CONFIDENTIAL TREATMENT REQUESTED — THIS DOCUMENT IS A DRAFT AND IS SUBJECT TO REVIEW AND COMMENT. IT DOES NOT CONSTITUTE A COMMITMENT TO LEND OR A BINDING AGREEMENT. THIS DOCUMENT IS PROTECTED BY FEDERAL RULE OF EVIDENCE 408 AND ALL APPLICABLE PRIVILEGES, INCLUDING THE ATTORNEY-CLIENT PRIVILEGE AND THE WORK PRODUCT DOCTRINE.
SENIOR SECURED SUPERPRIORITY DEBTOR-IN-POSSESSION CREDIT AGREEMENT
Dated as of [●], 2025
Among
GREENFIELD AGRICULTURAL PARTNERS LLC, an Iowa limited liability company, as Borrower,
THE LENDERS FROM TIME TO TIME PARTY HERETO,
IRONCLAD CAPITAL PARTNERS LP, a Delaware limited partnership, as Administrative Agent,
and
MERIDIAN TRUST COMPANY, a New York-chartered trust company, as Collateral Agent
________________________________________
TOTAL COMMITMENTS: $175,000,000
________________________________________
Prepared by:
Calderwood & Harkness LLP 450 Park Avenue New York, New York 10022
TABLE OF CONTENTS
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ARTICLE I — DEFINITIONS AND INTERPRETATION
Section 1.01 — Defined Terms
As used in this Agreement, the following terms shall have the meanings set forth below:
"ABL Credit Agreement" means that certain Revolving Credit Agreement, dated as of March 17, 2023, by and among the Borrower, as borrower, Prairie State Bank, N.A., as administrative agent (the "Pre-Petition ABL Agent"), and Hawthorn National Bank and Northland Savings Bank, F.S.B., as lenders thereunder, pursuant to which the lenders committed to provide a revolving credit facility in an aggregate principal amount of up to $95,000,000 (of which $72,300,000 is currently drawn as of the Petition Date), as such agreement may have been amended, restated, supplemented, or otherwise modified prior to the Petition Date.
"Adequate Protection Liens" means the replacement liens granted to the Pre-Petition Secured Parties on the DIP Collateral pursuant to the DIP Orders, which liens shall at all times be junior and subordinate to (a) the DIP Liens and (b) the Carve-Out, all as more fully set forth in Section 2.13 hereof and in the DIP Orders.
"Adequate Protection Obligations" means, collectively, (a) the current-pay interest obligations payable to the Pre-Petition Secured Parties at the applicable non-default contract rate (being SOFR plus 450 basis points with respect to obligations arising under the First Lien Credit Agreement and SOFR plus 275 basis points with respect to obligations arising under the ABL Credit Agreement), (b) the Adequate Protection Liens, and (c) the superpriority administrative expense claims granted to the Pre-Petition Secured Parties under Section 507(b) of the Bankruptcy Code, in each case as set forth in Section 2.13 hereof and in the DIP Orders.
"Administrative Agent" means Ironclad Capital Partners LP, a Delaware limited partnership, with its principal office at 600 Lexington Avenue, 34th Floor, New York, New York 10022, in its capacity as administrative agent for the Lenders under this Agreement and the other Loan Documents, and any successor Administrative Agent appointed in accordance with Section 9.07 hereof.
"Affiliate" means, with respect to any Person, any other Person that, directly or indirectly, Controls, is Controlled by, or is under common Control with, such Person.
"Agreement" means this Senior Secured Superpriority Debtor-in-Possession Credit Agreement, as the same may be amended, restated, supplemented, or otherwise modified from time to time in accordance with the terms hereof.
"Applicable Law" means all applicable provisions of constitutions, statutes, rules, regulations, ordinances, treaties, and orders of all governmental and quasi-governmental authorities, and all orders, writs, injunctions, decrees, and awards of any court, arbitrator, or governmental or quasi-governmental authority.
"Applicable Margin" means 850 basis points (8.50%) per annum.
"Applicable Rate" means, at any time, a rate per annum equal to SOFR (subject to the SOFR Floor) plus the Applicable Margin.
"Appraisal" means the appraisal of the real property, equipment, inventory, and intellectual property of the Borrower prepared by Bellwether Valuation Services Inc. (Gregory Pineda, Senior Managing Director), in form and substance satisfactory to the Administrative Agent.
"Assignment and Assumption" means an assignment and assumption agreement entered into by a Lender and an assignee in substantially the form of Exhibit G hereto.
"Availability" means, at any time, an amount equal to (a) the Total Commitments then in effect, minus (b) the aggregate outstanding principal amount of all Loans at such time.
"Bankruptcy Case" means the case commenced by the Borrower under Chapter 11 of the Bankruptcy Code, designated as Case No. 25-01147, pending in the United States Bankruptcy Court for the Northern District of Iowa (Cedar Rapids Division), before the Honorable Margaret R. Dunleavy.
"Bankruptcy Code" means Title 11 of the United States Code, 11 U.S.C. §§ 101 et seq., as amended from time to time.
"Bankruptcy Court" means the United States Bankruptcy Court for the Northern District of Iowa, Cedar Rapids Division, having jurisdiction over the Bankruptcy Case, or such other court as may have jurisdiction over the Bankruptcy Case or any proceedings arising therein or related thereto.
"Bankruptcy Rules" means the Federal Rules of Bankruptcy Procedure, as amended from time to time, and any local rules of the Bankruptcy Court.
"Bellwether Valuation Services" means Bellwether Valuation Services Inc., with Gregory Pineda, Senior Managing Director, as the lead appraiser for purposes of the Appraisal.
"Borrower" means Greenfield Agricultural Partners LLC, an Iowa limited liability company (EIN: 42-8837291), with its principal office and headquarters located at 1400 Prairie Ridge Drive, Cedar Falls, Iowa 50613, as a debtor and debtor-in-possession under Sections 1107 and 1108 of the Bankruptcy Code.
