1006-00002 · Crestline Packaging Solutions LLC · DIP Financing

proposed-interim-dip-order.docx DOCUMENT Finance & Banking

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UNITED STATES BANKRUPTCY COURT FOR THE NORTHERN DISTRICT OF OHIO EASTERN DIVISION

^1 The Debtors in these jointly administered Chapter 11 cases, along with the last four digits of each Debtor's federal tax identification number, are: Crestline Packaging Solutions LLC (2094) and CPS Holdings Inc. (1657). The Debtors' corporate headquarters is located at 3550 Gilchrist Road, Akron, Ohio 44312.

INTERIM ORDER (I) AUTHORIZING THE DEBTORS TO OBTAIN POSTPETITION FINANCING PURSUANT TO 11 U.S.C. §§ 105, 361, 362, 363, 364(c)(1), 364(c)(2), 364(c)(3), AND 364(d), (II) GRANTING LIENS AND SUPERPRIORITY ADMINISTRATIVE EXPENSE CLAIMS, (III) AUTHORIZING THE USE OF CASH COLLATERAL, (IV) GRANTING ADEQUATE PROTECTION TO PREPETITION SECURED LENDERS, AND (V) SCHEDULING A FINAL HEARING

Date Entered: June 24, 2022

Upon consideration of the motion (Dkt. No. 15) (the "DIP Motion") filed by the above-captioned debtors and debtors in possession (collectively, the "Debtors") seeking, pursuant to sections 105, 361, 362, 363, 364(c)(1), 364(c)(2), 364(c)(3), and 364(d) of title 11 of the United States Code, 11 U.S.C. §§ 101–1532 (the "Bankruptcy Code"), and Rules 2002, 4001(b), 4001(c), 6004, and 9014 of the Federal Rules of Bankruptcy Procedure (the "Bankruptcy Rules"), entry of an interim order (this "Interim Order"): (i) authorizing the Debtors to obtain postpetition financing; (ii) granting liens and superpriority administrative expense status to the DIP Agent and the DIP Lenders (each as defined below); (iii) authorizing the Debtors to use cash collateral of the prepetition secured lenders; (iv) granting adequate protection to the prepetition secured lenders; and (v) scheduling a final hearing on the DIP Motion; and the Court having reviewed the DIP Motion, the DIP Credit Agreement (as defined below), the Declaration of Dana Kowalski, the Chief Financial Officer of Crestline Packaging Solutions LLC (Dkt. No. 16), and all other pleadings, exhibits, and evidence submitted in connection therewith; and the Court having conducted an interim hearing on the DIP Motion on June 24, 2022 (the "Interim Hearing"); and due and sufficient notice of the DIP Motion and the Interim Hearing having been given under the circumstances; and upon the record made by the Debtors at the Interim Hearing; and after due deliberation thereon; and good and sufficient cause appearing therefor;

RECITALS

The Court finds and determines as follows:

A. Filing and Jurisdiction. On June 20, 2022 (the "Petition Date"), the above-captioned debtors—Crestline Packaging Solutions LLC, an Ohio limited liability company (EIN 31-1782094), and CPS Holdings Inc., a Delaware corporation (EIN 82-3491657) (collectively, the "Debtors")—filed voluntary petitions for relief under chapter 11 of the Bankruptcy Code in this Court, commencing the above-captioned chapter 11 cases (the "Chapter 11 Cases"). The Debtors continue to operate their businesses and manage their properties as debtors in possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code. No trustee, examiner, or official committee of unsecured creditors has been appointed in these Chapter 11 Cases as of the date hereof. This Court has jurisdiction over this matter pursuant to 28 U.S.C. §§ 157 and 1334 and the General Order of Reference entered by the United States District Court for the Northern District of Ohio. This is a core proceeding within the meaning of 28 U.S.C. § 157(b)(2). Venue of these Chapter 11 Cases and this proceeding is proper in this District pursuant to 28 U.S.C. §§ 1408 and 1409.

B. The DIP Motion. On June 20, 2022, the Debtors filed the DIP Motion seeking, inter alia, interim and final approval of postpetition financing, authorization to use cash collateral, and the granting of adequate protection to prepetition secured lenders. The DIP Motion was supported by the Declaration of Dana Kowalski, the Chief Financial Officer of Crestline Packaging Solutions LLC, filed contemporaneously with the Debtors' first day motions (Dkt. No. 16) (the "Kowalski Declaration"), which set forth the facts and circumstances giving rise to the Debtors' need for postpetition financing and the terms upon which such financing was negotiated and obtained.

C. Prepetition Capital Structure. The Court has been advised of the following with respect to the Debtors' prepetition capital structure:

(i) First Lien Credit Agreement. Crestline Packaging Solutions LLC, as borrower, and CPS Holdings Inc., as guarantor, are parties to that certain First Lien Credit Agreement dated as of October 13, 2017 (as amended, restated, supplemented, or otherwise modified from time to time prior to the Petition Date, the "First Lien Credit Agreement"), among Crestline Packaging Solutions LLC, CPS Holdings Inc., Ridgeline National Bank, N.A., as administrative agent and collateral agent (in such capacity, the "Prepetition First Lien Agent"), and the several financial institutions and other entities from time to time party thereto as lenders (collectively, the "Prepetition First Lien Lenders"). The First Lien Credit Agreement provides for: (a) a first lien term loan facility in the original principal amount of $175,000,000 (the "First Lien Term Loan"), of which approximately $158,700,000 in aggregate principal amount remains outstanding as of the Petition Date, bearing interest at the Secured Overnight Financing Rate ("SOFR") plus 425 basis points per annum, with a maturity date of October 13, 2024; and (b) a revolving credit facility with a total commitment of $40,000,000 (the "First Lien Revolver"), of which approximately $32,600,000 was drawn as of the Petition Date, bearing interest at SOFR plus 375 basis points per annum, with a maturity date of October 13, 2022. As of the Petition Date, the aggregate outstanding principal amount of all obligations under the First Lien Credit Agreement was approximately $191,300,000 (inclusive of the $158,700,000 outstanding under the First Lien Term Loan and the $32,600,000 outstanding under the First Lien Revolver), plus accrued and unpaid interest, fees, and expenses (collectively, the "Prepetition First Lien Obligations").

(ii) Second Lien Notes Indenture. Crestline Packaging Solutions LLC, as issuer, and CPS Holdings Inc., as guarantor, are parties to that certain Indenture dated as of October 13, 2017 (the "Second Lien Indenture"), among Crestline Packaging Solutions LLC, CPS Holdings Inc., and Continental Fiduciary Trust Company, as indenture trustee (in such capacity, the "Second Lien Indenture Trustee"), governing the 9.75% Senior Secured Second Lien Notes due 2025 (CUSIP 22761TAA3) (the "Second Lien Notes") in the original aggregate principal amount of $60,000,000. As of the Petition Date, approximately $56,000,000 in aggregate principal amount of Second Lien Notes remains outstanding (reflecting $4,000,000 in open-market repurchases completed during the fiscal year ended December 31, 2019), plus approximately $3,900,000 in accrued and unpaid interest (including default rate interest) (collectively, the "Prepetition Second Lien Obligations," and together with the Prepetition First Lien Obligations, the "Prepetition Secured Obligations").

(iii) Total Funded Debt. As of the Petition Date, the Debtors' total funded indebtedness was approximately $247,300,000, consisting of (a) the Prepetition First Lien Obligations of approximately $191,300,000, and (b) the Prepetition Second Lien Obligations of approximately $59,900,000 (inclusive of accrued and unpaid interest).

(iv) Prepetition Liens and Intercreditor Agreement. The obligations under the First Lien Credit Agreement are secured by first-priority liens and security interests on and in substantially all assets of the Debtors, whether now owned or hereafter acquired (the "Prepetition First Lien Collateral"). The obligations under the Second Lien Indenture are secured by second-priority liens and security interests on and in the same collateral (the "Prepetition Second Lien Collateral," and together with the Prepetition First Lien Collateral, the "Prepetition Collateral"). The relative priority of the liens and security interests of the Prepetition First Lien Lenders and the holders of the Second Lien Notes (the "Prepetition Second Lien Noteholders," and together with the Prepetition First Lien Lenders, the "Prepetition Secured Lenders") is governed by that certain Intercreditor Agreement dated as of October 13, 2017, among Ridgeline National Bank, N.A., as first lien agent, and Continental Fiduciary Trust Company, as second lien collateral agent (the "Intercreditor Agreement").

D. Events of Default. Prior to the Petition Date, the Debtors breached the maximum total leverage ratio financial covenant set forth in Section 7.11 of the First Lien Credit Agreement for the fiscal quarter ended March 31, 2022. As of the end of the first quarter of 2022, the Debtors' actual total leverage ratio was 8.50x (calculated as Total Net Debt of approximately $247,300,000 divided by trailing twelve-month adjusted EBITDA of approximately $29,100,000), as compared to the maximum permitted total leverage ratio of 5.75x—a breach of 2.75 turns, representing a 47.8% excess over the permitted level. On April 22, 2022, Ridgeline National Bank, N.A., in its capacity as administrative agent under the First Lien Credit Agreement, delivered a Notice of Default to the Debtors, which notice triggered cross-default provisions under Section 6.01(e) of the Second Lien Indenture. On May 18, 2022, the Debtors, Ridgeline National Bank, N.A., and consenting first lien lenders holding approximately 68% of the outstanding principal amount of the First Lien Term Loan entered into a Forbearance Agreement (the "Forbearance Agreement"), pursuant to which the consenting lenders agreed to forbear from exercising certain rights and remedies under the First Lien Credit Agreement pending the commencement of these Chapter 11 Cases.

E. Need for DIP Financing. The Debtors have an immediate, critical, and ongoing need for postpetition financing to, among other things, fund continuing operations at their four manufacturing plants located in Akron, Ohio; Evansville, Indiana; Baton Rouge, Louisiana; and Ravenna, Ohio; maintain critical business relationships with customers, vendors, and suppliers; pay approximately 1,420 employees; satisfy the administrative costs of these Chapter 11 Cases; and generally preserve the going-concern value of the Debtors' businesses during the pendency of the prepackaged plan process. The Debtors manufacture a range of industrial packaging products, including high-density polyethylene ("HDPE") drums, intermediate bulk containers ("IBCs"), steel pails, and specialty containment vessels, serving customers in the chemical, petrochemical, and agricultural sectors. Without the DIP Facility (as defined below), the Debtors' estates will suffer immediate and irreparable harm, the Debtors' businesses will be forced to cease operations, and the going-concern value of the Debtors' assets will be severely and irrevocably diminished, to the detriment of all creditors and parties in interest.

F. The DIP Facility. The Debtors have negotiated a postpetition financing facility pursuant to that certain Debtor-in-Possession Credit Agreement dated as of June 24, 2022 (together with all exhibits, schedules, annexes, and attachments thereto, as may be amended, restated, supplemented, or otherwise modified from time to time, the "DIP Credit Agreement"), among Crestline Packaging Solutions LLC, as borrower, CPS Holdings Inc., as guarantor, Ridgeline National Bank, N.A., as administrative agent (in such capacity, the "DIP Agent"), and the several financial institutions from time to time party thereto as lenders (the "DIP Lenders," which DIP Lenders consist of certain consenting first lien lenders under the First Lien Credit Agreement). The DIP Credit Agreement provides for a senior secured superpriority revolving credit facility in an aggregate principal amount of $30,000,000 (the "DIP Facility"). The DIP Facility bears interest at SOFR plus 500 basis points per annum, with a default rate of an additional 200 basis points per annum. The Debtors shall pay a commitment fee of 1.50% of the total DIP Facility commitment amount ($450,000), due and payable on the closing date, and a closing fee of 2.00% of the total DIP Facility commitment amount ($600,000), likewise due and payable on the closing date. The DIP Facility matures on the earlier of (a) 120 days after the Petition Date (i.e., October 18, 2022) and (b) the effective date of a confirmed plan of reorganization. The DIP Facility is subject to a thirteen-week rolling cash flow budget (the "DIP Budget"), with a permitted variance of plus or minus 15% on aggregate disbursements, tested on a bi-weekly basis. A copy of the initial DIP Budget is attached hereto as Exhibit A.

G. Interim Hearing. An interim hearing on the DIP Motion was held before this Court on June 24, 2022 (the "Interim Hearing"), at which the Debtors presented evidence and argument in support of the DIP Motion. The Court has reviewed the DIP Motion, the DIP Credit Agreement, the Kowalski Declaration, the DIP Budget, and all other evidence and arguments presented at the Interim Hearing. Notice of the DIP Motion and the Interim Hearing was provided to: (a) the Office of the United States Trustee, Region 9, Howard M. Metzenbaum U.S. Courthouse, 201 Superior Avenue, Cleveland, Ohio 44114; (b) Ridgeline National Bank, N.A., as administrative agent and collateral agent under the First Lien Credit Agreement; (c) Continental Fiduciary Trust Company, as indenture trustee under the Second Lien Indenture; (d) Hargrove, Mitchell & Saunders LLP, counsel to the Ad Hoc Group of First Lien Lenders; (e) Pemberton & Locke LLP, counsel to the Ad Hoc Group of Second Lien Noteholders; (f) the holders of the twenty (20) largest unsecured claims against the Debtors; and (g) all parties that have filed notices of appearance and requests for service of papers in these Chapter 11 Cases. The notice so provided was sufficient and adequate under the circumstances and in compliance with the Bankruptcy Code, the Bankruptcy Rules (including Rules 2002, 4001(b), and 4001(c)), the Local Rules of this Court, and all applicable orders of this Court.

