~l, subordination, avoidance or other claim

arising under or pursuant to section 105 or chapter 5 of the Bat~~«ptcy Code oz• uzacle~~ any other

similar provisioxas of applicable state law, federal law ox' ~i~unicipal law and {.ii) a~iy rigtlt or basis

to challenge or object to tl~e amouslt, validity or enforceability of the applicable Pre-Petition Debt

or airy payments .made on account of the applicable Pre-.Petition Debt, o~• the validity,

eiifarceability, p~•iorzty or non-avoidabiiity o1~ the applicat~le Pz•e-PeEition Security Interests

securing tl~e applicable Pre-Petition Debt.

f. Need foz• l~iz~aracin~. An inai~~edzate azad ongoing heed exists for the

Debtox•s tv obtai~i t ie DIP Facility iii order to permit, among o#Ilex things, the oz-clez•1y continuation

of the operation of their business, to maiz~taizi business relationships with vendors, suppliers aXad

customers, to pay payz•oll obligatio7is, and to sa#rsfy ~tller wo7~lcing ca~~ital, development, a~~d

opex•atzonal needs so as to maxii~lize the value of their res~~ective businesses and assets as debtors

in possession antler chapter 11 of tl~e Ra~~lc~•u~~tc~ Code. Tlae Debtors do not lave sufficie~~t

available resoi~~~ces of worlciilg capital to operate i~~eir businesses iz1 fine oa~di~iary course ti~rit~~o~ut

post-petition financing. The Debtors' ability to coi~tiiiue growt3i, ni~~i~ltaii~ business relationships

vrith vendors and customers, to pay ezllployees, az~d ot~~erwise t~ fund operations is essential to

8uocs sT~:~o~s~o.~os~~b~ioo~



tl~e Debtors' viability and to the preservation of tl~e goi~Ig concern value oftheii• btzsix~esses pending

a sale of their assets.

G. Findings Re a~•ding the DIP F~~cility.

a. Good Cause. Good cause has been sliovv~~ foz~ the entry of this

Interiil~ ~z der and authorizatio~l for the Debtot~s to iz~cu~• DIP Obligations pursua~it to the DIP Load

Agieeznent acid ~~se Cash Collateral as I~ereinafter provided up to tk~e Interim Atnot~nt Litnit d~uing

the Interim Period. Each Debtor's need for financing of the type afforded by the DIP Loan

Agreement and the use of Cash Collatexal is irn~netiiate and critical. Entry of this Interim Order

wi11 preserve tale assets of each Debtors estate arld its value at~d is ix~ tl~e best interests of Debtors,

their creditors and their estates. Tl~e terns of tllc proposed financing are fair ai d a•easonable, reflect

each Debtoz•'s e~e~•cise of business j~~dg~nez~t, az~d are su~~oa•ted by reasonably equivalent value

az~d fai~~ consideration,

b. P~•o~~osed DIP Facility. Tl~e Debtors lave requested that tkte DIP

Lende~•s establish the llIP Facility piusuant to which the llebtors may obtain Loans from dine to

time {the "DIP Laans", and collectively with all other debts, obligations, liabilities ar~d indemnities

of the Debtors udder tl~e DIP Loa71 Documents, tI~e "DIP Obli~atio~~s"), all in accol•datice with and

subject to the terms of the DIP Loan Docui~~ents, with all DIP Obligations bei~~g secured ley all

real and personal property cif Ehe Debtoz•s; wvllerever located and whether created, acqui~•ec~ or

arising prior to, on ox• after the Petition Date. Tl~e DIP Len~lez~s a~-e willixag to establish the DIP

Facility zlpon the teens and conditio~is sef far-th llez-eiii and in the DIP Loa~1 Agreement,

substanti~~lly iu the lorn~~ at~acl~zed to the Motiaz~, and the otl~ier DIP Loan Dt~ctuneTrl~s.

c, No Credit Available o►~ More Fat~o~-able "Perms. Despite diligent

effot~ts, the llebtors have been unable to obtain financing on 7ilore favorable tek'nzs frorTi sources

c~

ROCS SP_ 1 U1590.10 39566/001



other than DIP Lenders iulcier the DIP Loan Documents az~d are unable to obtain adequate

uz~sectued credit allowable uz~clez• Section 503{b}(l) of the Banla•uptcy Code as are administrative

expense. The Debtozs az~e also unable to obtain secttreci credit allowable u~~dez• Sections 364(c)(1),

364(c)(2) ar~c3 364(c)(3) of the Balikrulatcy Code without granting priming liens under Section

364(d}(1) ofthe Bankruptcy Code and tlae Supezpz•io~•ity Chinas (as defined iii Paragraph 10 below)

iuider the terns acid condztiox~s set forth in this I~iterini C}rder and. ire the DIP Loa~~ Docunaez~ts.

d. Bu, diet. The Debtors have prepared old annehed to this Interim

O~•cier as Exhibit 1 hereto a budget (as at airy tiz~le amel~ded or supplemented with tl~e written

consent of the DIP Lendez•s, tlae "]3ud~et"} which sets foirtl~, among other t~lings, tl~e projected cash

receipts and disburserne~~ts for tl~e periods covered thereby and which the Debtors believe in good

faith to be realistic and achievable. "I'l~e DIP Lendexs are relyinb upon tl~e Budget in ex~tering into

the DIP Loan 11.gz'een~ent and P~•e-Petition Credit Pal-ties are relying upon the Budget in consenting

to tl~e terms of this Interiili O~•der. TI~e Debtors shall p~•ovide the DIP Lenders with an updated 13-

week Budget eozn~l~e~~cing oz~ tlae first Wednesday following the end oftl~e fotu~tli (4th) Loan Wee~C

(as defilied in the DIP Lo~ul Ag~•eeinent), and oil each Wednesday the~•eafter, which shall be subject

to the approval requirements in t1~e llIP Loan Docume~its. Comme~ici~lg on the fix•st Wecl~aesday

following the enc~ of the fourth (4th) Loan Week and coiiti~ltzing on each Vt~ednesday thereafter,

the Debtors shall clelivea~ to the DIP Lei~de~~s {i) a coz~a~az~isozz of actual to budgeted res~zlts of

opex•ations for the preceding to~u• (4) Loan Weel<s, and (ii) a 7•eport of aIl income and expense

variance on a liXae-item basis fo~~ the preceding four (4) Loan Weelcs. 1111 references restricting the

use of Cash Callateral and DIP Loan proceeds to Z~ay~aaent of azxaauzats set forth ir1 t11e ~3udget shall

t~1~;a1~ the most i~eeent a~~~z~o~~ed Bt~clget, subject to the "Permitted Variance" arld "Per~~litted

Va~-ia~lce Txception" (e~cl~ as cle:fiz~ect i~~ the DIP I_,oan Documents}.

DOCS S}~:7 01590. i 0 3956fi10Q1



e. Certain Conditions to DIP racility. The DIP I.,enclers' willingness

to make DIP Loans pursualit to ilie DTP Loan Documents, and tl~e Pre-Petition Cx•edit ~'arties'

willingness to al~owr Debtors to use Cash Collateral, is conditio~~ed upon, among other things,

(i} tl~e Debtozs' obtai~~izig Co~ut approval of the DIP Lo~u~ Agreement and all DIP Obligations of

the Debtoxs azld all rights a~ld remedies of DIP Cz•edit Parties thereunder; (ii) the Debtors' ~~z~ovision

of adec~~~ate p~•otectio~l for Pre-Petition Credit Parties' uitex~ests in tl~e P~~e-Petitiol~ Collateral

pt~rsuat~t to Sections 361 anti 363(e} of tl~e Bai~lct-uptcy Code; and (iii) each DAP Lender• receiving,

as security foz• il~e p~~o~pt payment of all DIP Obligations, a security interest in anc~ lien upon all

of each Debtor's pre-petition and post-petition real and pez•soaial p~•a~3erty, including, u~ztl~ottt

limitation, all of each De6toi's cash, accounts, inventory, equipment, fixtures, gezleral intangibles,

docu~nez~ts, i~istruzzaez~ts, chattel papez•, deposzt accounts, letter-of-credit rights, commercial toz-t

claizils, investment ~~roperty, intellectual property, real propet~ty and leasehold interests (to tine

extent subject to valid and et~~oz•ceable pxepetitiozi liens, mortgages, or deeds of tzust that have

been approved i~l writing by applicable l~uidlords or expressly permitted by the terms of applicable

leases), the proceeds of leased real propet-ty (to the extent riot subject to valid at~d eziforceable

prepetition liens, mortgages, oa~ c~eecls of trust that lave bee~i a~~~roved in writing by applicable

landlords oi- e~p~•essly peri~iitted by the tcrins of applicable leases), contract x•ig}ats, and books ~u~ci

Y•ecords relating to ar1~ assets ~f such Debtor and all proceeds (including, without li~~aitafiion,

irisuraz~ce proceeds) of the foregoing, ~vhett~er sl~cli assets were i~ existence o~1 the Petitioa~ Date

oz• were thereafter created, acquired o~- arising Auld wherever looted (all such real a~1d peasonal

property, including, witl~~out 1itz~itatior~, all Pz~e-Petition Collateral and the proceeds thereof, being

col]ectively hereinafter referred to as the "DIP Collateral"), a~~d (iii) that suds sec2uity interests

a~ad liens I1ave tl~e priorities hereinafter set forth. Notwitl~staridii~~ tie foregoi~ig, the DIl'

11ROCS S[':]O1590.t0395GG/007



Collateral shall not include (i) the Debtors' real property leases to the extent not subject to valid

and enforceable pre~~etition lie~ls, mortgages, or deeds of trust that have been approved in writi~~g

by applicable landlords o~• expressly per~~~ztted by the teizns of applicable leases (but s}iall ~zacl~~de

the proceeds of such leases) and (ii} pe~Iding ent~•y of the Finai Order, tine D.I.P Collateral shall not

include a Tien upon and security il~terest in any of Debtors' claims and causes of action pursuant

to Sectio~~s 502{d), 54~, 545, 547, 548, _549, 550, 551 and 553 oftlie I3anlcri~ptcy Code ("Avoidance

Claims") or any p~•oceecis or other property ("Avoicl~mce Proceeds") recovered iz~ co~ineclian with

the successful prosec~~tioi~, settlement or collection of any Avoida~lce Claims.

f. Ir~terin~ Heaziz~g. Puz~suant to Bazxkruptcy Rules 4001(b}(2) and

(c)(2) anci Local Banlcz•t~ptcy R~~le 4001-2, the Court leas 1~e1d the Interim Hearing aid hereby

authorizes DeE~tors to use Cash Collateral and obtain DID' Loans duz•in~ the period from the date

o~ entry of this Order thz•ougla the date on which the final lielring alp the Motioa~ pursuant to

Bankruptcy Rules 4001(b){2) and (c}(2) scheduled ptusuant to Paragrap1132 of this Iiltcrim Order

is cozychided (the "Interiri~ Period"), fox- puz•~oses specified in the initial Budget.

g. FiYidin~ of Good Faith. Based upon the record presented at the

7nteri~n Hearing, the DIP Facility and the Debto~•s' use of Cash Collateral we~•e negotiated i~~ good

faith and at arm's-length betwee►~ the DeE~toz~s, on the one hard, and the DTP Lenders and Pre-

Petition Cz•edit Pa~~ties, ou tl~e other. X11 of the DIP Oblig~tioi~s incl~lding, without limitation, all

DIP Loans made pursuant to the DIP Laan Ag~•een~ezit and all ot}~cr liabilities and obligatiozas of

any Debtors wider this Inte~•i~~~ Oz•der owing to the DIP Lenders a~.id the Pre-Petition Credit Parties,

as applicable, incil~ding tl~e Debtors' use of Cash Collateral, s11a11 lie cieen~ed to have been extended

by tlae DIP Lenders and tllc Pre-Petitioa~ Cx•~d~t Parties in "good faith," as s~~c11 tez~z~~ is used iiz

Sectiotl 364(e} of the Ba~~l~tuptcy Code, and in express reliance upon the protections olfe~~ed by

]2noes sr:3u~,~o.io ~~;~~iooi



Section 364{e) of the Bankiliptcy Code. The DIP Lenders and the Pre-Petitioa~ Credit Patties shall

be e~ititled to the fiill protection of Section 364(e) of the Ba~~•uptcy Code in the eve~~t that this

Inte3•ir~ Order o~• azly px•ovision hereof is vacated, reversed or modified, on appea~i~~-~13er~is~:

h. Immediate E~~tzy. Tl~e Debtozs have requested inunediate entry of

this I~lterim O~•der pursuant to Batilcruptcy Rules 40d1(b)(2) and 40~1(c){2) and the Local

Bat~liptcy Rules. Absent gaantin~ the interim relief sought by tl~e Motion, eac~i Debto~•'s estate

will be immediately and iz•~epa~•ably hax•~ned pending tie Final Hearing. The Debtors'

col~stlm~nation of the DIP Facility in accordance with tiie terms o~ this It~tex•ina Or•cler ai d the DIP

Loa71 Agreement and each Debtor's i1~~11ediate access to Cash Collateral is in the best intez~est of

each Dehtoz~'s estate a~~d is cot~sisten.t with each Debtor's exexcise of its fiduciary duties. Under

t ie circumstances, the notice given by the Debtors of the Motion and t~~e Ir~tez•in~ Hearing

constitutes due and sufficient notice thexeof and complies witka Banlc~uptcy Rules 4001(b) and (e)

ai d the Local :lZules. No fiirther notice of the relief sought at the Inte~•im Hearing is necessary or

x•equired.