"Borrowing" means a borrowing consisting of Loans made by each of the Lenders on a pro rata basis pursuant to Section 2.01 and Section 2.02 hereof.
"Borrowing Date" means any Business Day on which a Borrowing is made or is to be made hereunder.
"Borrowing Request" means a request for a Borrowing in substantially the form of Exhibit B hereto, executed by an authorized officer of the Borrower and delivered to the Administrative Agent in accordance with Section 2.02 hereof.
"Budget" means the 13-week cash flow budget attached as Exhibit A to the Interim Order, as such budget may be updated and extended from time to time in accordance with Section 5.12 and Section 6.01(b) hereof, each such updated budget to be in form and substance satisfactory to the Required Lenders.
"Budget Period" means the 13-week period commencing on the Petition Date (May 15, 2025) and ending on August 13, 2025, subject to extensions in four (4)-week increments upon the written approval of the Required Lenders in their reasonable discretion.
"Budget Variance" has the meaning assigned to such term in Section 7.01(b) hereof.
"Business Day" means any day other than a Saturday, a Sunday, or any other day on which commercial banks in New York, New York are authorized or required by law, regulation, or executive order to close.
"Capital Expenditures" means, for any period, the aggregate amount of all expenditures (whether paid in cash or accrued as liabilities) by the Borrower during such period that, in conformity with GAAP, are or are required to be included as capital expenditures on the consolidated statement of cash flows of the Borrower for such period, excluding, for the avoidance of doubt, expenditures constituting permitted acquisitions.
"Carve-Out" has the meaning assigned to such term in Section 2.11 hereof.
"Carve-Out Trigger Notice" has the meaning assigned to such term in Section 2.11(c) hereof.
"Closing Date" means the date on which all conditions precedent set forth in Section 4.01 hereof have been satisfied or waived in writing by the Administrative Agent (acting at the direction of the Required Lenders) and the Interim Order has been entered by the Bankruptcy Court, which date is expected to occur on or about May 22, 2025.
"Closing Fee" means a fee equal to 2.00% of the Total Commitments (being $175,000,000 × 2.00% = $3,500,000), as more fully set forth in Section 2.08(a) hereof.
"Collateral" means all assets and properties of the Borrower of every kind and description, whether now owned or hereafter acquired, whether real, personal, or mixed, and whether tangible or intangible, including, without limitation, all real property, all personal property, all fixtures, all equipment, all inventory, all accounts receivable, all chattel paper, all instruments, all documents, all deposit accounts, all securities accounts, all commodity accounts, all general intangibles (including payment intangibles), all intellectual property, all investment property, all letter-of-credit rights, all commercial tort claims, all proceeds and products of the foregoing, and all books and records relating to any of the foregoing, in each case as more fully described in the Security Documents.
"Collateral Agent" means Meridian Trust Company, a New York-chartered trust company, with its principal office at 101 Park Avenue, 20th Floor, New York, New York 10178, in its capacity as collateral agent for the benefit of the Administrative Agent and the Lenders under this Agreement and the Security Documents, and any successor Collateral Agent appointed in accordance with Section 9.07 hereof.
"Commitment" means, with respect to each Lender, such Lender's commitment to make Loans hereunder in an aggregate principal amount at any one time outstanding not to exceed the amount set forth opposite such Lender's name on Schedule 1.01(a) hereto, as such amount may be reduced or modified from time to time in accordance with the terms hereof. As of the Closing Date, the Commitments are as follows: (a) Ironclad Capital Partners LP — $100,000,000; (b) Ridgeline Opportunity Fund III LP — $50,000,000; and (c) Bramblewood Credit Advisors LLC — $25,000,000.
"Committee" means the statutory Official Committee of Unsecured Creditors appointed or to be appointed in the Bankruptcy Case.
"Compliance Certificate" means a certificate in substantially the form of Exhibit E hereto, executed by the Chief Financial Officer of the Borrower.
"Control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract, or otherwise. "Controlled" and "Controlling" have meanings correlative thereto.
"Covenant Compliance Certificate" has the meaning assigned to such term in Section 7.02 hereof.
"Default" means any event or condition that constitutes an Event of Default or that, with the giving of notice, the passage of time, or both, would constitute an Event of Default.
"Default Rate" means the Applicable Rate plus 200 basis points per annum (i.e., SOFR plus 1,050 basis points per annum).
"DIP Collateral" means the Collateral, together with any and all proceeds, products, accessions, rents, and profits thereof.
"DIP Facility" means the $175,000,000 senior secured superpriority revolving credit facility established pursuant to this Agreement.
"DIP IP Security Agreement" means the Debtor-in-Possession intellectual Property Security Agreement, dated as of the Closing Date, by and between the Borrower and the Collateral Agent, for the benefit of the Administrative Agent and the Lenders.
"DIP Liens" means, collectively, (a) the first-priority priming liens on all Pre-Petition Collateral granted pursuant to Section 364(d) of the Bankruptcy Code, (b) the first-priority liens on all assets of the Borrower that were not subject to valid, perfected, and non-avoidable liens as of the Petition Date, granted pursuant to Section 364(c)(2) of the Bankruptcy Code, and (c) the junior liens on all assets of the Borrower that are subject to valid, perfected, and non-avoidable liens as of the Petition Date (to the extent not primed), granted pursuant to Section 364(c)(3) of the Bankruptcy Code, in each case as authorized by the DIP Orders.
"DIP Order" means, collectively, the Interim Order and the Final Order.
"DIP Pledge Agreement" means the Debtor-in-Possession Pledge Agreement, dated as of the Closing Date, by and between the Borrower and the Collateral Agent, for the benefit of the Administrative Agent and the Lenders.
"DIP Promissory Note" means a promissory note in substantially the form of Exhibit F hereto, executed by the Borrower in favor of a Lender, evidencing the Loans made by such Lender.
"DIP Security Agreement" means the Debtor-in-Possession Security Agreement, dated as of the Closing Date, by and between the Borrower and the Collateral Agent, for the benefit of the Administrative Agent and the Lenders.