H. Good Cause Finding. Good cause has been shown for entry of this Interim Order pursuant to Bankruptcy Rule 4001(c)(2). The terms of the DIP Facility, as set forth in the DIP Credit Agreement, are fair, reasonable, and reflect the best terms available to the Debtors under the circumstances. The DIP Facility was negotiated in good faith and at arm's length among the Debtors, the DIP Agent, and the DIP Lenders, and each of the parties acted without coercion, duress, or undue influence. The Debtors have been unable to obtain unsecured credit allowable under section 503(b)(1) of the Bankruptcy Code, or credit secured solely under section 364(c)(1) of the Bankruptcy Code, sufficient to meet the Debtors' operational and administrative needs. The Debtors have demonstrated sound business justification for the entry into the DIP Facility and for the granting of the DIP Liens and DIP Superpriority Claims (each as defined below) pursuant to sections 364(c) and 364(d) of the Bankruptcy Code.

FINDINGS OF FACT AND CONCLUSIONS OF LAW

Based upon the entire record before the Court, including the DIP Motion, the Kowalski Declaration, the DIP Credit Agreement, the DIP Budget, and all other pleadings, evidence, and arguments of counsel presented at the Interim Hearing, the Court makes the following findings of fact and conclusions of law:

1. Petition and Estate. The Debtors filed voluntary petitions for relief under chapter 11 of the Bankruptcy Code on June 20, 2022, and are operating their businesses and managing their properties as debtors in possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code. No trustee or examiner has been appointed in these Chapter 11 Cases.

2. Jurisdiction, Venue, and Core Proceeding. This Court has subject matter jurisdiction over this matter pursuant to 28 U.S.C. §§ 157 and 1334. This is a core proceeding within the meaning of 28 U.S.C. § 157(b)(2), including, without limitation, subparagraphs (A), (D), (G), (M), and (O) thereof. Venue of these Chapter 11 Cases and this proceeding is proper in this District pursuant to 28 U.S.C. §§ 1408 and 1409. The Court has the authority to enter a final order consistent with Article III of the United States Constitution.

3. Notice Sufficient. The notice given by the Debtors of the DIP Motion, the Interim Hearing, and the relief requested therein was adequate and sufficient under the circumstances, the Bankruptcy Code, the Bankruptcy Rules (including Rules 2002, 4001(b), and 4001(c)), the Local Rules of this Court, and all other applicable requirements. No further or other notice of the DIP Motion, the Interim Hearing, or the relief granted herein is required.

4. Need for DIP Financing. An immediate and critical need exists for the Debtors to obtain postpetition financing to continue the operation of their businesses in the ordinary course, fund the administration of the Chapter 11 Cases, satisfy payroll and employee benefit obligations, maintain relationships with customers, vendors, and suppliers, and preserve the going-concern value of the Debtors' estates for the benefit of all stakeholders. The Debtors' existing cash resources, together with cash generated from ongoing operations, are insufficient to permit the Debtors to operate their businesses, meet their obligations, and administer these Chapter 11 Cases absent the DIP Facility. The ability of the Debtors to fund their operations and administer these cases is essential to the Debtors' reorganization efforts and to the maximization of value for the benefit of the Debtors' estates, their creditors, and other parties in interest. Time is of the essence in obtaining the DIP Facility, and any delay in obtaining the relief requested in the DIP Motion would cause immediate and irreparable harm to the Debtors and their estates.

5. Inability to Obtain Credit on Other Terms. The Debtors have been unable to obtain sufficient postpetition financing on terms more favorable than those set forth in the DIP Credit Agreement. The Debtors are unable to obtain unsecured credit allowable as an administrative expense under section 503(b)(1) of the Bankruptcy Code. The Debtors are unable to obtain credit secured solely by liens on unencumbered assets of the Debtors or by junior liens on encumbered assets of the Debtors sufficient to meet their operational and administrative needs. The only financing available to the Debtors on terms acceptable and sufficient to meet the Debtors' needs is financing secured by priming liens and superpriority claims as authorized by sections 364(c) and 364(d) of the Bankruptcy Code. The Debtors have satisfied the requirements of section 364 of the Bankruptcy Code for the granting of the DIP Liens and DIP Superpriority Claims as set forth herein.

6. Good Faith of DIP Lenders. The DIP Credit Agreement was negotiated in good faith and at arm's length among the Debtors, the DIP Agent, and the DIP Lenders. The DIP Agent and the DIP Lenders are extending credit to the Debtors in good faith within the meaning of section 364(e) of the Bankruptcy Code. The terms of the DIP Facility do not constitute a sub rosa plan of reorganization or otherwise seek to establish rights or priorities that are inconsistent with the provisions of the Bankruptcy Code. The DIP Agent and the DIP Lenders shall be entitled to the full protections afforded by section 364(e) of the Bankruptcy Code with respect to all obligations arising under the DIP Credit Agreement and this Interim Order.

7. Business Judgment. The Debtors' decision to enter into the DIP Credit Agreement and to obtain the DIP Facility on the terms set forth therein reflects the exercise of prudent business judgment consistent with the Debtors' fiduciary duties to their estates, creditors, and other parties in interest. The terms of the DIP Facility, including the interest rate of SOFR plus 500 basis points, the commitment fee of $450,000, the closing fee of $600,000, the maturity provisions, and all other material terms and conditions, are reasonable and appropriate under the circumstances and were the product of arm's-length, good-faith negotiations among the Debtors and sophisticated institutional lenders.

8. Adequate Protection. The Prepetition Secured Lenders, including the Prepetition First Lien Lenders and the Prepetition Second Lien Noteholders, are entitled to adequate protection of their interests in the Prepetition Collateral to the extent of any diminution in value of such interests resulting from the Debtors' use, sale, or lease of the Prepetition Collateral (including Cash Collateral), the imposition of the automatic stay pursuant to section 362 of the Bankruptcy Code, and the granting of the DIP Liens. The adequate protection granted herein is consistent with and satisfies the requirements of sections 361, 362, 363, and 364 of the Bankruptcy Code.

ORDER

Based upon the foregoing Recitals and Findings of Fact and Conclusions of Law, each of which is incorporated herein by reference, and upon the entire record before the Court, and after due deliberation and good cause appearing therefor:

IT IS HEREBY ORDERED, ADJUDGED, AND DECREED AS FOLLOWS:

1. DIP Motion Granted on Interim Basis. The DIP Motion is hereby GRANTED on an interim basis, as set forth herein and subject to the terms and conditions of this Interim Order. All objections to the DIP Motion that have not been withdrawn, waived, or settled, and all reservations of rights included therein, are hereby overruled on their merits to the extent inconsistent with the provisions of this Interim Order. The entry of this Interim Order is without prejudice to the rights of any party to be heard at the Final Hearing (as defined below) on any issue relating to the entry of a final order approving the DIP Facility.

2. Authorization of DIP Facility. The Debtors are hereby authorized, on an interim basis, to borrow under the DIP Facility up to an aggregate principal amount of $30,000,000 pursuant to the DIP Credit Agreement dated as of June 24, 2022, among Crestline Packaging Solutions LLC, as borrower, CPS Holdings Inc., as guarantor, Ridgeline National Bank, N.A., as DIP Agent, and the DIP Lenders party thereto. All borrowings under the DIP Facility shall be made in accordance with the terms and conditions of the DIP Credit Agreement and the DIP Budget. The DIP Credit Agreement and all documents, instruments, and agreements executed or delivered in connection therewith (collectively, the "DIP Loan Documents") are hereby approved on an interim basis, and the Debtors are authorized and directed to execute, deliver, and perform all obligations required thereunder, including, without limitation, the payment of all interest, fees, expenses, and other amounts as and when due thereunder.

3. DIP Budget and Variance Testing.

(a) The Debtors shall use proceeds of the DIP Facility and Cash Collateral solely in accordance with the DIP Budget, a true and correct copy of which is attached hereto as Exhibit A and incorporated herein by reference. The DIP Budget shall be a thirteen-week rolling cash flow budget and shall set forth, on a line-item and weekly basis, the Debtors' projected receipts and disbursements.

(b) The DIP Budget shall be updated every two (2) weeks and delivered to the DIP Agent, together with a reconciliation of actual receipts and disbursements against the projections set forth in the then-applicable DIP Budget.

(c) The permitted variance on aggregate disbursements shall be plus or minus fifteen percent (±15%), measured on a cumulative basis and tested bi-weekly (each such testing date, a "Variance Testing Date").

(d) The Debtors shall deliver detailed variance reports (each, a "Variance Report") to the DIP Agent, the Office of the United States Trustee, counsel to the Ad Hoc Group of First Lien Lenders (Hargrove, Mitchell & Saunders LLP), and counsel to the Ad Hoc Group of Second Lien Noteholders (Pemberton & Locke LLP) within three (3) business days of each Variance Testing Date. Each Variance Report shall set forth, in reasonable detail, the Debtors' actual receipts and disbursements for the applicable period as compared to the amounts projected in the DIP Budget, together with an explanation of any material variances.

4. Terms of DIP Facility. The principal terms of the DIP Facility, as set forth in the DIP Credit Agreement and approved on an interim basis herein, are as follows:

(a) Principal Amount: A senior secured superpriority revolving credit facility in an aggregate principal amount of $30,000,000.

(b) Interest Rate: SOFR plus 500 basis points per annum, calculated on the basis of a 360-day year and actual days elapsed, payable monthly in arrears.

(c) Default Rate: Upon the occurrence and during the continuance of an Event of Default (as defined in the DIP Credit Agreement or this Interim Order), an additional 200 basis points per annum above the otherwise applicable interest rate.

(d) Commitment Fee: 1.50% of the total DIP Facility commitment amount ($450,000), fully earned and due and payable on the closing date of the DIP Facility.

(e) Closing Fee: 2.00% of the total DIP Facility commitment amount ($600,000), fully earned and due and payable on the closing date of the DIP Facility.

(f) Maturity Date: The DIP Facility shall mature on the earliest of: (i) the date that is 120 days after the Petition Date (i.e., October 18, 2022); (ii) the effective date of a confirmed plan of reorganization in these Chapter 11 Cases; (iii) the date of acceleration of the DIP Obligations following an Event of Default; and (iv) the date of termination of the DIP Lenders' commitments under the DIP Credit Agreement in accordance with the terms thereof.

(g) The DIP Facility shall be subject in all respects to the terms and conditions set forth in the DIP Credit Agreement, including, without limitation, the conditions precedent to borrowings, representations and warranties, affirmative and negative covenants, and events of default set forth therein. In the event of any conflict between the terms of this Interim Order and the terms of the DIP Credit Agreement, the terms of this Interim Order shall control.

5. Superpriority Administrative Expense Claims (Section 364(c)(1)). All obligations arising under or in connection with the DIP Facility, the DIP Credit Agreement, the DIP Loan Documents, and this Interim Order, including, without limitation, all principal, interest (including default interest), fees, expenses (including reasonable and documented attorneys' fees and expenses), indemnification obligations, and other amounts due and owing to the DIP Agent and the DIP Lenders (collectively, the "DIP Obligations"), shall constitute allowed superpriority administrative expense claims against each of the Debtors and their respective estates, jointly and severally, pursuant to section 364(c)(1) of the Bankruptcy Code (collectively, the "DIP Superpriority Claims"), with priority in payment over any and all administrative expense claims, unsecured claims, and all other claims against the Debtors or their estates of any kind or nature whatsoever, whether now existing or hereafter arising, of any kind or nature whatsoever, including, without limitation, administrative expense claims of the kind specified in, or arising or ordered under, sections 105, 326, 328, 330, 331, 365, 503(b), 506(c), 507(a), 507(b), 726, 1113, or 1114 of the Bankruptcy Code, whether or not such claims may become allowed administrative expense claims under the Bankruptcy Code, subject only to the Carve-Out (as defined in Paragraph 11 below). The DIP Superpriority Claims shall be payable from and shall have recourse to all prepetition and postpetition property of the Debtors and their estates, wherever located, whether acquired before or after the Petition Date, and whether or not encumbered by the DIP Liens.

6. DIP Liens (Sections 364(c)(2), 364(c)(3), and 364(d)). As security for the DIP Obligations, the following liens and security interests (collectively, the "DIP Liens") are hereby granted to the DIP Agent, for the ratable benefit of the DIP Lenders, on all assets, property, and interests in property of each of the Debtors and their estates of any kind or nature whatsoever, whether real, personal, or mixed, whether tangible or intangible, whether now owned or hereafter acquired, and wherever located, including, without limitation, all accounts, chattel paper, commercial tort claims, deposit accounts, documents, equipment, fixtures, general intangibles, goods, instruments, intellectual property, inventory, investment property, letter-of-credit rights, money, oil, gas, and other minerals, and all proceeds, products, rents, and profits of any of the foregoing (collectively, the "DIP Collateral"):

(a) Section 364(c)(2) Liens. Pursuant to section 364(c)(2) of the Bankruptcy Code, valid, binding, continuing, enforceable, fully perfected, first-priority liens on and security interests in all assets and property of the Debtors and their estates that are not otherwise subject to valid, perfected, and non-avoidable liens as of the Petition Date.

