Interim Order (I) Authorizing The Debtors
- Date
- 2024-06-12
Summary
An interim order entered June 12, 2024 as Doc 103 in In re Vyaire Medical, Inc., et al., Case No. 24-11217 (BLS), a Chapter 11 case in the U.S. Bankruptcy Court for the District of Delaware, on the debtors' motion at Docket No. 12. It authorizes the debtors to obtain postpetition financing under a DIP Facility in the aggregate principal amount of $180,000,000, consisting of New Money Loans of $45,000,000 and Roll-Up Loans of up to $135,000,000. On an interim basis it authorizes borrowing of $120,000,000, including $25,000,000 of New Money Loans made available, $20,000,000 funded into escrow and $75,000,000 of Roll-Up Loans deemed funded. The order also authorizes use of cash collateral, grants liens, superpriority claims and adequate protection, modifies the automatic stay and schedules a final hearing. It is signed by United States Bankruptcy Judge Brendan L. Shannon.
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Full text
Case 24-11217-BLS Doc 103 Filed 06/12/24 Page 1 of 75
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
)
In re: ) Chapter 11
)
VYAIRE MEDICAL, INC., et al., 1 ) Case No. 24-11217 (BLS)
)
Debtors. ) (Joint Administration Requested)
) Re: Docket No. 12
INTERIM ORDER (I) AUTHORIZING THE DEBTORS
TO OBTAIN POSTPETITION FINANCING, (II) AUTHORIZING
THE DEBTORS TO USE CASH COLLATERAL, (III) GRANTING LIENS
AND PROVIDING SUPERPRIORITY ADMINISTRATIVE EXPENSE CLAIMS,
(IV) GRANTING ADEQUATE PROTECTION, (V) MODIFYING AUTOMATIC STAY,
(VI) SCHEDULING A FINAL HEARING, AND (VII) GRANTING RELATED RELIEF
Upon the motion (the “Motion”) 2 of the above-captioned debtors and debtors in possession
(collectively, the “Debtors”) in the above captioned chapter 11 cases (collectively, the “Cases”),
pursuant to sections 105, 361, 362, 363, 364, 506(c), 507, and 552 of title 11 of the United States
Code (as amended, the “Bankruptcy Code”), rules 2002, 4001, 6003, 6004, and 9014 of the Federal
Rules of Bankruptcy Procedure (the “Bankruptcy Rules”), and Rules 2002-1(b), 4001-2, 9006-1,
and 9013 of the Local Rules of Bankruptcy Practice and Procedure of the United States Bankruptcy
Court for the District of Delaware (the “Local Rules”), seeking entry of this interim order
(this “Interim Order”):
(i) authorizing Vyaire Medical, Inc. and Vyaire Finance B.V., in their
capacities as borrowers (the “DIP Borrowers”), to obtain postpetition financing, and for
each of the other Debtors to guarantee unconditionally (the Debtors, other than the DIP
1
The last four digits of Debtor Vyaire Medical, Inc.’s federal tax identification number are 6495. A complete list
of each of the Debtors in these chapter 11 cases and each such Debtor’s federal tax identification number may be
obtained on the website of the Debtors’ proposed claims and noticing agent at
https://omniagentsolutions.com/Vyaire. The location of Debtor Vyaire Medical, Inc.’s principal place of business
and the Debtors’ service address in these chapter 11 cases is 26125 North Riverwoods Boulevard, Mettawa,
Illinois, USA 60045.
2
Capitalized terms used but not defined herein have the meanings given to such terms in the Motion or the DIP
Credit Agreement (as defined herein).
Case 24-11217-BLS Doc 103 Filed 06/12/24 Page 2 of 75
Borrowers, the “DIP Guarantors”) on a joint and several basis, the DIP Borrowers’
obligations in connection with a superpriority senior secured multiple draw term loan credit
facility (the “DIP Facility”) in the aggregate principal amount of $180,000,000 (the “DIP
Loans”), consisting of:
(a) New Money Loans. A superpriority senior secured multiple
draw term loan credit facility in the principal amount of $45,000,000 (the “New
Money Commitments” and the term loans made thereunder, the “New Money
Loans”), which New Money Loans shall be fully funded upon entry of this Interim
Order in accordance with the terms and conditions set forth in the DIP Credit
Agreement (as defined below), substantially in the form attached hereto as
Exhibit A and all other terms and conditions of the DIP Documents (as defined
below);
(b) Roll-Up Loans. A superpriority term loan facility in the
principal amount of up to $135,000,000 (the “Roll-Up Loans”), of which (x)
$75,000,000 will be deemed funded in accordance with clause (i) below on the date
of this Interim Order, and (y) up to an additional $60,000,000 will be deemed
funded in accordance with clause (ii) below, subject to the entry of and the terms
of the Final Order, which Roll-Up Loans shall be deemed funded and an equal
amount of First Lien Term Loans (as defined below) shall be deemed converted
into and exchanged for, such Roll-Up Loans, in each case, at the times, and in
accordance with the terms and conditions, set forth in the DIP Credit Agreement
and the other DIP Documents and as set forth below.
(i) On the date of this Interim Order, concurrently with the
making of the New Money Loans as described in clause (a) above,
$75,000,000 in aggregate principal amount of First Lien Term
Loans shall be deemed converted into and exchanged for Roll-Up
Loans (the First Lien Term Loans rolled-up pursuant to this clause
(b), the “Rolled-Up First Lien Term Loans” and, the First Lien Term
Loans that are not Rolled-Up First Lien Term Loans, the
“Remaining First Lien Term Loans”), and $75,000,000 of Roll-Up
Loans shall be deemed funded on the date of this Interim Order,
without constituting a novation, and shall satisfy and discharge
$25,000,000 in aggregate principal amount of Rolled-Up First Lien
Term Loans. The Roll-Up Loans deemed funded on the date of this
Interim Order shall be deemed to be made by each Backstop Party
(as defined in the DIP Credit Agreement) (or an investment advisor,
manager, or beneficial owner for the account of a Backstop Party,
or an affiliated fund or trade counterparty designated by such
Backstop Party) (such initial lender holding such Roll-Up Loans, the
“Closing Date Roll-Up Lenders”) in an amount equal to the lesser
of (x) the aggregate principal amount of the First Lien Term Loans
owing to the applicable Closing Date Roll-Up Lenders on the date
of this Interim Order and (y) an amount equal to (I) $75,000,000
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multiplied by (II) the quotient of the amount set forth next to each
Backstop Party’s name on Schedule 2.09 of the DIP Credit
Agreement divided by the sum of all amounts set forth on Schedule
2.09 of the DIP Credit Agreement.
(ii) Subject to the entry of and the terms of the Final Order, on
each Withdrawal Date (as defined in the DIP Credit Agreement),
concurrently with and automatically upon the withdrawal from the
Loan Proceeds Account (as defined in the DIP Credit Agreement)
and disbursement of New Money Loans to the DIP Borrower on
such Withdrawal Date (the aggregate amount of New Money Loans
funded by any DIP Lender and so withdrawn and disbursed on any
such Withdrawal Date, such DIP Lender’s “Withdrawn Amount”),
each DIP Lender (or an investment advisor, manager, or beneficial
owner for the account of such DIP Lender, or an affiliated fund or
trade counterparty designated by such DIP Lender) (collectively,
the “Additional Roll-Up Lenders”) shall be deemed to have
(x) converted and exchanged an aggregate principal amount of
Remaining First Lien Term Loans equal to the lesser of (I) such
Additional Roll-Up Lender’s Remaining First Lien Term Loans on
such date and (II) three times its Withdrawn Amount on such
Withdrawal Date (such lesser amount, such DIP Lender’s “Roll-Up
Amount”) for Roll-Up Loans and (y) funded an amount of Roll-Up
Loans equal to its Roll-Up on such Withdrawal Date, without
constituting a novation, and satisfied and discharged an aggregate
principal amount of Rolled-Up First Lien Term Loans equal to its
Roll-Up Amount.
(iii) On the terms set forth in the Syndication Procedures, upon
completion of the Syndication (as defined in the DIP Credit
Agreement) (1) each DIP Lender holding Roll-Up Loans on such
date (“Existing Roll-Up Lender”) shall be deemed to have assigned
a portion of its Roll-Up Loans ratably to each other DIP Lender on
such date (each such DIP Lender, a “Syndicate Lender”), and each
Syndicate Lender shall be deemed to have ratably assumed an
amount of Roll-Up Loans from each Existing Roll-Up Lender and
(2) each Syndicate Lender on such date shall be deemed to have
assigned a portion of its Remaining First Lien Term Loans to each
Existing Roll-Up Lender and each Existing Roll-Up Lender shall be
deemed to have assumed a portion of such Remaining First Lien
Term Loans from each Syndicate Lender such that each DIP Lender
(including both Existing Roll-Up Lenders and Syndicate Lenders)
will hold the amount of Roll-Up Loans as set forth set forth on
Schedule 2.17 of the DIP Credit Agreement and the Remaining First
Lien Term Loans will be reallocated and assigned accordingly.
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(c) Interim Facility. Upon entry of this Interim Order, the
maximum amount of the New Money Commitments that will be disbursed to the
Borrowers shall be $25,000,000;
(ii) authorizing the DIP Borrowers and the DIP Guarantors to (a) enter
into and perform under that certain Senior Secured Super-Priority Term Loan
Debtor-In-Possession Credit Agreement dated on or around June 11, 2024, among the DIP
Borrowers, the lenders party thereto (collectively in such capacities, the “DIP Lenders”),
and Wilmington Savings Fund Society, FSB, as administrative agent, and collateral agent
(in such capacities, the “DIP Agent,” and, together with the DIP Lenders, the “DIP Secured
Parties”) (as the same may be amended, restated, amended and restated, supplemented,
waived, or otherwise modified from time to time, the “DIP Credit Agreement”) and the
other DIP Documents (as defined below) and (b) enter into and perform under that certain
Escrow Agreement (the “Escrow Agreement”), dated on or around June 11, 2024, among
the DIP Borrowers, the DIP Agent, and Wilmington Savings Fund Society, FSB, as escrow
agent (the “Escrow Agent”); and each of the foregoing, together with this Interim Order,
the Final Order, and all agreements, documents, and instruments delivered or executed in
connection therewith, in each case as may be amended, restated, amended and restated,
supplemented, waived, or otherwise modified from time to time in accordance with the
terms thereof (including the fee letters executed by the DIP Borrowers in connection with
the DIP Facility and the Escrow Agreement), and other guarantee and security
documentation, collectively, the “DIP Documents”), and to perform such other and further
acts as may be required in connection with the DIP Documents;
(iii) authorizing the Debtors to use the proceeds of the DIP Loans and
the Prepetition Collateral (as defined below), including Cash Collateral (as defined below),
(x) solely in accordance with the Approved DIP Budget (subject to any Permitted Variance
set forth herein and in the DIP Credit Agreement), (y) to effectuate the exchange of First
Lien Term Loans for Roll-Up Loans in accordance with the DIP Credit Agreement, this
Interim Order, and the Final Order, and (z) to provide working capital for, and for other
general corporate purposes of, the Debtors and certain of the Debtors’ subsidiaries,
including for funding the Carve Out (as defined below) and for payment of any Adequate
Protection Payments (as defined below);
(iv) subject to the Carve Out, granting adequate protection to the
Prepetition Secured Parties (as defined below) to the extent of any Diminution in Value (as
defined below) of their interests in the Prepetition Collateral (as defined below);
(v) subject to the Carve Out, and except as otherwise provided in
paragraph 39 of this Interim Order, granting valid, enforceable, binding, non-avoidable,
and fully perfected first priority priming liens on and senior security interests in
substantially all of the property, assets, and other interests in property and assets of the
Debtors, whether such property is presently owned or after-acquired, and each Debtors’
estate as created by section 541 of the Bankruptcy Code, of any kind or nature whatsoever,
real or personal, tangible, intangible, or mixed, now existing or hereafter acquired or
created, whether existing prior to or arising after the Petition Date (as defined below),
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subject only to the (x) Carve Out (as defined below) and (y) other valid, perfected and
unavoidable liens, if any, existing as of the Petition Date that are senior to the liens or
security interests of the Prepetition Secured Parties as of the Petition Date by operation of
law or permitted by the Prepetition Documents and liens that are perfected after the Petition
Date to the extent permitted by section 546(b) of the Bankruptcy Code (the “Prior Senior
Liens”);
(vi) granting superpriority administrative expense claims against each of
the Debtors’ estates to the DIP Agent and the DIP Lenders with respect to the DIP
Obligations (as defined below) over any and all administrative expenses of any kind or
nature subject and subordinate only to the payment of the Carve Out on the terms and
conditions set forth herein and in the DIP Documents;
(vii) subject to entry of a Final Order (as defined below), waiving the
Debtors’ and the estates’ right to surcharge against the Prepetition Collateral or DIP
Collateral (each as defined below) pursuant to section 506(c) of the Bankruptcy Code;
(viii) subject to entry of a Final Order and to the extent set forth herein,
for the “equities of the case” exception under section 552(b) of the Bankruptcy Code to not
apply to such parties with respect to the proceeds, products, offspring, or profits of any of
the Prepetition Collateral or the DIP Collateral, as applicable;
(ix) pursuant to Bankruptcy Rule 4001, holding an interim hearing
(the “Interim Hearing”) on the Motion before this Court to consider entry of this Interim
Order, among other things, (1) authorizing the Debtors to, on an interim basis, borrow from
the DIP Lenders a principal amount of $120,000,000 in DIP Loans of which
(I) $25,000,000 of New Money Loans will be made available to the DIP Borrower on the
date of this Interim Order, (II) $20,000,000 of New Money Loans will be funded into an
escrow account on the date of this Interim Order and available to be drawn by the DIP
Borrowers and (III) $75,000,000 of Roll-Up Loans shall be deemed funded and converted
from and exchanged for First Lien Term Loans upon entry of this Interim Order, subject to
and in accordance with this Interim Order, without any further action by the Debtors or any
other party, (2) authorizing the DIP Guarantors to guaranty the DIP Obligations,
(3) authorizing the Debtors’ use of Prepetition Collateral (including Cash Collateral),
(4) granting the adequate protection described in this Interim Order, and (5) authorizing
the Debtors to execute and deliver the DIP Documents to which they are a party and to
perform their respective obligations thereunder and such other and further acts as may be
necessary or appropriate in connection therewith;
(x) scheduling a final hearing (the “Final Hearing”) to consider the
relief requested in the Motion and the entry of a final order (the “Final Order”), and
approving the form of notice with respect to the Final Hearing; and
(xi) granting related relief.
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This Court having considered the Motion, the exhibits thereto, the Declaration of John
Bibb, Group Chief Executive Officer of Vyaire Medical, Inc., in Support of Chapter 11 Filing and
First Day Motions [Docket No. 15] (the “First Day Declaration”), the Declaration of Michael
Schlappig in Support of the Motion for Entry of Interim and Final Orders (I) Authorizing the
Debtors to (A) Obtain Postpetition Financing and (B) Utilize Cash Collateral, (II) Granting Liens
and Superpriority Administrative Expense Claims, (III) Granting Adequate Protection to
Prepetition Secured Parties, (IV) Modifying the Automatic Stay, (V) Scheduling a Final Hearing,
and (VI) Granting Related [Docket No. 44] (the “Schlappig Declaration”), the Declaration of
Charles Braley in Support of the Motion for Entry of Interim and Final Orders (I) Authorizing the
Debtors to (A) Obtain Postpetition Financing and (B) Utilize Cash Collateral, (II) Granting Liens
and Superpriority Administrative Expense Claims, (III) Granting Adequate Protection to
Prepetition Secured Parties, (IV) Modifying the Automatic Stay, (V) Scheduling a Final Hearing,
and (VI) Granting Related [Docket No. 34] (the “Braley Declaration”), and the other evidence
submitted or adduced and the arguments of counsel made at the Interim Hearing held on June
11, 2024; and notice of the Motion and the Interim Hearing having been given in accordance with
Bankruptcy Rules 2002, 4001(b), (c) and (d), and 9014; and this Court having heard and resolved
or overruled any objections, reservations of rights, or other statements with respect to the relief
requested in the Motion; and the Court having noted the appearances of all parties in interest; and
it appearing that approval of the interim relief requested in the Motion is necessary to avoid
immediate and irreparable harm to the Debtors and their estates pending the Final Hearing, and
otherwise is fair and reasonable and in the best interests of the Debtors, their estates, and all parties
in interest, and is essential for the continued operation of the Debtors’ businesses and the
preservation of the value of the Debtors’ assets; and it appearing that the Debtors’ entry into the
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DIP Credit Agreement and the other DIP Documents is a sound and prudent exercise of the
Debtors’ business judgment; and the Debtors having provided notice of the Motion as set forth in
the Motion; and after due deliberation and consideration, and for good and sufficient cause
appearing therefor;
BASED UPON THE RECORD ESTABLISHED AT THE INTERIM HEARING, THE
COURT HEREBY MAKES THE FOLLOWING FINDINGS OF FACT AND
CONCLUSIONS OF LAW: 3
A. Petition Date. On June 9, 2024 (the “Petition Date”), each of the Debtors filed a
voluntary petition under chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court
for the District of Delaware commencing these Cases.
B. Debtors in Possession. The Debtors continue to manage and operate their
businesses and properties as debtors in possession pursuant to sections 1107(a) and 1108 of the
Bankruptcy Code. No trustee or examiner has been appointed in these Cases.
C. Jurisdiction and Venue. The Court has jurisdiction over the Motion, these Cases,
and the parties and property affected hereby pursuant to 28 U.S.C. §§ 157 and 1334. The Court’s
consideration of the Motion constitutes a core proceeding pursuant to 28 U.S.C. § 157(b)(2).