"DIP Superpriority Claim" means the allowed superpriority administrative expense claim against the Borrower and the estate arising under Section 364(c)(1) of the Bankruptcy Code, as more fully described in Section 2.10 hereof and in the DIP Orders.
"EBITDA" means, for any period, the net income (or net loss) of the Borrower for such period, plus (a) interest expense, (b) income tax expense, (c) depreciation expense, and (d) amortization expense, in each case determined in accordance with GAAP, plus (e) to the extent deducted in calculating net income (or net loss), (i) non-cash stock-based compensation expense, (ii) non-recurring restructuring charges approved by the Required Lenders, (iii) fees and expenses incurred in connection with the Bankruptcy Case (including professional fees), and (iv) other non-cash charges approved by the Administrative Agent, minus (f) to the extent added in calculating net income (or net loss), non-cash gains and extraordinary or non-recurring gains, all calculated on a consolidated basis. For purposes of the financial covenants set forth in Article VII, EBITDA shall be calculated on a rolling four (4)-week basis.
"Environmental Laws" means all applicable federal, state, and local statutes, rules, regulations, ordinances, orders, consent decrees, and other requirements relating to health, safety, or the protection of the environment, including, without limitation, the Comprehensive Environmental Response, Compensation, and Liability Act (42 U.S.C. §§ 9601 et seq.), the Resource Conservation and Recovery Act (42 U.S.C. §§ 6901 et seq.), the Federal Water Pollution Control Act (33 U.S.C. §§ 1251 et seq.), the Clean Air Act (42 U.S.C. §§ 7401 et seq.), the Toxic Substances Control Act (15 U.S.C. §§ 2601 et seq.), the Federal Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. §§ 136 et seq.), and any analogous state or local statutes or regulations.
"EPA" means the United States Environmental Protection Agency.
"Event of Default" has the meaning assigned to such term in Section 8.01 hereof.
"Exit Fee" means a fee equal to 1.00% of the Total Commitments (being $175,000,000 × 1.00% = $1,750,000), as more fully set forth in Section 2.08(c) hereof.
"Final Draw Availability" means $95,000,000 (being the Total Commitments of $175,000,000 minus the Interim Draw of $80,000,000), available for borrowing upon entry of the Final Order.
"Final Order" means a final order of the Bankruptcy Court, in form and substance acceptable to the Required Lenders in their reasonable discretion, approving the DIP Facility on a final basis pursuant to Sections 364(c) and 364(d) of the Bankruptcy Code and Bankruptcy Rule 4001, the target entry date for which is June 19, 2025 (being thirty-five (35) days following the Petition Date), which order shall have been entered on at least fourteen (14) days' notice to all required parties and as to which no stay is in effect.
"First Lien Credit Agreement" means that certain First Lien Term Loan Credit Agreement, dated as of November 12, 2021, by and among the Borrower, as borrower, and Prairie State Bank, N.A., as administrative agent (the "Pre-Petition First Lien Agent"), providing for a first lien term loan in an aggregate principal amount of $310,000,000, bearing interest at SOFR plus 450 basis points per annum, with a maturity date of November 12, 2026, secured by a first-priority lien on substantially all assets of the Borrower (subject to the split-collateral arrangement with respect to the ABL Credit Agreement), as such agreement may have been amended, restated, supplemented, or otherwise modified prior to the Petition Date.
"Forbearance Agreement" means the Forbearance Agreement, dated as of March 20, 2025, by and among the Borrower, Prairie State Bank, N.A. (as administrative agent under the First Lien Credit Agreement), and the lenders party thereto, which agreement expired by its terms on May 1, 2025.
"GAAP" means generally accepted accounting principles in the United States of America, as in effect from time to time, applied on a consistent basis.
"Governmental Authority" means the government of the United States of America or any other nation, or any political subdivision thereof, whether state, provincial, or local, and any agency, authority, instrumentality, regulatory body, court, central bank, or other entity exercising executive, legislative, judicial, taxing, regulatory, or administrative powers or functions of or pertaining to government.
"Guaranty" or "Guarantee" means, with respect to any Person, any obligation (other than an endorsement in the ordinary course of business for collection) of such Person guaranteeing or in effect guaranteeing any obligation of any other Person in any manner, whether directly or indirectly.
"Holloway & Birch" means Holloway & Birch LLP, the independent auditors of the Borrower, with Andrew Sorensen as the audit partner responsible for the Borrower's engagement.
"Indemnified Party" has the meaning assigned to such term in Section 10.03 hereof.
"intellectual Property" means all intellectual property and intellectual property rights, including all patents, patent applications, trademarks, trademark registrations, service marks, trade names, trade dress, copyrights, copyright registrations, domain names, trade secrets, know-how, technology, inventions, and licenses relating to any of the foregoing.
"Interest Period" means, with respect to any Loan, the period commencing on the Borrowing Date of such Loan and ending on the numerically corresponding day in the calendar month that is one (1) month thereafter (or such other period as may be agreed by the Borrower and the Administrative Agent), subject to customary adjustments for Business Days and month-end conventions.
"Interim Draw" means Loans in an aggregate principal amount of up to $80,000,000, available for borrowing upon entry of the Interim Order and prior to entry of the Final Order.
"Interim Order" means an interim order of the Bankruptcy Court, in form and substance acceptable to the Required Lenders in their reasonable discretion, approving the DIP Facility on an interim basis pursuant to Sections 364(c) and 364(d) of the Bankruptcy Code and Bankruptcy Rule 4001(c), the target entry date for which is May 22, 2025 (being five (5) Business Days following the Petition Date).
"Lender" or "Lenders" means, individually or collectively as the context requires, (a) Ironclad Capital Partners LP, (b) Ridgeline Opportunity Fund III LP, and (c) Bramblewood Credit Advisors LLC, together with their respective successors and permitted assigns.
"Lien" means any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or otherwise), charge, security interest, preference, priority, or other security agreement or preferential arrangement of any kind or nature whatsoever, including any conditional sale or other title retention agreement, any financing lease having substantially the same economic effect as any of the foregoing, and the filing of any financing statement under the Uniform Commercial Code or comparable law of any jurisdiction.