(b) Section 364(c)(3) Liens. Pursuant to section 364(c)(3) of the Bankruptcy Code, valid, binding, continuing, enforceable, fully perfected, junior liens on and security interests in all assets and property of the Debtors and their estates that are subject to valid, perfected, and non-avoidable liens as of the Petition Date (other than liens securing the Prepetition First Lien Obligations), which junior liens shall be junior only to such pre-existing valid, perfected, and non-avoidable liens and to the priming liens granted under subparagraph (c) below.

(c) Section 364(d) Priming Liens. Pursuant to section 364(d) of the Bankruptcy Code, valid, binding, continuing, enforceable, fully perfected, first-priority priming liens on and security interests in all assets and property of the Debtors and their estates that are subject to valid, perfected, and non-avoidable liens securing the Prepetition First Lien Obligations and the Prepetition Second Lien Obligations, which priming liens shall be senior to and shall prime the liens and security interests granted under the First Lien Credit Agreement, the Second Lien Indenture, and all related documents. The Prepetition First Lien Lenders (holding approximately 68% of the outstanding principal amount of the First Lien Term Loan through the consenting first lien lenders who are parties to the Forbearance Agreement, together with additional consenting lenders who have indicated their consent at or prior to the Interim Hearing) have consented to the imposition of such priming liens. The Prepetition Second Lien Noteholders are adequately protected against any diminution in the value of their interests in the Prepetition Collateral as set forth in Paragraph 10 of this Interim Order.

7. DIP Lien Priority. The DIP Liens granted pursuant to Paragraph 6 above shall be senior in priority to all other liens, claims, and security interests of any kind or nature whatsoever, whether now existing or hereafter arising, whether created by contract, statute, or otherwise, subject only to: (a) the Carve-Out (as defined in Paragraph 11 below); (b) valid, perfected, and non-avoidable liens existing as of the Petition Date that are senior in priority to the liens of the Prepetition First Lien Lenders and that are not subject to avoidance under the Bankruptcy Code or applicable nonbankruptcy law (collectively, "Permitted Prior Liens"); and (c) any liens permitted to exist under the DIP Credit Agreement. For the avoidance of doubt, the DIP Liens shall at all times be senior in priority to the liens and security interests of the Prepetition First Lien Lenders, the Prepetition Second Lien Noteholders, and any liens or security interests granted as adequate protection pursuant to this Interim Order.

8. Automatic Perfection of DIP Liens. The DIP Liens shall be deemed valid, binding, continuing, enforceable, and fully perfected upon the entry of this Interim Order, without the necessity of the execution, filing, or recording of any financing statements (including any UCC-1 financing statements), mortgages, deeds of trust, security agreements, pledge agreements, control agreements, intellectual property security agreements, or other documents or instruments that may otherwise be required under federal, state, or local law. If the DIP Agent elects, in its sole discretion, to file any financing statements, mortgages, notices of lien, or similar instruments in any jurisdiction to evidence or further perfect the DIP Liens, the Debtors shall execute and deliver, and are hereby authorized and directed to execute and deliver, any and all such documents, instruments, or agreements as may be reasonably requested by the DIP Agent, and all such filings and recordings shall be deemed to have been made at the time of and simultaneously with the entry of this Interim Order. A certified copy of this Interim Order may be filed with or recorded in any filing or recording office and shall constitute conclusive evidence of the perfection of the DIP Liens. The DIP Agent shall not be required to enter into any deposit account control agreement, securities account control agreement, or landlord or bailee waiver or consent letter as a condition of perfection of the DIP Liens.

9. Adequate Protection for Prepetition First Lien Lenders. As adequate protection of the interests of the Prepetition First Lien Lenders in the Prepetition Collateral, including Ridgeline National Bank, N.A., as administrative agent and collateral agent, and the members of the Ad Hoc Group of First Lien Lenders (including, without limitation, Blackmoor Capital Management LLC, Greystone Fixed Income Partners LP, and Wexford Opportunity Fund III LP), for any diminution in the value of the Prepetition First Lien Lenders' interests in the Prepetition Collateral (including Cash Collateral) resulting from the Debtors' use, sale, or lease of the Prepetition Collateral, the imposition of the automatic stay pursuant to section 362 of the Bankruptcy Code, and the granting of the DIP Liens, the Prepetition First Lien Lenders are hereby granted the following adequate protection:

(a) Adequate Protection Liens. Valid, binding, continuing, enforceable, and fully perfected replacement liens on and security interests in all DIP Collateral (the "First Lien Adequate Protection Liens"), which liens shall be junior only to the DIP Liens, Permitted Prior Liens, and the Carve-Out, and shall be senior to all other liens, claims, and security interests, including the liens and security interests of the Prepetition Second Lien Noteholders and any official committee of unsecured creditors (if any should be appointed). The First Lien Adequate Protection Liens shall be deemed perfected upon entry of this Interim Order without the necessity of the execution, filing, or recording of any additional documents or instruments.

(b) Adequate Protection Superpriority Claims. Allowed superpriority administrative expense claims against each of the Debtors and their respective estates pursuant to section 507(b) of the Bankruptcy Code (the "First Lien Adequate Protection Claims"), which claims shall have priority over all administrative expense claims and all other claims against the Debtors or their estates except the DIP Superpriority Claims and the Carve-Out. The First Lien Adequate Protection Claims shall be payable from and have recourse to all prepetition and postpetition property of the Debtors and their estates.

(c) Current Payment of Interest and Fees. Payment of accrued and unpaid current (non-default) interest, fees, and expenses (including, without limitation, reasonable and documented attorneys' fees and disbursements of Hargrove, Mitchell & Saunders LLP, as counsel to the Ad Hoc Group of First Lien Lenders, and such other advisors as may be retained with the reasonable consent of the Debtors and the DIP Agent) in accordance with the terms of the First Lien Credit Agreement, to the extent such amounts are set forth in and contemplated by the DIP Budget. For the avoidance of doubt, the payment of such amounts shall be subject to the terms and conditions of the DIP Budget and the DIP Credit Agreement.

(d) Reporting and Information Rights. Delivery of all financial reporting, budgets, Variance Reports, and other information required to be delivered to the DIP Agent and the Prepetition First Lien Lenders pursuant to Paragraph 3 of this Interim Order and the DIP Credit Agreement, including, without limitation, the updated DIP Budget, the bi-weekly Variance Reports, and such other financial information as may be reasonably requested by the Prepetition First Lien Agent.

10. Adequate Protection for Prepetition Second Lien Noteholders. As adequate protection of the interests of the Prepetition Second Lien Noteholders and Continental Fiduciary Trust Company, as indenture trustee under the Second Lien Indenture, for any diminution in the value of the Prepetition Second Lien Noteholders' interests in the Prepetition Collateral from and after the Petition Date resulting from the Debtors' use, sale, or lease of the Prepetition Collateral, the imposition of the automatic stay pursuant to section 362 of the Bankruptcy Code, and the granting of the DIP Liens, the Prepetition Second Lien Noteholders are hereby granted the following adequate protection:

(a) Replacement Liens. Valid, binding, continuing, enforceable, and fully perfected replacement liens on and security interests in all DIP Collateral (the "Second Lien Adequate Protection Liens"), which liens shall be junior to the DIP Liens, Permitted Prior Liens, the First Lien Adequate Protection Liens, and the Carve-Out, and shall be senior to all other liens, claims, and security interests other than the foregoing. The Second Lien Adequate Protection Liens shall be deemed perfected upon entry of this Interim Order without the necessity of the execution, filing, or recording of any additional documents or instruments.

(b) Superpriority Claims. Allowed superpriority administrative expense claims against each of the Debtors and their respective estates pursuant to section 507(b) of the Bankruptcy Code (the "Second Lien Adequate Protection Claims"), which claims shall have priority over all administrative expense claims and all other claims against the Debtors or their estates except the DIP Superpriority Claims, the First Lien Adequate Protection Claims, and the Carve-Out.

(c) Reporting. Delivery of all financial reporting, budgets, Variance Reports, and other information consistent with the reporting obligations set forth in Paragraph 3 of this Interim Order, on the same timeline and in the same manner as such information is delivered to the DIP Agent and the Prepetition First Lien Lenders.

11. Carve-Out. Notwithstanding any other provision of this Interim Order, the DIP Liens, the DIP Superpriority Claims, the First Lien Adequate Protection Liens, the First Lien Adequate Protection Claims, the Second Lien Adequate Protection Liens, and the Second Lien Adequate Protection Claims shall in each case be subject and subordinate to the payment of the following amounts (collectively, the "Carve-Out"):

(a) Statutory Fees. All fees required to be paid to the Clerk of the Bankruptcy Court and to the Office of the United States Trustee pursuant to 28 U.S.C. § 1930(a) and 31 U.S.C. § 3717, plus any interest payable thereon, without regard to the date of accrual or the date of any Carve-Out Trigger Notice.

(b) Professional Fees Pre-Trigger. All unpaid fees, costs, and expenses incurred by professionals (including attorneys, financial advisors, investment bankers, and other professionals) retained by the Debtors pursuant to sections 327, 328, or 363 of the Bankruptcy Code, and professionals retained by any official committee of unsecured creditors (if any should be appointed) pursuant to sections 328 or 1103 of the Bankruptcy Code, in each case to the extent allowed by the Court at any time, whether such fees, costs, and expenses are incurred before or after delivery of a Carve-Out Trigger Notice (as defined below), and regardless of whether the same are invoiced or paid before or after the delivery of a Carve-Out Trigger Notice; provided, however, that the fees and expenses described in this subparagraph (b) that are incurred after delivery of a Carve-Out Trigger Notice shall be subject to the limitations set forth in subparagraph (c) below.

(c) Professional Fees Post-Trigger. Following delivery of a Carve-Out Trigger Notice by the DIP Agent, allowed and unpaid professional fees, costs, and expenses incurred by estate professionals (including professionals retained by the Debtors and professionals retained by any official committee of unsecured creditors) in an aggregate amount not to exceed $1,500,000 (the "Post-Trigger Carve-Out Cap"). The Post-Trigger Carve-Out Cap shall be in addition to, and not in limitation of, the Statutory Fees described in subparagraph (a) above.

(d) Carve-Out Trigger Notice. The DIP Agent may deliver a written notice (the "Carve-Out Trigger Notice") to the Debtors, counsel to the Debtors (Calderwood & Harkness LLP, 30 Rockefeller Plaza, New York, New York 10112, and Kellner & Hartwick LLP, 600 Superior Avenue East, Suite 1800, Cleveland, Ohio 44114), and the Office of the United States Trustee, Region 9, upon the occurrence and continuation of an Event of Default under the DIP Credit Agreement and the expiration of any applicable notice and cure period set forth therein. The Carve-Out Trigger Notice shall be delivered in writing and shall specifically identify the Event of Default upon which it is based. Following delivery of a Carve-Out Trigger Notice, the Debtors shall be permitted to continue to pay estate professionals for services rendered and expenses incurred, subject to the Post-Trigger Carve-Out Cap, until such time as the DIP Obligations are indefeasibly paid in full in cash.

12. Authorization to Use Cash Collateral. The Debtors are hereby authorized to use Cash Collateral (as defined in section 363(a) of the Bankruptcy Code) in accordance with the DIP Budget, subject to the terms and conditions of this Interim Order and the DIP Credit Agreement. For purposes of this Interim Order, "Cash Collateral" shall include all cash and cash equivalents of the Debtors, wherever located, in which the Prepetition First Lien Lenders, the Prepetition Second Lien Noteholders, or any of them hold a security interest, lien, or other interest, including, without limitation, all cash proceeds of any of the Prepetition Collateral and all amounts on deposit in any deposit accounts of the Debtors. The Debtors' authorization to use Cash Collateral shall terminate automatically upon the occurrence of a Termination Event (as defined in the DIP Credit Agreement), subject to the Remedies Notice Period set forth in Paragraph 14 below.

13. Events of Default. The occurrence of any of the following events shall constitute an "Event of Default" under this Interim Order:

(a) An Event of Default (as defined in the DIP Credit Agreement) shall have occurred and be continuing under the DIP Credit Agreement;

(b) The Debtors shall have failed to comply with the DIP Budget, taking into account the permitted variance of plus or minus fifteen percent (±15%) on aggregate disbursements as tested on a bi-weekly basis pursuant to Paragraph 3 of this Interim Order;

(d) The Chapter 11 Cases shall be converted to cases under chapter 7 of the Bankruptcy Code, whether voluntarily or involuntarily;

(e) A trustee under chapter 11 of the Bankruptcy Code shall be appointed in any of the Chapter 11 Cases;

(f) Any of the Chapter 11 Cases shall be dismissed;

(g) This Interim Order or any subsequent final order approving the DIP Facility shall be reversed, stayed, vacated, or modified in any material respect without the prior written consent of the DIP Agent and the Required DIP Lenders (as defined in the DIP Credit Agreement); or

(h) The Debtors shall have failed to comply with any milestone set forth in the Restructuring Support Agreement, if any, to be dated on or about July 8, 2022, among the Debtors and certain of the Prepetition Secured Lenders (the "RSA"), to the extent the RSA is executed prior to the Final Hearing.