Venue for these Cases and proceedings on the Motion is proper pursuant to 28 U.S.C. §§ 1408 and
1409. This Court may enter a final order consistent with Article III of the United States
Constitution.
D. Committee. As of the date hereof, the Office of the United States Trustee for the
District of Delaware (the “U.S. Trustee”) has not yet appointed an official committee of unsecured
3
Findings of fact shall be construed as conclusions of law, and conclusions of law shall be construed as findings
of fact, pursuant to Bankruptcy Rule 7052.
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creditors pursuant to section 1102 of the Bankruptcy Code (any such committee,
the “Committee”).
E. Notice. Notice of the Motion and the Interim Hearing has been provided in
accordance with the Bankruptcy Code, the Bankruptcy Rules, and the Local Rules, and no other
or further notice of the Motion with respect to the relief requested at the Interim Hearing is or shall
be required. The interim relief granted herein is necessary to avoid immediate and irreparable
harm to the Debtors and their estates pending the Final Hearing, for purposes of Bankruptcy Rule
6003.
F. Debtors’ Stipulations. Subject only to the rights of parties in interest specifically
set forth in paragraph 12 of this Interim Order (and subject to the limitations thereon contained in
such paragraph or otherwise in this Interim Order), the Debtors stipulate and agree that
(collectively, paragraphs F(i) through (x) below are referred to herein as the “Debtors’
Stipulations”):
(i) First Lien Term Loans.
(a) The Prepetition First Lien Term Lenders (as defined below) provided loans
(the “First Lien Term Loans”) in a total aggregate principal amount outstanding as of the Petition
Date of $339,300,000 under that certain First Lien Credit Agreement dated as of April 16, 2018,
by and among Vyaire Company (“Holdings”), the DIP Borrowers, each of the other revolving
lenders from time to time party thereto (collectively, the “Prepetition First Lien Revolving
Lenders”), each of the other term lenders from time to time party thereto (collectively, the
“Prepetition First Lien Term Lenders”), and Bank of America, N.A. as administrative agent and
collateral agent (in such capacities, the “Prepetition First Lien Term Loan Agent”, and together
with the Prepetition First Lien Revolving Lenders, the Prepetition First Lien Term Lenders and
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the other Secured Parties (as defined in the Prepetition First Lien Credit Agreement), the
“Prepetition First Lien Term Loan Secured Parties”) (such credit agreement, as amended, restated,
amended and restated, supplemented, or otherwise modified from time to time, the “Prepetition
First Lien Credit Agreement”, and together with the other Loan Documents (as defined in the
Prepetition First Lien Credit Agreement), the “Prepetition First Lien Term Loan Documents”).
The First Lien Credit Agreement and Prepetition First Lien Loan Documents include a Revolving
Credit Facility (as defined in the Prepetition First Lien Credit Agreement) that matured on April
16, 2024.
(b) (1) As of the Petition Date, the Prepetition Loan Party Debtors (as defined
below) were jointly and severally indebted to the Prepetition First Lien Term Loan Secured Parties
pursuant to the Prepetition First Lien Term Loan Documents without objection, defense,
counterclaim, or offset of any kind, in the aggregate principal amount of not less than $339,300,000
on account of First Lien Term Loans plus accrued and unpaid interest with respect thereto and any
additional fees, costs, premiums, expenses (including any attorneys’, accountants’, consultants’,
appraisers’, financial advisors’, and other professionals’ fees and expenses), reimbursement
obligations, indemnification obligations, guarantee obligations, other contingent obligations, and
other charges of whatever nature, whether or not contingent, whenever arising, due, or owing, and
all other Obligations (as defined in the Prepetition First Lien Credit Agreement), in each case,
owing under or in connection with the Prepetition First Lien Term Loan Documents and (2) the
Prepetition First Lien Revolving Lenders and the Prepetition First Lien Term Loan Agent assert,
subject to paragraph 39 of this Interim Order, including, without limitation, the Debtors’, DIP
Agent’s and DIP/First Lien Group’s respective rights to contest such assertion, that, as of the
Petition Date, the Prepetition Loan Party Debtors were jointly and severally indebted to the
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Prepetition First Lien Revolving Lenders and the Prepetition First Lien Term Loan Agent pursuant
to the Prepetition First Lien Loan Documents without objection, defense, counterclaim, or offset
of any kind, in the aggregate amount of not less than $1,363,179.20 as of April 5, 2024, on account
of certain outstanding fees and certain fees and expenses owed to the Prepetition First Lien Term
Loan Agent’s legal counsel and financial advisor (collectively, the “Prepetition First Lien
Revolving Loan Obligations”), plus accrued and unpaid interest with respect thereto and any
additional fees, costs, premiums, expenses (including any attorneys’, financial advisors’, and other
professionals’ fees and expenses), reimbursement obligations, indemnification obligations,
guarantee obligations, other contingent obligations, and other charges of whatever nature, whether
or not contingent, whenever arising, due, or owing to the Prepetition First Lien Revolving Lenders
and the Prepetition First Lien Term Loan Agent (the obligations described in the foregoing
subparagraph (b)(1) and (2), collectively, the “Prepetition First Lien Term Loan Obligations”).
(ii) First Lien Term Loan Collateral. In connection with the Prepetition First
Lien Credit Agreement, (x) certain Prepetition Loan Party Debtors entered into that certain First
Lien Security Agreement, dated as of April 16, 2018 (as amended, restated, amended and restated,
supplemented, or otherwise modified from time to time the “Prepetition First Lien Term Loan
Security Agreement”), by and between Holdings, Vyaire Medical, Inc., certain subsidiaries
identified therein as guarantors (including, as applicable, those subsidiaries that became guarantors
via a supplemental joinder thereto), and the Prepetition First Lien Term Loan Agent and (y)
Holdings entered into that certain First Lien Guaranty, dated as of April 16, 2018 (as amended,
restated, amended and restated, supplemented, or otherwise modified from time to time,
the “Prepetition First Lien Term Loan Guaranty Agreement” and, together with the Prepetition
First Lien Term Loan Security Agreement, the “Prepetition First Lien Term Loan Collateral
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Agreements”), by and between Holdings, certain subsidiaries of Holdings identified therein as
guarantors (including, as applicable, those subsidiaries that became guarantors via supplemental
joinder thereto), and the Prepetition First Lien Term Loan Agent. Pursuant to the Prepetition First
Lien Term Loan Collateral Agreements and the other Prepetition First Lien Term Loan
Documents, the Prepetition First Lien Term Loan Obligations are secured by valid, binding,
perfected, and enforceable first-priority security interests in and liens (the “First Lien Term Loan
Liens”) on the “Collateral” (the “Prepetition First Lien Term Loan Collateral”), as such term is
defined in the Prepetition First Lien Credit Agreement, pursuant to the Prepetition First Lien Term
Loan Documents. The Prepetition First Lien Term Loan Collateral consists of substantially all of
the assets of the Debtors that were Loan Parties (as defined in the Prepetition First Lien Credit
Agreement) under the Prepetition First Lien Term Loan Documents (the “Prepetition Loan Party
Debtors”), except as set forth in the Prepetition First Lien Credit Agreement.
(iii) First Lien Notes.
(a) The Prepetition First Lien Noteholders provided notes (the “First Lien
Notes”) in a total aggregate principal amount outstanding as of the Petition Date of €72,102,348.98
under that certain Note Purchase Agreement dated as of May 3, 2019, by and among Holdings, the
DIP Borrowers, each of the purchasers party thereto (collectively, the “Prepetition First Lien
Noteholders”), and Wilmington Trust, National Association as notes agent and collateral agent (in
such capacities, the “Prepetition First Lien Notes Agent”, and together with the Prepetition First
Lien Noteholders and the other Secured Parties (as defined in the Prepetition First Lien Note
Purchase Agreement), the “Prepetition First Lien Notes Secured Parties” and, together with the
Prepetition First Lien Term Loan Secured Parties, the “Prepetition First Lien Secured Parties”)
(such note purchase agreement, as amended, restated, amended and restated, supplemented, or
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otherwise modified from time to time, the “Prepetition First Lien Note Purchase Agreement”, and
together with the other “Note Documents” (as defined in the Prepetition First Lien Note Purchase
Agreement), the “Prepetition First Lien Note Documents”).
(b) As of the Petition Date, the Prepetition Loan Party Debtors were jointly and
severally indebted to the Prepetition First Lien Notes Secured Parties pursuant to the Prepetition
First Lien Notes Documents without objection, defense, counterclaim, or offset of any kind, in the
aggregate principal amount of not less than €72,102,348.98 on account of First Lien Notes plus
accrued and unpaid interest with respect thereto and any additional fees, costs, premiums, expenses
(including any attorneys’, accountants’, consultants’, appraisers’, financial advisors’, and other
professionals’ fees and expenses), reimbursement obligations, indemnification obligations,
guarantee obligations, other contingent obligations, and other charges of whatever nature, whether
or not contingent, whenever arising, due, or owing, and all other Obligations (as defined in the
Prepetition First Lien Note Purchase Agreement), in each case, owing under or in connection with
the Prepetition First Lien Notes Documents (collectively, the “Prepetition First Lien Notes
Obligations” and, together with the Prepetition First Lien Term Loan Obligations, the “Prepetition
First Lien Obligations”).
(iv) First Lien Notes Collateral. In connection with the Prepetition First Lien
Note Purchase Agreement, (x) certain Prepetition Loan Party Debtors entered into that certain
Security Agreement, dated as of May 3, 2019 (as amended, restated, amended and restated,
supplemented, or otherwise modified from time to time the “Prepetition First Lien Notes Security
Agreement”), by and between Holdings, Vyaire Medical, Inc., certain subsidiaries identified
therein as guarantors (including, as applicable, those subsidiaries that became guarantors via a
supplemental joinder thereto), and the Prepetition First Lien Notes Agent and (y) Holdings entered
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into that certain Guaranty, dated as of May 3, 2019 (as amended, restated, amended and restated,
supplemented, or otherwise modified from time to time, the “Prepetition First Lien Notes Guaranty
Agreement” and, together with the Prepetition First Lien Notes Security Agreement, the
“Prepetition First Lien Notes Collateral Agreements”), by and between Holdings, certain
subsidiaries of Holdings identified therein as guarantors (including, as applicable, those
subsidiaries that became guarantors via a supplemental joinder thereto), and the Prepetition First
Lien Notes Agent. Pursuant to the Prepetition First Lien Notes Collateral Agreements and the
other Prepetition First Lien Notes Documents, the Prepetition First Lien Notes Obligations are
secured by valid, binding, perfected, and enforceable first-priority security interests in and liens
(the “First Lien Notes Liens”) on the “Collateral” (the “Prepetition First Lien Notes Collateral”),
as such term is defined in the Prepetition First Lien Note Purchase Agreement, pursuant to the
Prepetition First Lien Notes Documents. The Prepetition First Lien Notes Collateral consists of
substantially all of the assets of the Prepetition Loan Party Debtors, except as set forth in the
Prepetition First Lien Note Purchase Agreement.
(v) Second Lien Term Loans.
(a) The Prepetition Second Lien Term Lenders (as defined below) provided
loans (the “Second Lien Term Loans”) in a total aggregate principal amount outstanding as of the
Petition Date of €106,178,070.76 under that certain Second Lien Credit Agreement dated as of
April 16, 2018, by and among Holdings, the DIP Borrowers, each of the other lenders from time
to time party thereto (collectively, the “Prepetition Second Lien Term Lenders”), Wilmington
Trust, National Association as administrative agent and collateral agent (in such capacities,
the “Prepetition Second Lien Term Loan Agent”, and together with the Prepetition First Lien Term
Loan Agent and the Prepetition First Lien Notes Agent, the “Prepetition Agents”, and the
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Prepetition Second Lien Term Loan Agent, together with the Prepetition Second Lien Term
Lenders, and the other Secured Parties (as defined in the Prepetition Second Lien Credit
Agreement), the “Prepetition Second Lien Term Loan Secured Parties”, and together with the
Prepetition First Lien Term Loan Secured Parties and the Prepetition First Lien Notes Secured
Parties, the “Prepetition Secured Parties”) (such credit agreement, as amended, restated, amended
and restated, supplemented, or otherwise modified from time to time, the “Prepetition Second Lien
Credit Agreement”, and together with the other “Loan Documents” (as defined in the Prepetition
Second Lien Credit Agreement), the “Prepetition Second Lien Term Loan Documents”, and
together with the Prepetition First Lien Term Loan Documents and the Prepetition First Lien Notes
Documents, the “Prepetition Documents”).
(b) As of the Petition Date, the Prepetition Loan Party Debtors were jointly and
severally indebted to the Prepetition Second Lien Term Loan Secured Parties pursuant to the
Prepetition Second Lien Term Loan Documents without objection, defense, counterclaim, or offset
of any kind, in the aggregate principal amount of not less than €106,178,070.76 on account of
Second Lien Term Loans plus accrued and unpaid interest with respect thereto and any additional
fees, costs, premiums, expenses (including any attorneys’, accountants’, financial advisors’, and
other professionals’ fees and expenses), reimbursement obligations, indemnification obligations,
guarantee obligations, other contingent obligations, and other charges of whatever nature, whether
or not contingent, whenever arising, due, or owing, and all other Obligations (as defined in the
Prepetition Second Lien Credit Agreement), in each case, owing under or in connection with the
Prepetition Second Lien Term Loan Documents (collectively, the “Prepetition Second Lien Term
Loan Obligations”, together with the Prepetition First Lien Term Loan Obligations and the
Prepetition First Lien Notes Obligations, the “Prepetition Obligations”).
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(vi) Second Lien Term Loan Collateral. In connection with the Prepetition
Second Lien Credit Agreement, (x) certain Prepetition Loan Party Debtors entered into that certain
Second Lien Security Agreement, dated as of April 16, 2018 (as amended, restated, amended and
restated, supplemented, or otherwise modified from time to time the “Prepetition Second Lien
Term Loan Security Agreement”), by and between Holdings, Vyaire Medical, Inc., certain
subsidiaries identified therein as guarantors (including, as applicable, those subsidiaries that
became guarantors via a supplemental joinder thereto), and the Prepetition Second Lien Term Loan
Agent and (y) Holdings entered into that certain Second Lien Guaranty, dated as of April 16, 2018
(as amended, restated, amended and restated, supplemented, or otherwise modified from time to
time, the “Prepetition Second Lien Term Loan Guaranty Agreement” and, together with the
Prepetition Second Lien Term Loan Security Agreement, the “Prepetition Second Lien Term Loan
Collateral Agreements”), by and between Holdings, certain subsidiaries of Holdings identified
therein as guarantors (including, as applicable, those subsidiaries that became guarantors via a
supplemental joinder thereto), and the Prepetition Second Lien Term Loan Agent. Pursuant to the
Prepetition Second Lien Term Loan Collateral Agreements and the other Prepetition Second Lien
Term Loan Documents, the Prepetition Second Lien Term Loan Obligations are secured by valid,
binding, perfected, and enforceable second-priority security interests in and liens (the “Second
Lien Term Loan Liens”, together with the First Lien Term Loan Liens and the First Lien Notes
Liens, the “Prepetition Liens”) on the “Collateral” (the “Prepetition Second Lien Term Loan
Collateral”, and together with the Prepetition First Lien Term Loan Collateral and the Prepetition
First Lien Notes Collateral, the “Prepetition Collateral”), as such term is defined in the Prepetition
Second Lien Credit Agreement, pursuant to the Prepetition Second Lien Term Loan Documents.
The Prepetition Second Lien Term Loan Collateral consists of substantially all of the assets of the
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Prepetition Loan Party Debtors, except as set forth in the Prepetition Second Lien Credit
Agreement.
(vii) Cash Collateral. Any and all of the Debtors’ cash, including any amounts
on deposit or maintained in any banking, checking, or other deposit accounts by the Debtors, any
amounts generated by the collection of accounts receivable or other disposition of the Prepetition
Collateral existing as of the Petition Date or deposited into the Debtors’ banking, checking, or
other deposit accounts after the Petition Date, and the proceeds of any of the foregoing is the
Prepetition Secured Parties’ cash collateral within the meaning of section 363(a) of the Bankruptcy
Code (the “Cash Collateral”).
(viii) Bank Accounts. The Debtors acknowledge and agree that as of the
Petition Date, none of the Debtors has either opened or maintains any bank accounts other than
the accounts listed in the exhibit attached to any order authorizing the Debtors to continue to use
the Debtors’ existing cash management system (the “Cash Management Order”).