7. Authorization of Inte~•il~i I'i;iancit~g; Use of Pzoceeds.

a. Tlie Court hereby authorizes and approves the Debtors' eYeclrtion

and delivery o1 tl~e DIP Loa~~ .l~~zeement in si~bsta~itially tl~e foi•na annexed to the Motioi3 (with

such changes, i:C any, as were made pa•io~~ tc~ or as a ~~est~lt of the Iiiteriin Hearing or az~e otherwise

aut3~orized to b~ made as amenci~l3ents to the DIP Loan Agree~~lent in accordance with this Ir~terina

Qrcie~•) and all DIP Loaxi Documents.

b. The Debtors are he~•eby authorized to bo~ro~v money pursuant

to the DIP Loan Documents, oar the tez•z~~s az~d subject to tl~e conditions, lending loi-~ntil~e and

sub-limits set foz•ll~ in are}~ DIP Loan Doc~unent and this Interi~~~ O~•der, u~~ to an aggregate

i~L)OCS SF:10159C).7039566/001



outsta~dii~g principal amount at any time not exceeding the sum of $13,SOO,000, plus applicable

interest, projective advances, expenses, fees a~lc~ other chaf•ges payable in co~~iection with such

DIP Loans, a7ad to inc~ix• any a~ad all liabilities at~d obligations ui~dez• the DIP Laan Docume~~ts and

to pay all principal, interest, fees, expenses and other obligations ~~rovideci for tinder tl~e DIP Loan

Documents {inctudiil~ ally o~iigations, to the extent provided for in t11e DIP Loan Documents, to

indeinriify the llIP Lende~~s).

c. No DIP Lender shall have any obligation or responsibility to

z~~c~z~itor any Debtors use of the DIP Laans, and each DIP Lender• may rely upon each Debtor's

representations that the ai~lou~zt of DIP Loans requested at any time, and the use thereof, are in

aeco~'dance with tl~e a•equirements of this Interim Order, the DIl' Loan Documents, and Bankruptcy

Rule ~001(e)(2).

d. No proceeds of any DIP Lo~ui shall be used to {i) make any paya~~ent

in set#lei~~e~rt or satisfactio2i of airy pre-petition claim {excluding t11e Pre-Petition Debt) or

administrative claim (excll~ding t~~e llI~' Obligations), unless such payment is ixz con~~~Iia~ace with

the Budget, permitted u~~der the DIl' Loan Docuillei~ts, and separately approved. ~y the Court upon

notice to, and i~o forma.l objection havii~b been tiiliely ~~ilec~ with t~~e Couz•t by, the DIP Lenders;

(ii) exce~at as eYp~'essly ~~~•ovicled or pel7nitted hereunder, to make ~n3~ distril~~~tions riot iiz

col~~pliance with the 13uc~get, or as otherwise approved by the DIP Lenders, includi~ig without

limitation, to make and payz~~ent ox• disi~~ib~ition to a~iy no~1-Debtoz• affiliate, equity bolder; oz•

inside~~ of any Debtor; or (iii) to make any payment otherwise p~~ol~ibited by this Interim Order.

g. Execution Delivery alad Perfi~rinance of~ DIP I.,oan Documents. T11e DCP

Loan llocuments n~a.y be executed and delivered on behalf of each Debtor by ar~y officez-, directo~~,

or ag~~~t of suc)~ Debto~~, ~~3~o by signing shall bP deemed to re~~reset~~ Himself o7~ l~et-seIfto lie duly

14DOCS SP: I 0 i 590.1 D 39ti66/U01



atitlx~rizecl and empowered to execute tl2e DIP Lo~~ Doc~iments fog• and oza behalf of stzcl~ Debtor.

The DIP Lendex•s shall be authorized to rely u~oi~ any such person's execi~tiot~ and delivery any of

tl~e D~k' Loam Documents as l~avizzg been daze with all requisite power ~1d authority so to do, and

the execution and delivery of any of the DIP Laa~~ Documents or ainendrxzents tl~ezeto by any such

person on behalf o1~ such Debtor shall be conclusively pres~~ii~ed to Have been duly autlio~•ized by

all necessary corpozate, lizaaited liability cozz~pazay, o~- other entity action (as applicable) of such

Debtor. Upon execution and delivery thereof; each of the DIP Loan Documents shall constit~rte

valid and binding obligations of each Debtor, eiifozceable against each Debtor in accoz•daz~ce with

their• terzals for all pux•~oses during its Chapter 11 Case, any sul~sequentIy converted case of such

Debtor under Chapter 7 of the Bal~uptcy Code (each, a "Successoz• Case"), ar~d aftez• the

disi~~issal of its Chapter 11 Case with respect to those provisions of tl~e DIP Loan Docu~~~ents

which expressly survive the Terminatio~i Date and any such dismissal. Subject to Paragraph 26 of

this Interim Order, no obligation, payment, transfer or grant of sectu-ity u7ider the DIP Loazz

DocuXnexats or this Intez•im O~•de~• shall be stayed, restrained, voidable, avoidable ar recoveral~Ie

under the Bankruptcy Code or under any a~7plicable non-banic~l~ptcy law (includixxg, without

limitation, uX~cicz~ Sectioias 502{d), 544, S4~ or 549 of the Bankruptcy Code or t~nder~ any ap~~licable

state Unifo}•m I~Y•auduletit Tr~ulsfer Act, Uniform Fraudtiient Conveyance Act o1• sin~ila~~ statute or

coanmon law), or subject to any defense, reduction, setoff, aecoupn~ci~t oi~ coiuiterclaim. In

fiu-therance of the provisiozas ot~Pa~~agraph 7 ofthis Interim Orc~ez•, each Debtor is authorized to do

and pe~•foa•zn all acts, to make, execute aritl deliver all instrulne~its and documents (including,

~vitl~c~ut limitation, sec~~rity agreements, pledge agz~eeia~ei~ts, rnol•tgages, deeds of trust, deeds to

S~CUl'C' C{2~t, ~Il1~ll]C1I1~ SliiteJYIe11~S, c1I11eT1C~lI]f;I1tS, W~l1V~l'S, COI]Se111S, Ot~lel' II]OC~1f1C~131OI1S,c111C~

i~~tellect~zal p~~ope~•ty filings); and to pay all reasoi7able fees, costs a3id eYpe-nses in each case as

15170CS SF: i O l 590. 10 39S6G/001



tnay be necessary or, in the opinion of either DIP Lender, desi~~able to give effect #o any of the

te~•zns and cofiditions of the DIF Loan Documents, to validate fhe ~~erfection of the DIP Liens (as

defined below), oz as may othez•wise be xec~uirecl ox cotztemplated by the DIP Loan Docuzne~rts.

9. DIP I.ie~is. As security for Debtors' payment and ~erfoi~nance of all DIP

Obligations, each DIP Le~lder s1~all have anti is hereby granted valid, bindil~g, enforceable, rion-

avoidable a~~d automatically anc~ ~ropezly pcz•fected security intezests in a~~d liens upon all of the

DIP Collate~'al, subject to the provisions in Paragraph 9(tl) (collectively, the "DIP Liens"} and in

tlae ~~z•iorities set foi-t1~ herein. Subject to tl~e provisiotls of Parag~•aph 26 hereof and the Carve-0ut

and any Uxeak-u~ fees and expense rezrz~buzsen~ezat obligations of the Debtoz•s appz•oved by the

Caurt vvitl~ x'espect to the APA (as defined in the DIP ~,oan Agreement},5 the DIP Liens shad be:

a. Unencun~bez•ed Property. Puz•suant to Section 364(c)(2) of the

Bankruptcy Code, valid, bindz~g, contiimi~~g, enforceable, fully perfected, first p7•iority sesiior liens

o~~, at}d security interests in, ail 17.IP Collateral that is not ott~.erwise subject to valid, perfected,

enforceable and unavoidable Iiezas oza tl~e Petition Date, oi• to afiy valid, perfected and t~navoiclable

interests in such p~•operty arising out of liens arising subsequent to the Petition Date as permitted

by sectio~z 546(b) of the Bai~lu•uptcy Code.

b. Liens Jtulio~• to Certain Other Liens. Pursuant to Section 364{c)(3)

of the Bankruptcy Code, junior• only to valzd, bizading, pez~fected azid unavoidable intezests of any

other ~~arties arisir3g out of liens, zf any, on such property existing immediately prior to tl~e Feiition

Date that we~•e se~iior in pxio7•ity to ~tlie liens of tl~e Pre-Petition Credit PaiK~.ies, or to auy valid,

~ Notwithstanding anytl~ir~g to tt~e contrary in this I~itei-im Order, nothing u~ this Inte~•un Order or the DIP Loan

Doctnnents should b~ construed as awarding an adminisuative ez~e~~se or supe~~priocity adininistrat.ive expense status

t~ avy break-up fee or expense reimbinseinei~t i~elaFing to tl~e APA. Any bid protections will be add~~essed by separate

motion and order.

16DOCS SF:IQE590.10345EC/0~7



perfected a2~d u~~avaidable interests in such property arising o~~t of liens arising subseque~rt to tl~e

Petition Date as ~~ez•~~aitted by section 546{bj o{'tl~e I3ankx•uptcy Code t}aat are se~~ior in priority to

the liens of the Pre-Petition C~•edit Parties,

c. Priinii~~ DIP Liens. Pu7•suant to Section 3G4{d)(1) of the

Bankruptcy Code, valid, bizading, coz~ti~~uing, enfoz•ceable, fully perfected secuz~il:y interests in and

liens upoza the DIP Collateral, which sectuity i~~terests at~d liens shall Ue p~•ior and senior i~1 all

zespects to (i} the security interests and lie~is in favor of Pre-Petition Credit Parties with respect to

the Pre-Petition Collateral, and (ii) the Adequate Pz•otection Liens (as defined below) with respect

to t11e P~•e-1'etitio~~ Col~ateial.

d. Lie~~s Sel~ior to Certain Other Liens. T1ze DIP Liens and the

Adequate Protection Liens, aside from the Calve-C3u# and u~iless the Adequate Protection Liens

az~e successfiiily challenged piusiia~it to Paragraph 26 below, shall ~1ot be (i) subject or subordil3ate

to (A) any lieu or• security iz~texest that is avoided and p7•eserved far the benefit of any Debtor oz•

its estate under Section SS1 of the Bal~lc~•uptcy Code, {B) a~1y liens or sectuity ii~t~rests granted by

aziy DebtoY~ to other persons or entities after the Petition Dace, or (C} any intercompany o~• affi3iate

liens or security interests of the Debtors; (ii} sti~bordii~ated to or i~~ade par•i passzr with airy other

lien ar secw•ity interest wider Section 363 or 364 0('the Ba~~kx•uptcy Cocie or ot~~er~vise; or {iii)

suUject to Sections 510, 549 ax• 550 of the Bai~l~nl~tcy Code. In i~o event shall ally person oz' entity

wl~o pays {or, thY•ot~gh the extension of credit to any Debtor, causes to be paid) atly of tl~e DIP

Obligations o~• the oi~ligations and i~~debtedness of tl~e Pre-k'etitioi~ Cz•edit Parties, be subrogated,

in whole or in part, to any z'ights, z'e~neciies, claims, privileges, lieYis or security interests granted to

or in favox• of, oz~ conferred upon, ally DIP Lender by the ter~~ls of any DIP Loan Doctunents or this

]7rocs sr:~ois~o.io3~s66ioo~



Interim Order u~~less such perso~~ or entity eoi~temporaueously causes Full Payment of the Pz•e-

Petition Debt owed to such DIP Lendez• to be inade.~

10. 5~~~3e3-~~riority Claims. All DIP Obligations shall constitute joint anti several

allotived su~erp3•iority claims (the ̀~`~upe3zieii~ Claims") against each Debtox• (without tlae xzeed to

file ar~y p~•oot of claim} puzsuant to Section 364(c)(1) of the Ba~~c~•uptcy Code having priority in

xight of payment. avez~ all other oblzgations, liabzlitzes anc~ iz~zdebtedness of eac11 Debtar, wi~ether

~~ow in existence or hereafter incurred by any Debtor, and over any and all adnninistz•ative oxpenses

of the ki~1d specified in sectiozls SQ3(b) and 507(b) of the Bar~l~uptcp Code, a~~d over any and all

adxzzizaist~•ative expenses or other claims ar•isi~~g undez• Sectzozls 105, 326, 328, 330, 331 503(x),

503(U}, 506(c) (suvject to entry of the Final Order approving the grant), .507, S46(c} 552(b} 726, ~ ({ ~"~g

1113~or 1114 of the Banlcz•uptcy Code. Such Superpriozity Claims sha11 for• purposes of Section

1129(x){9){A) of the Bankruptcy Lode be corlsiderecl ad.~ninistrative expenses allowed under

Section 503(b) of fhe Ban1uuptcy Code and shall be payable from all pre-petition and post-petition

pxoperty of Det~tors and x31 proceeds thereof; provided, ho~•vever, that the Superprioiity Claims

shall be subject to the Carve-Out (as tiefizaed below) acid ~zy break-up fees and expense

reinabti~•se7ne~lt obligations of the DeE~tors a~piovecl by the Court with respect to the ~.Pf\ (as

defined in the DIP Loan Agreement); and provide; hoi-c~ever, that to the extea~t tl~e Supez•~~~•iorit}r

Maims are payable out of Avoidance Claims acid Avoidance Proceeds, such payii~ei~t shall be

subj eat to e~~firy of the Final Order.