"Loan Documents" means, collectively, this Agreement, the DIP Promissory Notes, the Security Documents, the DIP Orders, any fee letters, and each other document, instrument, or agreement executed and delivered in connection herewith or therewith, as any of the foregoing may be amended, restated, supplemented, or otherwise modified from time to time.
"Loans" means the revolving loans made by the Lenders to the Borrower pursuant to Section 2.01 hereof.
"Material Adverse Change" or "Material Adverse Effect" means (a) a material adverse change in, or a material adverse effect on, the business, operations, properties, assets, liabilities, or financial condition of the Borrower, (b) a material impairment of the ability of the Borrower to perform any of its obligations under any Loan Document, or (c) a material adverse effect on the validity or enforceability of any Loan Document, on the rights, remedies, and benefits available to the Administrative Agent, the Collateral Agent, or any Lender thereunder, or on the priority or perfection of the DIP Liens; provided, that the filing of the Bankruptcy Case, the commencement of proceedings related thereto, and events of default under the Pre-Petition Debt Documents that occurred prior to the Petition Date and have been disclosed in the Loan Documents shall not, in and of themselves, constitute a Material Adverse Change.
"Maturity Date" means the earliest to occur of (a) May 15, 2026 (being twelve (12) months from the Petition Date), (b) the effective date of a confirmed plan of reorganization in the Bankruptcy Case, (c) the date of consummation of a sale of all or substantially all of the assets of the Borrower under Section 363 of the Bankruptcy Code, and (d) the date of acceleration of the Obligations following an Event of Default in accordance with Section 8.02 hereof.
"Milestones" has the meaning assigned to such term in Section 6.14 hereof.
"Minimum EBITDA" means, with respect to any rolling four (4)-week period, EBITDA of not less than negative $5,000,000 (i.e., an EBITDA loss not exceeding $5,000,000 for any rolling four (4)-week period), as more fully set forth in Section 7.01(c) hereof.
"Minimum Liquidity" means, at any time, the sum of (a) unrestricted cash and cash equivalents of the Borrower plus (b) the Availability, which sum shall not be less than $15,000,000, tested at all times, as more fully set forth in Section 7.01(a) hereof.
"Mortgages" means, collectively, the DIP Mortgages, Deeds of Trust, Assignments of Rents, and Security Agreements covering (a) the Cedar Falls Plant (1400 Prairie Ridge Drive, Cedar Falls, Iowa 50613), (b) the Decatur Plant (2200 Industrial Boulevard, Decatur, Illinois 62521), and (c) the Jonesboro Plant (815 County Road 740, Jonesboro, Arkansas 72401), and such other real property as may be designated by the Administrative Agent.
"Obligations" means all present and future indebtedness, obligations, and liabilities of the Borrower to the Administrative Agent, the Collateral Agent, and each Lender under this Agreement and the other Loan Documents, whether direct or indirect, absolute or contingent, now existing or hereafter arising, including, without limitation, all principal, interest (including post-petition interest, whether or not an allowed claim in the Bankruptcy Case), fees, costs, charges, expenses, indemnification obligations, and other amounts payable hereunder or thereunder.
"Officer's Certificate" means a certificate substantially in the form of Exhibit C hereto, executed by the Chief Executive Officer or the Chief Financial Officer of the Borrower.
"Perfection Certificate" means a certificate in substantially the form of Exhibit H hereto, identifying filing jurisdictions, organizational details, collateral locations, deposit accounts, intellectual property registrations, and such other information as the Collateral Agent may reasonably require.
"Permitted Liens" means (a) the DIP Liens, (b) the Adequate Protection Liens, (c) Liens for taxes not yet due or being contested in good faith by appropriate proceedings and for which adequate reserves have been established in accordance with GAAP, (d) statutory Liens of landlords, carriers, warehousemen, mechanics, materialmen, and other similar Liens imposed by law and arising in the ordinary course of business, (e) Liens existing on the Petition Date and disclosed on Schedule 6.02 hereto, and (f) such other Liens as may be approved by the Required Lenders in writing.
"Person" means any individual, corporation, limited liability company, partnership, joint venture, trust, unincorporated organization, governmental authority, or any other entity.
"Petition Date" means May 15, 2025, the date on which the Borrower filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code, commencing the Bankruptcy Case.
"Pre-Petition ABL Agent" means Prairie State Bank, N.A., in its capacity as administrative agent under the ABL Credit Agreement.
"Pre-Petition Collateral" means all assets of the Borrower that are subject to Liens securing the pre-petition indebtedness arising under the First Lien Credit Agreement and the ABL Credit Agreement as of the Petition Date.
"Pre-Petition Debt Documents" means, collectively, the First Lien Credit Agreement, the ABL Credit Agreement, the indenture governing the Senior Unsecured Notes, and all related documents, instruments, and agreements.
"Pre-Petition First Lien Agent" means Prairie State Bank, N.A., in its capacity as administrative agent under the First Lien Credit Agreement, with its principal office at 500 Main Street, Suite 1200, Kansas City, Missouri 64105.
"Pre-Petition Secured Parties" means, collectively, (a) Prairie State Bank, N.A., in its capacity as administrative agent under the First Lien Credit Agreement and the ABL Credit Agreement, (b) the lenders under the First Lien Credit Agreement, and (c) the lenders under the ABL Credit Agreement, including Hawthorn National Bank and Northland Savings Bank, F.S.B.
"Pro Rata Share" means, with respect to each Lender, the percentage obtained by dividing (a) such Lender's Commitment by (b) the Total Commitments, as set forth on Schedule 1.01(a) hereto.
"Registered Agent" means Capitol Registered Agents Inc., 400 E. Court Avenue, Suite 200, Des Moines, Iowa 50309, the registered agent of the Borrower in the State of Iowa.