(ix) Validity, Perfection, and Priority of Prepetition Liens and Prepetition
Obligations. Subject to paragraph 39 of this Interim Order, each of the Debtors acknowledges and
agrees that, in each case as of the Petition Date: (A) the Prepetition Liens are valid, binding,
enforceable, non-avoidable, and properly perfected liens on and security interests in the Prepetition
Collateral; (B) the First Lien Term Loan Liens and the First Lien Notes Liens are subject and
subordinate only to Prior Senior Liens; (C) the Second Lien Term Loan Liens are subject and
subordinate only to Prior Senior Liens, the First Lien Term Loan Liens and the First Lien Notes
Liens; (D) the Prepetition Obligations constitute legal, valid, binding, and non-avoidable
obligations of the Prepetition Loan Party Debtors; (E) the Prepetition Liens encumber all of the
Prepetition Collateral subject to the priorities set forth in the Prepetition Documents and the
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Prepetition Intercreditor Agreements (as defined below), as the same existed on the Petition Date;
(F) the Prepetition Liens were granted to or for the benefit of the Prepetition Secured Parties for
fair consideration and reasonably equivalent value and were granted contemporaneously with, or
covenanted to be provided as an inducement for, the making of the loans and/or commitments and
other financial accommodations secured thereby; (G) no offsets, challenges, objections, defenses,
claims, or counterclaims of any kind or nature to any of the Prepetition Liens or Prepetition
Obligations exist, and no portion of the Prepetition Liens or Prepetition Obligations is subject to
any challenge or defense including impairment, set-off, right of recoupment, avoidance,
attachment, disallowance, disgorgement, reduction, recharacterization, recovery, subordination
(whether equitable or otherwise), attack, offset, defense, counterclaims, cross-claims, or “claim”
(as defined in the Bankruptcy Code), pursuant to the Bankruptcy Code or applicable
nonbankruptcy law; and (H) the Debtors and their estates have no claims, objections, challenges,
causes of actions, recoupments, counterclaims, cross-claims, setoff rights, and/or choses in action,
including “lender liability” causes of action or avoidance claims under chapter 5 of the Bankruptcy
Code, whether arising under applicable state law or federal law (including any recharacterization,
subordination, avoidance, disgorgement, recovery, or other claims arising under or pursuant to
sections 105, 510, or 542 through 553 of the Bankruptcy Code), against the Prepetition Agents,
the Prepetition Secured Parties, or any of their respective affiliates, agents, representatives,
attorneys, advisors, professionals, officers, directors, and employees arising out of, based upon, or
related to their loans under the Prepetition Documents, the Prepetition Obligations, or the
Prepetition Liens.
(x) Prepetition Intercreditor Agreements. Pursuant to section 510 of the
Bankruptcy Code, any applicable intercreditor or subordination provisions contained in any of, or
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entered into as permitted by and in accordance with, the Prepetition Documents, including that
certain (x) Equal Priority Intercreditor Agreement dated as of May 3, 2019, by and among
Holdings, the DIP Borrowers, the Prepetition First Lien Term Loan Agent, the Prepetition First
Lien Notes Agent, Wilmington Trust, National Association as the initial additional authorized
representative, and each additional authorized representative from time to time party thereto (such
intercreditor agreement, as amended, restated, amended and restated, supplemented, or otherwise
modified from time to time, the “Equal Priority Intercreditor Agreement”) and (y) Junior Lien
Intercreditor Agreement dated as of April 16, 2018 by and among the Prepetition First Lien Term
Loan Agent, the Prepetition First Lien Notes Agent, the Prepetition Second Lien Term Loan Agent,
and each additional representative from time to time party thereto (such intercreditor agreement,
as amended, restated, amended and restated, supplemented, or otherwise modified from time to
time, the “Junior Lien Intercreditor Agreement”, and together with the Equal Priority Intercreditor
Agreement, the “Prepetition Intercreditor Agreements”) shall (i) remain in full force and effect,
and (iii) not be deemed to be amended, altered or modified by the terms of this Interim Order or
the DIP Documents, in each case, unless expressly set forth herein or therein.
G. Findings Regarding the DIP Facility and Use of Cash Collateral.
(i) The Debtors have an immediate need to obtain the DIP Facility and to use
Cash Collateral (solely to the extent consistent with the Approved DIP Budget, subject to any
Permitted Variance set forth herein and in the DIP Credit Agreement) to, among other things,
(A) permit the orderly continuation of their businesses; (B) pay certain Adequate Protection
Payments; (C) pay the costs of administration of their estates and satisfy other working capital and
general corporate purposes of the Debtors and certain subsidiaries thereof; and (D) fund the
wind-down budget, subject to the terms of the Restructuring Support Agreement, to wind down
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either certain, all, or substantially all of the Debtors’ operations in the event a sale of the Debtors’
assets is not achievable within the terms, conditions, and/or milestones contemplated in the
Restructuring Support Agreement, the DIP Credit Agreement, the Bidding Procedures Order
and/or the Bidding Procedures. The DIP Facility will also reassure the Debtors’ and their
non-Debtor affiliates’ customers and employees that the Debtors will have access to additional
liquidity to meet their commitments during the Cases. The ability of the Debtors to obtain
sufficient working capital and liquidity through the incurrence of the new indebtedness for
borrowed money and other financial accommodations is vital to the preservation and maintenance
of the Debtors’ going concern value and successful reorganization. The Debtors will not have
sufficient sources of working capital and financing to operate their businesses in the ordinary
course of business throughout the Cases or to fund the wind-down budget as set forth in this
paragraph, subject to the Restructuring Support Agreement, without access to the DIP Facility and
authorized use of Cash Collateral, and subject to the Carve Out (defined below) as provided herein.
(ii) The Debtors and their estates will suffer immediate and irreparable harm if
immediate financing is not obtained and permission to use Cash Collateral is not granted. The
extensions of credit under the DIP Facility are fair and reasonable, reflect the Debtors’ exercise of
prudent business judgment consistent with their fiduciary duties.
(iii) The Debtors are unable to obtain financing on more favorable terms from
sources other than the DIP Lenders under the DIP Documents and are unable to obtain unsecured
credit allowable under section 503(b)(1) of the Bankruptcy Code as an administrative expense.
The Debtors also are unable to obtain secured credit allowable under sections 364(c)(1), 364(c)(2),
and 364(c)(3) of the Bankruptcy Code for the purposes set forth in the DIP Documents without the
Debtors granting to the DIP Secured Parties the DIP Liens (as defined below) and the DIP
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Superpriority Claims (as defined below) under the terms and conditions set forth in this Interim
Order and the DIP Documents.
(iv) The DIP Facility has been negotiated in good faith and at arm’s length
among the Debtors and the DIP Secured Parties, and all of the Debtors’ obligations and
indebtedness arising under, in respect of, or in connection with the DIP Facility and the DIP
Documents, including, without limitation, all loans made to and guarantees issued by the Debtors
pursuant to the DIP Documents and all other obligations under the DIP Documents (collectively,
the “DIP Obligations”) shall be deemed to have been extended by the DIP Secured Parties in good
faith as that term is used in section 364(e) of the Bankruptcy Code and in express reliance upon
the protections offered by section 364(e) of the Bankruptcy Code. The DIP Obligations, the DIP
Liens, and the DIP Superpriority Claims shall be entitled to the full protection of section 364(e) of
the Bankruptcy Code in the event that this Interim Order or any provision hereof is vacated,
reversed, or modified on appeal or otherwise, and any liens or claims granted to, or payments made
to, or payments made to, the DIP Agent or the DIP Lenders hereunder arising prior to the effective
date of any such vacatur, reversal, or modification of this Interim Order shall be governed in all
respects by the original provisions of this Interim Order, including entitlement to all rights,
remedies, privileges, and benefits granted herein.
(v) Adequate Protection. Each of the Prepetition Secured Parties are entitled,
pursuant to sections 105, 361, 362, and 363(e) of the Bankruptcy Code, to adequate protection of
their respective interests in the Prepetition Collateral, including Cash Collateral, for any
diminution in the value thereof, subject only to the rights of parties in interest specifically set forth
in paragraph 12 of this Interim Order (and subject to the limitations thereon contained in such
paragraph or otherwise in this Interim Order).
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(vi) Sections 506(c) and 552(b). In light of the Prepetition Secured Parties’
agreement to subordinate their liens and superpriority claims to the DIP Obligations and the Carve
Out and to permit the use of their Cash Collateral as set forth herein, the Prepetition Secured Parties
are entitled to the rights and benefits of section 552(b) of the Bankruptcy Code and, subject to and
upon entry of the Final Order, (i) a waiver of any “equities of the case” claims under section 552(b)
of the Bankruptcy Code and (ii) a waiver of the provisions of section 506(c) of the Bankruptcy
Code.
(vii) Consent by Required Lenders. Holders constituting Required Lenders (as
defined in the Prepetition First Lien Credit Agreement), Required Purchasers (as defined in the
Prepetition First Lien Note Purchase Agreement), and Required Lenders (as defined in the
Prepetition Second Lien Credit Agreement) have consented to, or are deemed to consent to,
conditioned upon the entry of this Interim Order, the Debtors’ incurrence of the DIP Facility, and
proposed use of Cash Collateral on the terms and conditions set forth in this Interim Order,
including, without limitation, the terms of the adequate protection provided for in this Interim
Order.
H. Good Cause Shown; Best Interest. Good cause has been shown for entry of this
Interim Order, and entry of this Interim Order is in the best interests of the Debtors’ respective
estates and creditors as its implementation will, among other things, allow for the continued
operation of the Debtors’ existing business and enhance the Debtors’ prospects for a successful
reorganization. Absent granting the relief sought by this Interim Order, the Debtors’ estates will
be immediately and irreparably harmed.
I. Notice. In accordance with Bankruptcy Rules 2002, 4001(b) and (c), and 9014, and
the Local Rules, notice of the Interim Hearing and the emergency relief requested in the Motion
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has been provided by the Debtors. Under the circumstances, the notice given by the Debtors of
the Motion, the relief requested herein, and of the Interim Hearing complies with Bankruptcy Rules
2002, 4001(b) and (c), and 9014 and applicable Local Rules.
J. Arm’s Length, Good Faith Negotiations. The terms of this Interim Order were
negotiated in good faith and at arm’s length between the Debtors and the Prepetition Secured
Parties. The Prepetition Secured Parties have acted in good faith in respect of all actions taken by
them in connection with or related in any way to negotiating, implementing, documenting, or
obtaining requisite approvals of the Debtors’ incurrence of the DIP Facility and the Debtors’ use
of Cash Collateral, including in respect of all of the terms of this Interim Order, all documents
related thereto, and all transactions contemplated by the foregoing.
Based upon the foregoing findings and conclusions, the Motion and the record before the
Court with respect to the Motion, and good and sufficient cause appearing therefor,
IT IS HEREBY ORDERED THAT:
1. DIP Financing Approved. The Motion is granted on an interim basis as set forth
herein, the DIP Facility approved on an interim basis, and the use of Cash Collateral on an interim
basis is authorized, subject to the terms of this Interim Order.
2. Objections Overruled. Any objections, reservations of rights, or other statements
with respect to entry of the Interim Order, to the extent not withdrawn or resolved, are overruled
on the merits. This Interim Order shall become effective immediately upon its entry.
3. Authorization of the DIP Facility and the DIP Documents.
(a) The DIP Borrower and the DIP Guarantors are hereby immediately
authorized and empowered to enter into, and execute and deliver, the DIP Documents, including
the DIP Credit Agreement, and such additional documents, instruments, certificates and
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agreements as may be reasonably required or requested by the DIP Secured Parties to implement
the terms or effectuate the purposes of this Interim Order and the DIP Documents and to effectuate
the exchange of First Lien Term Loans for Roll-Up Loans. To the extent not entered into as of the
date hereof, the Debtors and the DIP Secured Parties shall negotiate the DIP Documents in good
faith, and in all respects such DIP Documents shall be, subject to the terms of this Interim Order
and the Final Order, consistent with the terms of the DIP Credit Agreement and
otherwise reasonably acceptable to the DIP Borrowers and the DIP Agent (acting at the direction
of the required lenders under and pursuant to the DIP Credit Agreement (the “Required DIP
Lenders”)) and the Required DIP Lenders. Upon entry of this Interim Order and until execution
and delivery of the DIP Credit Agreement and other DIP Documents required to be delivered
thereunder, the Debtors and the DIP Secured Parties shall be bound by (x) the terms and conditions
and other provisions set forth in the other executed DIP Documents (including the fee letters
executed in connection with the DIP Facility), with the same force and effect as if duly executed
and delivered to the DIP Agent by the Debtors, and (y) this Interim Order and the other executed
DIP Documents (including the fee letters executed in connection with the DIP Facility) shall
govern and control the DIP Facility. Upon entry of this Interim Order, the Interim Order, the DIP
Credit Agreement, and other DIP Documents shall govern and control the DIP Facility. The DIP
Agent is hereby authorized to execute and enter into its respective obligations under the DIP
Facility Documents, subject to the terms and conditions set forth therein and this Interim Order.
Upon execution and delivery thereof, the DIP Documents shall constitute valid and binding
obligations of the Debtors enforceable in accordance with their terms. To the extent there exists
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any conflict among the terms and conditions of the DIP Documents and this Interim Order, the
terms and conditions of this Interim Order shall govern and control.
(b) Upon entry of this Interim Order, the DIP Borrowers are hereby authorized
to borrow, and the DIP Guarantors are hereby authorized to guaranty, borrowings up to an
aggregate principal amount of $120,000,000 of DIP Loans (inclusive of the Roll-Up Loans), of
which (i) $25,000,000 of New Money Loans will be made available to the DIP Borrower on the
date of this Interim Order, (ii) $20,000,000 of New Money Loans will be funded into an escrow
account on the date of this Interim Order and available to be drawn by the DIP Borrower, and (iii)
$75,000,000 of Roll-Up Loans shall be deemed funded and converted from and exchanged for
First Lien Term Loans upon entry of this Interim Order, subject to and in accordance with the
Carve-Out and this Interim Order, without any further action by the Debtors or any other party.
(c) Upon the entry of this Interim Order, subject to the Carve-Out, without any
further action by the Debtors or any other party, the Debtors shall be authorized and deemed to
have effectuated the exchange of First Lien Term Loans for Roll-Up Loans, subject to the
occurrence of the Closing Date (as defined in the DIP Credit Agreement); provided that the Roll-
Up authorized upon entry of this Interim Order shall be final, subject only to the right of parties in
interest to seek a determination in accordance with paragraph 12 below that such Roll-Up resulted
in the payment of an unsecured prepetition claim of the Prepetition Secured Parties.
(d) In accordance with the terms of this Interim Order and the DIP Documents,
proceeds of the DIP Loans shall be used solely for the purposes permitted under the DIP
Documents and this Interim Order, and in accordance with the Approved DIP Budget, subject to
the Carve Out and any Permitted Variance, as set forth in this Interim Order and the DIP
Documents. Attached as Exhibit B hereto and incorporated herein by reference is a budget
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prepared by the Debtors and approved by the Required DIP Lenders in accordance with section
6.20 of the DIP Credit Agreement (the “Initial DIP Budget”).
(e) In furtherance of the foregoing and without further approval of this Court,
each Debtor is authorized, and the automatic stay imposed by section 362 of the Bankruptcy Code
is hereby lifted solely to the extent necessary to perform all acts and to make, execute, and deliver
all instruments and documents (including, without limitation, the DIP Credit Agreement, any
security and pledge agreement, and any mortgage to the extent contemplated thereby, or the DIP
Credit Agreement), and to pay all fees (including all amounts owed to the DIP Lenders and the
DIP Agent under the DIP Documents, the Escrow Agent under the Escrow Agreement, and the
Prepetition Agents under the Prepetition Documents) that may be reasonably required or necessary
for the Debtors’ performance of their obligations under the DIP Facility, including, without
limitation:
(1) the execution, delivery, and performance of the DIP Documents, including,
without limitation, the DIP Credit Agreement, any security and pledge
agreement, and any mortgage to the extent required thereby;
(2) the execution, delivery, and performance of one or more amendments,
waivers, consents, or other modifications to and under the DIP Documents
(in each case in accordance with the terms of the applicable DIP Documents
and in such form as the Debtors, the DIP Agent, and the Required DIP
Lenders may reasonably agree), it being understood that no further approval
of the Court shall be required for amendments, waivers, consents, or other
modifications to and under the DIP Documents or the DIP Obligations that
are not material; provided, that, any such non-material amendment shall be
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provided to the U.S. Trustee and counsel for the Committee to the extent
one has been appointed at such time;
(3) the non-refundable payment to each of and/or on behalf of the DIP Secured
Parties, as applicable, of the fees referred to in the DIP Documents,
including (x) all fees and other amounts owed to the DIP Agent and the
DIP Lenders and (y) all reasonable and documented costs and expenses as
may be due from time to time, including, without limitation, the reasonable
and documented fees and expenses of counsel and other professionals
retained as provided for in the DIP Documents and this Interim Order (in
the case of (i) the DIP/First Lien Advisors and the DIP Agent Advisors
whether incurred before or after the Petition Date and (ii) any other party,
solely incurred after the Petition Date) including, for the avoidance of doubt,
(a) Gibson, Dunn & Crutcher LLP (as counsel), Rothschild & Co (as
financial advisor), Pachulski Stang Ziehl & Jones LLP (as local bankruptcy
counsel), and any other foreign counsel and other professionals necessary
to represent the interests of the DIP Lenders and the ad hoc group of
Prepetition First Lien Term Lenders and Prepetition First Lien Noteholders
(the “DIP/First Lien Group”) in connection with the Cases (collectively, the
“DIP/First Lien Advisors”); (b) ArentFox Schiff LLP (as counsel), and
Morris James LLP (as local bankruptcy counsel) to the DIP Agent (“DIP
Agent Advisors”); (c) Haynes and Boone, LLP (as counsel) and Ashby &
Geddes, P.A. (as local counsel) to the Prepetition First Lien Term Loan
Agent; and (d) Seward & Kissel LLP (as counsel) and local counsel to the
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Prepetition First Lien Notes Agent; and one counsel to the DIP Agent and
the DIP Lenders (which shall be chosen by the Required DIP Lenders) in
each local foreign jurisdiction, which such fees and expenses shall not be
subject to the approval of the Court, nor shall any recipient of any such
payment be required to file with respect thereto any interim or final fee
application with the Court, provided that any fees and expenses of a
professional shall be subject to the provisions of paragraph 18 of this
Interim Order; and
(4) the performance of all other acts required under or in connection with the
DIP Documents, including, without limitation, pursuant to the Escrow
Agreement.