14. Remedies Upon Event of Default. Upon the occurrence and during the continuance of an Event of Default under this Interim Order or the DIP Credit Agreement, the DIP Agent shall provide five (5) business days' prior written notice (the "Remedies Notice Period") to the Debtors, counsel to the Debtors (Calderwood & Harkness LLP), and the Office of the United States Trustee of the DIP Agent's intention to exercise remedies. Following the expiration of the Remedies Notice Period (unless the applicable Event of Default has been cured or waived during such period):

(a) The DIP Agent may, upon the direction of the Required DIP Lenders, declare all DIP Obligations immediately due and payable, without presentment, demand, protest, or further notice of any kind, all of which are hereby expressly waived by the Debtors;

(b) The DIP Agent may terminate all commitments of the DIP Lenders under the DIP Facility, and no further borrowings shall be permitted under the DIP Credit Agreement;

(c) The DIP Agent may exercise any and all rights and remedies available under the DIP Credit Agreement, the DIP Loan Documents, this Interim Order, and applicable nonbankruptcy law, including, without limitation, the right to set off amounts owed by the Debtors against amounts held in deposit accounts of the Debtors maintained with any DIP Lender or its affiliates;

(d) The automatic stay imposed under section 362 of the Bankruptcy Code is hereby modified and vacated, effective upon expiration of the Remedies Notice Period, to the extent necessary to permit the DIP Agent and the DIP Lenders to exercise all rights and remedies against the DIP Collateral, including, without limitation, the right to foreclose upon, sell, lease, or otherwise dispose of the DIP Collateral, without further order of this Court, application, or motion; and

(e) During the Remedies Notice Period, the Debtors and any other party in interest may seek emergency relief from this Court, and the Court shall consider any such request for emergency relief on an expedited basis. Nothing in this Paragraph 14 shall be construed to limit or prejudice the rights of any party in interest to seek emergency relief during the Remedies Notice Period.

15. Limitations on Use of DIP Proceeds and Collateral. No proceeds of the DIP Facility, no Cash Collateral, and no other amounts constituting DIP Collateral or Prepetition Collateral may be used, directly or indirectly, by the Debtors, any official committee of unsecured creditors (if appointed), or any other party in interest to:

(a) Object to, challenge, or contest in any manner, or raise any defense to, the validity, extent, amount, perfection, priority, or enforceability of any claims, liens, or security interests held by or on behalf of the Prepetition First Lien Lenders, the Prepetition First Lien Agent, the Prepetition Second Lien Noteholders, or the Second Lien Indenture Trustee, in each case in respect of the Prepetition Secured Obligations;

(b) Assert, prosecute, investigate, or fund the investigation or prosecution of any claim, counterclaim, action, suit, adversary proceeding, or other proceeding of any kind against the DIP Agent, any DIP Lender, any Prepetition First Lien Lender, the Prepetition First Lien Agent, any Prepetition Second Lien Noteholder, the Second Lien Indenture Trustee, or any of their respective officers, directors, employees, agents, attorneys, advisors (including, without limitation, Hargrove, Mitchell & Saunders LLP and Pemberton & Locke LLP), representatives, successors, or assigns, in each case relating to or arising out of the Prepetition Secured Obligations, the First Lien Credit Agreement, the Second Lien Indenture, or the Intercreditor Agreement;

(c) Prevent, hinder, or delay the assertion or exercise by the DIP Agent, the DIP Lenders, or the Prepetition Secured Lenders of any of their respective rights and remedies under the DIP Credit Agreement, this Interim Order, or applicable law;

(d) Pay, satisfy, or discharge any amounts on account of any claims arising prior to the Petition Date unless such payment is authorized by a separate order of this Court; or

(e) Fund any adversary proceeding or contested matter against the DIP Agent, the DIP Lenders, or any of the Prepetition Secured Lenders or their respective agents, attorneys, or advisors;

provided, however, that notwithstanding the foregoing, an official committee of unsecured creditors, if appointed, may use up to $50,000 of its allowed professional fees to investigate the claims, liens, and security interests of the Prepetition Secured Lenders during the Challenge Period (as defined in Paragraph 19 below), subject to the terms and conditions of this Interim Order.

16. Section 506(c) Waiver. No costs or expenses of administration that have been or may be incurred in these Chapter 11 Cases at any time shall be charged against, recovered from, or surcharged against the DIP Collateral or the Prepetition Collateral pursuant to section 506(c) of the Bankruptcy Code or otherwise, without the prior written consent of the DIP Agent and the applicable Prepetition Secured Lenders, and the Debtors hereby irrevocably waive, and shall be deemed to be estopped hereafter from asserting, any surcharge claim or any claim arising under section 506(c) of the Bankruptcy Code against the DIP Collateral, the Prepetition Collateral, or any proceeds thereof.

17. No marshaling. In no event shall the DIP Agent, the DIP Lenders, or any of the Prepetition Secured Lenders be subject to the equitable doctrine of marshaling or any other similar doctrine with respect to the DIP Collateral, the Prepetition Collateral, or any other assets or property of the Debtors or their estates. The DIP Agent, the DIP Lenders, and the Prepetition Secured Lenders shall not be required to marshal any of the DIP Collateral or Prepetition Collateral or to resort to any particular portion of the DIP Collateral or Prepetition Collateral for the satisfaction of the DIP Obligations, the Prepetition Secured Obligations, or any other amounts owed to them.

18. Section 552(b) Reservation. The Prepetition Secured Lenders shall be entitled to the benefits of section 552(b) of the Bankruptcy Code, and the "equities of the case" exception set forth in section 552(b) of the Bankruptcy Code shall not apply to the liens, security interests, or claims of the Prepetition Secured Lenders, the DIP Agent, or the DIP Lenders with respect to the Prepetition Collateral, the DIP Collateral, or any proceeds, products, offspring, rents, or profits thereof, and no party in interest shall assert the "equities of the case" exception under section 552(b) to challenge or limit the extent or reach of the liens or security interests of the Prepetition Secured Lenders or the DIP Lenders to any after-acquired property or proceeds of Prepetition Collateral or DIP Collateral.

19. Preservation of Rights / Investigation Period (Challenge Period). Notwithstanding any other provision of this Interim Order, any party in interest with standing (including, without limitation, any official committee of unsecured creditors appointed in these Chapter 11 Cases) shall have until the later of: (a) sixty (60) days after the Petition Date (i.e., August 19, 2022) and (b) sixty (60) days after the date of appointment of an official committee of unsecured creditors (if any), in which to investigate and, if appropriate, commence an adversary proceeding or contested matter challenging the validity, extent, amount, priority, perfection, or enforceability of the Prepetition First Lien Lenders' or the Prepetition Second Lien Noteholders' claims, liens, or security interests (the "Challenge Period"). The Challenge Period may be extended by the Court upon a motion filed prior to the expiration thereof for cause shown. If no such challenge is timely commenced within the Challenge Period (as it may be extended), then, without further order of this Court: (i) all findings and conclusions in this Interim Order and any final order entered in connection with the DIP Motion regarding the validity, extent, amount, priority, perfection, and enforceability of the Prepetition Secured Lenders' claims, liens, and security interests shall be binding and conclusive upon all parties in interest in these Chapter 11 Cases (including any official committee of unsecured creditors and any subsequently appointed trustee); (ii) the Prepetition Secured Obligations shall be deemed to be allowed claims for all purposes in these Chapter 11 Cases; and (iii) the liens and security interests of the Prepetition Secured Lenders shall be deemed to be valid, perfected, enforceable, and non-avoidable for all purposes.

20. Modifications to Automatic Stay. The automatic stay imposed under section 362 of the Bankruptcy Code is hereby modified, to the minimum extent necessary, to implement and effectuate the terms and provisions of this Interim Order and the DIP Credit Agreement, including, without limitation, to permit: (a) the Debtors to grant the DIP Liens and provide adequate protection as contemplated herein; (b) the Debtors to perform all of their obligations under the DIP Credit Agreement, the DIP Loan Documents, and this Interim Order; (c) the DIP Agent and the DIP Lenders to exercise their rights and remedies upon the occurrence and during the continuance of an Event of Default in accordance with the terms of this Interim Order and the DIP Credit Agreement; and (d) the DIP Agent to implement the terms of the DIP Credit Agreement and this Interim Order. The Debtors are authorized and directed to execute, deliver, and perform all obligations and instruments required under the DIP Credit Agreement, the DIP Loan Documents, and this Interim Order without further order of this Court.

21. Protection Under Section 364(e). If any or all of the provisions of this Interim Order are hereafter reversed, modified, vacated, or stayed by subsequent order of this Court or any other court, such reversal, modification, vacation, or stay shall not affect: (a) the validity, enforceability, or priority of any DIP Obligations incurred, or any DIP Liens granted, prior to the effective date of such reversal, modification, vacation, or stay; or (b) the validity or enforceability of any adequate protection provided to the Prepetition Secured Lenders pursuant to this Interim Order prior to the effective date of such reversal, modification, vacation, or stay. Notwithstanding any such reversal, modification, vacation, or stay, any DIP Obligations incurred and any DIP Liens granted prior thereto shall be governed in all respects by the original provisions of this Interim Order, and the DIP Agent and the DIP Lenders shall be entitled to all of the rights, remedies, privileges, and benefits, including the superpriority claims and liens granted herein, with respect to all such DIP Obligations. The DIP Agent and the DIP Lenders are entitled to the full protections afforded by section 364(e) of the Bankruptcy Code, and no reversal or modification on appeal of the authorization to obtain credit or incur indebtedness under this Interim Order shall affect the validity of the DIP Obligations or the DIP Liens, or the priority of the DIP Superpriority Claims, to the extent such DIP Obligations or DIP Liens were incurred or granted in good faith.

22. No Third-Party Rights. Except as expressly provided in this Interim Order, the DIP Credit Agreement, or the adequate protection provisions set forth herein, this Interim Order does not create any rights for the benefit of any third party, creditor, equity holder, or any other entity. Nothing in this Interim Order shall be construed to create any fiduciary duty or other obligation on the part of the DIP Agent or the DIP Lenders to any party other than as expressly set forth in the DIP Credit Agreement or this Interim Order.

23. Survival. The provisions of this Interim Order and any DIP Superpriority Claims, DIP Liens, adequate protection liens, and adequate protection superpriority claims granted hereunder shall continue in full force and effect notwithstanding the dismissal of any or all of these Chapter 11 Cases (whether voluntarily or involuntarily) or the conversion of any or all of these Chapter 11 Cases to cases under chapter 7 of the Bankruptcy Code, and such claims and liens shall maintain their priority as provided herein until all DIP Obligations are indefeasibly paid in full in cash and all commitments under the DIP Facility are terminated. Upon any such dismissal or conversion, neither the filing of a motion to dismiss or convert nor any order of dismissal or conversion shall operate as a stay of the exercise of rights and remedies by the DIP Agent or the DIP Lenders under the DIP Credit Agreement or this Interim Order. In the event of a conversion to chapter 7, the DIP Superpriority Claims, the DIP Liens, the adequate protection liens, and the adequate protection superpriority claims granted herein shall continue in full force and effect, and no trustee appointed in such chapter 7 case shall have standing to challenge or avoid the same.

24. Binding Effect. This Interim Order shall be binding upon and inure to the benefit of the Debtors, their estates, the DIP Agent, the DIP Lenders, the Prepetition Secured Lenders, and their respective successors and assigns, including, without limitation, any trustee appointed in these Chapter 11 Cases under chapter 7 or chapter 11 of the Bankruptcy Code, any examiner appointed in these Chapter 11 Cases, and any official committee of unsecured creditors appointed in these Chapter 11 Cases (subject to the Challenge Period set forth in Paragraph 19 above).

25. No Waiver. The failure of the DIP Agent or the DIP Lenders to seek relief or to exercise any right, remedy, power, or privilege under this Interim Order, the DIP Credit Agreement, or the DIP Loan Documents at any time shall not constitute a waiver of any such right, remedy, power, or privilege, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, remedy, power, or privilege. All rights and remedies of the DIP Agent and the DIP Lenders under this Interim Order, the DIP Credit Agreement, and the DIP Loan Documents are cumulative and are not exclusive of any other rights, remedies, powers, or privileges available at law, in equity, or otherwise.

26. Headings. The section and paragraph headings used in this Interim Order are for convenience of reference only and shall not affect the meaning, interpretation, or construction of any provision of this Interim Order.