"Required Lenders" means Lenders holding, in the aggregate, more than 50% of the Total Commitments (or, after the termination of the Commitments, more than 50% of the aggregate outstanding principal amount of the Loans).
"Roll-Up Amount" means $20,000,000 of Pre-Petition ABL Obligations to be rolled up into and deemed to constitute Obligations under this Agreement upon entry of the Final Order, as more fully set forth in Section 2.14 hereof.
"Security Documents" means, collectively, the DIP Security Agreement, the DIP Pledge Agreement, the DIP IP Security Agreement, the Mortgages, and any other document or instrument granting or perfecting a Lien in favor of the Collateral Agent for the benefit of the Administrative Agent and the Lenders.
"Senior Unsecured Notes" means the $84,200,000 aggregate principal amount of 9.50% Senior Unsecured Notes due March 15, 2027, issued on March 15, 2024, pursuant to an Indenture, dated as of March 15, 2024, between the Borrower and Meridian Trust Company, as indenture trustee.
"SOFR" means, with respect to any Business Day, the Secured Overnight Financing Rate published for such Business Day by the Federal Reserve Bank of New York (or any successor administrator) on the Federal Reserve Bank of New York's website (or any successor source).
"SOFR Floor" means 4.00% per annum. In no event shall SOFR, for purposes of calculating the Applicable Rate, be deemed to be less than the SOFR Floor.
"Solvency Certificate" means a certificate in substantially the form of Exhibit D hereto, executed by the Chief Financial Officer of the Borrower.
"Superpriority Claim" has the meaning assigned to such term in Section 2.10 hereof.
"Total Commitments" means $175,000,000, being the aggregate amount of the Commitments of all Lenders.
"UCC" means the Uniform Commercial Code as in effect from time to time in the applicable jurisdiction.
"Unused Line Fee" means a fee equal to 0.50% per annum on the average daily amount of undrawn Commitments, as more fully set forth in Section 2.08(b) hereof.
"U.S. Trustee" means the Office of the United States Trustee for Region 12, having responsibility for the Northern District of Iowa.
Section 1.02 — Rules of Interpretation
(a) Unless the context otherwise requires, (i) the definitions of terms herein shall apply equally to the singular and plural forms of the terms defined, (ii) whenever the context may require, any pronoun shall include the corresponding masculine, feminine, and neuter forms, (iii) the words "include," "includes," and "including" shall be deemed to be followed by the phrase "without limitation," (iv) the word "will" shall be construed to have the same meaning and effect as the word "shall," (v) the word "or" shall not be exclusive, and (vi) all references herein to "Articles," "Sections," "Exhibits," and "Schedules" shall be deemed references to Articles and Sections of, and Exhibits and Schedules to, this Agreement unless the context shall otherwise require.
(b) In the computation of periods of time from a specified date to a later specified date, the word "from" means "from and including," the word "to" means "to but excluding," and the word "through" means "to and including." If the last day of any period falls on a day that is not a Business Day, the period shall be extended to the next succeeding Business Day, except that, with respect to any Interest Period, if such extension would cause the Interest Period to extend into the next calendar month, the Interest Period shall end on the immediately preceding Business Day.
(c) All references to statutes and related regulations shall include any amendments of the same and any successor statutes and regulations. All references to Sections of the Bankruptcy Code shall be deemed to refer to the corresponding Sections of any successor statute.
(d) Unless otherwise specified, all accounting terms not specifically defined herein shall be construed in accordance with GAAP as in effect on the date of this Agreement, applied on a consistent basis.
(e) All references to dollar amounts shall mean lawful money of the United States of America.
(f) All references to the time of day shall be references to Eastern Time unless otherwise specified.
Section 1.03 — UCC Definitions
Unless otherwise defined herein, terms defined in the Iowa Uniform Commercial Code (Iowa Code Chapter 554, Article 9) that are used herein to describe or define Collateral or types of Collateral shall have the meanings assigned to such terms in the Iowa Uniform Commercial Code. To the extent that the definition of any category or type of Collateral is modified by any amendment, recodification, or revision to the Iowa Uniform Commercial Code after the date hereof, such modified definition shall apply to this Agreement automatically, without the need for amendment, unless the Administrative Agent otherwise determines.
Section 1.04 — Rounding
Any financial ratios or metrics required to be maintained by or calculated with respect to the Borrower pursuant to this Agreement shall be calculated by dividing the appropriate component by the other component, carrying the result to one place more than the number of places by which such ratio is expressed herein, and rounding the result up or down to the nearest number (with a rounding-up if there is no nearest number).
Section 1.05 — Times of Day
Unless otherwise specified, all references herein to times of day shall be references to Eastern Time (New York City time).
Section 1.06 — Rates
(a) SOFR Conventions. The Administrative Agent does not warrant, and shall not be responsible for, and no Lender shall be responsible for, the administration of, submission of, or any other matter related to the rates in the definition of "SOFR" or with respect to any comparable or successor rate thereto or replacement rate therefor.
(b) Benchmark Replacement. Notwithstanding anything to the contrary herein or in any other Loan Document, if a Benchmark Transition Event and its related Benchmark Replacement Date have occurred, then the applicable Benchmark Replacement shall replace the then-current Benchmark for all purposes hereunder and under any Loan Document in respect of any setting of such Benchmark on such day and all subsequent settings, without any amendment to, or further action or consent of any other party to, this Agreement or any other Loan Document, subject to the provisions of Section 2.15. The Administrative Agent shall have the right to make Benchmark Replacement Conforming Changes from time to time and, notwithstanding anything to the contrary herein or in any other Loan Document, any amendments implementing such Benchmark Replacement Conforming Changes shall become effective without any further action or consent of any other party to this Agreement or any other Loan Document.