(f) Upon entry of this Interim Order and subject to the Carve Out and the rights
of parties in interest specifically set forth in paragraph 12 of this Interim Order (and subject to the
limitations thereon contained in such paragraph or otherwise in this Interim Order), such DIP
Documents, the DIP Obligations, and the DIP Liens shall constitute valid, binding, and
non-avoidable obligations of the Debtors enforceable against each Debtor in accordance with their
respective terms and the terms of this Interim Order for all purposes during the Cases, any
subsequently converted Case of any Debtor to a case under chapter 7 of the Bankruptcy Code or
after the dismissal of any Case. No obligation, payment, transfer, or grant of security under the
DIP Credit Agreement, the other DIP Documents, or this Interim Order shall be stayed, restrained,
voidable, avoidable, or recoverable under the Bankruptcy Code or under any applicable law
(including, without limitation, under sections 502(d), 548, or 549 of the Bankruptcy Code or under
any applicable state Uniform Fraudulent Transfer Act, Uniform Fraudulent Conveyance Act,
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Uniform Voidable Transactions Act or similar statute or common law), or subject to any defense,
reduction, setoff, recoupment, or counterclaim. All payments or proceeds remitted (a) to or on
behalf of the DIP Agent on behalf of any DIP Secured Parties or (b) to or on behalf of the
Prepetition Secured Parties, in each case, pursuant to the DIP Documents, 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, section 506(c) of the Bankruptcy Code or the
“equities of the case” exception of section 552(b) of the Bankruptcy Code (and, solely in the case
of waivers of rights under sections 506(c) of the Bankruptcy Code and the “equities of the case”
exception of section 552(b) of the Bankruptcy Code, subject to the entry of the Final Order). For
the avoidance of doubt, and notwithstanding anything to the contrary in any Prepetition Document,
DIP Document, any additional document, instrument, certificate and/or agreement related to any
of the foregoing, in no event shall any property, proceeds, cash, cash equivalents, or otherwise
placed or held in the escrow account established pursuant to the Escrow Agreement at any time
be, or be deemed to be, property of any of the Debtors or their affiliates or subsidiaries or any of
the Debtors’ estates and the parties to the Escrow Agreement have acknowledged and agreed to
the foregoing.
(g) The DIP Guarantors are hereby authorized and directed to jointly, severally,
and unconditionally guarantee, and upon entry of this Interim Order shall be deemed to have
guaranteed, in full, all of the DIP Obligations of the DIP Borrowers.
4. Budget and Variance Reporting.
(a) The Initial DIP Budget shall set forth, on a weekly basis, the Budgeted Cash
Receipts, Budgeted Disbursement Amounts, Budgeted Liquidity and Budgeted Borrower
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Professional Fees (each as set forth and referenced in the Approved DIP Budget) for the period
commencing with the week that includes the Closing Date and shall be approved by, and be in
form and substance reasonably satisfactory to, the Required DIP Lenders (it being acknowledged
and agreed that the form of Initial DIP Budget set forth as Exhibit B hereto is approved by and
reasonably satisfactory to the Required DIP Lenders).
(b) On or before the fifth (5th) business day before the end of each Budget
Period (as defined below) beginning with the fourth full week following the Petition Date (or more
frequently if determined by the Debtors), the Debtors and/or the DIP Agent (at the direction of the
Required DIP Lenders) may request an updated budget, and in such case, the Debtors will deliver
to the DIP Agent, the DIP/First Lien Advisors, and counsel to the Prepetition First Lien Agent an
updated Budget for the subsequent 13-week period (a “Subsequent DIP Budget”), which shall be
in form and substance satisfactory to the Required DIP Lenders in their sole discretion (not to be
unreasonably withheld); provided the Debtors shall be limited to two (2) requests for an updated
budget during the ninety (90) days following the Petition Date. The Initial DIP Budget or any
Subsequent DIP Budget shall be deemed to constitute the “Approved DIP Budget” for purposes
of this Interim Order with the most recently delivered Budget constituting the “Approved DIP
Budget” solely upon approval by the Required DIP Lenders (which must be in writing (including
from the DIP/First Lien Advisors), email being sufficient), or which shall be deemed an Approved
DIP Budget absent objection by the Required DIP Lenders within ten (10) business days after
delivery of the Budget) in their sole discretion. In the event the conditions for the most recently
delivered Subsequent DIP Budget to constitute an “Approved DIP Budget” are not met as set forth
herein, the prior Approved DIP Budget shall remain in full force and effect and the Debtors shall
be required to work in good faith with the Required DIP Lenders to modify such Subsequent DIP
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Budget until the Required DIP Lenders approve (which approval shall not be unreasonably
withheld) such Subsequent DIP Budget as an “Approved DIP Budget.” Each Approved Budget
delivered shall be accompanied by such supporting documentation as reasonably requested by the
Required DIP Lenders. Each Approved Budget shall be prepared in good faith based upon
assumptions believed to be reasonable at the time of preparation thereof. “Budget Period” means
the initial four-week period set forth in the Approved DIP Budget in effect at such time.
(c) Commencing on the Friday of the second full calendar week after the
Petition Date, Budget Variances (as defined below) shall be tested on each Friday on a two-week
basis (each such date, a “Testing Date”). Commencing after the second full week after the Petition
Date, on or before 5:00 p.m. (prevailing Eastern time) on each Friday after each full calendar week
ending on Friday, the Debtors shall deliver to the DIP Agent, the DIP/First Lien Advisors, and
counsel to the Prepetition First Lien Agent a budget variance report/reconciliation in form and
substance reasonably satisfactory to the DIP/First Lien Group (the “Approved DIP
Budget Variance Report”), setting forth in detail (i) the Debtors’ actual disbursements (the “Actual
Disbursements”), including, without limitation, the sum of all such net line items under the
headings “Total Operating Disbursements”, “Total Non-Operating Receipts/(Disbursements)” and
“Total Restructuring Receipts/(Disbursements)” (as set forth in the Approved DIP Budget) for the
week period and the two-week period if ending on the applicable Testing Date; (ii) the Debtors’
actual ordinary course receipts that are accounted for as “revenue” under GAAP (as applied by the
Debtors in the ordinary course of business consistent with past practice) (the “Actual Receipts”),
including the line item under the heading “Total Operating Receipts” in the Approved Budget and
excluding, for the avoidance of doubt, any intercompany transactions or asset sales outside the
ordinary course of business, on an aggregate basis during the two-week period ending on the
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applicable Testing Date; (iii) a comparison (whether positive or negative, in dollars and expressed
as a percentage) of the Actual Receipts and the Actual Disbursements for the week and two-week
period ending on the Testing Date to the amount of Debtors’ projected cash receipts and
disbursements, in each case, on an aggregate basis, set forth in the Approved DIP Budget with
respect to such week or two-week period ending on the applicable Testing Date; (iv) as to each
variance contained in the Approved DIP Budget Variance Report and required to be tested
pursuant to clause (c) above, an indication as to whether such variance is temporary or permanent
and an analysis and explanation in reasonable detail for any variance; (v) only in the event that a
Subsequent DIP Budget has been requested during the two-week period ending on the applicable
Testing Period, a weekly roll forward of the Debtors’ cash forecast (both domestic and
international); and (vi) a cash balance for the Debtors by country.
(d) The Debtors shall not permit: (i) for the rolling two-week period ending on
any Testing Date, the Debtors’ Total Operating Disbursements (in the aggregate) to be more than
110% (on a cumulative basis taking into account the variance for any prior Budget Period) of the
projected disbursements (in the aggregate) as set forth in the Approved DIP Budgets with respect
to such period; and (ii) for the rolling two-week period ending on any Testing Date, the Debtors’
Actual Receipts (in the aggregate) to be less than 85% (on a cumulative basis taking into account
the variance for any prior Budget Period) of the projected receipts (in the aggregate) as set forth in
the Approved DIP Budgets with respect to such period (the “Budget Variances”; all references in
this Interim Order and the DIP Documents to “Approved DIP Budget” shall mean the Approved
DIP Budget as it is subject to the Budget Variances). Commencing with the first full calendar
week after the Petition Date, the Debtors shall maintain Liquidity (as defined in the DIP Credit
Agreement) of not less than $2,500,000 as of the last business day of each calendar week. For
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purposes of Budget Variances testing, (i) the Debtors shall receive credit in subsequent Budget
Periods for any overperformance on either receipts or disbursements for the Budget Period prior
thereto and (ii) the fees and expenses of Professional Persons and disbursements made in
connection with the administration of the Debtors’ chapter 11 cases and other non-operating
expenses shall be excluded.
5. Access to Records. The Debtors shall provide the DIP/First Lien Advisors with all
reporting and other information required to be provided to the DIP Agent under the DIP
Documents. In addition to, and without limiting, whatever rights to access the DIP Secured Parties
have under the DIP Documents, upon reasonable notice to counsel to the Debtors (email being
sufficient), at reasonable times during normal business hours, the Debtors shall permit
representatives, agents, and employees of the DIP Secured Parties to have reasonable access to
(i) inspect the Debtors’ assets, and (ii) reasonably requested information (including historical
information and the Debtors’ books and records) and personnel, including regularly scheduled
meetings as mutually agreed with senior management of the Debtors and other company advisors
(during normal business hours), and the DIP Secured Parties shall be provided with access to all
information they shall reasonably request, excluding any information for which confidentiality is
owed to third parties, information subject to attorney client or similar privilege, or where such
disclosure would not be permitted by any applicable requirements of law.
6. DIP Superpriority Claims. Subject to, and subordinate in all respects to, the Carve
Out, pursuant to section 364(c)(1) of the Bankruptcy Code, all of the DIP Obligations shall
constitute allowed superpriority administrative expense claims against each of the Debtors’ estates
(the “DIP Superpriority Claims”) (without the need to file any proof of claim) to the extent set
forth in the Bankruptcy Code, with priority over any and all administrative expenses, adequate
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protection claims, diminution claims, and all other claims against the Debtors, now existing or
hereafter arising, of any kind whatsoever, including, without limitation, all administrative expenses
of the kind specified in sections 503(b) and 507(b) of the Bankruptcy Code, and over any and all
administrative expenses or other claims arising under sections 105, 326, 327, 328, 330, 331, 361,
362, 364, 365, 503(b), 506(c), 507(a), 507(b), 726, 1113, or 1114 of the Bankruptcy Code or
otherwise, which allowed claims shall for the purposes of section 1129(a)(9)(A) of the Bankruptcy
Code be considered administrative expenses allowed under section 503(b) of the Bankruptcy Code
and which shall be payable from all prepetition and postpetition property of the Debtors and all
proceeds thereof, including, without limitation, the DIP Collateral and including, without
limitation, subject to entry of the Final Order, any proceeds or property recovered in connection
with the pursuit of claims or causes of action arising under chapter 5 of the Bankruptcy Code, if
any (the “Avoidance Actions”), subject only to the payment of the Carve Out. Except as set forth
in this Interim Order or the Final Order, no other superpriority claims shall be granted or allowed
in these Cases.
7. DIP Liens. As security for the DIP Obligations, effective and perfected upon the
date of this Interim Order, and without the necessity of the execution, recordation of filings by the
Debtors of mortgages, security agreements, control agreements, pledge agreements, financing
statements, or other similar documents, or the possession or control by the DIP Agent or any
DIP Lender of, or over, any DIP Collateral (as defined below), the following security interests and
liens are hereby granted by the Debtors to the DIP Agent, for the benefit of the DIP Secured Parties
(all property identified in clause (a) and (b) below being collectively referred to as
the “DIP Collateral”), subject only to (x) Prior Senior Liens, (y) the Excluded Property (as defined
in the DIP Credit Agreement), and (z) the Carve Out (all such liens and security interests granted
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to the DIP Agent, for the benefit of the DIP Lenders, pursuant to this Interim Order and the DIP
Documents, the “DIP Liens”):
(a) First Priority Lien On Any Unencumbered Property. Subject only to the
Carve Out, pursuant to section 364(c)(2) of the Bankruptcy Code, a valid, binding, continuing,
enforceable, fully-perfected, non-avoidable, automatically, and properly perfected first priority
senior security interest in and lien upon all property of the Debtors, whether existing on the Petition
Date or thereafter acquired, that, on or as of the Petition Date is not subject to valid, perfected, and
non-avoidable liens (or perfected after the Petition Date to the extent permitted by section 546(b)
of the Bankruptcy Code) including, without limitation (in each case, to the extent not subject to
valid, perfected, and non-avoidable liens), a 100% equity pledge of all first-tier foreign subsidiaries
and all unencumbered assets of the Debtors; all prepetition property and post-petition property of
the Debtors’ estates, and the proceeds, products, rents and profits thereof, whether arising from
section 552(b) of the Bankruptcy Code or otherwise, including, without limitation, unencumbered
cash, if any, (and any investment of such cash) of the Debtors (whether maintained with the DIP
Agent or otherwise); all equipment, all goods, all accounts, cash, payment intangibles, bank
accounts and other deposit or securities accounts of the Debtors (including any accounts opened
prior to, on, or after the Petition Date to the fullest extent permitted under applicable law); all
insurance policies and proceeds thereof, equity interests, instruments, intercompany claims,
accounts receivable, other rights to payment, all general intangibles, all contracts and contract
rights, securities, investment property, letters of credit and letter of credit rights, chattel paper, all
interest rate hedging agreements of the Debtors; all owned real estate, real property leaseholds and
fixtures of the Debtors; patents, copyrights, trademarks, trade names, rights under license
agreements and other intellectual property of the Debtors; all commercial tort claims of the
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Debtors; and all claims and causes of action (including causes of action under section 549 of the
Bankruptcy Code, claims arising on account of transfers of value from a Debtor to (x) another
Debtor and (y) a non-Debtor affiliate incurred on or following the Petition Date), and any and all
proceeds, products, rents, and profits of the foregoing, all products and proceeds of the foregoing
and, subject to entry of the Final Order, all proceeds and property recovered in respect of
Avoidance Actions (collectively, the “Previously Unencumbered Property”); provided, for the
avoidance of doubt, and notwithstanding anything to the contrary contained herein, to the extent a
lien cannot attach to any of the foregoing pursuant to applicable law, the liens granted pursuant to
this Interim Order shall attach to the Debtors’ economic rights, including, without limitation, any
and all proceeds of the foregoing.
(b) Liens Priming the Prepetition Liens. Subject only to the Carve Out and
Prior Senior Liens, pursuant to section 364(d)(1) of the Bankruptcy Code, a valid, binding,
continuing, enforceable, fully-perfected first priority senior priming security interest in and lien
upon all property of the Debtors that was subject to the Prepetition Liens, including, without
limitation, the Prepetition Collateral and Cash Collateral; provided, for the avoidance of doubt,
and notwithstanding anything to the contrary contained herein, to the extent a lien cannot attach to
any of the foregoing pursuant to applicable law, the liens granted pursuant to this Interim Order
shall attach to the Debtors’ economic rights, including, without limitation, any and all proceeds of
the foregoing.
(c) Liens Junior to Certain Other Liens. Subject only to the Carve Out, pursuant
to section 364(c)(3) of the Bankruptcy Code, a valid, binding, continuing, enforceable, fully
perfected security interest in and lien upon all prepetition and post-petition property of the Debtors
immediately junior to the Prior Senior Liens.
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8. Adequate Protection for the Prepetition First Lien Term Loan Secured Parties and
the Prepetition First Lien Notes Secured Parties. Subject only to the Carve Out and the rights of
parties in interest specifically set forth in paragraph 12 of this Interim Order (and subject to the
limitations thereon contained in such paragraph or otherwise in this Interim Order), and the terms
of this Interim Order, pursuant to sections 361, 363(e), and 364 of the Bankruptcy Code, and in
consideration of the stipulations and consents set forth herein, as adequate protection of their
interests in the Prepetition First Lien Term Loan Collateral and the Prepetition First Lien Notes
Collateral (in each case, including Cash Collateral), as applicable, for any diminution in value of
such interests (each such diminution, a “Diminution in Value”), resulting from, among other
things, the imposition of the priming DIP Liens on the Prepetition First Lien Term Loan Collateral
and the Prepetition First Lien Notes Collateral, the Carve Out, the Debtors’ use of the Prepetition
First Lien Term Loan Collateral and the Prepetition First Lien Notes Collateral (in each case,
including Cash Collateral), and the imposition of the automatic stay, the Prepetition First Lien
Term Loan Agent, for the benefit of itself and the Prepetition First Lien Term Loan Secured Parties
and the Prepetition First Lien Notes Agent, for the benefit of itself and the Prepetition First Lien
Notes Secured Parties, are hereby granted the following (collectively, the “First Lien Adequate
Protection Obligations”):
(a) First Lien Adequate Protection Liens. As security for any Diminution in
Value, additional and replacement, valid, binding, enforceable, non-avoidable, and effective and
automatically perfected postpetition security interests in and liens as of the date of this Interim
Order (together, the “First Lien Adequate Protection Liens”), without the necessity of the
execution by the Debtors (or recordation or other filing), of security agreements, control
agreements, pledge agreements, financing statements, mortgages, or other similar documents, on
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all DIP Collateral and, upon entry of the Final Order, all proceeds or property recovered from
Avoidance Actions. Subject to the terms of this Interim Order, the First Lien Adequate Protection
Liens shall be subordinate only to the (A) Carve Out, (B) the DIP Liens, and (C) Prior Senior
Liens. The First Lien Adequate Protection Liens shall otherwise be senior to all other security
interests in, liens on, or claims against any of the DIP Collateral (including, for the avoidance of
doubt, any lien or security interest that is avoided and preserved for the benefit of the Debtors and
their estates under section 551 of the Bankruptcy Code).