27. Final Hearing. A final hearing on the DIP Motion (the "Final Hearing") shall be held before this Court on July 18, 2022, at a time to be determined by the Court and set forth in a separate notice of hearing. Objections, if any, to entry of a final order approving the DIP Facility on a final basis shall be filed with the Court and served upon: (i) counsel to the Debtors (Calderwood & Harkness LLP and Kellner & Hartwick LLP); (ii) the DIP Agent (Ridgeline National Bank, N.A.); (iii) counsel to the Ad Hoc Group of First Lien Lenders (Hargrove, Mitchell & Sa

UNITED STATES BANKRUPTCY COURT FOR THE NORTHERN DISTRICT OF OHIO EASTERN DIVISION
^1 The Debtors in these jointly administered Chapter 11 cases, along with the last four digits of each Debtor's federal tax identification number, are: Crestline Packaging Solutions LLC (2094) and CPS Holdings Inc. (1657). The Debtors' corporate headquarters is located at 3550 Gilchrist Road, Akron, Ohio 44312.
INTERIM ORDER (I) AUTHORIZING THE DEBTORS TO OBTAIN POSTPETITION FINANCING PURSUANT TO 11 U.S.C. §§ 105, 361, 362, 363, 364(c)(1), 364(c)(2), 364(c)(3), AND 364(d), (II) GRANTING LIENS AND SUPERPRIORITY ADMINISTRATIVE EXPENSE CLAIMS, (III) AUTHORIZING THE USE OF CASH COLLATERAL, (IV) GRANTING ADEQUATE PROTECTION TO PREPETITION SECURED LENDERS, AND (V) SCHEDULING A FINAL HEARING
Date Entered: June 24, 2022
Upon consideration of the motion (Dkt. No. 15) (the "DIP Motion") filed by the above-captioned debtors and debtors in possession (collectively, the "Debtors") seeking, pursuant to sections 105, 361, 362, 363, 364(c)(1), 364(c)(2), 364(c)(3), and 364(d) of title 11 of the United States Code, 11 U.S.C. §§ 101–1532 (the "Bankruptcy Code"), and Rules 2002, 4001(b), 4001(c), 6004, and 9014 of the Federal Rules of Bankruptcy Procedure (the "Bankruptcy Rules"), entry of an interim order (this "Interim Order"): (i) authorizing the Debtors to obtain postpetition financing; (ii) granting liens and superpriority administrative expense status to the DIP Agent and the DIP Lenders (each as defined below); (iii) authorizing the Debtors to use cash collateral of the prepetition secured lenders; (iv) granting adequate protection to the prepetition secured lenders; and (v) scheduling a final hearing on the DIP Motion; and the Court having reviewed the DIP Motion, the DIP Credit Agreement (as defined below), the Declaration of Dana Kowalski, the Chief Financial Officer of Crestline Packaging Solutions LLC (Dkt. No. 16), and all other pleadings, exhibits, and evidence submitted in connection therewith; and the Court having conducted an interim hearing on the DIP Motion on June 24, 2022 (the "Interim Hearing"); and due and sufficient notice of the DIP Motion and the Interim Hearing having been given under the circumstances; and upon the record made by the Debtors at the Interim Hearing; and after due deliberation thereon; and good and sufficient cause appearing therefor;
RECITALS
The Court finds and determines as follows:
A. Filing and Jurisdiction. On June 20, 2022 (the "Petition Date"), the above-captioned debtors—Crestline Packaging Solutions LLC, an Ohio limited liability company (EIN 31-1782094), and CPS Holdings Inc., a Delaware corporation (EIN 82-3491657) (collectively, the "Debtors")—filed voluntary petitions for relief under chapter 11 of the Bankruptcy Code in this Court, commencing the above-captioned chapter 11 cases (the "Chapter 11 Cases"). The Debtors continue to operate their businesses and manage their properties as debtors in possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code. No trustee, examiner, or official committee of unsecured creditors has been appointed in these Chapter 11 Cases as of the date hereof. This Court has jurisdiction over this matter pursuant to 28 U.S.C. §§ 157 and 1334 and the General Order of Reference entered by the United States District Court for the Northern District of Ohio. This is a core proceeding within the meaning of 28 U.S.C. § 157(b)(2). Venue of these Chapter 11 Cases and this proceeding is proper in this District pursuant to 28 U.S.C. §§ 1408 and 1409.
B. The DIP Motion. On June 20, 2022, the Debtors filed the DIP Motion seeking, inter alia, interim and final approval of postpetition financing, authorization to use cash collateral, and the granting of adequate protection to prepetition secured lenders. The DIP Motion was supported by the Declaration of Dana Kowalski, the Chief Financial Officer of Crestline Packaging Solutions LLC, filed contemporaneously with the Debtors' first day motions (Dkt. No. 16) (the "Kowalski Declaration"), which set forth the facts and circumstances giving rise to the Debtors' need for postpetition financing and the terms upon which such financing was negotiated and obtained.
C. Prepetition Capital Structure. The Court has been advised of the following with respect to the Debtors' prepetition capital structure:
(i) First Lien Credit Agreement. Crestline Packaging Solutions LLC, as borrower, and CPS Holdings Inc., as guarantor, are parties to that certain First Lien Credit Agreement dated as of October 13, 2017 (as amended, restated, supplemented, or otherwise modified from time to time prior to the Petition Date, the "First Lien Credit Agreement"), among Crestline Packaging Solutions LLC, CPS Holdings Inc., Ridgeline National Bank, N.A., as administrative agent and collateral agent (in such capacity, the "Prepetition First Lien Agent"), and the several financial institutions and other entities from time to time party thereto as lenders (collectively, the "Prepetition First Lien Lenders"). The First Lien Credit Agreement provides for: (a) a first lien term loan facility in the original principal amount of $175,000,000 (the "First Lien Term Loan"), of which approximately $158,700,000 in aggregate principal amount remains outstanding as of the Petition Date, bearing interest at the Secured Overnight Financing Rate ("SOFR") plus 425 basis points per annum, with a maturity date of October 13, 2024; and (b) a revolving credit facility with a total commitment of $40,000,000 (the "First Lien Revolver"), of which approximately $32,600,000 was drawn as of the Petition Date, bearing interest at SOFR plus 375 basis points per annum, with a maturity date of October 13, 2022. As of the Petition Date, the aggregate outstanding principal amount of all obligations under the First Lien Credit Agreement was approximately $191,300,000 (inclusive of the $158,700,000 outstanding under the First Lien Term Loan and the $32,600,000 outstanding under the First Lien Revolver), plus accrued and unpaid interest, fees, and expenses (collectively, the "Prepetition First Lien Obligations").
(ii) Second Lien Notes Indenture. Crestline Packaging Solutions LLC, as issuer, and CPS Holdings Inc., as guarantor, are parties to that certain Indenture dated as of October 13, 2017 (the "Second Lien Indenture"), among Crestline Packaging Solutions LLC, CPS Holdings Inc., and Continental Fiduciary Trust Company, as indenture trustee (in such capacity, the "Second Lien Indenture Trustee"), governing the 9.75% Senior Secured Second Lien Notes due 2025 (CUSIP 22761TAA3) (the "Second Lien Notes") in the original aggregate principal amount of $60,000,000. As of the Petition Date, approximately $56,000,000 in aggregate principal amount of Second Lien Notes remains outstanding (reflecting $4,000,000 in open-market repurchases completed during the fiscal year ended December 31, 2019), plus approximately $3,900,000 in accrued and unpaid interest (including default rate interest) (collectively, the "Prepetition Second Lien Obligations," and together with the Prepetition First Lien Obligations, the "Prepetition Secured Obligations").
(iii) Total Funded Debt. As of the Petition Date, the Debtors' total funded indebtedness was approximately $247,300,000, consisting of (a) the Prepetition First Lien Obligations of approximately $191,300,000, and (b) the Prepetition Second Lien Obligations of approximately $59,900,000 (inclusive of accrued and unpaid interest).
(iv) Prepetition Liens and Intercreditor Agreement. The obligations under the First Lien Credit Agreement are secured by first-priority liens and security interests on and in substantially all assets of the Debtors, whether now owned or hereafter acquired (the "Prepetition First Lien Collateral"). The obligations under the Second Lien Indenture are secured by second-priority liens and security interests on and in the same collateral (the "Prepetition Second Lien Collateral," and together with the Prepetition First Lien Collateral, the "Prepetition Collateral"). The relative priority of the liens and security interests of the Prepetition First Lien Lenders and the holders of the Second Lien Notes (the "Prepetition Second Lien Noteholders," and together with the Prepetition First Lien Lenders, the "Prepetition Secured Lenders") is governed by that certain Intercreditor Agreement dated as of October 13, 2017, among Ridgeline National Bank, N.A., as first lien agent, and Continental Fiduciary Trust Company, as second lien collateral agent (the "Intercreditor Agreement").
D. Events of Default. Prior to the Petition Date, the Debtors breached the maximum total leverage ratio financial covenant set forth in Section 7.11 of the First Lien Credit Agreement for the fiscal quarter ended March 31, 2022. As of the end of the first quarter of 2022, the Debtors' actual total leverage ratio was 8.50x (calculated as Total Net Debt of approximately $247,300,000 divided by trailing twelve-month adjusted EBITDA of approximately $29,100,000), as compared to the maximum permitted total leverage ratio of 5.75x—a breach of 2.75 turns, representing a 47.8% excess over the permitted level. On April 22, 2022, Ridgeline National Bank, N.A., in its capacity as administrative agent under the First Lien Credit Agreement, delivered a Notice of Default to the Debtors, which notice triggered cross-default provisions under Section 6.01(e) of the Second Lien Indenture. On May 18, 2022, the Debtors, Ridgeline National Bank, N.A., and consenting first lien lenders holding approximately 68% of the outstanding principal amount of the First Lien Term Loan entered into a Forbearance Agreement (the "Forbearance Agreement"), pursuant to which the consenting lenders agreed to forbear from exercising certain rights and remedies under the First Lien Credit Agreement pending the commencement of these Chapter 11 Cases.
E. Need for DIP Financing. The Debtors have an immediate, critical, and ongoing need for postpetition financing to, among other things, fund continuing operations at their four manufacturing plants located in Akron, Ohio; Evansville, Indiana; Baton Rouge, Louisiana; and Ravenna, Ohio; maintain critical business relationships with customers, vendors, and suppliers; pay approximately 1,420 employees; satisfy the administrative costs of these Chapter 11 Cases; and generally preserve the going-concern value of the Debtors' businesses during the pendency of the prepackaged plan process. The Debtors manufacture a range of industrial packaging products, including high-density polyethylene ("HDPE") drums, intermediate bulk containers ("IBCs"), steel pails, and specialty containment vessels, serving customers in the chemical, petrochemical, and agricultural sectors. Without the DIP Facility (as defined below), the Debtors' estates will suffer immediate and irreparable harm, the Debtors' businesses will be forced to cease operations, and the going-concern value of the Debtors' assets will be severely and irrevocably diminished, to the detriment of all creditors and parties in interest.
F. The DIP Facility. The Debtors have negotiated a postpetition financing facility pursuant to that certain Debtor-in-Possession Credit Agreement dated as of June 24, 2022 (together with all exhibits, schedules, annexes, and attachments thereto, as may be amended, restated, supplemented, or otherwise modified from time to time, the "DIP Credit Agreement"), among Crestline Packaging Solutions LLC, as borrower, CPS Holdings Inc., as guarantor, Ridgeline National Bank, N.A., as administrative agent (in such capacity, the "DIP Agent"), and the several financial institutions from time to time party thereto as lenders (the "DIP Lenders," which DIP Lenders consist of certain consenting first lien lenders under the First Lien Credit Agreement). The DIP Credit Agreement provides for a senior secured superpriority revolving credit facility in an aggregate principal amount of $30,000,000 (the "DIP Facility"). The DIP Facility bears interest at SOFR plus 500 basis points per annum, with a default rate of an additional 200 basis points per annum. The Debtors shall pay a commitment fee of 1.50% of the total DIP Facility commitment amount ($450,000), due and payable on the closing date, and a closing fee of 2.00% of the total DIP Facility commitment amount ($600,000), likewise due and payable on the closing date. The DIP Facility matures on the earlier of (a) 120 days after the Petition Date (i.e., October 18, 2022) and (b) the effective date of a confirmed plan of reorganization. The DIP Facility is subject to a thirteen-week rolling cash flow budget (the "DIP Budget"), with a permitted variance of plus or minus 15% on aggregate disbursements, tested on a bi-weekly basis. A copy of the initial DIP Budget is attached hereto as Exhibit A.
G. Interim Hearing. An interim hearing on the DIP Motion was held before this Court on June 24, 2022 (the "Interim Hearing"), at which the Debtors presented evidence and argument in support of the DIP Motion. The Court has reviewed the DIP Motion, the DIP Credit Agreement, the Kowalski Declaration, the DIP Budget, and all other evidence and arguments presented at the Interim Hearing. Notice of the DIP Motion and the Interim Hearing was provided to: (a) the Office of the United States Trustee, Region 9, Howard M. Metzenbaum U.S. Courthouse, 201 Superior Avenue, Cleveland, Ohio 44114; (b) Ridgeline National Bank, N.A., as administrative agent and collateral agent under the First Lien Credit Agreement; (c) Continental Fiduciary Trust Company, as indenture trustee under the Second Lien Indenture; (d) Hargrove, Mitchell & Saunders LLP, counsel to the Ad Hoc Group of First Lien Lenders; (e) Pemberton & Locke LLP, counsel to the Ad Hoc Group of Second Lien Noteholders; (f) the holders of the twenty (20) largest unsecured claims against the Debtors; and (g) all parties that have filed notices of appearance and requests for service of papers in these Chapter 11 Cases. The notice so provided was sufficient and adequate under the circumstances and in compliance with the Bankruptcy Code, the Bankruptcy Rules (including Rules 2002, 4001(b), and 4001(c)), the Local Rules of this Court, and all applicable orders of this Court.