ARTICLE II — THE DIP FACILITY
Section 2.01 — Commitments
(a) Subject to the terms and conditions set forth herein and in the DIP Orders, each Lender severally (and not jointly) agrees to make revolving loans (each, a "Loan" and collectively, the "Loans") to the Borrower from time to time during the period from the Closing Date to the Maturity Date in an aggregate principal amount at any one time outstanding not to exceed such Lender's Commitment. The Commitments as of the Closing Date are as follows:
(b) The DIP Facility is a revolving credit facility, and, subject to the terms, conditions, and limitations set forth herein, amounts repaid or prepaid may be reborrowed at any time prior to the Maturity Date, provided that the aggregate outstanding principal amount of all Loans shall not at any time exceed the Total Commitments then in effect.
(c) Each Lender's obligation to make Loans hereunder is several and not joint. The failure of any Lender to make any Loan required to be made by it on any Borrowing Date shall not relieve any other Lender of its obligation to make its Loan on such Borrowing Date, and no Lender shall be responsible for the failure of any other Lender to make any Loan required to be made by such other Lender.
Section 2.02 — Borrowing Procedures
(a) The Borrower shall deliver a Borrowing Request to the Administrative Agent not later than 1:00 p.m. (Eastern Time) at least two (2) Business Days prior to the proposed Borrowing Date. Each Borrowing Request shall be irrevocable and shall specify (i) the proposed Borrowing Date, (ii) the aggregate principal amount of the proposed Borrowing, (iii) the Interest Period applicable thereto, and (iv) the deposit account of the Borrower to which funds should be disbursed.
(b) Each Borrowing shall be in a minimum aggregate principal amount of $5,000,000 and in integral multiples of $1,000,000 in excess thereof, unless the Borrowing is for the entire remaining Availability.
(c) Promptly following receipt of a Borrowing Request, the Administrative Agent shall notify each Lender of the details thereof, including such Lender's Pro Rata Share of the requested Borrowing. Each Lender shall make its Pro Rata Share of the requested Borrowing available to the Administrative Agent in immediately available funds at the Administrative Agent's office no later than 12:00 noon (Eastern Time) on the applicable Borrowing Date. Subject to receipt of such funds, the Administrative Agent shall credit the aggregate amount received from the Lenders to the Borrower's designated deposit account on the applicable Borrowing Date.
(d) Unless the Administrative Agent shall have received notice from a Lender prior to 11:00 a.m. (Eastern Time) on the date of any proposed Borrowing that such Lender will not make available to the Administrative Agent such Lender's Pro Rata Share of such Borrowing, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with this Section 2.02 and may, in reliance upon such assumption, make available to the Borrower a corresponding amount. In such event, if a Lender has not in fact made its Pro Rata Share of the applicable Borrowing available to the Administrative Agent, then the applicable Lender and the Borrower severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount, together with interest thereon, for each day from and including the date such amount is made available to the Borrower to but excluding the date of payment to the Administrative Agent, at (i) in the case of a payment to be made by such Lender, the greater of the Federal Funds Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation, and (ii) in the case of a payment to be made by the Borrower, the Applicable Rate.
Section 2.03 — Interim and Final Availability
(a) Interim Availability. Upon entry of the Interim Order by the Bankruptcy Court, the Borrower may borrow Loans in an aggregate principal amount of up to $80,000,000 (the "Interim Draw"). The initial draw under the DIP Facility shall be made on the Closing Date in the amount specified in the Borrowing Request delivered in accordance with Section 4.01(d), which is anticipated to be $80,000,000. No draws shall be made prior to entry of the Interim Order.
(b) Final Availability. Upon entry of the Final Order by the Bankruptcy Court, the Borrower may borrow additional Loans in an aggregate principal amount of up to $95,000,000 (being the Total Commitments of $175,000,000 minus the Interim Draw of $80,000,000), such that the aggregate amount available under the DIP Facility following entry of the Final Order shall be $175,000,000. No borrowings in excess of the Interim Draw shall be made prior to entry of the Final Order.
(c) For the avoidance of doubt, no Loans shall be made, and no Borrowing Request shall be effective, prior to the entry of the Interim Order by the Bankruptcy Court.
Section 2.04 — Interest
(a) Applicable Rate. Subject to subsection (d) below, each Loan shall bear interest at a per annum rate equal to SOFR (subject to the SOFR Floor) plus the Applicable Margin of 850 basis points (8.50%).
(b) SOFR Floor. Notwithstanding anything to the contrary herein, in no event shall SOFR, for purposes of calculating the Applicable Rate, be deemed to be less than 4.00% per annum (the "SOFR Floor"). Accordingly, the minimum all-in interest rate applicable to the Loans shall be 12.50% per annum (being the SOFR Floor of 4.00% plus the Applicable Margin of 8.50%).
(c) Interest Payment Dates. Interest accrued on each Loan shall be payable monthly in arrears on the first Business Day of each calendar month, commencing on the first such date to occur after the Closing Date, and on the Maturity Date. Interest shall also be payable upon any prepayment of principal, to the extent accrued on the amount being prepaid, and upon acceleration of the Obligations.
(d) Default Interest. Upon the occurrence and during the continuance of an Event of Default, all outstanding Obligations (including, without limitation, overdue principal, overdue interest, and any overdue fees) shall bear interest at the Default Rate, being SOFR (subject to the SOFR Floor) plus 1,050 basis points per annum (the Applicable Margin of 850 basis points plus an additional 200 basis points). Default interest shall accrue from the date of the Event of Default until such Event of Default is cured or waived and shall be payable on demand.
(e) Computation. All interest hereunder shall be computed on the basis of a year of 360 days for the actual number of days elapsed (including the first day but excluding the last day) in the period for which interest is payable. Each determination by the Administrative Agent of an interest rate or fee hereunder shall be conclusive and binding for all purposes, absent manifest error.
Section 2.05 — Repayment and Prepayment
(a) Maturity Repayment. The Borrower shall repay all outstanding principal of the Loans, together with all accrued and unpaid interest thereon and all other Obligations, on the Maturity Date. The aggregate outstanding principal amount of all Loans, together with accrued and unpaid interest and all other Obligations, shall be due and payable in full in cash on the Maturity Date without further demand, presentment, protest, or notice of any kind, all of which are hereby expressly waived by the Borrower.
