XFL Chapter 11 - Motion To Pay Employee Wages

Case 20-10940-LSS Doc 7 Filed 04/13/20 Page 1 of 71
IN THE UNITED STATES BANKRUPTCY COURT

FOR THE DISTRICT OF DELAWARE
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:
In re : Chapter 11
:
ALPHA ENTERTAINMENT LLC, : Case No. 20-10940 (LSS)
:
Debtor. 1 :
:
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MOTION FOR INTERIM AND FINAL ORDERS, PURSUANT TO 11 U.S.C. §§ 105,

362, 363, 364 AND 507, (A) AUTHORIZING POST-PETITION FINANCING,
(B) AUTHORIZING USE OF CASH COLLATERAL, (C) SCHEDULING
A FINAL HEARING, AND (D) GRANTING RELATED RELIEF
The debtor and debtor in possession in the above-captioned case (the “Debtor”) hereby
submits this motion (this “Motion”) for the entry of an interim order (the “Interim Order”),
substantially in the form attached hereto as Exhibit B, and a final order (the “Final Order”),
pursuant to sections 105, 361, 362, 363, 364 and 507 of title 11 of the United States Code, 11 U.S.C.
§§ 101–1532 (the “Bankruptcy Code”), Rules 2002 and 4001 of the Federal Rules of Bankruptcy
Procedure (the “Bankruptcy Rules”) and Rule 4001-2 of the Local Rules of Bankruptcy Practice
and Procedure of the United States Bankruptcy Court for the District of Delaware (the “Local
Rules”): (i) authorizing the Debtor to obtain senior secured postpetition financing (the “DIP
Financing”) pursuant to the terms of the debtor-in-possession financing facility (the “DIP
Facility”) described herein and in that certain General Term Sheet for Post-Petition Debtor-in-
Possession Financing (the “DIP Term Sheet”);2 (ii) granting the DIP Lender (as defined below)
1
The last four digits of the Debtor’s federal tax identification number are 7778. The Debtor’s mailing address is 1266
East Main St., Stamford, CT 06902.
2
Capitalized terms used but not otherwise defined herein shall the meaning given to such terms in the DIP Term Sheet
or the Interim Order, as applicable. A copy of the DIP Term Sheet is attached to the Interim Order as Exhibit A.
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allowed superpriority administrative expense claims in the Chapter 11 Case and any Successor
Case (as defined below) for the DIP Financing and all obligations of the Debtor owing under the
DIP Facility (collectively, and including all “DIP Obligations” of the Debtor as defined and
described in the DIP Term Sheet, the “DIP Obligations”); (iii) granting the DIP Lender
automatically perfected security interests in and liens on all of the DIP Collateral (as defined
below), including all property constituting “cash collateral” as defined in section 363(a) of the
Bankruptcy Code (“Cash Collateral”); (iv) authorizing the Debtor to use any prepetition collateral,
including the Cash Collateral, and provide adequate protection to the DIP Lender for any
diminution in value of its interests therein on account of the Prepetition Secured Note;
(v) scheduling a final hearing with respect to the relief requested herein; and (vi) granting related
relief. In support of this Motion, the Debtor incorporates the statements contained in the
Declaration of Jeffrey N. Pollack in Support of Chapter 11 Petition and First Day Relief (the “First
Day Declaration”), filed contemporaneously herewith, and further respectfully states as follows:
PRELIMINARY STATEMENT
1. Prior to the Petition Date, the XFL provided high-energy professional football,
reimagined for the 21st century with many innovative elements designed to bring fans closer to
the players and the game they love, during the time of year when they wanted more football. The
league debuted on February 8, 2020 to immediate acclaim; unfortunately, however, just weeks
later the worldwide COVID-19 pandemic forced every major American sports league to suspend,
if not cancel, their seasons. On March 20, 2020, the XFL canceled the remainder of its inaugural
season, costing the nascent league tens of millions of dollars in revenue. The impossibility of
knowing when the pandemic would sufficiently abate and allow the league to restart only
exacerbated the problems posed by the Debtor’s abrupt loss of revenue and continuing operating
expenses. After considering all available strategic options, the Debtor and its professional advisors
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determined that the best course to preserve and maximize the value of the Debtor’s estate is through
a chapter 11 sale process.
2. Prior to the commencement of the Chapter 11 Case, the Debtor appointed an
independent manager, John Brecker of Drivetrain, LLC (the “Independent Manager”), to oversee
the Debtor’s financial restructuring efforts. Since his appointment, the Independent Manager has
overseen and directed the negotiations over the Debtor’s prepetition and postpetition financing
facilities, and he has played, and will continue to play, an integral role in the overall sale and
restructuring process. Under the Independent Manager’s oversight, the Debtor has determined it
is necessary to commence the Chapter 11 Case with the benefit of the DIP Facility, a critical
component of the Debtor’s value-maximization strategy, as it will allow the Debtor to fund payroll
and provide the runway needed to conduct a robust chapter 11 sale process, among other things.
3. The terms of the DIP Facility are fair and reasonable under the circumstances. For
these reasons, set forth more fully herein in and in the First Day Declaration, the Debtor believes
it is in its best interest to enter into the DIP Facility and hereby seeks its approval.
JURISDICTION AND VENUE
4. The Court has jurisdiction to consider this Motion pursuant to 28 U.S.C. §§ 157
and 1334, and the Amended Standing Order of Reference from the United States District Court for
the District of Delaware dated as of February 29, 2012. This is a core proceeding pursuant to 28
U.S.C. § 157(b), and the Debtor consents, pursuant to Local Rule 9013-1(f), to the entry of a final
order by the Court in connection with this Motion to the extent that it is later determined that the
Court, absent consent of the parties, cannot enter final orders or judgments in connection herewith
consistent with Article III of the United States Constitution. Venue is proper before the Court
pursuant to 28 U.S.C. §§ 1408 and 1409.
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5. The statutory and legal predicates for the relief requested herein are sections 105(a),