(b) First Lien Adequate Protection Superpriority Claims. As further adequate
protection, and to the extent provided by sections 503(b), 507(a), and 507(b) of the Bankruptcy
Code, allowed administrative expense claims in each of the Cases ahead of and senior to any and
all other administrative expense claims in such Cases to the extent of any postpetition Diminution
in Value (the “First Lien Adequate Protection Superpriority Claims”), but junior to the Carve Out
and the DIP Superpriority Claims. Subject to the Carve Out and the DIP Superpriority Claims in
all respects, and to the extent set forth in the Bankruptcy Code, the First Lien Adequate Protection
Superpriority Claims will not be junior to any claims and shall have priority over all administrative
expense claims against each of the Debtors, now existing or hereafter arising, of any kind or nature
whatsoever, including, without limitation, administrative expense claims of the kinds specified in
or ordered pursuant to sections 105, 326, 328, 330, 331, 365, 503(a), 503(b), 506(c) (subject to
entry of the Final Order), 507(a), 507(b), 546(d), 726, 1113, and 1114 of the Bankruptcy Code.
(c) First Lien Adequate Protection Payments. As further adequate protection,
the Debtors are authorized and directed to pay, in accordance with the terms of paragraph 18 of
this Interim Order, all reasonable and documented fees and expenses (the “First Lien Adequate
Protection Fees”), in the case of (i) the DIP/First Lien Advisors and DIP Agent Advisors whether
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incurred before or after the Petition Date and (ii) any other party, solely incurred after the Petition
Date, to the extent not duplicative of any fees and/or expenses paid pursuant to paragraph 3(e)(3)
hereof, including all reasonable and documented fees and expenses of counsel and other
professionals retained as provided for in the DIP Documents and this Interim Order, including, for
the avoidance of doubt, of (i) the DIP/First Lien Advisors, including, without limitation, Gibson,
Dunn & Crutcher LLP (as counsel), Rothschild & Co (as financial advisor), Pachulski Stang Ziehl
& Jones LLP (as local bankruptcy counsel), and any other foreign counsel and other professionals
necessary to represent the interests of the DIP Lenders and the ad hoc group of Prepetition First
Lien Term Lenders and Prepetition First Lien Noteholders, (ii) the DIP Agent Advisors, including,
without limitation, ArentFox Schiff LLP and Morris James LLP as counsel to the DIP Agent, (iii)
Haynes and Boone, LLP and Ashby & Geddes, P.A. as counsel to the Prepetition First Lien Term
Loan Agent, and (iv) Seward & Kissel LLP and local counsel as counsel to the Prepetition First
Lien Notes Agent (all payments referenced in this sentence, collectively, the “First Lien Adequate
Protection Payments”). None of the First Lien Adequate Protection Fees shall be subject to
separate approval by this Court, and no recipient of any such payment shall be required to file any
interim or final fee application with respect thereto or otherwise seek the Court’s approval of any
such payments.
(d) Right to Seek Additional Adequate Protection. This Interim Order is
without prejudice to, and does not constitute a waiver of, expressly or implicitly, the rights of the
Prepetition First Lien Term Loan Secured Parties or the Prepetition First Lien Notes Secured
Parties to request further or alternative forms of adequate protection at any time or the rights of
the Debtors or any other party to contest such request. Nothing herein shall impair or modify the
application of section 507(b) of the Bankruptcy Code in the event that the adequate protection
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provided to the Prepetition First Lien Term Loan Secured Parties or the Prepetition First Lien
Notes Secured Parties is insufficient to compensate for any Diminution in Value of their interests
in the Prepetition First Lien Term Loan Collateral and the Prepetition First Lien Notes Collateral
during the Cases. Nothing contained herein shall be deemed a finding by the Court, or an
acknowledgment by any of the Prepetition First Lien Term Loan Secured Parties or the Prepetition
First Lien Notes Secured Parties that the adequate protection granted herein does in fact adequately
protect any of the Prepetition First Lien Term Loan Secured Parties or the Prepetition First Lien
Notes Secured Parties against any Diminution in Value of their respective interests in the
Prepetition First Lien Term Loan Collateral and the Prepetition First Lien Notes Collateral (in each
case, including the Cash Collateral).
(e) Other Covenants. The Debtors shall maintain their cash management
arrangements in a manner consistent with the Cash Management Order approving the Debtors’
cash management motion. The Debtors’ failure to comply with the covenants contained in the
DIP Credit Agreement regarding conduct of business, including, without limitation, preservation
of rights, qualifications, licenses, permits, privileges, franchises, governmental authorizations and
intellectual property rights material to the conduct of their business and the maintenance of
properties and insurance shall be an Event of Default.
(f) Reporting Requirements. As additional adequate protection to the
Prepetition First Lien Term Loan Secured Parties and the Prepetition First Lien Notes Secured
Parties, the Debtors shall comply with all reporting requirements set forth in the DIP Credit
Agreement.
(g) Miscellaneous. Except for (i) the Carve Out; (ii) the rights of parties in
interest specifically set forth in paragraph 12 of this Interim Order (and subject to the limitations
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thereon contained in such paragraph or otherwise in this Interim Order); and (iii) as otherwise
provided in paragraphs 6 and 7, the First Lien Adequate Protection Liens and First Lien Adequate
Protection Superpriority Claims granted to the Prepetition First Lien Term Loan Secured Parties
and the Prepetition First Lien Notes Secured Parties pursuant to paragraph 8 of this Interim Order
shall not be subject, junior, or pari passu, to any lien or security interest that is avoided and
preserved for the benefit of the Debtors’ estates under the Bankruptcy Code, including, without
limitation, pursuant to section 551 of the Bankruptcy Code or otherwise, and shall not be
subordinated to or made pari passu with any lien, security interest or administrative claim under
the Bankruptcy Code, including, without limitation, pursuant to section 364 of the Bankruptcy
Code or otherwise.
9. Adequate Protection for the Prepetition Second Lien Term Loan Secured Parties.
Subject only to the Carve Out, the rights of parties in interest specifically set forth in paragraph 12
of this Interim Order (and subject to the limitations thereon contained in such paragraph or
otherwise in this Interim Order), the First Lien Adequate Protection Obligations, and the terms of
this Interim Order, pursuant to sections 361, 363(e), and 364 of the Bankruptcy Code, and in
consideration of the stipulations and consents set forth herein, as adequate protection of their
interests in the Prepetition Second Lien Term Loan Collateral (including Cash Collateral), as
applicable, for any Diminution in Value, resulting from, among other things, the imposition of the
priming DIP Liens on the Prepetition Second Lien Term Loan Collateral, the Carve Out, the
Debtors’ use of the Prepetition Second Lien Term Loan Collateral (in each case, including Cash
Collateral), and the imposition of the automatic stay, the Prepetition Second Lien Term Loan
Agent, for the benefit of itself and the Prepetition Second Lien Term Loan Secured Parties, is
hereby granted the following (collectively, the “Second Lien Adequate Protection Obligations”,
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and together with the First Lien Adequate Protection Obligations, the “Adequate Protection
Obligations”):
(a) Second Lien Adequate Protection Liens. As security for any Diminution in
Value, additional and replacement, valid, binding, enforceable, non-avoidable, and effective and
automatically perfected postpetition security interests in and liens as of the date of this Interim
Order (together, the “Second Lien Adequate Protection Liens”, and together with the First Lien
Adequate Protection Liens, the “Adequate Protection Liens”), without the necessity of the
execution by the Debtors (or recordation or other filing), of security agreements, control
agreements, pledge agreements, financing statements, mortgages, or other similar documents, on
all DIP Collateral and, upon entry of the Final Order, all proceeds or property recovered from
Avoidance Actions. Subject to the terms of this Interim Order, the Second Lien Adequate
Protection Liens shall be subordinate only to the (A) Carve Out, (B) the DIP Liens, (C) Prior Senior
Liens, (D) the First Lien Term Loan Liens, (E) the First Lien Notes Liens, and (F) the First Lien
Adequate Protection Liens. The Second Lien Adequate Protection Liens shall otherwise be senior
to all other security interests in, liens on, or claims against any of the DIP Collateral (including,
for the avoidance of doubt, any lien or security interest that is avoided and preserved for the benefit
of the Debtors and their estates under section 551 of the Bankruptcy Code).
(b) Second Lien Adequate Protection Superpriority Claims. As further
adequate protection, and to the extent provided by sections 503(b), 507(a), and 507(b) of the
Bankruptcy Code, allowed administrative expense claims in each of the Cases ahead of and senior
to any and all other administrative expense claims in such Cases to the extent of any postpetition
Diminution in Value (the “Second Lien Adequate Protection Superpriority Claims”, and together
with the First Lien Adequate Protection Superpriority Claims, the “Adequate Protection
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Superpriority Claims”), but junior to the Carve Out, the DIP Superpriority Claims, and the First
Lien Adequate Protection Superpriority Claims. Subject to the Carve Out, the DIP Superpriority
Claims, and the First Lien Adequate Protection Superpriority Claims in all respects, and to the
extent set forth in the Bankruptcy Code, the Second Lien Adequate Protection Superpriority
Claims will not be junior to any claims and shall have priority over all administrative expense
claims against each of the Debtors, now existing or hereafter arising, of any kind or nature
whatsoever, including, without limitation, administrative expense claims of the kinds specified in
or ordered pursuant to sections 105, 326, 328, 330, 331, 365, 503(a), 503(b), 506(c) (subject to
entry of the Final Order), 507(a), 507(b), 546(d), 726, 1113, and 1114 of the Bankruptcy Code.
(c) Second Lien Adequate Protection Payments. As further adequate
protection, the Debtors are authorized and directed to pay, in accordance with the terms of
paragraph 18 of this Interim Order, all reasonable and documented fees and expenses up to
$100,000 (the “Second Lien Adequate Protection Fees”), to the extent not duplicative of any fees
and/or expenses paid pursuant to paragraph 3(e)(3) hereof, of counsel to the Prepetition Second
Lien Term Lenders. None of the Second Lien Adequate Protection Fees shall be subject to
separate approval by this Court, and no recipient of any such payment shall be required to file any
interim or final fee application with respect thereto or otherwise seek the Court’s approval of any
such payments.
10. Carve Out.
(a) Carve Out. As used in this Interim Order, the “Carve Out” means the sum
of (i) all fees required to be paid to the Clerk of the Court and to the Office of the United States
Trustee under section 1930(a) of title 28 of the United States Code plus interest at the statutory
rate (without regard to the notice set forth in (iii) below); (ii) all reasonable fees and expenses up
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to $50,000 incurred by a trustee under section 726(b) of the Bankruptcy Code (without regard to
the notice set forth in (iii) below); (iii) to the extent allowed at any time, whether by interim order,
procedural order, or otherwise, all unpaid fees and expenses (the “Allowed Professional Fees”)
incurred by persons or firms retained by the Debtors pursuant to section 327, 328, or 363 of the
Bankruptcy Code (the “Debtor Professionals”) and the Committee (if appointed) pursuant to
section 328 or 1103 of the Bankruptcy Code (the “Committee Professionals” and, together with
the Debtor Professionals, the “Professional Persons”) at any time before or on the first business
day following delivery by the DIP Agent (at the direction of the Required DIP Lenders) (or by the
Prepetition First Lien Term Loan Agent (at the direction of the Required Lenders) after repayment
of the DIP Obligations in full) of a Carve Out Trigger Notice (as defined below), whether allowed
by the Court prior to or after delivery of a Carve Out Trigger Notice; and (iv) Allowed Professional
Fees of Professional Persons in an aggregate amount not to exceed $1,500,000 incurred after the
first business day following delivery by the DIP Agent of the Carve Out Trigger Notice (or by the
Prepetition First Lien Term Loan Secured Parties after repayment of the DIP Obligations in full),
to the extent allowed at any time, whether by interim order, procedural order, or otherwise (the
amounts set forth in this clause (iv) being the “Post-Carve Out Trigger Notice Cap”). For purposes
of the foregoing, “Carve Out Trigger Notice” shall mean a written notice delivered by email (or
other electronic means) by the DIP Agent (at the direction of the Required DIP Lenders) (or by
the Prepetition First Lien Term Loan Agent (at the direction of the Required Lenders) after
repayment of the DIP Obligations in full) to the Debtors, their lead restructuring counsel, the U.S.
Trustee, and counsel to the Committee (if appointed), which notice may be delivered following
the occurrence and during the continuation of an Event of Default and acceleration of the DIP
Obligations under the DIP Facility (or the occurrence of the Termination Date for the Debtors’ use
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of cash collateral and the expiration of the applicable Remedies Notice Period and during the
continuation of an Event of Default (as defined herein)), stating that the Post-Carve Out Trigger
Notice Cap has been invoked.
(b) Delivery of Weekly Fee Statements. Not later than 7:00 p.m. New York
time on the third business day of each week starting with the first full calendar week following the
Petition Date, each Professional Person shall deliver to the Debtors, the DIP Agent, and the
DIP/First Lien Advisors a statement setting forth a good-faith estimate of the amount of unpaid
fees and expenses incurred during the preceding week by such Professional Person (through
Saturday of such week, the “Calculation Date”), along with a good-faith estimate of the cumulative
total amount of unreimbursed fees and expenses incurred through the applicable Calculation Date
and a statement of the amount of such fees and expenses that have been paid to date by the Debtors
(each such statement, a “Weekly Statement”); provided that, within one business day of the
occurrence of the Termination Declaration Date (as defined below), each Professional Person shall
deliver one additional statement (the “Final Statement”) setting forth a good-faith estimate of the
amount of unpaid fees and expenses incurred during the period commencing on the calendar day
after the most recent Calculation Date for which a Weekly Statement has been delivered and
concluding on the Termination Declaration Date (and the Debtors shall cause such Weekly
Statement and Final Statement to be delivered on the same day received to the DIP Agent and the
DIP/First Lien Advisors). If any Professional Person fails to deliver a Weekly Statement within
three (3) calendar days after such Weekly Statement is due, such Professional Person’s entitlement
(if any) to any funds in the Pre-Carve Out Trigger Notice Reserve (as defined below) with respect
to the aggregate unpaid amount of Allowed Professional Fees for the applicable period(s) for which
such Professional Person failed to deliver a Weekly Statement covering such period shall be
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limited to the aggregate unpaid amount of Allowed Professional Fees included in the Approved
Budget for such period for such Professional Person.
(c) Carve Out Reserves. Commencing with the week ended June 14, 2024, and on or
before the Thursday of each week thereafter, the Debtors shall utilize all cash on hand as of such
date to fund a reserve in an amount equal to the sum of (a) the greater of (i) the aggregate unpaid
amount of all Estimated Fees and Expenses reflected in the Weekly Statement delivered on the
immediately prior Wednesday to the Debtors and the DIP Agent, and (ii) the aggregate amount of
unpaid Allowed Professional Fees contemplated to be incurred in the Approved Budget during
such week, plus (b) the Post Carve-Out Trigger Notice Cap, plus (c) an amount equal to the amount
of Allowed Professional Fees set forth in the Budget for the week occurring after the most recent
Calculation Date. The Debtors shall deposit and hold such amounts in a segregated account
maintained at the Debtors in trust (the “Funded Reserve Account”) to pay such Allowed
Professional Fees (the “Funded Reserves”) prior to any and all other claims, and all payments of
Allowed Professional Fees incurred prior to the Termination Declaration Date shall be paid first
from such Funded Reserve Account; provided that when all Allowed Professional Fees have been
paid in full, any funds remaining in the Funded Reserve Account shall revert to the Debtors for
use in a manner consistent with the DIP Credit Agreement and this Interim Order. For the
avoidance of doubt, the DIP Lenders shall have no obligation to fund aggregate fees and expenses
in excess of the New Money Commitments. Other than with respect to Debtor Professionals,
Professional Person’s entitlement (if any) to any funds in the Funded Reserve Account shall be
limited to the aggregate unpaid amount of Allowed Professional Fees included in the Approved
Budget for such Professional Person. On the day on which a Carve Out Trigger Notice is given
by the DIP Agent (at the direction of the Required DIP Lenders) (or by the Prepetition First Lien
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Term Loan Agent (at the direction of the Required Lenders) after repayment of the DIP
Obligations in full) to the Debtors with a copy to counsel to the Committee (the “Termination
Declaration Date”), the Carve Out Trigger Notice shall constitute a demand to, and the Debtors
shall utilize all cash on hand as of such date, including cash in the Funded Reserve Account, and
any available cash thereafter held by any Debtor, to fund a reserve in an amount equal to the then
unpaid amounts of the Allowed Professional Fees accrued prior to the Termination Declaration
Date. The Debtors shall deposit and hold such amounts in a segregated account maintained at the
Debtors in trust to pay such then unpaid Allowed Professional Fees incurred through the
Termination Declaration Date (the “Pre-Carve Out Trigger Notice Reserve”) prior to any and all
other claims. For the avoidance of doubt, the DIP Lenders shall have no obligation to fund the
Pre-Carve Out Trigger Notice Reserve in excess of the DIP Loans already funded to the Debtors
from the escrow account prior to the Termination Declaration Date and any such remaining DIP
Loans held in the escrow account that has not yet been funded to the Debtors prior to the
Termination Declaration Date shall not be used to fund the Pre-Carve Out Trigger Notice Reserve.