H. Good Cause Finding. Good cause has been shown for entry of this Interim Order pursuant to Bankruptcy Rule 4001(c)(2). The terms of the DIP Facility, as set forth in the DIP Credit Agreement, are fair, reasonable, and reflect the best terms available to the Debtors under the circumstances. The DIP Facility was negotiated in good faith and at arm's length among the Debtors, the DIP Agent, and the DIP Lenders, and each of the parties acted without coercion, duress, or undue influence. The Debtors have been unable to obtain unsecured credit allowable under section 503(b)(1) of the Bankruptcy Code, or credit secured solely under section 364(c)(1) of the Bankruptcy Code, sufficient to meet the Debtors' operational and administrative needs. The Debtors have demonstrated sound business justification for the entry into the DIP Facility and for the granting of the DIP Liens and DIP Superpriority Claims (each as defined below) pursuant to sections 364(c) and 364(d) of the Bankruptcy Code.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
Based upon the entire record before the Court, including the DIP Motion, the Kowalski Declaration, the DIP Credit Agreement, the DIP Budget, and all other pleadings, evidence, and arguments of counsel presented at the Interim Hearing, the Court makes the following findings of fact and conclusions of law:
1. Petition and Estate. The Debtors filed voluntary petitions for relief under chapter 11 of the Bankruptcy Code on June 20, 2022, and are operating their businesses and managing their properties as debtors in possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code. No trustee or examiner has been appointed in these Chapter 11 Cases.
2. Jurisdiction, Venue, and Core Proceeding. This Court has subject matter jurisdiction over this matter pursuant to 28 U.S.C. §§ 157 and 1334. This is a core proceeding within the meaning of 28 U.S.C. § 157(b)(2), including, without limitation, subparagraphs (A), (D), (G), (M), and (O) thereof. Venue of these Chapter 11 Cases and this proceeding is proper in this District pursuant to 28 U.S.C. §§ 1408 and 1409. The Court has the authority to enter a final order consistent with Article III of the United States Constitution.
3. Notice Sufficient. The notice given by the Debtors of the DIP Motion, the Interim Hearing, and the relief requested therein was adequate and sufficient under the circumstances, the Bankruptcy Code, the Bankruptcy Rules (including Rules 2002, 4001(b), and 4001(c)), the Local Rules of this Court, and all other applicable requirements. No further or other notice of the DIP Motion, the Interim Hearing, or the relief granted herein is required.
4. Need for DIP Financing. An immediate and critical need exists for the Debtors to obtain postpetition financing to continue the operation of their businesses in the ordinary course, fund the administration of the Chapter 11 Cases, satisfy payroll and employee benefit obligations, maintain relationships with customers, vendors, and suppliers, and preserve the going-concern value of the Debtors' estates for the benefit of all stakeholders. The Debtors' existing cash resources, together with cash generated from ongoing operations, are insufficient to permit the Debtors to operate their businesses, meet their obligations, and administer these Chapter 11 Cases absent the DIP Facility. The ability of the Debtors to fund their operations and administer these cases is essential to the Debtors' reorganization efforts and to the maximization of value for the benefit of the Debtors' estates, their creditors, and other parties in interest. Time is of the essence in obtaining the DIP Facility, and any delay in obtaining the relief requested in the DIP Motion would cause immediate and irreparable harm to the Debtors and their estates.
5. Inability to Obtain Credit on Other Terms. The Debtors have been unable to obtain sufficient postpetition financing on terms more favorable than those set forth in the DIP Credit Agreement. The Debtors are unable to obtain unsecured credit allowable as an administrative expense under section 503(b)(1) of the Bankruptcy Code. The Debtors are unable to obtain credit secured solely by liens on unencumbered assets of the Debtors or by junior liens on encumbered assets of the Debtors sufficient to meet their operational and administrative needs. The only financing available to the Debtors on terms acceptable and sufficient to meet the Debtors' needs is financing secured by priming liens and superpriority claims as authorized by sections 364(c) and 364(d) of the Bankruptcy Code. The Debtors have satisfied the requirements of section 364 of the Bankruptcy Code for the granting of the DIP Liens and DIP Superpriority Claims as set forth herein.
6. Good Faith of DIP Lenders. The DIP Credit Agreement was negotiated in good faith and at arm's length among the Debtors, the DIP Agent, and the DIP Lenders. The DIP Agent and the DIP Lenders are extending credit to the Debtors in good faith within the meaning of section 364(e) of the Bankruptcy Code. The terms of the DIP Facility do not constitute a sub rosa plan of reorganization or otherwise seek to establish rights or priorities that are inconsistent with the provisions of the Bankruptcy Code. The DIP Agent and the DIP Lenders shall be entitled to the full protections afforded by section 364(e) of the Bankruptcy Code with respect to all obligations arising under the DIP Credit Agreement and this Interim Order.
7. Business Judgment. The Debtors' decision to enter into the DIP Credit Agreement and to obtain the DIP Facility on the terms set forth therein reflects the exercise of prudent business judgment consistent with the Debtors' fiduciary duties to their estates, creditors, and other parties in interest. The terms of the DIP Facility, including the interest rate of SOFR plus 500 basis points, the commitment fee of $450,000, the closing fee of $600,000, the maturity provisions, and all other material terms and conditions, are reasonable and appropriate under the circumstances and were the product of arm's-length, good-faith negotiations among the Debtors and sophisticated institutional lenders.
8. Adequate Protection. The Prepetition Secured Lenders, including the Prepetition First Lien Lenders and the Prepetition Second Lien Noteholders, are entitled to adequate protection of their interests in the Prepetition Collateral to the extent of any diminution in value of such interests resulting from the Debtors' use, sale, or lease of the Prepetition Collateral (including Cash Collateral), the imposition of the automatic stay pursuant to section 362 of the Bankruptcy Code, and the granting of the DIP Liens. The adequate protection granted herein is consistent with and satisfies the requirements of sections 361, 362, 363, and 364 of the Bankruptcy Code.
ORDER
Based upon the foregoing Recitals and Findings of Fact and Conclusions of Law, each of which is incorporated herein by reference, and upon the entire record before the Court, and after due deliberation and good cause appearing therefor:
IT IS HEREBY ORDERED, ADJUDGED, AND DECREED AS FOLLOWS:
1. DIP Motion Granted on Interim Basis. The DIP Motion is hereby GRANTED on an interim basis, as set forth herein and subject to the terms and conditions of this Interim Order. All objections to the DIP Motion that have not been withdrawn, waived, or settled, and all reservations of rights included therein, are hereby overruled on their merits to the extent inconsistent with the provisions of this Interim Order. The entry of this Interim Order is without prejudice to the rights of any party to be heard at the Final Hearing (as defined below) on any issue relating to the entry of a final order approving the DIP Facility.
2. Authorization of DIP Facility. The Debtors are hereby authorized, on an interim basis, to borrow under the DIP Facility up to an aggregate principal amount of $30,000,000 pursuant to the DIP Credit Agreement dated as of June 24, 2022, among Crestline Packaging Solutions LLC, as borrower, CPS Holdings Inc., as guarantor, Ridgeline National Bank, N.A., as DIP Agent, and the DIP Lenders party thereto. All borrowings under the DIP Facility shall be made in accordance with the terms and conditions of the DIP Credit Agreement and the DIP Budget. The DIP Credit Agreement and all documents, instruments, and agreements executed or delivered in connection therewith (collectively, the "DIP Loan Documents") are hereby approved on an interim basis, and the Debtors are authorized and directed to execute, deliver, and perform all obligations required thereunder, including, without limitation, the payment of all interest, fees, expenses, and other amounts as and when due thereunder.
3. DIP Budget and Variance Testing.
(a) The Debtors shall use proceeds of the DIP Facility and Cash Collateral solely in accordance with the DIP Budget, a true and correct copy of which is attached hereto as Exhibit A and incorporated herein by reference. The DIP Budget shall be a thirteen-week rolling cash flow budget and shall set forth, on a line-item and weekly basis, the Debtors' projected receipts and disbursements.
(b) The DIP Budget shall be updated every two (2) weeks and delivered to the DIP Agent, together with a reconciliation of actual receipts and disbursements against the projections set forth in the then-applicable DIP Budget.
(c) The permitted variance on aggregate disbursements shall be plus or minus fifteen percent (±15%), measured on a cumulative basis and tested bi-weekly (each such testing date, a "Variance Testing Date").
(d) The Debtors shall deliver detailed variance reports (each, a "Variance Report") to the DIP Agent, the Office of the United States Trustee, counsel to the Ad Hoc Group of First Lien Lenders (Hargrove, Mitchell & Saunders LLP), and counsel to the Ad Hoc Group of Second Lien Noteholders (Pemberton & Locke LLP) within three (3) business days of each Variance Testing Date. Each Variance Report shall set forth, in reasonable detail, the Debtors' actual receipts and disbursements for the applicable period as compared to the amounts projected in the DIP Budget, together with an explanation of any material variances.
4. Terms of DIP Facility. The principal terms of the DIP Facility, as set forth in the DIP Credit Agreement and approved on an interim basis herein, are as follows:
(a) Principal Amount: A senior secured superpriority revolving credit facility in an aggregate principal amount of $30,000,000.
(b) Interest Rate: SOFR plus 500 basis points per annum, calculated on the basis of a 360-day year and actual days elapsed, payable monthly in arrears.
(c) Default Rate: Upon the occurrence and during the continuance of an Event of Default (as defined in the DIP Credit Agreement or this Interim Order), an additional 200 basis points per annum above the otherwise applicable interest rate.
(d) Commitment Fee: 1.50% of the total DIP Facility commitment amount ($450,000), fully earned and due and payable on the closing date of the DIP Facility.
(e) Closing Fee: 2.00% of the total DIP Facility commitment amount ($600,000), fully earned and due and payable on the closing date of the DIP Facility.
(f) Maturity Date: The DIP Facility shall mature on the earliest of: (i) the date that is 120 days after the Petition Date (i.e., October 18, 2022); (ii) the effective date of a confirmed plan of reorganization in these Chapter 11 Cases; (iii) the date of acceleration of the DIP Obligations following an Event of Default; and (iv) the date of termination of the DIP Lenders' commitments under the DIP Credit Agreement in accordance with the terms thereof.
(g) The DIP Facility shall be subject in all respects to the terms and conditions set forth in the DIP Credit Agreement, including, without limitation, the conditions precedent to borrowings, representations and warranties, affirmative and negative covenants, and events of default set forth therein. In the event of any conflict between the terms of this Interim Order and the terms of the DIP Credit Agreement, the terms of this Interim Order shall control.
5. Superpriority Administrative Expense Claims (Section 364(c)(1)). All obligations arising under or in connection with the DIP Facility, the DIP Credit Agreement, the DIP Loan Documents, and this Interim Order, including, without limitation, all principal, interest (including default interest), fees, expenses (including reasonable and documented attorneys' fees and expenses), indemnification obligations, and other amounts due and owing to the DIP Agent and the DIP Lenders (collectively, the "DIP Obligations"), shall constitute allowed superpriority administrative expense claims against each of the Debtors and their respective estates, jointly and severally, pursuant to section 364(c)(1) of the Bankruptcy Code (collectively, the "DIP Superpriority Claims"), with priority in payment over any and all administrative expense claims, unsecured claims, and all other claims against the Debtors or their estates of any kind or nature whatsoever, whether now existing or hereafter arising, of any kind or nature whatsoever, including, without limitation, administrative expense claims of the kind specified in, or arising or ordered under, sections 105, 326, 328, 330, 331, 365, 503(b), 506(c), 507(a), 507(b), 726, 1113, or 1114 of the Bankruptcy Code, whether or not such claims may become allowed administrative expense claims under the Bankruptcy Code, subject only to the Carve-Out (as defined in Paragraph 11 below). The DIP Superpriority Claims shall be payable from and shall have recourse to all prepetition and postpetition property of the Debtors and their estates, wherever located, whether acquired before or after the Petition Date, and whether or not encumbered by the DIP Liens.
6. DIP Liens (Sections 364(c)(2), 364(c)(3), and 364(d)). As security for the DIP Obligations, the following liens and security interests (collectively, the "DIP Liens") are hereby granted to the DIP Agent, for the ratable benefit of the DIP Lenders, on all assets, property, and interests in property of each of the Debtors and their estates of any kind or nature whatsoever, whether real, personal, or mixed, whether tangible or intangible, whether now owned or hereafter acquired, and wherever located, including, without limitation, all accounts, chattel paper, commercial tort claims, deposit accounts, documents, equipment, fixtures, general intangibles, goods, instruments, intellectual property, inventory, investment property, letter-of-credit rights, money, oil, gas, and other minerals, and all proceeds, products, rents, and profits of any of the foregoing (collectively, the "DIP Collateral"):
(a) Section 364(c)(2) Liens. Pursuant to section 364(c)(2) of the Bankruptcy Code, valid, binding, continuing, enforceable, fully perfected, first-priority liens on and security interests in all assets and property of the Debtors and their estates that are not otherwise subject to valid, perfected, and non-avoidable liens as of the Petition Date.
(b) Section 364(c)(3) Liens. Pursuant to section 364(c)(3) of the Bankruptcy Code, valid, binding, continuing, enforceable, fully perfected, junior liens on and security interests in all assets and property of the Debtors and their estates that are subject to valid, perfected, and non-avoidable liens as of the Petition Date (other than liens securing the Prepetition First Lien Obligations), which junior liens shall be junior only to such pre-existing valid, perfected, and non-avoidable liens and to the priming liens granted under subparagraph (c) below.