(b) Voluntary Prepayment. The Borrower may prepay the outstanding principal amount of the Loans, in whole or in part, at any time and from time to time, without premium or penalty (other than the Exit Fee payable in accordance with Section 2.08(c)), upon not less than three (3) Business Days' prior written notice to the Administrative Agent (which notice shall be irrevocable and shall specify the date and aggregate principal amount of the prepayment). Each partial voluntary prepayment shall be in a minimum aggregate principal amount of $5,000,000 and in integral multiples of $1,000,000 in excess thereof. All voluntary prepayments shall be accompanied by accrued and unpaid interest on the amount prepaid through the date of prepayment.
(c) Mandatory Prepayment. The Borrower shall prepay the outstanding principal amount of the Loans (together with accrued and unpaid interest on the amount prepaid) upon receipt by the Borrower of:
(i) Net cash proceeds from any casualty event or condemnation proceeding in excess of $2,500,000 per occurrence, to the extent such proceeds are not reinvested in the business within 180 days of receipt (or committed to be reinvested, with such reinvestment completed within 360 days of receipt);
(ii) Net cash proceeds from any sale, transfer, or other disposition of assets of the Borrower (other than sales of inventory in the ordinary course of business and dispositions of obsolete equipment with a fair market value not exceeding $500,000 per occurrence), to the extent such proceeds are not reinvested in productive assets of the business within 180 days of receipt;
(iii) Extraordinary receipts, including tax refunds, insurance recoveries (other than those described in clause (i) above), indemnity payments, litigation settlements, and other non-recurring receipts, in an aggregate amount exceeding $1,000,000 during any fiscal year; and
(iv) Any proceeds received from the issuance of indebtedness not permitted under Section 6.01.
(d) Application of Prepayments. All prepayments under this Section 2.05 shall be applied to the Loans on a pro rata basis among the Lenders in accordance with their respective Pro Rata Shares.
Section 2.06 — Reduction and Termination of Commitments
(a) Voluntary Reduction. The Borrower may, upon not less than five (5) Business Days' prior irrevocable written notice to the Administrative Agent, permanently reduce the Total Commitments in whole or in part, provided that (i) any such partial reduction shall be in a minimum aggregate amount of $10,000,000 and in integral multiples of $1,000,000 in excess thereof, and (ii) after giving effect to any such reduction, the Total Commitments shall not be less than the aggregate outstanding principal amount of all Loans at such time. Each reduction of the Total Commitments shall be applied to the Commitments of the Lenders on a pro rata basis.
(b) Automatic Termination. The Commitments shall automatically and permanently terminate on the Maturity Date.
(c) Termination Upon Event of Default. Upon acceleration of the Obligations in accordance with Section 8.02, the Commitments shall automatically and permanently terminate.
Section 2.07 — Notes
Upon the written request of any Lender made through the Administrative Agent, the Borrower shall execute and deliver to such Lender a DIP Promissory Note, in substantially the form of Exhibit F hereto, payable to the order of such Lender in the principal amount of its Commitment. Each DIP Promissory Note shall evidence the Loans made by the applicable Lender and shall be governed by the terms of this Agreement. The anticipated DIP Promissory Notes are as follows:
(i) DIP Promissory Note payable to the order of Ironclad Capital Partners LP in the principal amount of $100,000,000;
(ii) DIP Promissory Note payable to the order of Ridgeline Opportunity Fund III LP in the principal amount of $50,000,000; and
(iii) DIP Promissory Note payable to the order of Bramblewood Credit Advisors LLC in the principal amount of $25,000,000.
Each Lender's Loans and the interest thereon shall at all times (including after any assignment pursuant to Section 10.04) be evidenced by one or more accounts or records maintained by such Lender and by the Administrative Agent in the ordinary course of business. The entries made in such accounts or records shall be prima facie evidence of the existence and amounts of the Obligations recorded therein; provided that the failure of any Lender or the Administrative Agent to maintain such accounts or records or any error therein shall not in any manner affect the Obligations of the Borrower to repay the Loans in accordance with the terms hereof.
Section 2.08 — Fees
(a) Closing Fee. The Borrower shall pay to the Administrative Agent, for the pro rata benefit of the Lenders, a closing fee (the "Closing Fee") equal to 2.00% of the Total Commitments, which equals $3,500,000 (being $175,000,000 multiplied by 2.00%). The Closing Fee shall be fully earned upon execution of this Agreement and shall be due and payable in full in cash on the Closing Date. The Closing Fee, once paid, shall be non-refundable under any circumstances. The Closing Fee shall constitute an allowed administrative expense of the Borrower's estate under Section 503(b) of the Bankruptcy Code.
(b) Unused Line Fee. The Borrower shall pay to the Administrative Agent, for the pro rata benefit of the Lenders, an unused line fee (the "Unused Line Fee") equal to 0.50% per annum on the average daily amount by which the Total Commitments then in effect exceed the aggregate outstanding principal amount of all Loans during the applicable period. The Unused Line Fee shall accrue from the Closing Date and shall be payable quarterly in arrears on the last Business Day of each calendar quarter and on the Maturity Date or any earlier date on which the Commitments are terminated. The Unused Line Fee shall be computed on the basis of a year of 360 days for the actual number of days elapsed. The Unused Line Fee shall constitute an allowed administrative expense of the Borrower's estate under Section 503(b) of the Bankruptcy Code.
(c) Exit Fee. The Borrower shall pay to the Administrative Agent, for the pro rata benefit of the Lenders, an exit fee (the "Exit Fee") equal to 1.00% of the Total Commitments, which equals $1,750,000 (being $175,000,000 multiplied by 1.00%). The Exit Fee shall be fully earned upon execution of this Agreement and shall be due and payable in full in cash on the Maturity Date or any earlier termination of this Agreement for any reason (including, without limitation, upon acceleration of the Obligations following an Event of Default). The Exit Fee, once earned, shall be non-refundable under any circumstances. The Exit Fee shall constitute an allowed administrative expense of the Borrower's estate under Section 503(b) of the Bankruptcy Code.