On the Termination Declaration Date, after funding the Pre-Carve Out Trigger Notice Reserve,
the Debtors shall utilize all remaining cash on hand as of such date and any available cash
thereafter held by any Debtor, after funding the Pre-Carve Out Trigger Notice Reserve, to fund a
reserve in an amount equal to the Post-Carve Out Trigger Notice Cap. The Debtors shall deposit
and hold such amounts in a segregated account maintained at the Debtors in trust to pay such
unpaid Allowed Professional Fees benefiting from the Post-Carve Out Trigger Notice Cap
(the “Post-Carve Out Trigger Notice Reserve” and, together with the Pre-Carve Out Trigger
Notice Reserve, the “Carve Out Reserves”) prior to any and all other claims. Any remaining DIP
Loans held in the escrow account that has not yet been funded to the Debtors prior to the
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Termination Declaration Date shall not be used to fund the Post-Carve Out Trigger Notice
Reserve. All funds in the Pre-Carve Out Trigger Notice Reserve shall be used first to pay the
obligations set forth in clauses (i) through (iii) of the definition of Carve Out set forth above (the
“Pre-Carve Out Amounts”), but not, for the avoidance of doubt, the Post-Carve Out Trigger Notice
Cap, until indefeasibly paid in full, and then to the extent the Pre-Carve Out Trigger Notice
Reserve has not been reduced to zero to pay the DIP Agent for the benefit of the DIP Lenders,
unless the DIP Obligations have been indefeasibly paid in full, in cash, and all Commitments have
been terminated, in which case any such excess shall be paid to the Prepetition Secured Parties in
accordance with their rights and priorities as of the Petition Date. All funds in the Post-Carve Out
Trigger Notice Reserve shall be used first to pay the obligations set forth in clause (iv) of the
definition of Carve Out set forth above (the “Post-Carve Out Amounts”), and then, to the extent
the Post-Carve Out Trigger Notice Reserve has not been reduced to zero, to pay the DIP Agent
for the benefit of the DIP Lenders, unless the DIP Obligations have been indefeasibly paid in full,
in cash, and all Commitments have been terminated, in which case any such excess shall be paid
to the Prepetition Secured Parties in accordance with their rights and priorities under the
Prepetition Intercreditor Agreements as of the Petition Date. Notwithstanding anything to the
contrary in the DIP Documents, or this Interim Order, if either of the Carve Out Reserves is not
funded in full in the amounts set forth in this paragraph 10, then, any excess funds in one of the
Carve Out Reserves following the payment of the Pre-Carve Out Amounts and Post-Carve Out
Amounts, respectively, shall be used to fund the other Carve Out Reserve, up to the applicable
amount set forth in this paragraph 10, prior to making any payments to the DIP Agent, the
Prepetition Secured Parties, or the Prepetition Agents, as applicable. Notwithstanding anything
to the contrary in the DIP Documents or this Interim Order, following delivery of a Carve Out
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Trigger Notice, the DIP Agent and the Prepetition Agents shall not sweep or foreclose on cash
(including cash received as a result of the sale or other disposition of any assets) of the Debtors
until the Carve Out Reserves have been fully funded, but shall have an automatically perfected
lien and a security interest in any residual interest in the Carve Out Reserves, with any excess paid
to the DIP Agent for application in accordance with the DIP Documents or if the DIP Obligations
have been indefeasibly paid in full, to the applicable Prepetition Agents, for application in
accordance with the Prepetition Documents and the Prepetition Intercreditor
Agreements. Further, notwithstanding anything to the contrary in this Interim Order,
(i) disbursements by the Debtors from the Carve Out Reserves shall not constitute Loans (as
defined in the DIP Credit Agreement) or increase or reduce the DIP Obligations, (ii) the failure of
the Carve Out Reserves to satisfy in full the Allowed Professional Fees shall not affect the priority
of the Carve Out, and (iii) in no way shall the Initial Budget, Budget, Carve Out, Post-Carve Out
Trigger Notice Cap, Carve Out Reserves, or any of the foregoing be construed as a cap or
limitation on the amount of the Allowed Professional Fees, nor as a cap or limitation on the amount
of fees under 28 U.S.C. § 1930, due and payable by the Debtors. For the avoidance of doubt and
notwithstanding anything to the contrary in this Interim Order, the DIP Facility, or in any
Prepetition Document, the Carve Out shall be senior to all liens and claims securing the DIP
Facility, the DIP Superpriority Claims, the DIP Liens, the Adequate Protection Liens, and claims
pursuant to section 507(b) of the Bankruptcy Code, and any and all other forms of adequate
protection, liens, or claims securing the DIP Obligations or the Prepetition Obligations.
(d) Carve Out Payment of Allowed Professional Fees Prior to the Termination
Declaration Date. Any payment or reimbursement made prior to the occurrence of the Termination
Declaration Date in respect of any Allowed Professional Fees shall not reduce the Carve Out.
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(e) No Direct Obligation To Pay Allowed Professional Fees. None of the DIP
Agent, DIP Lenders, or the Prepetition First Lien Term Loan Secured Parties shall be responsible
for the payment or reimbursement of any fees or disbursements of any Professional Person or any
fees or expenses of the U.S. Trustee or Clerk of the Court incurred in connection with the Cases
or any successor cases under any chapter of the Bankruptcy Code. Nothing in this Interim Order
or otherwise shall be construed to obligate the DIP Agent, the DIP Lenders, or the Prepetition
Secured Parties, in any way, to pay compensation to, or to reimburse expenses of, any Professional
Person or to guarantee that the Debtors have sufficient funds to pay such compensation or
reimbursement.
(f) Payment of Carve Out On or After the Termination Declaration Date. Any
payment or reimbursement made on or after the occurrence of the Termination Declaration Date
in respect of any Allowed Professional Fees shall permanently reduce the Carve Out on a
dollar-for-dollar basis. Any funding of the Carve Out shall be added to, and made a part of, the
DIP Obligations secured by the DIP Collateral and shall be otherwise entitled to the protections
granted under this Interim Order, the DIP Documents, the Bankruptcy Code, and applicable law.
11. Reservation of Rights of the DIP Agent, DIP Lenders, and Prepetition First Lien
Secured Parties. Subject only to the Carve Out, notwithstanding any other provision in this Interim
Order or the DIP Documents to the contrary, the entry of this Interim Order is without prejudice
to, and does not constitute a waiver of, expressly or implicitly, or otherwise impair: (a) any of the
rights of any of the Prepetition First Lien Secured Parties to seek any other or supplemental relief
in respect of the Debtors including the right to seek additional adequate protection at and following
the Final Hearing; provided that any such further or different adequate protection shall at all times
be subordinate and junior to the Carve Out and the claims and liens of the DIP Secured Parties
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granted under this Interim Order and the DIP Documents; (b) any of the rights of the DIP Secured
Parties or the Prepetition First Lien Secured Parties under the DIP Documents, the Prepetition
Documents, the Prepetition Intercreditor Agreements, or the Bankruptcy Code or under
non-bankruptcy law (as applicable), including, without limitation, the right of any of the DIP
Secured Parties or the Prepetition First Lien Secured Parties to (i) request modification of the
automatic stay of section 362 of the Bankruptcy Code, (ii) request dismissal of any of the Cases,
conversion of any of the Cases to cases under chapter 7, or appointment of a chapter 11 trustee or
examiner with expanded powers in any of the Cases, (iii) seek to propose, subject to the provisions
of section 1121 of the Bankruptcy Code, a chapter 11 plan or plans; or (c) any other rights, claims,
or privileges (whether legal, equitable, or otherwise) of any of the DIP Secured Parties or the
Prepetition Secured Parties. The delay in or failure of the DIP Secured Parties and/or the
Prepetition First Lien Secured Parties to seek relief or otherwise exercise their rights and remedies
shall not constitute a waiver of any of the DIP Secured Parties’ or the Prepetition First Lien
Secured Parties’ rights and remedies. For all adequate protection purposes throughout the Cases,
each of the Prepetition First Lien Secured Parties shall be deemed to have requested relief from
the automatic stay and adequate protection for any Diminution in Value from and after the Petition
Date. For the avoidance of doubt, such request will survive termination of this Interim Order.
12. Reservation of Certain Committee and Third Party Rights and Bar of Challenges
and Claims. Subject to the Challenge Period (as defined herein), the stipulations, admissions,
waivers, and releases contained in this Interim Order, including the Debtors’ Stipulations, shall be
binding upon the Debtors, their estates, and any of their respective successors in all circumstances
and for all purposes and the Debtors are deemed to have irrevocably waived and relinquished all
Challenges (as defined below) as of the Petition Date. The stipulations, admissions, and waivers
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contained in this Interim Order, including, the Debtors’ Stipulations, shall be binding upon all
other parties in interest, including any Committee and any other person acting on behalf of the
Debtors’ estates, unless and to the extent that a party in interest with proper standing granted by
order of the Court (or other court of competent jurisdiction) has timely and properly filed an
adversary proceeding or contested matter under the Bankruptcy Rules seventy-five (75) calendar
days after entry of the Interim Order (the “Challenge Period” and the date of expiration of the
Challenge Period, the “Challenge Period Termination Date”); provided, however, that if, prior to
the end of the Challenge Period, (x) the cases convert to chapter 7, or (y) if a chapter 11 trustee is
appointed, then, in each such case, the Challenge Period shall be extended by the later of (A) the
time remaining under the Challenge Period plus ten (10) days or (B) such other time as ordered by
the Court solely with respect to any such trustee, commencing on the occurrence of either of the
events discussed in the foregoing clauses (x) and (y); provided, that, subject to entry of the Final
Order, the Challenge Period shall not be extended past the date of a hearing on the approval of the
Debtors’ proposed sale transaction(s), if any, before this Court; (i) seeking to avoid, object to, or
otherwise challenge the findings or Debtors’ Stipulations regarding: (a) the validity,
enforceability, extent, priority, or perfection of the mortgages, security interests, and liens of the
Prepetition Agents and the Prepetition Secured Parties; or (b) the validity, enforceability,
allowability, priority, secured status, or amount of the Prepetition Obligations (any such claim, a
“Challenge”), and (ii) in which the Court enters a final order in favor of the plaintiff sustaining
any such Challenge in any such timely filed adversary proceeding or contested matter. Upon the
expiration of the Challenge Period Termination Date without the filing of a Challenge (or if any
such Challenge is filed and overruled): (a) any and all such Challenges by any party (including
the Committee, any chapter 11 trustee, and/or any examiner or other estate representative
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appointed or elected in these Cases, and any chapter 7 trustee and/or examiner or other estate
representative appointed or elected in any Successor Case) shall be deemed to be forever barred;
(b) the Prepetition Obligations shall constitute allowed claims, not subject to counterclaim, setoff,
recoupment, reduction, subordination, recharacterization, defense, or avoidance for all purposes in
the Debtors’ Cases and any Successor Cases; (c) the Prepetition Liens shall be deemed to have
been, as of the Petition Date, legal, valid, binding, and perfected secured claims, not subject to
recharacterization, subordination, or avoidance; and (d) all of the Debtors’ stipulations and
admissions contained in this Interim Order, including the Debtors’ Stipulations, and all other
waivers, releases, affirmations, and other stipulations as to the priority, extent, and validity as to
the Prepetition Secured Parties’ claims, liens, and interests contained in this Interim Order shall be
of full force and effect and forever binding upon the Debtors, the Debtors’ estates, and all creditors,
interest holders, and other parties in interest in these Cases and any Successor Cases. If any such
adversary proceeding or contested matter is timely and properly filed under the Bankruptcy Rules
and remains pending and the Cases are converted to chapter 7, the chapter 7 trustee may continue
to prosecute such adversary proceeding or contested matter on behalf of the Debtors’ estates.
Furthermore, if any such adversary proceeding or contested matter is timely and properly filed
under the Bankruptcy Rules, the stipulations and admissions contained in this Interim Order,
including the Debtors’ Stipulations, shall nonetheless remain binding and preclusive on any
Committee and any other person or entity except to the extent that such stipulations and admissions
were expressly challenged in such adversary proceeding or contested matter prior to the Challenge
Period Termination Date. Nothing in this Interim Order vests or confers on any person (as defined
in the Bankruptcy Code), including, without limitation, any Committee appointed in the Cases,
standing or authority to pursue any cause of action belonging to the Debtors or their estates,
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including, without limitation any challenges (including a Challenge) with respect to the Prepetition
Documents, the Prepetition Liens, and the Prepetition Obligations, and a separate order of the
Court conferring such standing on any Committee or other party-in-interest shall be a prerequisite
for the prosecution of a Challenge by such Committee or such other party-in-interest.
13. Termination Date. Following the Termination Date (as defined below) and the
expiration of the Remedies Notice Period as defined below), consistent with Article VIII of the
DIP Credit Agreement, (a) all DIP Obligations shall be immediately due and payable, all New
Money Commitments will terminate, and the Carve Out Reserves shall be funded as set forth in
this Interim Order; (b) all authority to use Cash Collateral shall cease; provided, however, that
during the Remedies Notice Period (as defined below), the Debtors may use Cash Collateral solely
to fund the Carve Out and pay payroll and other expenses critical to the administration of the
Debtors’ estates in accordance with the Approved DIP Budget, subject to any Permitted Variance
provided for in the DIP Credit Agreement; and (c) the DIP Secured Parties shall be otherwise
entitled to exercise rights and remedies under the DIP Documents in accordance with this Interim
Order.
14. Events of Default. The occurrence of any of the following events, unless waived
by the Required DIP Lenders in accordance with the terms of the DIP Documents, shall constitute
an event of default (collectively, the “Events of Default”): (a) the failure of the Debtors to perform,
in any material respect, any of the terms, provisions, conditions, covenants, or obligations under
this Interim Order; (b) the failure of the Debtors to comply with any of the case milestones set
forth in section 6.19 of the DIP Credit Agreement (collectively, the “Required Milestones”), in
accordance with the DIP Credit Agreement, unless such Required Milestone has been waived or
extended by the Required DIP Lenders; or (c) the occurrence of an “Event of Default” under the
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DIP Credit Agreement. The Required DIP Lenders shall provide written notice of any Event of
Default to the Debtors, any Committee, and the U.S. Trustee; provided that such notice should be
for informational purposes only and shall not be a pre-requisite to the occurrence of an Event of
Default.
15. Rights and Remedies Upon Event of Default. Immediately upon the occurrence
and during the continuation of an Event of Default, notwithstanding the provisions of section 362
of the Bankruptcy Code, without any application, motion, or notice to, hearing before, or order
from the Court, but subject to the terms of this Interim Order, and following the expiration of the
Remedies Notice Period (defined below), (a) the DIP Agent (at the direction of the Required DIP
Lenders) may declare (any such declaration shall be referred to herein as a “Termination
Declaration”) (i) all DIP Obligations owing under the DIP Documents to be immediately due and
payable, (ii) the termination, reduction or restriction of any further commitment to extend credit
to the Debtors to the extent any such commitment remains under the DIP Facility, (iii) termination
of the DIP Facility and the DIP Documents as to any future liability or obligation of the DIP Agent
and the DIP Lenders, but without affecting any of the DIP Liens or the DIP Obligations, and
(iv) that the Carve Out shall be triggered, through the delivery of the Carve Out Trigger Notice to
the DIP Borrower and (b) subject to paragraph 13(b), the DIP Agent (at the direction of the
Required DIP Lenders) may declare a termination, reduction or restriction on the ability of the
Debtors to use Cash Collateral (the date on which a Termination Declaration is delivered,
the “Termination Date”). The automatic stay in the Cases otherwise applicable to the DIP Agent,
the DIP Lenders, and the Prepetition Secured Parties is hereby modified so that five (5) business
days after the date a Termination Declaration is delivered (such five (5) business day period,
the “Remedies Notice Period”): (a) the DIP Agent (at the direction of the Required DIP Lenders)
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shall be entitled to exercise its rights and remedies in accordance with the DIP Documents and this
Interim Order to satisfy the DIP Obligations, DIP Superpriority Claims, and DIP Liens, subject to
the Carve Out; (b) subject to the foregoing clause (a), the applicable Prepetition First Lien Secured
Parties shall be entitled to exercise their respective rights and remedies to the extent available in
accordance with the applicable Prepetition Documents, the Prepetition Intercreditor Agreements,
and this Interim Order with respect to the Debtors’ use of Cash Collateral. During the Remedies
Notice Period, the Debtors shall be entitled to seek an emergency hearing within the Remedies
Notice Period with the Court. Except as set forth in this paragraph 15 or otherwise ordered by the
Court prior to the expiration of the Remedies Notice Period, after the Remedies Notice Period, the
Debtors shall waive their right to and shall not be entitled to seek relief, including, without
limitation, under section 105 of the Bankruptcy Code, to the extent such relief would in any way
impair or restrict the rights and remedies of the DIP Agent, the DIP Lenders, or the Prepetition
Secured Parties under this Interim Order. Unless the Court orders otherwise prior to the expiration
of the Remedies Notice Period, the automatic stay, as to all of the DIP Agent, DIP Lenders, and
Prepetition First Lien Secured Parties shall automatically be terminated at the end of the Remedies
Notice Period without further notice or order. Upon expiration of the Remedies Notice Period, the
DIP Agent (at the direction of the Required DIP Lenders) and the Prepetition First Lien Secured
Parties shall be permitted to exercise all remedies set forth herein, and in the DIP Documents, and
as otherwise available at law without further order of or application or motion to this Court
consistent with this Interim Order. Notwithstanding anything to the contrary in this Interim Order,
following an Event of Default, the Prepetition Secured Parties shall be stayed from enforcing any
rights and remedies under this Interim Order unless and until the DIP Agent has delivered a Carve
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Out Trigger Notice and has complied with its obligations in connection with the issuance thereof
or consents to such enforcement.
16. Limitation on Charging Expenses Against Collateral. Subject to entry of the Final
Order, no expenses of administration of the Cases or any future proceeding that may result
therefrom, including liquidation in bankruptcy or other proceedings under the Bankruptcy Code,
shall be charged against or recovered from (a) the DIP Collateral (except to the extent of the Carve
Out), the DIP Agent, or the DIP Lenders or (b) the Prepetition Collateral (except to the extent of
the Carve Out) or the Prepetition Secured Parties, in each case, pursuant to sections 105(a) or
506(c) of the Bankruptcy Code or any similar principle of law or equity, without the prior written
consent of the DIP Agent, the DIP Lenders, and the Prepetition First Lien Secured Parties, as
applicable, and no such consent shall be implied from any other action, inaction, or acquiescence
by the DIP Agent, the DIP Lenders, or the Prepetition Secured Parties.