(c) Section 364(d) Priming Liens. Pursuant to section 364(d) of the Bankruptcy Code, valid, binding, continuing, enforceable, fully perfected, first-priority priming liens on and security interests in all assets and property of the Debtors and their estates that are subject to valid, perfected, and non-avoidable liens securing the Prepetition First Lien Obligations and the Prepetition Second Lien Obligations, which priming liens shall be senior to and shall prime the liens and security interests granted under the First Lien Credit Agreement, the Second Lien Indenture, and all related documents. The Prepetition First Lien Lenders (holding approximately 68% of the outstanding principal amount of the First Lien Term Loan through the consenting first lien lenders who are parties to the Forbearance Agreement, together with additional consenting lenders who have indicated their consent at or prior to the Interim Hearing) have consented to the imposition of such priming liens. The Prepetition Second Lien Noteholders are adequately protected against any diminution in the value of their interests in the Prepetition Collateral as set forth in Paragraph 10 of this Interim Order.
7. DIP Lien Priority. The DIP Liens granted pursuant to Paragraph 6 above shall be senior in priority to all other liens, claims, and security interests of any kind or nature whatsoever, whether now existing or hereafter arising, whether created by contract, statute, or otherwise, subject only to: (a) the Carve-Out (as defined in Paragraph 11 below); (b) valid, perfected, and non-avoidable liens existing as of the Petition Date that are senior in priority to the liens of the Prepetition First Lien Lenders and that are not subject to avoidance under the Bankruptcy Code or applicable nonbankruptcy law (collectively, "Permitted Prior Liens"); and (c) any liens permitted to exist under the DIP Credit Agreement. For the avoidance of doubt, the DIP Liens shall at all times be senior in priority to the liens and security interests of the Prepetition First Lien Lenders, the Prepetition Second Lien Noteholders, and any liens or security interests granted as adequate protection pursuant to this Interim Order.
8. Automatic Perfection of DIP Liens. The DIP Liens shall be deemed valid, binding, continuing, enforceable, and fully perfected upon the entry of this Interim Order, without the necessity of the execution, filing, or recording of any financing statements (including any UCC-1 financing statements), mortgages, deeds of trust, security agreements, pledge agreements, control agreements, intellectual property security agreements, or other documents or instruments that may otherwise be required under federal, state, or local law. If the DIP Agent elects, in its sole discretion, to file any financing statements, mortgages, notices of lien, or similar instruments in any jurisdiction to evidence or further perfect the DIP Liens, the Debtors shall execute and deliver, and are hereby authorized and directed to execute and deliver, any and all such documents, instruments, or agreements as may be reasonably requested by the DIP Agent, and all such filings and recordings shall be deemed to have been made at the time of and simultaneously with the entry of this Interim Order. A certified copy of this Interim Order may be filed with or recorded in any filing or recording office and shall constitute conclusive evidence of the perfection of the DIP Liens. The DIP Agent shall not be required to enter into any deposit account control agreement, securities account control agreement, or landlord or bailee waiver or consent letter as a condition of perfection of the DIP Liens.
9. Adequate Protection for Prepetition First Lien Lenders. As adequate protection of the interests of the Prepetition First Lien Lenders in the Prepetition Collateral, including Ridgeline National Bank, N.A., as administrative agent and collateral agent, and the members of the Ad Hoc Group of First Lien Lenders (including, without limitation, Blackmoor Capital Management LLC, Greystone Fixed Income Partners LP, and Wexford Opportunity Fund III LP), for any diminution in the value of the Prepetition First Lien Lenders' interests in the Prepetition Collateral (including Cash Collateral) resulting from the Debtors' use, sale, or lease of the Prepetition Collateral, the imposition of the automatic stay pursuant to section 362 of the Bankruptcy Code, and the granting of the DIP Liens, the Prepetition First Lien Lenders are hereby granted the following adequate protection:
(a) Adequate Protection Liens. Valid, binding, continuing, enforceable, and fully perfected replacement liens on and security interests in all DIP Collateral (the "First Lien Adequate Protection Liens"), which liens shall be junior only to the DIP Liens, Permitted Prior Liens, and the Carve-Out, and shall be senior to all other liens, claims, and security interests, including the liens and security interests of the Prepetition Second Lien Noteholders and any official committee of unsecured creditors (if any should be appointed). The First Lien Adequate Protection Liens shall be deemed perfected upon entry of this Interim Order without the necessity of the execution, filing, or recording of any additional documents or instruments.
(b) Adequate Protection Superpriority Claims. Allowed superpriority administrative expense claims against each of the Debtors and their respective estates pursuant to section 507(b) of the Bankruptcy Code (the "First Lien Adequate Protection Claims"), which claims shall have priority over all administrative expense claims and all other claims against the Debtors or their estates except the DIP Superpriority Claims and the Carve-Out. The First Lien Adequate Protection Claims shall be payable from and have recourse to all prepetition and postpetition property of the Debtors and their estates.
(c) Current Payment of Interest and Fees. Payment of accrued and unpaid current (non-default) interest, fees, and expenses (including, without limitation, reasonable and documented attorneys' fees and disbursements of Hargrove, Mitchell & Saunders LLP, as counsel to the Ad Hoc Group of First Lien Lenders, and such other advisors as may be retained with the reasonable consent of the Debtors and the DIP Agent) in accordance with the terms of the First Lien Credit Agreement, to the extent such amounts are set forth in and contemplated by the DIP Budget. For the avoidance of doubt, the payment of such amounts shall be subject to the terms and conditions of the DIP Budget and the DIP Credit Agreement.
(d) Reporting and Information Rights. Delivery of all financial reporting, budgets, Variance Reports, and other information required to be delivered to the DIP Agent and the Prepetition First Lien Lenders pursuant to Paragraph 3 of this Interim Order and the DIP Credit Agreement, including, without limitation, the updated DIP Budget, the bi-weekly Variance Reports, and such other financial information as may be reasonably requested by the Prepetition First Lien Agent.
10. Adequate Protection for Prepetition Second Lien Noteholders. As adequate protection of the interests of the Prepetition Second Lien Noteholders and Continental Fiduciary Trust Company, as indenture trustee under the Second Lien Indenture, for any diminution in the value of the Prepetition Second Lien Noteholders' interests in the Prepetition Collateral from and after the Petition Date resulting from the Debtors' use, sale, or lease of the Prepetition Collateral, the imposition of the automatic stay pursuant to section 362 of the Bankruptcy Code, and the granting of the DIP Liens, the Prepetition Second Lien Noteholders are hereby granted the following adequate protection:
(a) Replacement Liens. Valid, binding, continuing, enforceable, and fully perfected replacement liens on and security interests in all DIP Collateral (the "Second Lien Adequate Protection Liens"), which liens shall be junior to the DIP Liens, Permitted Prior Liens, the First Lien Adequate Protection Liens, and the Carve-Out, and shall be senior to all other liens, claims, and security interests other than the foregoing. The Second Lien Adequate Protection Liens shall be deemed perfected upon entry of this Interim Order without the necessity of the execution, filing, or recording of any additional documents or instruments.
(b) Superpriority Claims. Allowed superpriority administrative expense claims against each of the Debtors and their respective estates pursuant to section 507(b) of the Bankruptcy Code (the "Second Lien Adequate Protection Claims"), which claims shall have priority over all administrative expense claims and all other claims against the Debtors or their estates except the DIP Superpriority Claims, the First Lien Adequate Protection Claims, and the Carve-Out.
(c) Reporting. Delivery of all financial reporting, budgets, Variance Reports, and other information consistent with the reporting obligations set forth in Paragraph 3 of this Interim Order, on the same timeline and in the same manner as such information is delivered to the DIP Agent and the Prepetition First Lien Lenders.
11. Carve-Out. Notwithstanding any other provision of this Interim Order, the DIP Liens, the DIP Superpriority Claims, the First Lien Adequate Protection Liens, the First Lien Adequate Protection Claims, the Second Lien Adequate Protection Liens, and the Second Lien Adequate Protection Claims shall in each case be subject and subordinate to the payment of the following amounts (collectively, the "Carve-Out"):
(a) Statutory Fees. All fees required to be paid to the Clerk of the Bankruptcy Court and to the Office of the United States Trustee pursuant to 28 U.S.C. § 1930(a) and 31 U.S.C. § 3717, plus any interest payable thereon, without regard to the date of accrual or the date of any Carve-Out Trigger Notice.
(b) Professional Fees Pre-Trigger. All unpaid fees, costs, and expenses incurred by professionals (including attorneys, financial advisors, investment bankers, and other professionals) retained by the Debtors pursuant to sections 327, 328, or 363 of the Bankruptcy Code, and professionals retained by any official committee of unsecured creditors (if any should be appointed) pursuant to sections 328 or 1103 of the Bankruptcy Code, in each case to the extent allowed by the Court at any time, whether such fees, costs, and expenses are incurred before or after delivery of a Carve-Out Trigger Notice (as defined below), and regardless of whether the same are invoiced or paid before or after the delivery of a Carve-Out Trigger Notice; provided, however, that the fees and expenses described in this subparagraph (b) that are incurred after delivery of a Carve-Out Trigger Notice shall be subject to the limitations set forth in subparagraph (c) below.
(c) Professional Fees Post-Trigger. Following delivery of a Carve-Out Trigger Notice by the DIP Agent, allowed and unpaid professional fees, costs, and expenses incurred by estate professionals (including professionals retained by the Debtors and professionals retained by any official committee of unsecured creditors) in an aggregate amount not to exceed $1,500,000 (the "Post-Trigger Carve-Out Cap"). The Post-Trigger Carve-Out Cap shall be in addition to, and not in limitation of, the Statutory Fees described in subparagraph (a) above.
(d) Carve-Out Trigger Notice. The DIP Agent may deliver a written notice (the "Carve-Out Trigger Notice") to the Debtors, counsel to the Debtors (Calderwood & Harkness LLP, 30 Rockefeller Plaza, New York, New York 10112, and Kellner & Hartwick LLP, 600 Superior Avenue East, Suite 1800, Cleveland, Ohio 44114), and the Office of the United States Trustee, Region 9, upon the occurrence and continuation of an Event of Default under the DIP Credit Agreement and the expiration of any applicable notice and cure period set forth therein. The Carve-Out Trigger Notice shall be delivered in writing and shall specifically identify the Event of Default upon which it is based. Following delivery of a Carve-Out Trigger Notice, the Debtors shall be permitted to continue to pay estate professionals for services rendered and expenses incurred, subject to the Post-Trigger Carve-Out Cap, until such time as the DIP Obligations are indefeasibly paid in full in cash.
12. Authorization to Use Cash Collateral. The Debtors are hereby authorized to use Cash Collateral (as defined in section 363(a) of the Bankruptcy Code) in accordance with the DIP Budget, subject to the terms and conditions of this Interim Order and the DIP Credit Agreement. For purposes of this Interim Order, "Cash Collateral" shall include all cash and cash equivalents of the Debtors, wherever located, in which the Prepetition First Lien Lenders, the Prepetition Second Lien Noteholders, or any of them hold a security interest, lien, or other interest, including, without limitation, all cash proceeds of any of the Prepetition Collateral and all amounts on deposit in any deposit accounts of the Debtors. The Debtors' authorization to use Cash Collateral shall terminate automatically upon the occurrence of a Termination Event (as defined in the DIP Credit Agreement), subject to the Remedies Notice Period set forth in Paragraph 14 below.
13. Events of Default. The occurrence of any of the following events shall constitute an "Event of Default" under this Interim Order:
(a) An Event of Default (as defined in the DIP Credit Agreement) shall have occurred and be continuing under the DIP Credit Agreement;
(b) The Debtors shall have failed to comply with the DIP Budget, taking into account the permitted variance of plus or minus fifteen percent (±15%) on aggregate disbursements as tested on a bi-weekly basis pursuant to Paragraph 3 of this Interim Order;
(c) The Debtors shall have failed to comply with any material provision, term, or condition of this Interim Order;
(d) The Chapter 11 Cases shall be converted to cases under chapter 7 of the Bankruptcy Code, whether voluntarily or involuntarily;
(e) A trustee under chapter 11 of the Bankruptcy Code shall be appointed in any of the Chapter 11 Cases;
(f) Any of the Chapter 11 Cases shall be dismissed;
(g) This Interim Order or any subsequent final order approving the DIP Facility shall be reversed, stayed, vacated, or modified in any material respect without the prior written consent of the DIP Agent and the Required DIP Lenders (as defined in the DIP Credit Agreement); or
(h) The Debtors shall have failed to comply with any milestone set forth in the Restructuring Support Agreement, if any, to be dated on or about July 8, 2022, among the Debtors and certain of the Prepetition Secured Lenders (the "RSA"), to the extent the RSA is executed prior to the Final Hearing.