~ As used l~erei~3, tl~e term "Futl Payment," as ~~plicd Yo DI.P Obligatio~~s or Pre-PePition Debt, shall nZear3 full and

final pay~nenE oFsuch indebi~e~t~~ess in cash, the cash coltateralizalio~3 of any continge~it obfi~ ations its a~ld to the extent

required by the applicable loan documents, ter~ninaYion of any com~~~itit~enls to lend titader atiy of the applicable loan

documents, expiration of the Cha]lenge Deadline (as defined belo4v) without a cl~alienge 1~avi3lg been ti~ncly asserted;

and, in the case of the DIP Ob3igatians, te~•~~7ir~atio~z o~Pt~~e DIP Facility.

18DOCS SP:[O]S90.1U3)566/001



1 ~ . Repayment. The DIP Obligations shall be due and payable, and s11a11 be

paid, as az~d wlaez~ pz•avided zza the DIP Loan Docuzrzents and as pzovided herein, without offset or

coulite~•claim. Without limiting the generality of the foregoinb, in i~o event s1~a11 any Debtoz~ be

autlloi~ized to offset or recoup a~~y amotuits owed, or allegedly owed, b5~ any Pre-Petition Credit

Pa1•ty oi• any DIP Lender• to any Debtor oz• a~zy of its x•espective subsidiaries or affiliates against airy

of the DJl' Obligatio~~s without the prior written consent of each Pz~e-Petition C~•edit Party oz• DIP

Lender that would. be affected by any such offset ar• recoupmei~t, anti no such consent shall be

implied from any action, inaction or acq~iiescence by any Pre-Petitiol~ Credit I'ai~y or DIP Lender,

12. Use of Cash Collateral. The Debtors aie autl~oxized, by this Interiza~ Order,

subject to the terms and conditions of tl~e DIP Loa~~ Documents and tl~e Interim Order, to use X11

Cash Collatez•al, izzcluding, without limitation, any Cash Collateral on which tkae Pre-Petition Credit

Parties bold a lied, to fi~r~d a~iy post-petition cost or expense inciured by the DeUtars to t ie same

extent that; the i~se of DID' Laar~ ~x•oceeds would he pez•n~itted to fund such cost or expense under

tl~e tei-~ns of the DIP Loan Agreetnei~t and subj ect to the ~32~dget; pr•ovrded, ho~i~ever, that Sao Cash

Collateral shall be used i~~ a inan~ae~• tk~at would be a P~~ollibited Purpose (as defined herein). The

Debtors' right to use Cash Collateral, other than the Carve-Ot2t, shall terminate aL~tomaticalIy o~~

the Termination Date as defined ir1 the DIP Loa~z Agreement. Natwil~lstanding the ft~regoin~, the

Debtors' riglrt to rise Cash Collateral s~~all iYn~nediately tern~iz~ate without notice f'ror~i the DIP

Lenders or the Pre-Petitio~~ Credit Parties at t3ie title that any Debtor leas actual l~lowledge of tkze

elistence of an Event of Default i~ the Debtoz•s fail to promptly notify tl~e DIP Lende~~s ar~ci the

1're-PeCitioza C~~edit Parties of such Lvent of Default. Prior to t1~e Te~•~~aination Date, tl~e Debtors

and the DIP Lenders ai d/oi• Prue-Petition Credit Parties shall negotiate in good faith i•egarditag tl;e

terms of the Debtors' co~atiixlied use of Cash Collatez~al to ~~i~1d-clown the estates.

l9DUGS SI :1 U 159Q 10 395(iG/001



13. Adequate Protection of Pre-Petition Credit Parties, As adec}uate protection

for any Collatex•al Dizni~~utioz~ (as de~zaed below) suffered by any Pre-Petition Credit Party, the

Pre-Petition Agent is entitled, ptusuarrt to Sections 105, 361, 363{e) and 364 of tl~e Ban~a•ttptey

Code, to adequate protection of its interests it1 the Pre-Petition Collateral in a~i a~no~mt equal to tl~e

Collateral Din~inufiiozl (the "Adequate Pz•otecCior~ Claims"). As ~xsed in this Inte~•ini Order,

"Collateral Diminutiaz~" shall mean an arnot~~it equal (and Zi~r~:ited) to the aggregate di~nixaution of

the fair inaiket vah~e of a~iy of the P~•e-Petition Collateral (including Cas11 Collateral) fzom and

after tl~~ Petition Date for any ~•eason provided for in the Bai~l~~iptey Code, including, without

limitation, a~~y such clir~li~izttion resFilting fiorn the Calve-Out, the use of Cash Callater~l, tl~e

priming of the Pre-Petition agent's security interests in and liens on t~1e Pae-Petition Collateral by

the DIP Lie~~s pursuant to the DIP Loan llocuments az~d this Interim Order, the depreciation, sale,

lass or use by any Det~tor {or any other decline i~~ v~hie) of such Pre-Fetitiozi Collatez•al, tl~e anlo~int

of ally fees and ex~~enses paid t~ retained p1•ofessiol~als in these Chapter l l Cases, in accordance

with the Budget, aid the imposition of Clie automatic stay puzsuant to Section 3b2 of t11e

Bai~i~ptcy Code. The P~•e-Petition Agent is hereby gt•anted, suvject to file Carve-Out and the

rights of third parties preserved under Paragraph 26 anti solely to tl~e exteiat of any Collateral

Dimincition, the following for the benefit of Pre-I'~titioi~ Credit Parties:

a. Adequate Protection Lies. The P~•e-Petition. Agent, for file benefit

of the Pre-Petition Credit Parties, is hereby granted {effective and pez-fected upon t11e date of this

Interim Order a~~d without the ~~ecessity o~ the execution by any Debtor of security agz•eezaaer~ts,

~~ledge agreements, n~or•t~ages, :financing statezne~ats or• other agreen~~nts) valid, perfected

replacement sec~~rity interests in ar~d liens on all of the DIP Collateral (tl~e ".Adequate Protection

Liens"}. "]'he Adegzaate Px~otectioz~ J:,ieus o~~ llIP Collateral shall be,juuior and s~lbo~•ciia~ate ozaly to

20noes sF~to~s9o.~o~9s~~ioo~



tiae DIP Liens, the Cave-Out, and any break-up fees and expense reimbursement obligations of

the De~tozs a~pt•oved by the Count with res~~ect to tale APA (as defined in the DIP Loan

Agreement). The Adequate Pzotectiox~ Liens shall not be subjeck to Sections S06{c) (effective

upon ezltz'y of the Final O~'der), 510, 549, or 550 of the }3a~lkruptcy Code, and sinless othe~•~~ise

ordered ley tl~e Court, no lien avoided and preserved for the benefit of any estate puz~suant to Section

510 of file Bankruptcy Code small be made J~a~•i passac with o~~ se~lioz• to aiay lldeq~iate Protectio~~

Liens.

b. Priority of [1de~c Yiate Protection Claims. The 11.dequate Protection

Claims, if any, will be allor~ed as superpriox•ity adininist~•ative ciaitns ~ursuar~t to Sections 503(b)

ax~c~ 507(b) of tl~e Batikrtiptcy Code, which, subject to the Superpriority Claims, the Carve-0ut,

and any break-up fees and expense reimbursement obligations of t11e Debtors app~•oved by the

Court with ~'espect to the APA (as defined in the DIP Loan Agreement), shah leave prioa•ity in

payment over• any and all administrative expenses of the kinds specified or ordered pursuant to any

provisio~~ of the Bai~lc~•uptcy Cade, inclElding, without limitation, Sections 105; 326, 328, 330, 331,

503(b), 506(c} {subject to ent~•y of t11e Final Order), 507{a}, 507{b), 546, 726, 1113 or 7 114 of tl~e

Baz~•uptcy Code, which shall at all times be senior to the rights of each Debtoz•, a~~d any successo~~

trustee or aTay ci•edito7• i7~ these Chapter ll. Cases or any s~~bsequetit proceedings under t11e

Bar~lca•t~ptcy Code, pr•ovi~led, lio;•>>ever, that the Adequate Protection Claims entitled to superpriority

administrative status sllalI only be payable out of Avoidance Claims atld Avoidance- Pz~oceecls

subject to ezitzy of flee Final Order.

c. Fees and ~Y~enses of Professi~~lals for• Pre-Petition Credit Parties.

As additional adequate protection, the Debtors shall pay (i) the reaso~lable acid docu~~~ented

professional fees azid expenses (iuclucling, but not lir~lited to, the fees grid disbti~•serllents o:f

2IROCS S1=:10I590J039556/001



counsel, third-paz•ty consultants, financial advisors, and auditors) payable to ax ii~cuz~red b3~ any

Pre-Petitio~i C~~edit Party under and pursua~lt to the Pre-Petition Loan Documents arising prior to

the Petition Date, and {ii) on a cui~ent basis, the reasozaablc aiad documented p~•ofessional fees acid

ex~ez~ses (including, but not lirilited to, the fees. a~ld disl~ursen~ents of counsel, Hurd-pai-~y

consultan#s, inchidiaig ~~iancial consultants, and auditors) payable to ox• i~~cukz•ed by aizy Pre-

Petitia~i Credit ParEy under and ptusual~t to the Pre-Petition Loan Doetunents arising on or

subsequezat to the Petitio~~ Date, in each case iii compliance with the Budget. At the optio~i of the

Pre-Petition Credii Pa~•ties, all sucla amounts may be added to tl~e Pae-Petition Debt in Lieu of

c~zrrent payinez~t thereof by tale Debtors. Notwithstanding the foregoing, no payments s1aall be

n~acie by tl~e Debtors Qz1 account of any professional fees and expenses of aPre-Petition Credit

Party u~~til each relevant professio~~al leas pzovided copies of its fee and expense statements to tl3e

U.S. Tzustee and counsel to any official cormnittee appoz~zted in the Debtors' case (tl~.e

"Coi~7mittee") Y•easoz~ab~y cozaie~npoxaneously with the delivery of'such fee a7~d expense statements

to the Debtors. Such statements need riot be submitted in the form of a fee applicatio~i, but shall

contain reasonable detail as to the nu~~~ber of hotu•s worked acid applicable ~~ourly rates, btrt n ay

be redaeteci to the extent necessary to delete axiy infort~satiorl subject to attorney-eliez~t pz~ivilege,

any infoa~x~aatzoi~ constituting attorney tivork prod~~ct or any other• confidezitial information, at~d tl~e

provision of such iFivoices shall not cotlstztute airy waiver of ttie at~a~•ney-client privilege or ply

be~lefits of the attorney work produci doc~•ine. The U.S. Trustee, any Committee oz' any other

p~xty in iz~tex•est away object to t ae ~~easonableness of the lees, costs axed expenses included iii a~zy

pi~ofessic~iaal fee invoice submitted he~•eundeX', provided that, airy such objection shall be forever

waived and barred tuiless (i) it is filed with t}us Court anc~ served on counsel to the pa~•t-ies seeking

i•eiznbul•sen~eiit iao late~t~ t17az~ tez~ (1 U) days after tl~e objecting }~lrties receive such ap~~licable;