(d) Agent Fees. The Borrower shall pay to the Administrative Agent and the Collateral Agent certain agency fees as separately agreed in a fee letter entered into between the Borrower, the Administrative Agent, and the Collateral Agent (the "Agent Fee Letter"). The Agent Fee Letter and the fees payable thereunder are incorporated herein by reference. Such fees shall constitute allowed administrative expenses of the Borrower's estate under Section 503(b) of the Bankruptcy Code.
Section 2.09 — Pro Rata Treatment
Except as otherwise expressly provided in this Agreement, all payments of principal, interest, and fees hereunder shall be made to the Lenders on a pro rata basis in accordance with their respective Pro Rata Shares as set forth on Schedule 1.01(a) hereto. Each Lender's Pro Rata Share of any Borrowing shall be determined by multiplying the aggregate amount of such Borrowing by such Lender's Pro Rata Share. All reductions of the Commitments shall be applied to the Commitment of each Lender pro rata.
Section 2.10 — DIP Superpriority Claims
All Obligations arising under this Agreement and the other Loan Documents shall, subject only to the Carve-Out, constitute allowed superpriority administrative expense claims (the "Superpriority Claim" or "DIP Superpriority Claim") against the Borrower and the Borrower's estate under Section 364(c)(1) of the Bankruptcy Code, with priority in payment over any and all other administrative expense claims, diminution claims, and all other claims against the Borrower and the Borrower's estate of any kind or nature whatsoever, including, without limitation, administrative expense claims of the kind specified in or arising or ordered pursuant to Sections 105, 326, 328, 330, 331, 365, 503(b), 506(c), 507(a), 507(b), 546(c), 726, and 1114 of the Bankruptcy Code, whether or not such claims may become allowed claims in the Bankruptcy Case and whether or not such claims may arise or accrue after the Petition Date. The DIP Superpriority Claim shall at all times be senior to and have priority over all other administrative expense claims and superpriority claims, subject only to the Carve-Out.
Section 2.11 — Carve-Out
(a) Pre-Trigger Carve-Out. All accrued but unpaid professional fees and disbursements of estate professionals retained by the Borrower or any official committee of unsecured creditors pursuant to Sections 327 or 1103 of the Bankruptcy Code, incurred at any time prior to the delivery of a Carve-Out Trigger Notice by the Administrative Agent, shall not be subject to any cap or limitation and shall be senior to the DIP Liens and the DIP Superpriority Claim (the "Pre-Trigger Carve-Out"). For the avoidance of doubt, the Pre-Trigger Carve-Out shall be uncapped, provided that all such fees and disbursements have been incurred in accordance with the Budget (subject to the permitted variance).
(b) Post-Trigger Carve-Out. Following delivery of a Carve-Out Trigger Notice by the Administrative Agent to the Borrower (with copies to all retained professionals and the U.S. Trustee), the following amounts shall constitute the "Post-Trigger Carve-Out" and shall be senior to the DIP Liens and the DIP Superpriority Claim:
(i) an aggregate amount not to exceed $2,500,000 for fees and expenses of estate professionals (including professionals retained by the Borrower under Section 327 of the Bankruptcy Code and professionals retained by the Committee under Section 1103 of the Bankruptcy Code) incurred after delivery of such Carve-Out Trigger Notice; and
(ii) an aggregate amount not to exceed $500,000 for fees payable to the United States Trustee under 28 U.S.C. § 1930(a)(6) and to the Clerk of the Bankruptcy Court.
The aggregate Post-Trigger Carve-Out shall not exceed $3,000,000 under any circumstances. For the avoidance of doubt, the Post-Trigger Carve-Out shall include fees and expenses incurred after the delivery of the Carve-Out Trigger Notice to the extent such fees and expenses are necessary to preserve, protect, and maximize the value of the Borrower's estate, including fees incurred in connection with the investigation of claims against the Lenders or the Administrative Agent, provided that such investigative fees shall not exceed $100,000 in the aggregate.
(c) Carve-Out Trigger Notice. A "Carve-Out Trigger Notice" means a written notice from the Administrative Agent (acting at the direction of the Required Lenders) to the Borrower, with copies to all retained estate professionals, counsel to the Committee, and the U.S. Trustee, following the occurrence and during the continuance of an Event of Default or the termination of the Commitments, stating that the Post-Trigger Carve-Out has been invoked.
(d) Carve-Out Priority. The Carve-Out (comprising both the Pre-Trigger Carve-Out and the Post-Trigger Carve-Out) shall be senior to and have priority over the DIP Liens, the DIP Superpriority Claim, the Adequate Protection Liens, and the claims of the Pre-Petition Secured Parties. No portion of the Carve-Out shall be used to pay professional fees incurred in connection with challenging the validity, enforceability, priority, or extent of the DIP Liens or the DIP Superpriority Claim, except as expressly set forth in clause (b)(i) above with respect to the limited investigative fees.
Section 2.12 — Application of Payments
All amounts received by the Administrative Agent or the Collateral Agent in respect of the Obligations (whether from voluntary or mandatory prepayments, from the exercise of remedies, from the application of Collateral proceeds, or otherwise) shall be applied in the following order of priority:
First, to the payment of all accrued and unpaid fees and expenses of the Administrative Agent and the Collateral Agent (including fees and disbursements of counsel to the Administrative Agent, Harmon & Keach LLP);
Second, to the payment of all accrued and unpaid interest on the Loans (including, to the extent permitted by applicable law, default interest);
Third, to the repayment of the outstanding principal amount of the Loans, applied on a pro rata basis among the Lenders;
Fourth, to the payment of all other Obligations then due and payable (including the Exit Fee, if applicable, and any indemnification obligations); and
Fifth, to the establishment and maintenance of a Carve-Out reserve in an amount equal to the then-estimated Post-Trigger Carve-Out.
Any amounts remaining after application in accordance with the foregoing waterfall shall be returned to the Borrower or to such other Person as may be entitled thereto under applicable law or order of the Bankruptcy Court.