14. Remedies Upon Event of Default. Upon the occurrence and during the continuance of an Event of Default under this Interim Order or the DIP Credit Agreement, the DIP Agent shall provide five (5) business days' prior written notice (the "Remedies Notice Period") to the Debtors, counsel to the Debtors (Calderwood & Harkness LLP), and the Office of the United States Trustee of the DIP Agent's intention to exercise remedies. Following the expiration of the Remedies Notice Period (unless the applicable Event of Default has been cured or waived during such period):
(a) The DIP Agent may, upon the direction of the Required DIP Lenders, declare all DIP Obligations immediately due and payable, without presentment, demand, protest, or further notice of any kind, all of which are hereby expressly waived by the Debtors;
(b) The DIP Agent may terminate all commitments of the DIP Lenders under the DIP Facility, and no further borrowings shall be permitted under the DIP Credit Agreement;
(c) The DIP Agent may exercise any and all rights and remedies available under the DIP Credit Agreement, the DIP Loan Documents, this Interim Order, and applicable nonbankruptcy law, including, without limitation, the right to set off amounts owed by the Debtors against amounts held in deposit accounts of the Debtors maintained with any DIP Lender or its affiliates;
(d) The automatic stay imposed under section 362 of the Bankruptcy Code is hereby modified and vacated, effective upon expiration of the Remedies Notice Period, to the extent necessary to permit the DIP Agent and the DIP Lenders to exercise all rights and remedies against the DIP Collateral, including, without limitation, the right to foreclose upon, sell, lease, or otherwise dispose of the DIP Collateral, without further order of this Court, application, or motion; and
(e) During the Remedies Notice Period, the Debtors and any other party in interest may seek emergency relief from this Court, and the Court shall consider any such request for emergency relief on an expedited basis. Nothing in this Paragraph 14 shall be construed to limit or prejudice the rights of any party in interest to seek emergency relief during the Remedies Notice Period.
15. Limitations on Use of DIP Proceeds and Collateral. No proceeds of the DIP Facility, no Cash Collateral, and no other amounts constituting DIP Collateral or Prepetition Collateral may be used, directly or indirectly, by the Debtors, any official committee of unsecured creditors (if appointed), or any other party in interest to:
(a) Object to, challenge, or contest in any manner, or raise any defense to, the validity, extent, amount, perfection, priority, or enforceability of any claims, liens, or security interests held by or on behalf of the Prepetition First Lien Lenders, the Prepetition First Lien Agent, the Prepetition Second Lien Noteholders, or the Second Lien Indenture Trustee, in each case in respect of the Prepetition Secured Obligations;
(b) Assert, prosecute, investigate, or fund the investigation or prosecution of any claim, counterclaim, action, suit, adversary proceeding, or other proceeding of any kind against the DIP Agent, any DIP Lender, any Prepetition First Lien Lender, the Prepetition First Lien Agent, any Prepetition Second Lien Noteholder, the Second Lien Indenture Trustee, or any of their respective officers, directors, employees, agents, attorneys, advisors (including, without limitation, Hargrove, Mitchell & Saunders LLP and Pemberton & Locke LLP), representatives, successors, or assigns, in each case relating to or arising out of the Prepetition Secured Obligations, the First Lien Credit Agreement, the Second Lien Indenture, or the Intercreditor Agreement;
(c) Prevent, hinder, or delay the assertion or exercise by the DIP Agent, the DIP Lenders, or the Prepetition Secured Lenders of any of their respective rights and remedies under the DIP Credit Agreement, this Interim Order, or applicable law;
(d) Pay, satisfy, or discharge any amounts on account of any claims arising prior to the Petition Date unless such payment is authorized by a separate order of this Court; or
(e) Fund any adversary proceeding or contested matter against the DIP Agent, the DIP Lenders, or any of the Prepetition Secured Lenders or their respective agents, attorneys, or advisors;
provided, however, that notwithstanding the foregoing, an official committee of unsecured creditors, if appointed, may use up to $50,000 of its allowed professional fees to investigate the claims, liens, and security interests of the Prepetition Secured Lenders during the Challenge Period (as defined in Paragraph 19 below), subject to the terms and conditions of this Interim Order.
16. Section 506(c) Waiver. No costs or expenses of administration that have been or may be incurred in these Chapter 11 Cases at any time shall be charged against, recovered from, or surcharged against the DIP Collateral or the Prepetition Collateral pursuant to section 506(c) of the Bankruptcy Code or otherwise, without the prior written consent of the DIP Agent and the applicable Prepetition Secured Lenders, and the Debtors hereby irrevocably waive, and shall be deemed to be estopped hereafter from asserting, any surcharge claim or any claim arising under section 506(c) of the Bankruptcy Code against the DIP Collateral, the Prepetition Collateral, or any proceeds thereof.
17. No marshaling. In no event shall the DIP Agent, the DIP Lenders, or any of the Prepetition Secured Lenders be subject to the equitable doctrine of marshaling or any other similar doctrine with respect to the DIP Collateral, the Prepetition Collateral, or any other assets or property of the Debtors or their estates. The DIP Agent, the DIP Lenders, and the Prepetition Secured Lenders shall not be required to marshal any of the DIP Collateral or Prepetition Collateral or to resort to any particular portion of the DIP Collateral or Prepetition Collateral for the satisfaction of the DIP Obligations, the Prepetition Secured Obligations, or any other amounts owed to them.
18. Section 552(b) Reservation. The Prepetition Secured Lenders shall be entitled to the benefits of section 552(b) of the Bankruptcy Code, and the "equities of the case" exception set forth in section 552(b) of the Bankruptcy Code shall not apply to the liens, security interests, or claims of the Prepetition Secured Lenders, the DIP Agent, or the DIP Lenders with respect to the Prepetition Collateral, the DIP Collateral, or any proceeds, products, offspring, rents, or profits thereof, and no party in interest shall assert the "equities of the case" exception under section 552(b) to challenge or limit the extent or reach of the liens or security interests of the Prepetition Secured Lenders or the DIP Lenders to any after-acquired property or proceeds of Prepetition Collateral or DIP Collateral.
19. Preservation of Rights / Investigation Period (Challenge Period). Notwithstanding any other provision of this Interim Order, any party in interest with standing (including, without limitation, any official committee of unsecured creditors appointed in these Chapter 11 Cases) shall have until the later of: (a) sixty (60) days after the Petition Date (i.e., August 19, 2022) and (b) sixty (60) days after the date of appointment of an official committee of unsecured creditors (if any), in which to investigate and, if appropriate, commence an adversary proceeding or contested matter challenging the validity, extent, amount, priority, perfection, or enforceability of the Prepetition First Lien Lenders' or the Prepetition Second Lien Noteholders' claims, liens, or security interests (the "Challenge Period"). The Challenge Period may be extended by the Court upon a motion filed prior to the expiration thereof for cause shown. If no such challenge is timely commenced within the Challenge Period (as it may be extended), then, without further order of this Court: (i) all findings and conclusions in this Interim Order and any final order entered in connection with the DIP Motion regarding the validity, extent, amount, priority, perfection, and enforceability of the Prepetition Secured Lenders' claims, liens, and security interests shall be binding and conclusive upon all parties in interest in these Chapter 11 Cases (including any official committee of unsecured creditors and any subsequently appointed trustee); (ii) the Prepetition Secured Obligations shall be deemed to be allowed claims for all purposes in these Chapter 11 Cases; and (iii) the liens and security interests of the Prepetition Secured Lenders shall be deemed to be valid, perfected, enforceable, and non-avoidable for all purposes.
20. Modifications to Automatic Stay. The automatic stay imposed under section 362 of the Bankruptcy Code is hereby modified, to the minimum extent necessary, to implement and effectuate the terms and provisions of this Interim Order and the DIP Credit Agreement, including, without limitation, to permit: (a) the Debtors to grant the DIP Liens and provide adequate protection as contemplated herein; (b) the Debtors to perform all of their obligations under the DIP Credit Agreement, the DIP Loan Documents, and this Interim Order; (c) the DIP Agent and the DIP Lenders to exercise their rights and remedies upon the occurrence and during the continuance of an Event of Default in accordance with the terms of this Interim Order and the DIP Credit Agreement; and (d) the DIP Agent to implement the terms of the DIP Credit Agreement and this Interim Order. The Debtors are authorized and directed to execute, deliver, and perform all obligations and instruments required under the DIP Credit Agreement, the DIP Loan Documents, and this Interim Order without further order of this Court.
21. Protection Under Section 364(e). If any or all of the provisions of this Interim Order are hereafter reversed, modified, vacated, or stayed by subsequent order of this Court or any other court, such reversal, modification, vacation, or stay shall not affect: (a) the validity, enforceability, or priority of any DIP Obligations incurred, or any DIP Liens granted, prior to the effective date of such reversal, modification, vacation, or stay; or (b) the validity or enforceability of any adequate protection provided to the Prepetition Secured Lenders pursuant to this Interim Order prior to the effective date of such reversal, modification, vacation, or stay. Notwithstanding any such reversal, modification, vacation, or stay, any DIP Obligations incurred and any DIP Liens granted prior thereto shall be governed in all respects by the original provisions of this Interim Order, and the DIP Agent and the DIP Lenders shall be entitled to all of the rights, remedies, privileges, and benefits, including the superpriority claims and liens granted herein, with respect to all such DIP Obligations. The DIP Agent and the DIP Lenders are entitled to the full protections afforded by section 364(e) of the Bankruptcy Code, and no reversal or modification on appeal of the authorization to obtain credit or incur indebtedness under this Interim Order shall affect the validity of the DIP Obligations or the DIP Liens, or the priority of the DIP Superpriority Claims, to the extent such DIP Obligations or DIP Liens were incurred or granted in good faith.
22. No Third-Party Rights. Except as expressly provided in this Interim Order, the DIP Credit Agreement, or the adequate protection provisions set forth herein, this Interim Order does not create any rights for the benefit of any third party, creditor, equity holder, or any other entity. Nothing in this Interim Order shall be construed to create any fiduciary duty or other obligation on the part of the DIP Agent or the DIP Lenders to any party other than as expressly set forth in the DIP Credit Agreement or this Interim Order.
23. Survival. The provisions of this Interim Order and any DIP Superpriority Claims, DIP Liens, adequate protection liens, and adequate protection superpriority claims granted hereunder shall continue in full force and effect notwithstanding the dismissal of any or all of these Chapter 11 Cases (whether voluntarily or involuntarily) or the conversion of any or all of these Chapter 11 Cases to cases under chapter 7 of the Bankruptcy Code, and such claims and liens shall maintain their priority as provided herein until all DIP Obligations are indefeasibly paid in full in cash and all commitments under the DIP Facility are terminated. Upon any such dismissal or conversion, neither the filing of a motion to dismiss or convert nor any order of dismissal or conversion shall operate as a stay of the exercise of rights and remedies by the DIP Agent or the DIP Lenders under the DIP Credit Agreement or this Interim Order. In the event of a conversion to chapter 7, the DIP Superpriority Claims, the DIP Liens, the adequate protection liens, and the adequate protection superpriority claims granted herein shall continue in full force and effect, and no trustee appointed in such chapter 7 case shall have standing to challenge or avoid the same.
24. Binding Effect. This Interim Order shall be binding upon and inure to the benefit of the Debtors, their estates, the DIP Agent, the DIP Lenders, the Prepetition Secured Lenders, and their respective successors and assigns, including, without limitation, any trustee appointed in these Chapter 11 Cases under chapter 7 or chapter 11 of the Bankruptcy Code, any examiner appointed in these Chapter 11 Cases, and any official committee of unsecured creditors appointed in these Chapter 11 Cases (subject to the Challenge Period set forth in Paragraph 19 above).
25. No Waiver. The failure of the DIP Agent or the DIP Lenders to seek relief or to exercise any right, remedy, power, or privilege under this Interim Order, the DIP Credit Agreement, or the DIP Loan Documents at any time shall not constitute a waiver of any such right, remedy, power, or privilege, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, remedy, power, or privilege. All rights and remedies of the DIP Agent and the DIP Lenders under this Interim Order, the DIP Credit Agreement, and the DIP Loan Documents are cumulative and are not exclusive of any other rights, remedies, powers, or privileges available at law, in equity, or otherwise.
26. Headings. The section and paragraph headings used in this Interim Order are for convenience of reference only and shall not affect the meaning, interpretation, or construction of any provision of this Interim Order.
27. Final Hearing. A final hearing on the DIP Motion (the "Final Hearing") shall be held before this Court on July 18, 2022, at a time to be determined by the Court and set forth in a separate notice of hearing. Objections, if any, to entry of a final order approving the DIP Facility on a final basis shall be filed with the Court and served upon: (i) counsel to the Debtors (Calderwood & Harkness LLP and Kellner & Hartwick LLP); (ii) the DIP Agent (Ridgeline National Bank, N.A.); (iii) counsel to the Ad Hoc Group of First Lien Lenders (Hargrove, Mitchell & Sa

UNITED STATES BANKRUPTCY COURT FOR THE NORTHERN DISTRICT OF OHIO EASTERN DIVISION

RECITALS

FINDINGS OF FACT AND CONCLUSIONS OF LAW

IT IS HEREBY ORDERED, ADJUDGED, AND DECREED AS FOLLOWS:

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