22DOGS SF:107590J0395b6/001



lxc~fessional fee invoice, and (ii) it describes w~tl~ pazticularity the items and categories of fees,

costs and expenses that are subject to the objectio~i and it pzovides for• a sl~eci~c basis for the

objection to each such itezxa of category of fees, costs ai d expenses; pt~o>>idec~ Iro1•~~evef•, that tl~e

Debtors shall pay all amounts that are aiot s~ibject of any objection within ten (10) days of the

objection deadline. Any hearing on an objection to a~~y payznezat of any fees, costs and expenses

of such pzofessionals shall be limited to the particular items ox• catego~•ies of fees, costs, arld

eapei~ses which are the s~ibject to such objection. Notwi#hstanding the foregoing, izaaz~lediately

upon entry of this Interim Order, the Debtors are authorized to pay alI reasonable and documented

fees, costs azad out-of ~ocicet eYpe~~ses of t11e DIP Lenders and tl~e Pre-Petition Credit Parties

iuciu~•ed on or prior to tl~.e date of etltry hereof

d. Resez•vatio~~ of Rights, Nothing herein shall be deeinect to be a

waiver by any Pre-Petition Credit Paifiy of its right to request additional ar fi~rtl~er pz•otection of its

interests in any Pre-Petition Coliate~•al, to move for re~ieF lro~~a the automatic stay, to seek tl~e

appoin~rnent of a trustee oz• exazninez• for a~ay Debtor or the conversion or clisx~~issal of any of these

Chapter 11 Cases, or to request any other relief in these cases; nor shall anything hereitl o~~ in any

of tl~e DIP Loan Documents constitute an admission by aPre-Petition. Ca•eclit Party regarding the

quantity, gLlality or value of any T~1P Collatezal secuz•ing the Pre-Petition Debt oz• constitute a

~ndiiag of adequate protection witi~ respect t~ the i7~tez•ests of ~'z•e-Petition 1lgeilt iri ax~y DIP

Collateral. Pre-Petition Credit Parties shall be deemed to have xeserved all rights to assert

e~lfitlernent t~ the protectio~~s and bel~efts of Section 507(b} of the Bankruptcy Code in comlection

with airy use, sale, encuz~lbering or other disposition of a~i~y of t}~e DII' Collate~•al, to t~~e exte~st that

the p~~o#e~tiorl afforded ley this Interim Order to Pre-Petition Age71t's i7rte~~ests i~a airy .DIP Collateral

proves to he inadequate.

23DOGS 51 :101590.I0 3y~GG/001



14. Pavznents Free and Clear. Any and all ~ay~a~ents or proceeds z~ezaaitted {a)

to the Dl~' Lenders or (b) subjec# only to the ~otentiai challenges by thiz•d-parties as permitted btrt

limited by Paragraph 26 Uelow, to Pre-Petitio~l Agent oia behalf of any P~~e-Petition Credit 1'ai•ty,

in each case ptusuant to the ~~rovisio~~s of this Interim Order oz• at~zy subsec}uent o7•de1• of this Cotu-t,

shall be received free and cleat• of any claim, charge, assessment or other liability, including,

without limitation, a~ly such claim or~ charge a~•ising out of or rased on, dzzectly or indirectly,

Sectzo~~s 506(c) {subject to entry of the Final Ordex• appzovixag the grant} or the "ec~iiities of the

case" exception of 552(b) of tl~e ~alala'uptcy Code (subject to entzy of the Finial Order).

15. Fees acid Expenses of Estate Professioi7als. Subject to the terms of tl~e

DIP Loa~z Agreex~aent and the Budget, for so long as no Event of Default has occurred, each Debtor

is authorized to use DIP Loa~~s to pay such compensation a~1d ex~~erlse reiinbua:sez~ient

(collectively, "Px•afessional Fees"} of professional pex•sons (including attorneys, financial advisors,

accoiuitai~ts, investment ~azakez•s, clarnas andlor noticing agents, appraisers, and cons~altaslts}

retained by any Debtor with Co~.irt approval o~• as az~. oz•dinary course professional (tlie "Debtoxs

Professionals") or the Committee ~vith Count approval {the "Committee __Professionals,"

collectively with the Debtors Professiol~ads, tlae "Professionals"), to the extent that such

conapensatioz~ and ea.pense reimb~.use~~le~lt is allowed anal approved by the Cou7~t; otlzez• t11an with

respect to ordi~~aiy caitrse pz'ofessiox~als of the Debtors {i~lciti~cliiag tl~t•ougl~ any i~aterin~

compensation procedures approved by the Court); provic~ecl Izoi~~ever°, that, i~ottivithsta~lc~il~g

anytl~ilig 1~e7•ein oz• in ally other order of this Court to flee contrax•y, ~~o proceeds of any DIP Loans

or any Cash Collateral shall be used to pay Professional Fees incul•red foi• any Prol~ibitecl .Plaz~pose

(as cle~z~ed below).

24vocs sr:io~s~o.~o3~s~~iooi



16. Sectia~~ 50b ,c) Clairzas. effective upon entry of the Final Oxder, no costs or

ex~e~~ses of administra#ion shall be imposed upon any DIP Le~~der, any Pre-Petition C~-eclit P~-ty

or any of the DIP Collateral ptusuant to Section 506(c} of the Banlcr~zptcy Code or otherwise

without the pz•ior w~~ittez~ co~~sent of such DIP Le3~cier or Pre--1'etitioii Credit Pasty, ai d na such

conse~it shall be implied from any action, inactiat~ or acquiescence by a~iy DIP Lender or I'~~e-

Petition Credit Panty, provided that the following administrative expenses are fully fii~ided by the

Debtors consistent with tl~e Budget: (a) the Carve-Out and (~} all expenses that are accrued and

tjn~aid tl~ougli the elate of an Event of Default under tl~e lisle items in fhe Bt~d~et designated as

"Payroll Costs," "Sales Taxes" and "~'ACA/PASA Claims."

17. Caz•ve-Out. NoEwitlistanding ariytliing in this Interim Oz•dez•, any DIP Loam

lloc«~nents, any Pre-Petition Loan Doctunents, or any other order of this Cow-t to the contxazy, the

DIP Obligations, tale DIP Liens acid Superpriority Claiazis in favor of tkze DIP Lende~~s, tlae

Adequate Protection Liens iri favor of tl~e Pze-Petition Agent, tlae Adequate Protection Claims iu

favor of the Pre-Petition Credit Parties, and the Pre-Petition Debt azac~ the Pre-Petition Secux•ity

Interests in tavoi~ of the Pre-Petition Credit Paz•ties shall be subject and s~ibordinate zn all r~s~ects

to the payment of the following Carve--Out, As used in this Inte~•in~ Oz•der, the "Carve-Q~~t" means

the sung of (a) a]I lees required to be ~~aid pursuant to 28 U.S.C. ~ 1930(a}(6) aid any fees payable

to tl~e Clerk of the Banl~•uptcy Catut, (~) all of the z•easo~~able fees and expe~lses from tinge to tune

incurred by each Professional retained by the Debtors and tl~e Committee (amozmts set forth inn the

Budget aa~e specific to eaclx P~~ofessional and may be rallc;d over to subsec~~tezat weeks}, i~~cluding

any fees ea~7~ed by 1'J Soloino~~ Securities, LLC ("PJS") as investme~lt baT~.Icer for tl~e Debtors that

~~•e approved by this Count, that are (i} inciu-recl prior to the date o~~delivery of a Default Notice (as

defined below} {except in the case of atay lees earned by PJS, which shall be included in t3~e Car~ve-

25T)(~CS S~: J O E 590.10 39566/001



Out tivlienever incurred), aid (ii) included in an appt•oved B~~dget {except in the case of any fees

eai-~~ed by PJS, which shall be i~lcltided in the Cazvc-Ott# i~~ tl~e amotuit approved by this Cotu-t},

azid (c) a ~~axin~uni of $250,000 for all of the reasoaiable fees az~d expenses from tinge to time

incurz~ed by Professionals retained by Boz•z'ovt~er (other than PJS, which is addressed ai~ove) that

are i~~curred from a~ld after tl~e date of delivery of a Default Notice; prvvic~'ed, that ziotllia~g in t~~is

Interim Order shall be construed to impair the ability of ar~y party to object to tl.~e fees, expenses,

~•eiznbuzse~neirts ox• compensation of any P1•ofessio~lal, whether or not iza excess of the covexage

provided by the Cave-Out. In no event shall the Carve-0ut, or• the funding of the DIP Loaus to

satisfy the Carve-Out, result in any reduction in the anlouz~t of the DIP Obligatioa~s oz~ tine Pre-

Petition Debt. Prior to the date of deiivexy of a Default Notice~:(A) atx ax~aount sufficient to pay ~'`

tl~e Carve-Out for ProFessional Fees may be fimded by t~~e Debtors on a weekly basis into a trust

account held by Debtors' coutasel (the "Professional Pee T~-~ist Account") in accoadance with tl~e

approved Budget, {B) the Debto7•s shall be pez~mztted to borrow under the DIP Loan Agaeement to

find the Professional Fee Trust Acco~mt in the amounts contemplated uxide7• clause {~) above, arld

(C) the Debtors shall be perinitfed to pay, fi•oz~~ the Professional ~'ee " 9•ust Account, as and when

the sa~~le ri~ay l~ecozne due and payaUle, the allowec] Pz•ofessia~lal Fees of each Pz~ofessional.

following the dace of delivezy of a Default Notice, the Debtors shall be permitted to fiend the

Professional ~'ee Trust Account in the amotmt of $2.50,000 contemplated undez~ clause (c) above.

All ~moui~ts funded by the Debtors to til~ Professional Fe;e Trust Account shall cozatinue to

constitute DIP Collate7•al. Az~y excess am~i~f~ts re~~laii~ir~g in the Professio~~al Fee Trust Account

after payment of the Cat-ve-Out f'oa~ Professionals s11a11 be tefitnded to the I}ebto~•s and shall remain

1~1P Collateral.

26iJOCS SF:101590.10 39S6G/fl01



18. Excluded Pzofessionai Fees. No#-withstanding anything to tl~e contra~•y in

this ntez•im Order, neither the Cave-Out, nor the proceeds of the DIP Facility in any res~~ect,

including without limitation any DIP Loans, Cash Collateral or DIP Collateral, shall be used to

pay ar~y Professional Pees oz~ any other fees or expenses i~zcuz-~•ed by ax~y ~'~•ofessional in connection

wrt13 azzy of the following (each a "Pt~ohibited Purpose"}: (a) objecting to or contesting the

validity or enforceability of this Interim Ordez•, aiay DIF Obligations oz• Pz•e-Petition Debt,

provided that the Committee ma~~ spend up to $25,000 (tile "Investigation Budget") fox• tIae fees

and expenses inc~n•~•ed iz~ con~aection with the investigation of, lout not the litigation, objection ox•

ax~y challenge to, any Pre-petition Security Intez•est, Pze-Petition Debt, or Pre-~'etition Loan

Doct~nei~ts; (b) asserting or prosecuting any clait~l ar• cause of action agai~lst any .DIP Lender• or

any Pze-Peti#zozi Credit Pa~•ry, otl~ez• than to enforce the terms of the DIP Facility or this Interim

Qrder; (c) seeking to modify any of the rights grazrted iz~idei• this Izaterin~ Order to any DZP Lender

or any Pre-Petition Credit Party; o~~ (d) objecting to, contesting, delaying, pz•eventin~ or interfe~~ing

iz~. a~~y way wit11 the exercise of rights and remedies by any DIP Lender orPre-Petition Cz~edit Pa1~ty

with respect to any DIP Collateral or Pre-Petition Collateral after the occttX•rene~ and d~~ring tl~e

continuance of an F_,vent of Default, provided that the Debtaz~s~may contest or dispute whether aY1

Event of Default Ilas occurred and shall be entitled to any notice p~~ovisions provided i11 this Inte~•ii31

Order.