17. Use of Cash Collateral. The Debtors are hereby authorized to use all Cash
Collateral of the Prepetition Secured Parties, but solely for the purposes set forth in this Interim
Order and solely in accordance with the Approved DIP Budget (subject to permitted variances as
set forth in this Interim Order and the DIP Documents), including, without limitation, to make
payments on account of the Adequate Protection Obligations provided for in this Interim Order,
from the date of this Interim Order through and including the date of termination of the DIP Credit
Agreement.
18. Expenses and Indemnification.
(a) The Debtors are hereby authorized and directed to pay, in accordance with
this Interim Order, the principal, interest, fees, payments, expenses, and other amounts described
in the DIP Documents as such amounts become due and without need to obtain further Court
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approval, including, without limitation, backstop, fronting, closing, arrangement or commitment
payments (including all payments and other amounts owed to the DIP Lenders), administrative
agent’s fees, collateral agent’s fees, and escrow agent’s fees (including all fees and other amounts
owed to the DIP Agent), the reasonable and documented fees and disbursements of counsel and
other professionals to the extent set forth in paragraphs 3(e)(3), 8(c), and 9(c) of this Interim Order,
all to the extent provided in this Interim Order or the DIP Documents. Notwithstanding the
foregoing, the Debtors are authorized and directed to pay on the Closing Date (as defined in the
DIP Documents), subject to paragraphs 3(e)(3), 8(c), and 9(c), all reasonable and documented fees,
costs, and expenses, including the fees and expenses of counsel to the DIP Lenders, the DIP Agent,
the Prepetition Agents, and the Prepetition First Lien Secured Parties incurred on or prior to such
date without the need to be subject to the procedures set forth in paragraph 18(b).
(b) The Debtors shall be jointly and severally obligated to pay all fees and
expenses described above, which obligations shall constitute the DIP Obligations. The Debtors
shall pay the reasonable and documented professional fees, expenses, and disbursements of
professionals to the extent provided for in paragraphs 3(e)(3), 8(c), and 9(c) of this Interim Order
(collectively, the “Lender Professionals” and, each, a “Lender Professional”) no later than five (5)
business days (the “Review Period”) after the receipt by counsel for the Debtors, any Committee,
or the U.S. Trustee of each of the invoices therefor (the “Invoiced Fees”) and without the necessity
of filing formal fee applications, including such amounts arising before the Petition Date. Invoiced
Fees shall be in the form of an invoice summary for professional fees and categorized expenses
incurred during the pendency of the Cases, and such invoice summary shall not be required to
contain time entries, but shall include a general, brief description of the nature of the matters for
which services were performed (which shall provide sufficient information to determine if such
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fees and expenses are reasonable), and which may be redacted or modified to the extent necessary
to delete any information subject to the attorney-client privilege, any work product doctrine,
privilege or protection, common interest doctrine privilege or protection, any other evidentiary
privilege or protection recognized under applicable law, or any other confidential information, and
the provision of such invoices shall not constitute any waiver of the attorney-client privilege, work
product doctrine, privilege or protection, common interest doctrine privilege or protection, or any
other evidentiary privilege or protection recognized under applicable law. The Debtors, any
Committee, or the U.S. Trustee may dispute the payment of any portion of the Invoiced Fees
(the “Disputed Invoiced Fees”) if, within the Review Period, a Debtor, any Committee that may
be appointed in these Cases, or the U.S. Trustee notifies the submitting party in writing setting
forth the specific objections to the Disputed Invoiced Fees (to be followed by the filing with the
Court, if necessary, of a motion or other pleading, with at least ten (10) days prior written notice
to the submitting party of any hearing on such motion or other pleading). For avoidance of doubt,
the Debtors shall promptly pay in full all Invoiced Fees other than the Disputed Invoiced Fees.
(c) In addition, as provided in section 10.05 of the DIP Credit Agreement, the
Debtors will indemnify each of the DIP Lenders, the DIP Agent, the Prepetition Agents, the
Prepetition First Lien Secured Parties, and each of their respective affiliates, successors, and
assigns and the officers, directors, employees, agents, attorneys, advisors, controlling persons, and
members of each of the foregoing (each an “Indemnified Person”) and hold them harmless from
and against all costs, expenses (including but not limited to reasonable and documented legal fees
and expenses), and liabilities arising out of or relating to the transactions contemplated hereby and
any actual or proposed use of the proceeds of any loans made under the DIP Facility as and to the
extent provided in the DIP Credit Agreement; provided that the Debtors shall not indemnify any
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Indemnified Person against a successful Challenge, including a Challenge of the underlying First
Lien Term Loan Liens securing those First Lien Term Loans converted into Roll-Up Loans. No
Indemnified Person shall have any liability (whether direct or indirect, in contract, tort, or
otherwise) to the Debtors or any shareholders or creditors of the Debtors for or in connection with
the transactions contemplated hereby, except to the extent such liability is found in a final non-
appealable judgment by a court of competent jurisdiction to have resulted solely from such
Indemnified Person’s gross negligence, fraud, or willful misconduct or breach of their obligations
under the DIP Facility, which indemnity shall have equal priority and lien status to the DIP
Superpriority Claims. In no event shall any Indemnified Person or any Debtor be liable on any
theory of liability for any special, indirect, consequential, or punitive damages; provided, that this
shall not affect the Debtor’s indemnification obligations pursuant to the immediately preceding
sentence.
19. No Third Party Rights. Except as explicitly provided for herein, this Interim Order
does not create any rights for the benefit of any third party, creditor, equity holder, or any direct,
indirect, or incidental beneficiary.
20. Section 507(b) Reservation. Subject only to the Carve Out, nothing herein shall
impair or modify the application of section 507(b) of the Bankruptcy Code in the event that the
adequate protection provided to the Prepetition Secured Parties is insufficient to compensate for
any Diminution in Value of their interests in the Prepetition Collateral during the Cases. Nothing
contained herein shall be deemed a finding by the Court, or an acknowledgment by any of the
Prepetition Secured Parties that the adequate protection granted herein does in fact adequately
protect any of the Prepetition Secured Parties against any Diminution in Value of their respective
interests in the Prepetition Collateral (including the Cash Collateral).
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21. Insurance. Until the DIP Obligations have been indefeasibly paid in full, at all
times the Debtors shall maintain casualty and loss insurance coverage for the Prepetition Collateral
and the DIP Collateral on substantially the same basis as maintained prior to the Petition Date and
shall name the DIP Agent as loss payee or additional insured, as applicable, thereunder.
22. No Waiver for Failure to Seek Relief. The failure or delay of the DIP Agent or the
Required DIP Lenders to exercise rights and remedies under this Interim Order, the DIP
Documents, or applicable law, as the case may be, shall not constitute a waiver of their respective
rights hereunder, thereunder, or otherwise.
23. Perfection of the DIP Liens and Adequate Protection Liens.
(a) Without in any way limiting the automatically effective perfection of the
DIP Liens granted pursuant to paragraph 7 hereof and the Adequate Protection Liens granted
pursuant to paragraphs 8(a) and 9(a) hereof, the DIP Agent and the Prepetition Agents are hereby
authorized, but not required, to file or record financing statements, intellectual property filings,
mortgages, depository account control agreements, notices of lien, or similar instruments in any
jurisdiction in order to validate and perfect the liens and security interests granted hereunder.
Whether or not the DIP Agent or the Prepetition Agents shall (at the direction of the applicable
required lenders) choose to file such financing statements, intellectual property filings, mortgages,
notices of lien, or similar instruments, such liens and security interests shall be deemed valid,
perfected, allowed, enforceable, non-avoidable, and not, subject to the Challenge Period, subject
to challenge, dispute, or subordination as of the date of entry of this Interim Order. If the DIP
Agent or the Prepetition Agents (at the direction of the applicable required lenders) determines to
file or execute any financing statements, agreements, notice of liens, or similar instruments (which,
in each case, shall be at the sole cost and expense of the Debtors), the Debtors shall use
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commercially reasonable efforts to cooperate and assist in any such execution and/or filings as
reasonably requested by the DIP Agent or the Prepetition Agents (at the direction of the applicable
required lenders), and the automatic stay shall be modified solely to allow such filings as provided
for in this Interim Order.
(b) A certified copy of this Interim Order may, at the direction of the applicable
Required DIP Lenders, be filed with or recorded in filing or recording offices by the DIP Agent or
the Prepetition Agents in addition to or in lieu of such financing statements, mortgages, notices of
lien, or similar instruments, and all filing offices are hereby authorized to accept such certified
copy of this Interim Order for filing and recording; provided, however, that notwithstanding the
date of any such filing, the date of such perfection shall be the date of this Interim Order.
(c) Any provision of any lease or other license, contract or other agreement that
requires (i) the consent or approval of one or more landlords, lessors, or other parties or (ii)
excluding any stamp-tax, the payment of any fees or obligations to any governmental entity, in
order for any Debtor to pledge, grant, sell, assign, or otherwise transfer any such leasehold interest,
or the proceeds thereof, or other collateral related thereto, is hereby deemed to be inconsistent with
the applicable provisions of the Bankruptcy Code, subject to applicable law. Any such provision
shall have no force and effect with respect to the granting of the DIP Liens and the Adequate
Protection Liens on such leasehold interest or the proceeds of any assignment and/or sale thereof
by any Debtor in accordance with the terms of the DIP Credit Agreement or this Interim Order,
subject to applicable law.
24. Release. Subject to the rights and limitations set forth in paragraph 12 of this
Interim Order, each of the Debtors and the Debtors’ estates, on its own behalf and on behalf of
each of their predecessors, their successors, and assigns, shall, to the maximum extent permitted
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by applicable law, unconditionally, irrevocably, and fully forever release, remise, acquit,
relinquish, irrevocably waive, and discharge, effective upon entry of this Interim Order, each of
the DIP Secured Parties and each of their respective affiliates, former, current, or future officers,
employees, directors, agents, representatives, owners, members, partners, financial advisors, legal
advisors, shareholders, managers, consultants, accountants, attorneys, affiliates, assigns, and
predecessors in interest, each in their capacity as such (collectively, the “Related Parties”), and,
effective upon entry of the Final Order, each of the Prepetition First Lien Secured Parties and each
of their respective Related Parties, of and from any and all claims, demands, liabilities,
responsibilities, disputes, remedies, causes of action, indebtedness and obligations, rights,
assertions, allegations, actions, suits, controversies, proceedings, losses, damages, injuries,
attorneys’ fees, costs, expenses, or judgments of every type, whether known, unknown, asserted,
unasserted, suspected, unsuspected, accrued, unaccrued, fixed, contingent, pending, or threatened,
including, without limitation, all legal and equitable theories of recovery, arising under common
law, statute, or regulation or by contract, of every nature and description that exist on the date
hereof with respect to or relating to the DIP Obligations, the DIP Liens, the DIP Documents, the
Prepetition Obligations, the Prepetition Liens or the Prepetition Documents, as applicable,
including, without limitation: (i) any so-called “lender liability” or equitable subordination claims
or defenses, (ii) any and all claims and causes of action arising under the Bankruptcy Code, and
(iii) any and all claims and causes of action regarding the validity, priority, extent, enforceability,
perfection, or avoidability of the liens or claims of the DIP Secured Parties and the Prepetition
Secured Parties; provided that nothing in this paragraph 24 shall in any way limit or release the
obligations of any DIP Secured Party under the DIP Documents, this Interim Order, and the Final
Order.
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25. Credit Bidding. Subject to section 363(k) of the Bankruptcy Code, the DIP Agent
(at the direction of the Required DIP Lenders) and the Prepetition First Lien Term Loan Agent (at
the direction of the Required Lenders) shall have the right to credit bid (either directly or through
one or more acquisition vehicles), up to the full amount of the underlying lenders’ respective
claims, including, for the avoidance of doubt, Adequate Protection Superpriority Claims, if any,
in any sale of all or any portion of the Prepetition Collateral or the DIP Collateral including,
without limitation, sales occurring pursuant to section 363 of the Bankruptcy Code or included as
part of any chapter 11 plan subject to confirmation under section 1129(b)(2)(A)(ii)-(iii) of the
Bankruptcy Code.
26. Preservation of Rights Granted Under this Interim Order.
(a) Unless and until all DIP Obligations are indefeasibly paid in full, in cash,
and all New Money Commitments are terminated, the Prepetition Secured Parties shall: (i) have
no right to and shall take no action to foreclose upon, or recover in connection with, the liens
granted thereto pursuant to the Prepetition Documents or this Interim Order, or otherwise seek to
exercise or enforce any rights or remedies against such DIP Collateral; and (ii) not file any further
financing statements, trademark filings, copyright filings, mortgages, notices of lien or similar
instruments, or otherwise take any action to perfect their security interests in the DIP Collateral,
except as set forth in paragraph 23 herein.
(b) In the event this Interim Order or any provision hereof is vacated, reversed,
or modified on appeal or otherwise, any liens or claims granted to the DIP Secured Parties or the
Prepetition Secured Parties hereunder arising prior to the effective date of any such vacatur,
reversal, or modification of this Interim Order shall be governed in all respects by the original
provisions of this Interim Order, including entitlement to all rights, remedies, privileges, and
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benefits granted herein, and the Prepetition Secured Parties shall be entitled to all the rights,
remedies, privileges, and benefits afforded in section 364(e) of the Bankruptcy Code.
(c) Unless and until all DIP Obligations, Prepetition Obligations, and Adequate
Protection Obligations are indefeasibly paid in full, in cash, and all New Money Commitments are
terminated, the Debtors irrevocably waive the right to seek and shall not seek or consent to, directly
or indirectly (i) except as permitted under the DIP Documents or, if not provided for therein, with
the prior written consent of the DIP Agent, the Required DIP Lenders, and the Prepetition Agents
(acting at the direction of the applicable Required Lenders), (x) any modification, stay, vacatur, or
amendment of this Interim Order or (y) a priority claim for any administrative expense or
unsecured claim against any of the Debtors (now existing or hereafter arising of any kind or nature
whatsoever, including, without limitation, any administrative expense of the kind specified in
sections 503(b), 507(a), or 507(b) of the Bankruptcy Code) in any of the Cases, pari passu with or
senior to the DIP Superpriority Claims, the Adequate Protection Superpriority Claims, or the
Prepetition First Lien Obligations, or (z) any other order allowing use of the DIP Collateral;
(ii) except as permitted under the DIP Documents (including the Carve Out), any lien on any of
the DIP Collateral or the Prepetition Collateral with priority equal or superior to the DIP Liens,
the Adequate Protection Liens or the Prepetition Liens, as applicable; (iii) the use of Cash
Collateral for any purpose other than as permitted in the DIP Documents and this Interim Order;
(iv) except as set forth in the DIP Documents, the return of goods pursuant to section 546(h) of the
Bankruptcy Code (or other return of goods on account of any prepetition indebtedness) to any
creditor of any Debtor; (v) an order converting or dismissing any of the Cases; (vi) an order
appointing a chapter 11 trustee in any of the Cases; or (vii) an order appointing an examiner with
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enlarged powers in any of the Cases; provided, however, that none of the foregoing shall require
the Debtors to violate their fiduciary duties.
(d) Notwithstanding any order dismissing any of the Cases entered at any time,
(x) the DIP Liens, the DIP Superpriority Claims, the Adequate Protection Liens, the Adequate
Protection Superpriority Claims, and the other administrative claims granted pursuant to this
Interim Order shall continue in full force and effect and shall maintain their priorities as provided
in this Interim Order until all DIP Obligations and Adequate Protection Payments are indefeasibly
paid in full in cash (and such DIP Liens, DIP Superpriority Claims, Adequate Protection Liens,
Adequate Protection Superpriority Claims, and the other administrative claims granted pursuant
to this Interim Order, shall, notwithstanding such dismissal, remain binding on all parties in
interest); and (y) to the fullest extent permitted by law the Court shall retain jurisdiction,
notwithstanding such dismissal, for the purposes of enforcing the claims, liens, and security
interests referred to in clause (x) above.
(e) Except as expressly provided in this Interim Order or in the DIP Documents,
and subject to the rights of parties in interest specifically set forth in paragraph 12 of this Interim
Order (and subject to the limitations thereon contained in such paragraph or otherwise in this
Interim Order), the DIP Liens, the DIP Superpriority Claims, the Adequate Protection Liens, the
Adequate Protection Superpriority Claims, and all other rights and remedies of the DIP Agent, the
DIP Lenders, and the Prepetition Secured Parties granted by the provisions of this Interim Order
and the DIP Documents shall survive, and shall not be modified, impaired, or discharged by (i) the
entry of an order converting any of the Cases to a case under chapter 7, dismissing any of the
Cases, terminating the joint administration of these Cases or by any other act or omission, (ii) the
entry of an order approving the sale of any Prepetition Collateral or DIP Collateral pursuant to
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section 363(b) of the Bankruptcy Code, or (iii) the entry of an order confirming a chapter 11 plan
in any of the Cases and, pursuant to section 1141(d)(4) of the Bankruptcy Code, the Debtors have
waived any discharge as to any remaining DIP Obligations or Adequate Protection Obligations.