19. Preserv~ttio~i oCRi~hts Granted Ux~de~• T1ais Interim Order.

a. I?ro_tec#ion_Ei~om Subseci~rt Fi~la~~cin Order. There shall not be

entered in at~y of these Cha}~lez~ l 1 Cases or in any Successor Lase a11y ordez~ that autlic~lizes the

obtaini~~g of cj•edit or the incurrence of indebtedness by a~ay Debtor {or any trustee oz' examiner)

that is (i) secured by a seetzrity interest, mortgage or coIlater~al interest or 1iei~ on ~Il or any pax'T of

27DOCS SF:101590. ] 0 3956(/001



tl~e DIP Co~Iatexal that is equal or senior to tl~e DIP Liens or (i~) entitled to pz~iorii:y admi~iistrative

staltls that is equal or senior to tl~e Superpriority Claims granted to DIP Lenders liezein; provi~lecl,

hoi~~eve~, that nothing lierei~i shall ~~a•evez~t the enta'y of an order that specifically provides fox, as a

co~~dition to the granting of the benefits of clauses (i} or (ii} above, the Full Payment of all of t}ze

DIP Obligations, in the ma~ar~ez• required by flee DIP Loan r~greemeiii, froijl the proceeds of such

credit or indebtedness, and the tezz~aination of a~iy fwiding commitments udder the DIP Facility.

b. Rights Upon Dismissal, Conversion or Cor~solid~tion. 7f a1~y of the

Chapter 1 ~ Cases are dismissed, converted or substantively consolidated wztl~ another case, then

neither the envy of tills Inter•i~n OX•der i~oz• the dismissal, conversion oz• suUst~u~tive consolidation

of'ai~y of the Chapter 11 Cases shall affect the rights or remedies of a~iy DIP Lender i~~lder the DID

Loazi Documents oz• the z•zgl~ts oz- zenledies of any DIP Lender• oa~ Pre-Petition Credit Party unc3.er

this Interim Order, and all of the respective rights and remedies liereundeX• a~1d thereunder of each

DIP Leader and each Pre-Petition Credii Party shall remain in full fo~•ce a~~d effect as if such

Chapter 11 Case had not been dismissed, converted, or stibstantively co~isolidated. U~~less and

until FuII Pay~nerit of all DIP Obligations and Adequate Px•otection Claims leas occurred, it shall

constitute an Eve~lt of DeFault if atl}~ Debtor seeks, or if there is e7~te~•ed, any order diszz~issing any

olthe Chapter 1 I Lases. If an order dis~~lissing any of tl~e Chaptea• 11 Cases zs at any time entered,

such o~•dea~ shall ~~rovic~e (in accordal~ce wish Sections 105 a~~d 3~9 of the Ba~~l~~~~ptcy Code) that

{i) the Superpi•ioiit}~ Claims, the Adequ~~te Protection Claims, the DIP Liens a~ld the .~.deyuate

ProtecCion Liens shill co~ltiriue in fiill ~-orce a~lcl effect and sl3all ~nai~iEaiz~ their priorities as

}provided i~a t1~is I~~tez•im Order «ntil Full .P ~y~~~ent of all DIP Obligations az~d all adequate

Pt•otectior~ CIaiins, {ii) such Supe~prio~-i~ly Clair~~s, Adeq~zate P3~otectior~ Claims, I~I,P Liens a~~d

Adequate Protection Lie~is shall, 7iotw.itlistanding such dismissal, remain bindznb on all parties iii

28DOCS SI'_1015)0.1(~395f~61001



interest, {iii} tl~e other• rights granted by this Interim Order shall not be affected, incluciirig the zibl~ts

g~•anted by Parag~-ap11 26 of this Ir~tei~im Order•, and (i~~} this Court shall zetain jurisdiction,

notwithstanding sz~ch dismissal, for the purposes of e~~foxciz~g the claims, lie~~s anc~ security

i~~tex•ests refe~7ed to in this Paragraph and otherwise in this Inteiin~ Order.

c. Survival of Intez•ixz~ Oz•dez•. The provisions of tl~zs Interirri Ordet-, and

any actions talzen pu~~suant hereto, shall survive the entxy of and s1~all govern with res~~ect to any

conflict with any order that rr~ay be entered confirming a~~y plan of z•eorganization or lit~uidation

in any of the Chapter 11 Cases or• any Successoa' Case.

d. No Discilar~e, None of tl~e DIP Obligatio~~s shall be discharged by

th.e ez~tzy of any order coufirn~ing a flan of reorganizatio~i or liq~udation in any of these Chapter

11 Cases and, pursuant to Section 1 I41{d}(4) of the Banla•uptcy Code, each Debtor has waived

sucI1 discharge.

e. Credit Bid Rights. Following entry of t ie Piz~al Ordez• and subject

to the ~•equirements of section 363(lc} of the l3anl~2Tptey Code, but without prejudice to any

sLtccessfi~l cllalle~lge broug~it prioz• to the Claallez~ge Deadline, the DIP Lendez•s and the Pre-Petition

Credit Panties s11a11 each have ~lze z•ight to credit bid, individually oi~ on a combined basis, up to the

frill az~aount of the applicable outstanding DIP Obligations and Pre-Petitaozl Debt (as a~~plicable},

in each case including any acci2iec~ inferest or otl~e~~ agi•eecl cha~~ges, iti any sale of the DIP

Collateral (o~~ any part thereo f or Pre-Petition Collateral (oz• any part thereof}, as applicaUle,

witlao~it the i~eeci fox• fitz~tlze~ Court o~•dex• autl~orizi~lg same, a~~d whether such sale is effechiated

t~irough Sectiai~ 363 or 1129 of tl~e Bankruptcy Code, by a Chapter 7 t~«siee ~ulciez- Section 725 of

the Bat~Iu•uptcy Code, or• otlier•~vise. ~'oi• the ~voic~aT~ce of doubt, ~iithout prejudice to oily

suecessfiil challenge brought pxiox to the Challenge Deadline, iio plan of reor~anizatioii or

?9llOCS SF:101590.10 39~66i001



liquidation, riot any r~iotion in connection with a sale of ar~y Debtor's assets under Section 363 of

tl~e Bankruptcy Code, in any of these Cllaptez• l 1 Cases shall seek to Ii~~~it or othe~•wise restrict the

right of Pre-Petition Agent o~• the DIP Lendea-s to credit bicl for all or any part of tl~e Pre-Petition

Collateral ar T)IP ~ollate~•al.

£ No Marsl~alin~. Subject to entry ofthe Finai Order, in no event shall

a~~y DIP L,ende~~ ox• Pz•e-Petition Credit Party lie subject to the equitable doctrine of "marshaling"

o~• any sii7iilar doct~•ine with t~espect to any DIP Collateral, and in no event shall any DIP T lens fie

subject to any prc--petition or post-petitioXa lien or security interest that is avoided and presez•veti

faz• the benefit of az~y Debtor's estate pursuant to Section 551 of the Ba~~tcruptcy Code.

g. No Requiz~e~nent to File Clain faz• DIP Obligations or Poe-Petition

Debt. Notwitl~standitlg anything to the co~itraly contained in a~~y prior or subsequent order of tl~e

Couxt, including, WIf~Z011t II1701Jtc~tt011, any bai date order establishing a deadli~ie fox• the ding of

proofs of claim entitled to administrative expense treatment tu~de~~ Section 503{b) of tl~e

BanIa•uptcy Code, Sao DIP Lender shall Ue required to file any ~raof of claim with z•espect to a~ly

of t ie DIP Obligations and no Pre-Petition Credit Party s1~a11 Ue req~iired to file any proof of cIaitn

~ ~, n ~ ,.~,_ t_._„ ,_ ~ ~e-in-~eet~r~~rsc~~iCh~thewith res eCt ~0 c`ll1 ~I'e-pe~It1021 D~~7t~ «r~'o3"vvn~t,inixuix v~. uu.. uir c`t c

-~eai-rBo~t133~~'-51~;.~-~~cit-`r;~c T'-riv-1'c~iitit~,rZ-ozm-r~~et''t3rrr~n~t~; fts- -tizr~riv";--wrrieY1~11G~~fi@~5~'ty

crr~--~rlirtg~rry-s~cl~~r~~f of .l~~i ~~~ _and tl~e fail~~z~e to plc any such proof of claim shall not affect the

validity or en#ox•ceability of any of the DIP Loan Doct~mcnts oz• I'~-e-Petition Loan Documents, or

p~~ejudice or otherwise aclve~~se~y a~iect ar~y rights, remedies, powers or privileges of any DIP

Lender under any of the DIP Loan I~aci~ments, any I're-1'etitiot~ Credit Party under any of tl~e Pre-

Petitio~~ Loan Docuzxie~its, oz~ a~~y I II' Lender or Pre-Petition C~•ec3it Party under this Intez-ini Order.

30nt~cs s~:[ois~o.io3~~r~~iooi



20. Auto.~natc_Pez~fectiot~ ofLiens. The DIP Liens, and subject to the lhirdparty

challenge rights in Paragraph 2C, the Adequate Pz•otection Liens, shall ~e deemed valid, binding,

enforceable ~u1c1 duly ~~e~•fected upon e~~try of this Interim Ordez•. Neither any Pre-Petition Credit

Warty i~or• airy DIP Le7lder shall be regl~ix~ed to file any UCGI fina~~cing statements, ~~ioi-~gages,

deeds of trz~st, security deeds, notices of lied ox' aziy similar document oi~ take any other action

(izlcluding taping possession of any of the DIP Collateral} in oz•der to validate the perfection of any

DIP Liens or the Adequate Protection Liens, but all of s«ch filings anal other actions are hex•eby

authorized by the Cat~rt. The DIP Lendez~s slaaJ] be deemed to lave "control" over alI deposit

accounts for all ~t~rposes of pe~•feetion raider the Ui~iforin Con~znercial Code. If the Pz•e-Petition

Agent o~• the DIP Lencter•s shall, in their discretion, choose to file or record airy such ino~-t~ages,

deeds of trust, security deeds, notices of lien; or UCC-] fizzaneing statements, oz take any other

action to evidence the pet•fection of any pant of tl~e DID' Lie~~s or tt~e Adequate Protection Liezas,

each Debtor and its respective office~•s a~~e authorized to execute any documents o~• i~~strunleilts as

tl~e Pze-Petition Agent oz• PIS' Lenders shall request, and all sttcl~ documents and i~lstil~meaits shall

be deemed t~ have been sled or recorded at tl~e tine and on t ie date of entay of #his I1lterim Order.

Any Pre-Petitzon Credit Pa~•ty or D7P Le~lder may, in its discretion, file a certified copy of this

Intea•in~ Order in any Tiling office ia~ az~y juz•zsdiction in which a~ly Debtoz~ is t•ganized or has or;~t,Ex,E F'~~E~ {

maintains ar}y DIP Collateral or are office, and each filizig office is~c~rze~e~ to accept stjc~~ certified

copy of this Ii~te~~iz~1 O~~der for filing aald recording. ~~ip--~~ro~rsio-~t-~~a#-~~ry-h~~se-(ei~rer-#~~-

.1~813~1~S1{~~}?t3c't~-Ye~t~'~JTt~~~l6iniuPv~-oo^i1~1~3~'~i'-A~~lb'1'•-a~i'-~€'Ill~l~~-~}~-I~k~-~~~-~~1F' ~..,.~e`i?~~r3f

E3i--a~3I~-r7b~t~ o#-an~~er-irn~re-ec~tt~t~rp~~t°ties-a~~~s-~i~-~ry~t~~c~f-~t11~-€ems-e~--ail-7 ~~~~-~t~~t~~

er~rr~et3i~~-~t~~i~y~--i~~.-c~~~~i~-~c>~~...a-I~e~i~a:' tn~l~~,~~; ̀ T,~.1-~; a~sig~a-ar-o~17er~ti~~~.~I-~r-~~~

~~fi~k~ irrC~r~st-ar-~e-~~~eec~s-~hereaf is-]a~re~~-#i~~ti_tU_.b~(~xc1-~-1.1-~e-c~ee~~tc~-te-~t~--iz~.szst~i

31ROCS SF:101590. [0 3 9566/00 1



wi~l~-~l~-}3iea~s~Q}~~f-~~~Z~x~x« e~-C--~~1~-anrl-sl~~l-~ia~e-na~t~rc a e~-#die

ti~~s~tette3ls-~r~~i~,z__n t!~~-7~~? r «r-r~ler4-~~~-s~r~iE~r--iaxtr~~res~-irr-~~r~-l~i~ri---e~~--~t~eli-~-t3~e-st;--e~--~~~

p~~~--e~a~~-~ssi~-ra t-~ c~~-s~Ie-~er~~t~~H~b~~~~~ v~th th~L~~~P

~a~ab~~31I'--Lear-~s~~aca-ads-ak ris-hrt~rirr~-E3rc~

21. Reimbursement of Expezises. A.II reasonable and documented costs and

expenses incuz~red by tl~e D1P Lel~deis iia coluiectioil with {a) the negotiation and drafting of any

D~~' Loan Documents oz any a~i~endments thereto, (b) tl~e presezvation, perfection, prot:,ctian

and enfo3•cement of airy DIP Lender's rights hereunder• or tinder any DIP Loata Documents, (c)

the collection of a~~y DIP Obiigatiai~s, yr (d) the monitoring of these Chapter 11 Cases, including,

without lin~itatio7~, all filing and recorcli~~g fees and reasoz~al~le fees and expenses of attorneys,

accountants, eonst~Itants, financial advisors, appraisers az~cl o#her professionals incut'recl by a DIP

bender in connection with any of the foregoing, whether any of the foregoing were ine~zrred prioz•

to o~• after the Petition Date, shall t~oa~m a part of the DIP Obligations owing to such DIP Lender

and shall he paid by Debtors (without the necessit3T of filing airy a~plicatioil with or obtainizig

fua•tl~er order from the Co~~z•t) iu accordance with tlae tez~ms of the applicable DIP Loan Docuinei~ts.

Noitivitl~s#anding the foregoi3lg, i~o payments shaI1 be made by the Debtors oli accoun# of~ any

professional fees and e~.pei~ses of a DIP Lender• until each relev~uit p~•ofessionai has provided

copies of its fee and expense statements to tl~e U.S. Trustee ar~d counsel to auy Coz~~nlittee

re~~sonably eonl:ernporaneously with the delivery of s~ieli fee and expense stateme~lts to the Debtors

consistent with the procedures set fox-th in Paz•agra~~h 13(d) oI'this I~lterizll Oa~dex~.

22. A17iendments tv DIP Loan DocEu~lezats. "I~he I}ebtors atzd DIP Lei~deX~s are

hereby autlloi~ized to implement, in accordance w~t}~ tl~e ~te~7ns o~f t,l~e a~~~~licable DIP Loan

Docuix~ei~ts and without fuz~tl~ex- order• of the Cou~~t, airy a~~~iendille~rts to~ and Tnodil~icatio~ls of an3~

32ROCS SF:101590.10 39566/001



o~ suclx DZF Laan Docurrients on the following c~z~ditioz~s: {a) file amendment or aa~otli~catzon

~~lust not constitute a material cha~lge to the terns of such DIP Loan Documents, (b) copies of the

amendm~rit or modification insist be served upon counsel for the Cozn~nzttee (and, prior• to the

appointment of a Committee, upo~1 the Debtors' corasolictated 301argest i;nsecurecl cx•editoz•s), tl~e

U.S. Trustee, and othex• inCex•ested parties specifically requesting such notice, and {c) notice of the

an~endmeiit illust be filed with the Court. Any an~endmel~t or modification that constitutes a

material change, to be effective, insist be approved by the Court. For ptuposes hereof, a "material

change" shall tneaz~ a change to a DIP Loan Document that operates to shorted the DIP Facility

or tl~e n~atulity ofthe DIP Obligations, to incz~ease t11e aggregate amount of the cor~~mittneilts

of DIP Lezaders under the DIP facility, to increase tale rate of interest other tl~ax~ as cux•rently

provided in oi• contemplated by the DIP Loan Docume~lts, to acid specific E~~ents of Default, oa• to

eiilarge tl~e nature and. extent of 2•emedies available to a DIP Lender following the occurz•ence of

a~a Event of Default. Without limiting the generality of tl~e foregoing, any amenc~~lent of a D1P

Loan Doctullent to postpone or extend any date oz• deaciIiz~e therein (including, without limitation,

the expiz•atioza of the term of the DIP Facility) shall not constitute a "material change" and znay be

efFectuated by Debtors and the DIP Lenders witl~aut the need Far f~r[lier appx'oval of the Court.

23. Events of Default; Remedies.

~. ~vez~ts of Default. The occturei~ce of a~iy "~vez~t of Default" under

{and as defilied ili} the DIP Load Agreement shall constitute an Lvent of Default uiadez• this Interim.

Order.

h. Default Rez~~cdics. Upon tl.i.e occui-~~ence anc~ continuance of an

Eve~it of Delatxlt, anct following t1~e expiratiozl of any a~~}~licable cure period set foX•th in t~~e DIP

Lo~l~ Agt~eernent, (a) the DIP Lenders r31ay I"ile with 11~e Cou7•t and sez•ve upon the Debtors, counsel

3iDOGS SF:101590.10 39566/001



fox the Debtors, co~uisel for the Committee and the U.S. Trustee a written notice (a "Default

Notice")describing the EveYrts cif Default that elist, ire which e~~ent effective five (S} busi~~ess days

thereafter (the "Default Notice Period"), the DIl' Lenders sl~a~l be fully authorized, in then• sole

discretion, to demand payment of all DIP Obligations, and hold azld apply a~~y balances in airy

accou~ats of the Debtors to the payment or cash collatexalizatioil of arty of the DIP Obligations,

subject to payment of the Carve-Out; and (b) each DIP Lendex• az~d tl~e P~•e-Petition Agent shall be

deeri~ed to leave received complete x~elzef froze the automatic stay imposed by Section 362(a) of tl~e

Banla•uptcy Code with respect to alI of tl~e DTP Coll~tez•al and Pre-Petition Collateral, z•espectively,

effective following the expi~•ation of t11e Default Notice period, unless the Court detei-~nia~es

otherwise after an expedited hearing, Upol~ tl~e effectiveness of any relief from tl~e automatic stay

gz•anted or deemed to have been granted and subject to payment of the Carve~0ut, tl~e D.IP Lenders

and the Pre-Petition Agent inay e7iforce their ~•espective DIP Liens, tlae Pz•e-Petition Security

Interests, a~zd t11e Adequate Protection Liens, as applicable, with respect to the DIP Collate~•al, take

all other actions aiad exercise all othez• re~~edzes under the DIP Loan Documents, the Pre-Petition

Loam Docunleilts anc~ applicable Iaw that nlay be necessary or deemed app7•opriate to collect any

of its DIP Obligatio~as and/ox' tkie ~'re-Petition Debt, proceed agaizast ox realize upo~i all ar• any

portion of the Cc~l.lateral as if these Chapter 11 Cases or any superseding Chaptez• 7 case was riot

pending, az~d otherwise enforce any of the provisiolis of this Iz~tezim Ordea•. Notwitlislaz~ding

anythi7~g to the contt•at•y l~ex•ein, flee DIP Lende~•s and the Pre-Petitiol~ Agent nzay only enter• u~~o1~

a leased pieiuises of the Debtors afl:er ail went of Default in accorda~lce with (i) a sepaz•~tte written

agreement among the DIP Lellclels, the Pre-Petition Agent, a~~d tl3e applicable iaiidlord foz- the

leased p7•eYnises, (ii) pre-existi~lg ~•igl7ts of the DIP Lenders or the Pi•e-Petition Agent ui~de~•

applicable non-ba1~~•u~tc}~ 1aw; {iii} written consent o~ the applicable landlol•d for the leased

34noes st~:~o~s~o.~o ~~~~viooi



premises, or (iv} entry of Dui order by t~~is Court approving st~c11 access to the premises aftea• notice

and aia opporttanity to be hea;•d for the applicable Ia~~dlord for tine leased premises. Any delay or

failure to exercise xights az~ci remedies by tl~e DIP Lenders or Pre-Petition Agent under the DIP

Loan Doct~nents or this Interim O~•der shall nat constitute a waiver of such DIP I.,ezadez• ax• P~•e-

Petition Agent's rights he~•e~uider, the~~etincler oz• otherwise, unless az~y such waiver is pursuant to

a written instz•uznent execufed ire accordance with the terms of tt~e DIP Loan Agreement. In

Fiu-tl~erance of Paragzap~a l7 above, tlae DIP Lenders shall provide for cash payrz~ez~t of tl~e Carve-

Out from the proceeds of the DIP Collateral before any sunas are paid to the DrP Leride7•s from

such p~•oceeds.

c. Ki~hts Cumulative. Tl~e rights, remedies, po~~aers and px~zvileges

conferred upon DIP Credit P~-ties pursuant to t~lis Interim O~•dez• sl~.all be in addition to az~d

cumulative with those coz~taiz~ed in tlae a~~plicable DID' Loan Documents.

24. Loan ~d~~linistration.

a. Contzx~uatioxi o~ Pre-Petition Proce~lu7•es. .All pze--petition cash

rnai~agement practices alid procedures of the Debtor's, zz~cluding any lockbox alid/or L~locked

depositoz-y bank accou~lt ~~~rangeinents, to the extent appa•oved by the Cot2rt by separate order, shall

continue tivithout iarte~7~uption aftez• tl~e comme~lcex~~ent of the Cha13ter 11 Cases, a~~d shall be

deemed. effective for• tl~e benefit of the DIP Lender.

b. Iz~spectioza Rz~hts. Representatives of each DIP Lender shall be

authorized, with ~~easo~~al~le pa~ioi- notice to _Debtoi:s, to visit the business premises of a~~y Debtor

and its subsidiaries dt~rirlg regular business hotzr•s to (i) ii3spec# any CoIlateral, (ii) inspect a~ld ~nalce

co}pies of any books az~ct x•eco~-ds of any Deh~oa•, ~tici (iii} verify or ob~tai7i supporting details

35DOCS SP:101590.10 395G6/001



concer~~ir~g t11e financial in~o~•matio~~ to be provided by any Debtor hereunder o~~ undex any of the

DIP Loa~~ Documents, and t1~e ~el~toxs shall facilitate the exercise of such inspection rights.

c. DIP_I,enders' Right to Retain Professionals. Each DiP Lender shall

be authorized to retain a~taz~neys, appraisers, consulta~~ts, auditors, field eaainineis and fina~lcial

advisors, at Debtors' expense, WIIIC~I attorneys, appraisers, c~x~sultai~ts, auditors, #field

examii~ez•s and ~nanci~I advisors shall be afforded reasonable access to the Collate~•al and

each DeUto~•'s ~izsiness premises and ~~ecords, dtiriXag xloz~nal business l~ouzs, fo~~ pur~~oses of

monitoring tt2e businesses of DebTozs, verifying each Debtar's co~n~iia~~ce with the terms of the

DIP Loan Docu~~lents and this Inte~•im Order, at~d analyzing or appraisiz~.g all car airy part of the

Collateral. All such amounts ~ay~bla to or ii~cui~ed under this clause (c) shall be payable in

accozdance with Paragraph 21 above.

25. Madi~eatio~l of Autaiiiatic Stay. The automatic stay provisions of Section

362 of the Bankruptcy Code are hereby n~odi~ed acid lifted to the extent necessary to implement

the provisions o:P this Inte~•im Order and the DIP Loaz1 Docr~ments, thereby pezz~~ittiug the DIP

Lei2ders and Pae-Petition Agent t~ receive collections and proceeds of Collateral for applicafiotZ to

tl~e DID' Obligations Ind the Pre-Petition Debt as and to the extent provided taex•ein, ~o file ar record

any UCC-I ~r3aticing statezz~e~lts, mortgages, deeds o:f t~-nst, secu~•zty deeds ~zicl ofhez• izastruments

and documents evidencing oz~ validati.ng the pet•fectian of the DIP I,iezas or Adequate Protection

Liens, ai d to enforce Ehe DIP Liens aild Adeq~~ate Protection Liens as and to tlae extent authorized

by this Intet•i~~~ Orden.