The terms and provisions of this Interim Order and the DIP Documents shall continue in these
Cases, in any successor cases if these Cases cease to be jointly administered, or in any superseding
chapter 7 cases under the Bankruptcy Code. The DIP Liens, the DIP Superpriority Claims, the
Adequate Protection Liens, the Adequate Protection Superpriority Claims, and all other rights and
remedies of the DIP Secured Parties and the Prepetition Secured Parties granted by the provisions
of this Interim Order shall continue in full force and effect until the DIP Obligations and the
Adequate Protection Payments are indefeasibly paid in full, in cash or, with respect to the DIP
Obligations, otherwise satisfied in a manner agreed to by the Required DIP Lenders and the DIP
Agent (acting at the direction of the Required DIP Lenders).
(f) Other than as set forth in this Interim Order, subject to the Carve Out,
neither the DIP Liens nor the Adequate Protection Liens shall be made subject to or pari passu
with any lien or security interest granted in any of the Cases or arising after the Petition Date, and
neither the DIP Liens nor the Adequate Protection Liens shall be subject or junior to any lien or
security interest that is avoided and preserved for the benefit of the Debtors’ estates under section
551 of the Bankruptcy Code.
27. Limitation on Use of DIP Facility Proceeds, DIP Collateral, and Cash Collateral.
Notwithstanding anything to the contrary set forth in this Interim Order, none of the DIP Facility,
the DIP Collateral, the Prepetition Collateral, including Cash Collateral, or the Carve Out or
proceeds thereof may be used: (a) to investigate (including by way of examinations or discovery
proceedings), initiate, assert, prosecute, join, commence, support, or finance the initiation or
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prosecution of any claim, counterclaim, action, suit, arbitration, proceeding, application, motion,
objection, defense, adversary proceeding, or other litigation of any type (i) against any of the
DIP Secured Parties or the Prepetition Secured Parties (each in their capacities as such), and each
of their respective affiliates, officers, directors, employees, agents, representatives, attorneys,
consultants, financial advisors, affiliates, assigns, or successors, with respect to any transaction,
occurrence, omission, action, or other matter (including formal discovery proceedings in
anticipation thereof), including, without limitation, any so-called “lender liability” claims and
causes of action, or seeking relief that would impair the rights and remedies of the DIP Secured
Parties or the Prepetition Secured Parties (each in their capacities as such) under the DIP
Documents, the Prepetition Documents, or this Interim Order, including, without limitation, for
the payment of any services rendered by the professionals retained by the Debtors or any
Committee appointed in these Cases in connection with the assertion of or joinder in any claim,
counterclaim, action, suit, arbitration, proceeding, application, motion, objection, defense,
adversary proceeding, or other contested matter, the purpose of which is to seek, or the result of
which would be to obtain, any order, judgment, determination, declaration, or similar relief that
would impair the ability of any of the DIP Secured Parties or the Prepetition Secured Parties to
recover on the DIP Collateral or the Prepetition Collateral or seeking affirmative relief against any
of the DIP Secured Parties or the Prepetition Secured Parties related to the DIP Obligations or the
Prepetition Obligations; (ii) invalidating, setting aside, avoiding, or subordinating, in whole or in
part, the DIP Obligations or the Prepetition Obligations, or the DIP Agent’s, the DIP Lenders’, and
the Prepetition Secured Parties’ liens or security interests in the DIP Collateral or Prepetition
Collateral, as applicable; or (iii) for monetary, injunctive, or other affirmative relief against the
DIP Secured Parties or the Prepetition Secured Parties, or the DIP Agent’s, the DIP Lenders’, the
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Prepetition Secured Parties’ respective liens on or security interests in the DIP Collateral or the
Prepetition Collateral that would impair the ability of any of the DIP Secured Parties or the
Prepetition Secured Parties, as applicable, to assert or enforce any lien, claim, right, or security
interest or to realize or recover on the DIP Obligations or the Prepetition Obligations, to the extent
applicable; (b) for objecting to or challenging in any way the legality, validity, priority, perfection,
or enforceability of the claims, liens, or interests (including the Prepetition Liens) held by or on
behalf of each of the Prepetition Secured Parties related to the Prepetition Obligations, or by or on
behalf of the DIP Agent and the DIP Lenders related to the DIP Obligations; (c) for asserting,
commencing, or prosecuting any claims or causes of action whatsoever, including, without
limitation, any Avoidance Actions related to the DIP Obligations, the DIP Liens, the Prepetition
Obligations, or the Prepetition Liens; or (d) for prosecuting an objection to, contesting in any
manner, or raising any defenses to, the validity, extent, amount, perfection, priority, or
enforceability of: (x) any of the DIP Liens or any other rights or interests of the DIP Agent or the
DIP Lenders related to the DIP Obligations or the DIP Liens, or (y) any of the Prepetition Liens
or any other rights or interests of any of the Prepetition Secured Parties related to the Prepetition
Obligations or the Prepetition Liens, provided that no more than $50,000 of the proceeds of the
DIP Facility, the DIP Collateral, or the Prepetition Collateral, including the Cash Collateral, in the
aggregate, may be used by any Committee appointed in these Cases, if any, solely to investigate,
within the Challenge Period (as defined below), the claims, causes of action, adversary
proceedings, or other litigation against the Prepetition Secured Parties solely concerning the
legality, validity, priority, perfection, enforceability or extent of the claims, liens, or interests
(including the Prepetition Liens) held by or on behalf of each of the Prepetition Secured Parties
related to the Prepetition Obligations.
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28. Conditions Precedent. Except as provided for in the Carve Out, no DIP Lender
shall have any obligation to make any DIP Loan under the respective DIP Documents unless all
of the conditions precedent to the making of such extensions of credit under the applicable DIP
Documents have been satisfied in full or waived in accordance with such DIP Documents.
29. Prepetition Intercreditor Agreements. Pursuant to section 510 of the Bankruptcy
Code, any applicable intercreditor or subordination provisions contained in any of the Prepetition
Documents, including the Prepetition Intercreditor Agreements, shall remain in full force and
effect; provided that nothing in this Interim Order shall be deemed to provide liens to any
Prepetition Secured Party on any assets of the Debtors except as set forth herein.
30. Binding Effect; Successors and Assigns. The DIP Documents and the provisions
of this Interim Order, including all findings herein, shall be binding upon all parties in interest in
these Cases, including, without limitation, the DIP Secured Parties, the Prepetition Secured Parties,
any Committee appointed in these Cases, and the Debtors and their respective successors and
permitted assigns (including any chapter 7 or chapter 11 trustee hereinafter appointed or elected
for the estate of any of the Debtors, an examiner appointed pursuant to section 1104 of the
Bankruptcy Code, or any other fiduciary appointed as a legal representative of any of the Debtors
or with respect to the property of the estate of any of the Debtors) and shall inure to the benefit of
the DIP Secured Parties and the applicable Prepetition Secured Parties; provided that, except to
the extent expressly set forth in this Interim Order, the Prepetition Secured Parties shall have no
obligation to permit the use of Cash Collateral or to extend any financing to any chapter 7 trustee
or similar responsible person appointed for the estates of the Debtors. In determining to make any
loan (whether under the DIP Credit Agreement, a promissory note or otherwise) to permit the use
of Cash Collateral pursuant to this Interim Order or the DIP Documents, the DIP Secured Parties
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and the Prepetition Secured Parties shall not (i) be deemed to be in control of the operations of the
Debtors, or (ii) owe any fiduciary duty to the Debtors, their respective creditors, shareholders, or
estates.
31. Limitation of Liability. In determining to make any loan under the DIP Documents,
or permitting the use of Cash Collateral, pursuant to this Interim Order or the DIP Documents, the
DIP Secured Parties and the Prepetition Secured Parties shall not, solely by reason thereof, be
deemed in control of the operations of the Debtors or to be acting as a “responsible person” or
“owner or operator” with respect to the operation or management of the Debtors (as such terms,
or any similar terms, are used in the United States Comprehensive Environmental Response,
Compensation and Liability Act, 29 U.S.C. §§ 9601 et seq. as amended, or any similar federal or
state statute). Furthermore, nothing in this Interim Order or in the DIP Documents shall in any
way be construed or interpreted to impose or allow the imposition upon the DIP Agent, the DIP
Lenders, or any Prepetition Secured Parties of any liability for any claims arising from the
prepetition or post-petition activities of any of the Debtors.
32. No Requirement to File Claim for DIP Obligations. Notwithstanding anything to
the contrary contained in any prior or subsequent order of the Court, including, without limitation,
any order establishing a deadline for the filing of proofs of claim or requests for payment of
administrative expenses under section 503(b) of the Bankruptcy Code, neither the DIP Agent nor
any DIP Lender shall be required to file any proof of claim or request for payment of administrative
expenses with respect to any of the DIP Obligations, all of which shall be due and payable in
accordance with the DIP Documents without the necessity of filing any such proof of claim or
request for payment of administrative expenses, and the failure to file any such proof of claim or
request for payment of administrative expenses shall not affect the validity, priority, or
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enforceability of any of the DIP Documents or of any indebtedness, liabilities, or obligations
arising at any time thereunder or prejudice or otherwise adversely affect the DIP Agent’s or any
DIP Lender’s rights, remedies, powers, or privileges under any of the DIP Documents, this Interim
Order, or applicable law. The provisions set forth in this paragraph are intended solely for the
purpose of administrative convenience and shall not affect the substantive rights of any party-in-
interest or their respective successors-in-interest.
33. No Requirement to File Claim for Prepetition Obligations. Notwithstanding
anything to the contrary contained in any prior or subsequent order of the Court, including, without
limitation, any order establishing a deadline for the filing of proofs of claim or requests for
payment of administrative expenses under section 503(b) of the Bankruptcy Code, neither the
Prepetition Agents nor any Prepetition Secured Parties shall be required to file any proof of claim
or request for payment of administrative expenses with respect to any of the Prepetition
Obligations; and the failure to file any such proof of claim or request for payment of administrative
expenses shall not affect the validity, priority, or enforceability of any of the Prepetition
Documents or of any indebtedness, liabilities, or obligations arising at any time thereunder or
prejudice or otherwise adversely affect the Prepetition Agents’ or any Prepetition Secured Party’s
rights, remedies, powers, or privileges under any of the Prepetition Documents, this Interim Order,
or applicable law. The provisions set forth in this paragraph are intended solely for the purpose of
administrative convenience and shall not affect the substantive rights of any party-in-interest or
their respective successors-in-interest.
34. No Marshaling. Subject to entry of the Final Order, the DIP Agent and the
DIP Secured Parties shall not be subject to the equitable doctrine of “marshaling” or any other
similar doctrine with respect to any of the DIP Collateral, and proceeds of the DIP Collateral shall
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be received and applied pursuant to this Interim Order, the DIP Documents and the Prepetition
Documents, notwithstanding any other agreement or provision to the contrary, and the Prepetition
Secured Parties shall not be subject to the equitable doctrine of “marshaling” or any other similar
doctrine with respect to any of the Prepetition Collateral.
35. Application of Proceeds of DIP Collateral. Subject to entry of a Final Order, the
DIP Obligations, at the option of the Required DIP Lenders, to be exercised in their sole and
absolute discretion, shall be repaid (a) first, from the DIP Collateral comprising Previously
Unencumbered Property and (b) second, from all other DIP Collateral.
36. Equities of the Case. The Prepetition Secured Parties shall each be entitled to all
the rights and benefits of section 552(b) of the Bankruptcy Code, and, subject to and upon entry
of the Final Order, the “equities of the case” exception under section 552(b) of the Bankruptcy
Code shall not apply to the Prepetition Secured Parties with respect to proceeds, product, offspring,
or profits of any of the Collateral (including the Prepetition Collateral).
37. Transferred Assets. Notwithstanding anything contained in the Interim Order,
Final Order, or any DIP Documents, no liens or other security interests granted hereunder or under
any DIP Loan Document, including any DIP Liens or any Adequate Protection Liens, shall attach
to, encumber, or otherwise impact the “Transferred Assets” as defined in that certain Stock and
Asset Purchase Agreement by and between Vyaire Holding Company and SunMed Group
Holdings, LLC, dated as of March 27, 2023, and such Transferred Assets are not property of the
Debtors’ estates.
38. Final Hearing. The Final Hearing on the Motion shall be held on July 9, 2024, at
10:00 a.m., prevailing Eastern time. Any objections or responses to entry of a final order on the
Motion shall be filed on or before 4:00 p.m., prevailing Eastern time, on July 2, 2024, and shall be
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served on: (a) the Debtors, 26125 North Riverwoods Boulevard, Mettawa, Illinois, USA 60045,
Attn.: Charles Braley (cbraley@alixpartners.com); (b) proposed co-counsel to the Debtors
(i) Kirkland & Ellis LLP, 601 Lexington Avenue, New York, New York 10022, Attn.: Joshua A.
Sussberg, P.C. (joshua.sussberg@kirkland.com), Chris Ceresa (chris.ceresa@kirkland.com), and
Tiffani Chanroo (tiffani.chanroo@kirkland.com) (ii) Kirkland & Ellis LLP, 333 West Wolf Point
Plaza, Chicago, Illinois, 60654, Attn.: Spencer A. Winters (spencer.winters@kirkland.com) and
Yusuf U. Salloum (yusuf.salloum@kirkland.com), and, (iii) Cole Schotz P.C., 500 Delaware
Avenue, Suite 1410, Wilmington, Delaware 19801, Attn.: Patrick J. Reilley, Esq.
(preilley@coleschotz.com), Stacy L. Newman (snewman@coleschotz.com), Michael E.
Fitzpatrick, Esq. (mfitzpatrick@coleschotz.com), and Jack M. Dougherty, Esq.
(jdougherty@coleschotz), and (iv) Cole Schotz P.C., Court Plaza North, 25 Main Street,
Hackensack, New Jersey 07601, Attn.: Michael D. Sirota, Esq (msirota@coleschotz.com) and
Warren A. Usatine, Esq. (wusatine@coleschotz.com); (c) co-counsel to the DIP Lenders and the
DIP/First Lien Group, (i) Gibson, Dunn & Crutcher LLP, 200 Park Ave., New York, NY 10166,
Attn: Scott J. Greenberg (sgreenberg@gibsondunn.com), Jason Zachary Goldstein
(jgoldstein@gibsondunn.com), Joshua Brody (jbrody@gibsondunn.com), and Kevin Liang
(kliang@gibsondunn.com) and (ii) Pachulski Stang Ziehl & Jones LLP, 919 North Market Street,
17th Floor, Wilmington, DE 19801, Attn: Laura Davis Jones (ljones@pszjlaw.com); (d) co-
counsel to the DIP Agent, (i) ArentFox Schiff LLP, 1301 Avenue of the Americas, 42nd Floor,
New York, NY 10019, Attn: Jeffrey R. Gleit (jeffrey.gleit@afslaw.com) and (ii) Morris James
LLP, 500 Delaware Avenue, Suite 1500, Wilmington, DE 19801, Attn: Eric J. Monzo
(emonzo@morrisjames.com) and Brya Keilson (bkeilson@morrisjames.com); (e) co-counsel to
the Prepetition First Lien Term Loan Agent, (i) Haynes & Boone LLP, 2801 N. Hardwood Street,
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Suite 2300, Dallas, TX 75201, Attn: Eli Columbus (eli.columbus@haynesboone.com), James
Markus (james.markus@haynesboone.com), and Dani Leon-Osorio (Dani.Leon-
Osorio@haynesboone.com) and (ii) local counsel; (f) co-counsel to the Prepetition First Lien
Notes Agent and the Prepetition Second Lien Term Loan Agent, (i) Seward & Kissel LLP, One
Battery Park Plaza, New York, NY 10004, Attn: Ronald A. Hewitt (hewitt@sewkis.com) and
(ii) local counsel; (g) the United States Trustee, 844 King Street, Suite 2207, Lockbox 35,
Wilmington, Delaware 19801, Attn: Benjamin A. Hackman (benjamin.a.hackman@usdoj.gov);
and (h) counsel to any statutory committee appointed in these chapter 11 cases. In the event no
objections to entry of the Final Order on the Motion are timely received, this Court may enter such
Final Order without need for the Final Hearing.
39. Notwithstanding anything to the contrary contained in this Interim Order,
including, without limitation, paragraph 7 hereof, to the extent the Prepetition First Lien Revolving
Loan Obligations become allowed claims, the DIP Liens and DIP Superpriority Claims granted
herein solely with respect to the Roll-Up Loans (but, for the avoidance of doubt, not with respect
to the New Money Loans made available to the DIP Borrower on the date of this Interim Order)
shall not be senior to the First Lien Term Loan Liens, in existence as of the Petition Date, securing
such Prepetition First Lien Revolving Loan Obligations by virtue of entry of this Interim Order;
provided, that, all rights of the Debtors, DIP Agent and DIP/First Lien Group, on the one hand,
and the Prepetition First Lien Loan Agent and Prepetition First Lien Revolving Lenders, on the
other, are reserved with respect to the allowance of the Prepetition First Lien Revolving Loan
Obligations; provided, further, that the Debtors, DIP Agent and DIP/First Lien Group reserve the
right to request, upon entry of a Final Order, approval of DIP Liens in respect of any and all Roll-
Up Loans (and any other New Money Loans) that are senior in priority to the First Lien Term Loan
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Liens securing such Prepetition First Lien Revolving Loan Obligations, and the Prepetition First
Lien Loan Agent and Prepetition First Lien Revolving Lenders reserve the right to oppose such
relief.
40. Effect of this Interim Order. This Interim Order shall constitute findings of fact
and conclusions of law pursuant to Bankruptcy Rule 7052 and shall take effect and be enforceable
immediately upon execution hereof.
41. Retention of Jurisdiction. The Court retains jurisdiction with respect to all matters
arising from or related to the implementation of this Interim Order.
Dated: June 12th, 2024 BRENDAN L. SHANNON
Wilmington, Delaware UNITED STATES BANKRUPTCY JUDGE
75
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