26. Effect of Sti ulations oz~ Tlzircl Parties• Deadline foz- Cl~allengcs.

a. Each Debtor's admissions, stipulations, agreer~~ents a~~d releases

coT3tained in fhis Interim Order, iticlucling, without limitation, those contained in Paz•agzaph 5 of

36DUCS SP:lO15~~0.E039566/UOE



this Intez•in~ C)rdez•, shall be binding upo~i such Debfor and az~y successaz• thereto (including,

without Iimitatioi~ any Chaptex' 7 trustee or C1lapter 11 trustee or examiner appointed oz• elected for

such Debtor) under alI circumstances anti fog- all puz~poses, pf•ovided that iF a trustee or eaamiz~er

is appointed prior to the Challenge Deadline {as clefizled below), he or she shall not be bound by

the admissions, stipu~atiot~s, agreements and releases herein until tale late• o~:Courteet~ (14) days

after appointment or expiration of the Challenge Dead1i11e (sYzbject to extension by the Caurt).

b. Eaeli Debtor's admissions, stipulations, agreements and releases

contained in this Interim Order•, including, without limitation, those contained in Paragraph 5 of

this Inte~~im Order, shall be bindi~ig upon alI otliez• paz•ties in interest (incltidi~lg, without Iimrtatiox~,

any Committee) under all circt~nstances and for all purposes unless (z) the Committee or anothe~~

parky iii inierest (subject in all zespects to azxy agt•eeaneiit or applicable law that may liz~ait oz• affect

such entity's right or ability to da so) having requisite standing laas timely ~-r~Ei~-p t~ filed a~~

advez~sary pz~oceedizig oz• coz~Cestec! rnattez• by no later than the Challe~ige Deadline {A) objecti~lg to

or challenging tale amozult, validity, perfection, e~3forceabilzty priority or extent of the Pre-Petitio7~

Debt o~• az~y Pre-Pctitioi~ Credit Party's Liens, or (B) otherwise asserting any defenses, claims,

causes of acticm, co~interclaims oa• offsets agai~lst any Pz•e--Petition Credit Party or its z'espective

agents, affiliates, si~hsidiaries; directors, officers, representatives, attoz~~leys or advisors, and (ii)

tl~e Cai~Y•i i•u~es iYi favoz• of the plaintiff in any such timely a~zd properly filed. advel•sary px•oceeding

car conCest~d matter. As used herein, the Tenn "Challenge Deadline" means tl~e date that is tl~e latex•

of (i) ii3 the case of a ~~arty in interest with requisite standing other Haan the Coulinittee; seve~rty-

eve (7.5} days after e~~[ry of~ this Interi~a~ Orcie~•, {ii) iaa tl~e case of any Committee, sixty (60) days

after the filing ofiiotice of appoint~nen.t of a Cominit~ee-{-~~~c~-:s~xl~j~~-~e-~l~ie-I~r~t-igft~~et~~=l~~~}~e~;

(iii} any such laier date agreed to in writing by the Pre-Petition Cz•edit Pz~•ties, in them• sole

37vocs sr:~a~s~a.~a3~s<,Uioo~



discretion, aid (iv) any such later date ordered by the Court far the cause shown alter notice and

all opportunity to be heard, provided that such order is entered before the expiration of any

applicable pez•iod as set forth in clauses (i) tluoug~l (iii) of this sentence.

c. If no adversary proceeding or co~~tested matter is timely ~zz~i-

~ ~ died as of the applicable Challenge Deadline against aPre-Petition Credit Party or the

Court does nat rule in favor• of the plaintiff in any such proceedi~lg, then in these Chapter 11 Cases

aid iz~ azly Successoz• Case each DebtoX~'s admissions, stip~~latio~is, agree~~lei~ts and releases

contained in this Ilrterim Order, including, without liz~aitation, those contained in Paragraph 5 of

this Inte~~im Order, shall be binding on all parties in interest. If any sz~ch advez•sary proceeding or

contested .~~~atter is ~0~~1-3~ filed by the applicable Challenge Deadli~le, each Debtor's admissio~~s,

stiptialations, ag~~eements and releases contained in this Interim Oz•der, including, withaut limitation,

those confiaznecl iz~ Para~•a~l~ 5 of this I~~terim Order, shall ilo~ietlieiess reznaixi binding anti

preclusive on such pa~•ty, except to the extent that such aclzx~zssions, stipulations, agreements and

releases weze expressly c1~a11e~1ged in stfcli adversary proceeding or contested naattez• and the party

fringing such challenge prevails on the merits. Nothing contained in this Interim Order shall vest

or confer any person or• entity, including any Cotntnittee, standing ox authority to Ynusue or

con~~nence any such adversary pioceecling or co~itested matter.

d. Notwithstanding anyti~ir~g else coz~taizied in Yl~is Interim Order, if air

adversa~~y proceeding o~• cozitestec~ matter is timely ~~~~~~-~}~,r•~ filed as of the applicab.te

Challenge Deadline against aPre-Petition Credzt Paz't~, the entity prosecl~tii~g that timely acivez'sary

proceeding or motion can, if successful, challenge the adeglaate pz•otectia~l provided with respect

to any lzen ~voicled and ~~ay~~~ezits x~~a~le to any Pre-Petition Credit Party a~1d all of the provisions

z~ebarding Adequate Protection Clauns ~tnd Adeyltate Projection Liens its this Order axe quali:~ied

3HDQCS SI':10154U.10 395GG1U01



by this reservation of the rights of third p~-ties. 7f the Adequate Protection paytnezlts made exceed

tl~e azno~~z~t of ac~ec~~ate protection to wl~.ieh airy Pre-Petition Credit Party is e~~#itled, that excess

shall be applied to that Pre-Petition C~•edit Party's allowed secut~ed claim.

27. Debtors' Waivers. At all tines during the Claapte~• 11 Cases, and whether

or not an Event of Default has occurred, the Debtors ii7evocably waive a~~y right that they ~x~ay

leave to seek aitthox•ity (i) i~~itil Ft~li Payraaent of all DIP Obligations and Pre-Petition Debt, to obtain

post-petition loans or other financial aecolnmodations pux'suan.t to Section 3b4(c) or (d} of t~~e

Bankruptcy Code, other plan from tl~e DIP Lenders oii flee teems and conditions set fox•tla ilez~ein;

{ii) to clia3lenge the application of any payn~e~~ts authorized by this Interim Order pu7•suailt Section

506(b) of the Bal~l~~.~ptcy Code; {iii} to propose or support a piax~ of reorganization or liquidation

that does z~ot ~~z•ovide far the znde~easi6le ~~ayn~ent in full and satisfaction of alI DIP Obligations,

a~1c1, subj cet tv eni~~y o~tize Final Order, all Pre-PetiCion Debt on oz• before the effective date of such

plan; {iv) to cllallei~ge that any secu7•ity interests, claims or Bens arising on account of

infer•company transactions are junior• and subordiziate to all DIP Obligatio~ls and Pre-PetitioX~

Secz~rity Interests; or (v) to seek relief under the Bankruptcy Code, including, without 1ilnitatia~l,

ux~ciez~ Sectiotl 105 of the Banl~liptcy Code, to the extent al~y such relief would in any way ~~estrict

or im~~air the rights and remedies of any DIP Lender or a~iy Pz~e-Petitiaz~ Cz•ecIit Party as provided

in this Intez•ii~z Ordez• o~• az~y of the DIP Loan Documents, as applicable, or a DIP Lex~dez~'s exercise

of suc11 ri~}~ts or ~•emedies.

28. Service of Interim Order. P~~omptly after tl~e ezatt•y o~ this Interim Order,

Debtors s1~a.11 mail, by f~ixst class mail, a copy of this Interim Order, tl~e Mo#ion (auc~ X11 ~xhit~its

attached to the Motion), and a uatice of tl~e Final IIeai•ing, to {without duplication) counsel for tkae

D1P Lenders ~~d Pre-Petition Agent, the U.S. Trustee, the U.S. Securities & Exch~ui~e

39noes sr:lo~sv~.~o 3ss~~iai»



Com~nissioz~, counsel ~az~ tl~e Con~t~~zttee (oz•, zf the Committee has not been foi7i~ecl ~Id selected

coi~i~se~ as of the entry of this Interim O~•der, then the Debto~•s' co~asolid~ted 30 largest unsecured

creditors}, tl~e Internal Revenue Service, alI ~~a~-ties wlio lave filed requests for notices under Rule

2Q02 o:f tlae Bankruptcy Rz~les px•ior to tk~e dine of such sez•vice, and all parties known by a Debtor

to hold or assert a lien on airy assets of a Debtor•, and s13a11 file a certificate of se~•vice regarding

same with ttie Cl~~•k of the Count. Such service shall constitute goad and suf~cie~~t noCice of the

Final Heaving and the relief sought by the Debto~•s ptn•suant to the proposed Final 07•der.

29. No Deemed Control. In detez•nraining to xz~ake any DIP Loan uncle• the DIP

~`acility, ~~-~.~-~-~re~~-a~ ~~t~-~~~~~~ as and when permitted puxsua~~t to this ~tlterim

Oz~dez•, any Fizzal 01•dez- ox' t1~e DIP Loan Documents, i~o DIP Lender and no Pre-Petition C~•edit

Party shall be deemed to be in control of any Debtoz• or its operations oz• to be acting as a

"respallsible pe~•so~1," "tTlc~I11g111$ c`lgellt" Ol' "OWllel OY 0~81afdl'" {aS SliC~l t2T1T1S ~iTG C~(;~1ii~C~ 111 t~le

United States Carzlprehealsive Enviroml~ental Response, Compez~satioi~ and Liability Ac#, 29

U.S.C. §§ 9601, et seq., as amended, or any similar state or federal statute) with respect to i~ie

operation oi~ management of such Debtor.

3 0. Exct~it~atioil. effective upon entry of tl~e Final Order, natl~ing iii tills Irite~~iln

O~•de~-, tlae DIP Loan Docurne~rts, oz• a~~y other document related to the DIP Facility shall in arty

way be construed or iliteipreted to impose or allow the imposition upon any D.I.P .I_,ender or at~~

Pre-Petitio~l Credit Pal-ty oily liability for an}~ claims arising fs-ozi~ the p~•e-petitio~~ or past-petitio7~

activities of any Debtor in the operation of ifs business or iii coiulection with its z•estrtrcturir~g

efforts. Effective upon entry of the final Order, so long as a DIP Lender or .Pre-.Petitiol~ Credit

Parry complies with its o6ligatioxls udder tl~~e applicable DIP Loan Docui~~eaats a~ld its obligations,

if any, under• this Interim Orde~i• a~~d applicable law (z} such DIP Lender oi- ~',7-e-Petition C~~edit Party

40Df~CS SF: I O I Syp.l p 395661001



shall not, in any way or malmer, be liable or respo~xsible foz• (A) the safekec;ping of the Collateral,

{B} any loss ox dat~iage thea•eto occurring ai arising in airy ma~~nea• or #~ashioi~ tiom any cause, (C)

any dizni~iution in the vahie thereof, oz• (D) any act or defa~~lt of any caz~z•iez•, seivicer, bailee,

custodian►, foi~varding agency or othex• person oz• entity; arld (ii) all risk of loss, claaa~age o~•

destruction of tl~e Collateral shall be borne by the Debta~•s.

31. Biz~din~ Effect; Successors and Assi ns, The pz•ovisions of the DIP Loan

Docuzc~er~ts vid this this I~rterian Order, including all ~i~dings lserein {subject to Ya~~agt•aph 26 of

this ~iterin~ Qrder} shad be binding z~poti all pat-~ies in intez•est in these Chapter l 1 Cases,

includa~~g, ~vitl~out liza~ztatioaa, tl~e DIP Lenders and Debtors ar~d their respecti~~e successors and

assigns {inchidii~g airy Chapter 11 trustee laez•eafter appointed for the estate of any Debtor, ~►ny

Chapter 7 trustee appointed or elected in a Successor Case, any exa7~~i~~er appointed pu1•siiant to

Section 110 o~the Banlal~ptcy Code, ax' any oElie~• fiduciary appointed as a legal z~epresentative of

ally Debtor or with respect to the property ofthe estate of any Debtor•), ai d shall inu7•e to the benefit

of DIP Lende~•s and their respective successors and assigns. In no eveni s1~a11 any D7~' Lender oz~

Pre-Petition Credit Party have a~i5~ o~~li~ation to make DIP Loans to, or ~~ei~~iit the use of the

Collateral {iz~clt~ding Cash Collateral} by, any Chapter 7 t~2~stee, Cl~aptez• 11 trustee oi~ siraailax~

responsible person appoi~ited or elected for the estate of any Debtor.

32. Fi~lal ~Iearin~. Thy Fi1ia1 Hearing to coz~sicler entry of the Final Order shall

be ~~eld at ~~:00 o'clock L?..,xxa., p~~evailing Eastern time o~1~~t~=-~^ } 4 , 2019, at Coui-~rooz~~ 2, bth

Floor, United States I3anla~u~tc}T Court, 824 Market Street North, Wilinin~ton, Delaware 19801.

Tl~e I~inaf Hearing m~~y be adjourned or postponed without iurdler notice except ~s i~1ay be

a~iz~o~~t~ced in open Couz•t ox posted on the Cotu~t's docket. If any o~~ alI of~the provisions of this

I~iterun Order a~~e modified, vacated or stayed as ~l~le result o:[ any Objection {as de~~~ed ~~elow)

41noes sr:ioas<~o.~a3s~s~s;oo~



timely filed acid assea~ted at the final Hearing, then, wzthout lzt~~itizag the provisions of Paragraph

261~ereof, aX1y DIP Obligations incut7ed prior to the effective dale of such modification, vacation

o~• stay shall be govez•I~ed in alZ respects by the oz-iginal provisiolis of this I~~teri~aa O~•c~er, and the

DIP Lenders shall be entitled to the protections afforded unde~~ Section 364(e) of the Bankruptcy

Cod~te-a~-~I~e-~r~~11t~s>-~~Aa,~.~-", r~~::?~~,es; ~r~t~ene€rts;-~r~~r~irrg;-~it~~a~a~E-lirr►zt-alirm; the-D~P

I,iczi3-c^cnu vupP~i=l^,'•it`x~,.j viaiizi'S-~Y'ctt~t't~ }3C'.i'eYYl~' c rill OClltl7,~Il S ~ t

t~.alLsu.cl~.,~7p ~~-~at~rrs.

33. Objection Deadline. If at~y pa~•ty in intez'est shall have an objection to any

of the provisio~as of this Interim Order, ar~y provisio~is of the DIP Loan Documeflts, or any

px•ovisions of t ie proposed final Ozder (collectively, an "Objection"}, such party may assert such

Objection at the Fi~lal Hearing, if a written statement setting forth the basis foz• such Objection is

filed with the Cotiz•t and concuzre~tly serrved so as to be received on or before ~:00 ~.m., prevailing

Eastern time on ~ ~ ~~ . ~ ~ , 2019, by tl~e following: (a} the Office of the United States Trustee, 8~~

King Street, Suite 2207, Locicbox 35, Wilmingto~~, Delaware 19801; {b) cou~~sel foz• the Debtors,

Jeffrey N. Poi~iera~ltz, Pacl~ulski Stang Ziehl &Jones LLP, 10100 Sa~ita Monica Blvd, 13t1~ ~'Ioor,

Los Angeles, Califaznia, 90067- 003 and Peter J.1~eane, Pachulslci Stang Ziel~l &Jones LLP, 919

N. Marl~et Street, 17t~' Floor, Wilzningtoz~, Delawaz•e 19801; arld {c) coutlsel for the Pze-Petition

Agent and DIP Leiide.rs, Derek F. Meek, Bui7• & ~~'oamali LLP, 420 North 20ti' Street, Suite 3400,

Birn~ii~gha►~~, tl.labazna 35203. If ari objecting party shall fail to appear at tlae Final Hearing and~~~

assert the basis f'or such Objection befoz~e tl~e Cotu•t, such Objection~~l~~ be deemed to have been

uTaived and abandoned by such objecting party.

3~. Ii~suraiace. "T~ t11e exte~lt the Pre-Petitiol~ Agent is listed as 31~ortgagee, ]ass

payee or additia.iial i~lsured i~i~cler any Debto~•'s ix~surax~ce policies, tl~e DIP I.,endez~s s11a11 also

42DOCS Sl':10J590.1U39566/00(



deemed to be the lass payee, iiiortgagee or adc~itio~zal iz~suz~ed under such Debtoz•'s insut•ance

policies ai d shall act in that capacity and dist~•ibute any proceeds ~~ecovet•ed or received in respect

of any such insurance policies.

35. Effectiveness; ~nforceabi]ity. Tlzas Iz~te~•im Order s1ial1 constitl~te fiz~dit~gs

of fact and conclusions of law and shall take effect and be fully ei~foz•ceable nzcnc p ro tarns to the

Petition Date iriunediately upon envy hereof. Notwithstandi~i~ Banlcz•tx~tcy Rules ~~QOI (a}(3),

600b(d), 7062, or 9014 of the Bankruptcy Rules o~• any other Bankruptcy Rule, ox• Rule 62(a) of

tl~e Fec~exal Rules of Civil Procedure, this Interim Oi•cler shill be valid, take fiill effect, and be

enforceable immediately upon e~itry hereof; there s1~aI1 be no sta~T of execution o~• effecti.veiiess of

this Intex•iza~ Oxcie~r; axed any sfiay of the ef~ectivezaess of this Interi~l~ Orde~~ that might othe~•wise

apply is hereby waived for cause shown.

36. Rete~ltion of 3~lrisdiction. The Baril~•uptey Court shall retaizl jurisdiction to

enforce tkie provisions of this T~iteriin Order, and t~1is retention of jurisdiction shaIl st~Y~vive the .

con~rination mid consummation of any Chapter 11 plan for any Debtor notwit~astanding the terms

or provisions of any such Chapter• I 1 pla7~ or any ordet~ can~iming any such Cllapfer l I plaza.

37. Inconsistencies. 'I'o the extent of ~m~~ inconsistencies oz• conflicts between

this Interim Ot•de7• at~d the DIP Loan Documents, this Interim ~i•de~• shall govern.

Dated: August 6, 2019 ~ ;+ i=Wilmington, DE /~ _ ,~ , ~' , . _

~,~ •- ~i',~LTNITI~D S'1~~1"I'ES BAM~~ZUPTCY JUDGE

43ROCS SF:101590,7039$6(i/001



EA'H~BIT Y

BUDU~T

rocs sF:io~s~n.3o3~s~~ioo~


iPic Entertainment, fnc.D1P Cash Flow Fcrecast

(USD 000's}

Aduzl/Forecas.'->

Forecast Fp2czst

Forec2sf Forecast

FarEcast Forecast

Forecast Fcrecast

Forecast rorecas[

Fo:erasr Fn~r~.~.~~

~~~~~a~~

O'Ct

r-I

0OQ7

UOJC~-~I

.-i

.--1

Nc~

weex rvumaer->

12

34

56

78

910

41?2

'B

~ TOTAL

Week Stad Dafe ->

OS/0211908109/ 9

68116/i 908/23!19

98/30!t 909!06!19

09/93l~ 9CS/2C; t 9

09l27l~ 9~ 0104/19

1 Cl11;199 D

! i el19

10/25n 9

~'OSIC~2r19

WeskEntlDate->

OS7~8l19OSl~Sl19

09f22iS908129!19

09105l1909/12/79

09/79119

G9l251t9~D103l19

~0l10/~91011?!19

10l2e/~91013iH9

i~ SGl31l19

iOperational Receipts

3,0422,745

2,7182,324

2,6162,510

2,554

2,2172,608

3,5463,133

3,272

2,?07~

36,054

Operational Disbursements-

PayroilCosts(2,135)

-(2,GS2}

-(2.943}

-(1.993)

(2.143)(2.046)

-I2,099)

SG3A

-(333)

(98}

(135)

(258)

(225)

(98)

(.85)

(966)

(2G0)

(14.)

(185;

(190)

.(14.640)(3,052;

Film Renta(-

-(586)

(478J(473)

(A04}

(455 ~

(437)

(385J(454)

(657;

{Sa5)

~Cinema Operations-RentBCAM

-(1,714)

--

(7,714)(,{76~>

- 1g,142?

Cin:ma Operations

-{1.478)

(750}

(8a8)

(7°8)

(842)

f73o)S829J

;842)

(922)

(815)

rfi?6};8?8)

~(~gCo?i

Other-

(294)

{443)

(243)

{2C9)

;235)(443)

(243;

X204)(235)

(443)

(243;

(2pg)

- ~

!3.449,Total OperationalDisbursemerts

(2,93)

{3,419)(3,959)

(1,754)(5,5 4

)(1,707)

(3,724,(3,694)

(6,3D0)(9.743)

(3,E~8)(?,853)

;3,g61)(41,65)

Net Cash Flow from Operations

907

(6T1)

{1,243)570

2,978)803

(1.070}523

X3,692}1,803

X765}1,409

{1,154) i

{5.557J

RestructuringRestructuring F

ees Escrow

(23C)

(230)

(23Q)

{257)

(2S7)

(232)

(23.

(232}

(207,

(2Q7)

(2C7}

(207)

(2,963}Secured Lender Professional F

ees

-(37Q)

__

~329~(~~)~

253)

(~,226jUS'rustee Fees

__

__

_;257)

(25'ijDIP Loan Interest a

nd Fees

(32D)

--

(100)

--

-(133)

--

--

- (554!

PACAIPASACIaims

-(1,105)

-(245;

--

--

-_

__

_(i',35C;

Criticzl Vender Claims

-(2,16'IJ

(297}

{692;_

__

_t3;.5G,

UtilityDeposds-

(409 ~

-_

__

__

{409jOther

i2)fs)

--

~~)-

--

{5)~57j

Total Restructuring(237}

(4,600)(527)

(1,795)(687)

(232j

(237}

(232)

(629}

(207

(292}

(207)

(722)

I..~.(9,919}j

Net Cash Flow

675

(5,270)(7,769)

{624)

{3,665)57~

(i,307}291

(4,3201 5

96

(977)

5 202

(1 8?6}

i{15 476),

Liquidity Summary

~~,

Beginning Cash $alance

453

1,129

2,358

589

3,965299

3,8702,563

2,854533

2,1291:1

52

2,354 ~

453

Net CashFiow

675

(5,270)(1,769)

(624)

(3,665)571

(?,30i)297

(4,320)1:5

96

(977)

1,202(~,87E;

~ ('S;47fi)

DI? Advances/(Paydowns}

-6,500

-4,C-00

-3,OW

--

2,000

--

-SOu

i6,C00Ending Cash Balance

1,129

2,358589

3,965299

3,87Q2,563

2,854

533

2,1297,152

2,356977

,9R

D[P Loan Commitment

t&,00016,000

7&,00076,000

76,000

16,000'l6,DOC

18,000;fi,000

.6,006

X0,00016,000

16,00016,G~C

DIP Availabilit

16,0009,500

9,506

5,5005,500

2,5 0

2,5002,500

500

500

500

500

Total Available Liquidity (Cash +DIP)

77,72911,858

70,089

9,465

5,7896.370

5,0635,354

1,033

2,6291,652

2,&54977

977

FLndedDlPFaciliiy-BOP

--

6,500

6,500

10,500.0,500

X3,50093,SP~

'13,50095,SD0

15,50015,500

15,500+ Advances

-6,560

-4,00

-3,000

--

2,600

--

-500

18,OOG(Paydowns)

--

--

--

--

--

--

-

Punded0lPFacility-EOP

-6,500

6,50010,500

10,508

93,50013,500

13,50015,500

75,50015,500

15,500

16,00016,090

'iu


iPic Enteria[nment, Inc.Prcfessional F

ees Schedule

(USD 000's)

Artrrat/F~rr:rast—> Foreras!

Forecast Pot=cast

Foreces7 ForEcast

Frrecasl Forecast

Forecast Fere~st

,=orecas! Forecast

Porecas! ~~rrecasl

~'

Od'

c--I

OOLL

~'UODd~mtirna~

Week Number—~

~2

34

56

78

~1 C

~ 172

13

~"TOTAL-

WeekSfartDafe-a

08f02l~~OSlQ9/14

C8/1o/'19C823/~9

08/30!'909105!19

09!13/1909!20119

09127/19X0104199

~0/11liG1Q(18/~9

10i25i99 1

0~/O:r119Week End Date—>

OS/Oo,~9C8li 5/99

08.2211908/29/ 9

09!05!1909!}z/fig

09!1 9/1909/26/19

70/03!19~O/l Gf~9

~0/17l1?1Ql24/~9

10i3~H~

i 1Cl31i19

Restructuring Fees Escrgw

Debtor Counsel {PSZ,I}(105}

(SOS)(1G5)

(145)(105)

;BO)(80)

(80j(80}

{55)(55)

(55)(55)

(~,065jDeb,or C

RO

(59)

(59)(54)

(59){59)

;59)(59)

(59j(59j

(55)(55)

(59)(59)

(765jDe6:or F

A(25)

(25j(25)

{25){25)

{25)f25)

(25)(25)

(25)

(25)(25)

(25)(3251

UCC Counsa!

--

-{7 $

)(15j

(15)(15)

(15)(15)

(SS)(15)

f15J(15)

- - ~,(150j

UCC FA

--

-(13}

(13)

(13)

(93)('13j

('13J(i3)

(13)(13)

(13)(~'12Bj

lnvestmenf Bankec(29)

(29,(29)

(29)(29)

(29)(29)

{29)(29)

(29)(2?j

5J(29)

(3751Noticing&Claims Agent

f12j(72)

(12){12)

(12)(72)

(72)(72)

(12)(12)

(12)(~2)

(12).....

i~a51

Total Restructurin Feas Escrow

(230

230

230)

257

257

(232)

(232)

(232

232)

247

(207

207

207

2,9631

Secured Lender Professional F

ees

Secured Lender Counsel-

(270)-

-(264)

--

-(167)

--

-(h67)

(b?3)Secured Lender F

A-

(t0a}-

-(120)

--

-(95)

--

-(90)

i-?3j~

7ofal Secured Lender Professional F

ees

(376)

j329}(2S3)

(263)

(7,226);

~`


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