361, 362, 363, 364, and 507 of the Bankruptcy Code, Bankruptcy Rule 4001, and Local Rule 4001-
2.
BACKGROUND
A. General Background
6. On the date hereof (the “Petition Date”), the Debtor commenced this bankruptcy
case (the “Chapter 11 Case”) by filing a voluntary petition for relief under chapter 11 of the
Bankruptcy Code. The Debtor is authorized to continue to operate its business and manage its
property as a debtor in possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code.
No official committees have been appointed in the Chapter 11 Case and no request has been made
for the appointment of a trustee or examiner.
7. Additional factual background relating to the Debtor’s business, capital structure,
and the commencement of the Chapter 11 Case is set forth in the First Day Declaration.
B. Prepetition Indebtedness
8. On March 25, 2020, the Debtor executed a senior secured promissory note (as
amended, the “Prepetition Secured Note”) with Vince McMahon in the principal amount of $7
million to provide the XFL with liquidity in the face of a shortfall. All of the Debtor’s assets are
collateral under the Prepetition Secured Note. Also on March 25, 2020, an initial advance of $5
million under the Prepetition Secured Note was made to fund, among other things, employee
payroll.
9. On April 9, 2020, the Debtor borrowed an additional $4 million under the
Prepetition Secured Note, which was amended and restated to a principal amount of $9 million.
As of the Petition Date, the Debtor has no other outstanding funded secured debt obligations other
than the Prepetition Secured Note and believes that it has no other secured obligations of any kind
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other than any potential statutory liens claims of taxing authorities or vendors arising in the
ordinary course under applicable state law.
10. The vast majority of the Debtor’s liabilities are unsecured obligations owed to the
Debtor’s lessors or licensors, employees, and trade vendors. The Debtor is party to numerous
agreements under which the Debtor licenses the right to use the football stadiums, practice
facilities, and office space that the league and its eight teams needed to operate. Additionally, the
Debtor is party to a shared-services agreement with Wrestling Entertainment, Inc. (“WWE”), under
which WWE provides the Debtor with certain centralized corporate and administrative services,
principally finance and accounting services.3
C. The Debtor’s Immediate Need for Liquidity
11. As of the Petition Date, the Debtor’s cash on hand was approximately $5.6 million.
Accordingly, without immediate access to the additional liquidity provided under the DIP Facility,
the Debtor would be unable to cover payroll and other essential operating expenses in the near
term necessary to preserve and maximize the value of its assets, and would be forced into
liquidation to the detriment of all stakeholders.
12. In consultation with its professional advisors, the Debtor evaluated the cash
requirements needed to fund necessary expenses and conduct a robust sale process in the Chapter
11 Case. As a result of these efforts, the Debtor has determined it is necessary and appropriate to
enter into the DIP Facility with Vince McMahon (the “DIP Lender”), the lender under the
Prepetition Secured Note and the Debtor’s founder and principal shareholder.
13. The Debtor’s management team has worked with the Debtor’s advisors to develop
13-week cash flow forecasts, which take into account anticipated cash receipts and disbursements
3
As of the Petition Date, the Debtor is current on its obligations to WWE.
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during the projected period and consider a number of factors, including the effect of the chapter 11
filing on the Debtor’s operations, interest expenses associated with the DIP Facility, professional
fees, and required operational payments. Absent approval of the DIP Facility, the Debtor will not
have the liquidity to satisfy the administrative costs of the Chapter 11 Case.
14. The DIP Facility is critical to the Debtor’s ability to (i) pay necessary operational
expenses, including employee wages, and (ii) pay post-petition administrative claims. The DIP
Facility will preserve and maximize the value of the Debtor’s estate, allowing the Debtor to pursue
a Court-approved sale process in a non-compressed timeline and facilitate the administration of
the Chapter 11 Case. Without access to the DIP Facility, the Debtor has insufficient cash on hand,
and based on the Debtor’s liquidity forecast, the Debtor will not be able to generate sufficient
levels of operating cash flow in the ordinary course of business to cover ongoing expenses and the
projected costs of the Chapter 11 Case. Consequently, the Debtor will be forced to initiate chapter
7 proceedings and liquidate all of its assets. As a result, the Debtor believes that the availability
of the funding provided by the DIP Facility at the start of the Chapter 11 Case is necessary for the
Debtor to avoid immediate and irreparable harm.
D. Lack of Available Alternative Financing
15. All of the Debtor’s assets constitute the collateral of the DIP Lender under the
Prepetition Secured Note. In negotiating the terms of the DIP Facility, the DIP Lender was
unwilling to consent to the priming of his prepetition lien by a third-party lender, even if such
third-party lender was willing to lend. The DIP Facility was negotiated by the Debtor and the
Independent Manager,4 on the one hand, and the DIP Lender, on the other, in good faith and at
4
The DIP Lender recused himself from involvement on the Debtor’s behalf on this issue in favor of the Independent
Manager.
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arms’ length and includes certain highly favorable terms that the Debtor believes a different lender
would likely be unwilling to offer, including (i) no fees such as unused line or closing fees and (ii)
no postpetition debt-service payments.
16. In sum, under the circumstances, the only viable source of secured credit available
to the Debtor, other than the use of Cash Collateral, is the DIP Facility, and the Debtor requires
both additional financing under the DIP Facility and the continued use of Cash Collateral under
the terms of the DIP Orders to satisfy its postpetition liquidity needs and fund a robust chapter 11
sale process.
RELIEF REQUESTED
17. By this Motion, the Debtor seeks authorization to enter into the DIP Facility,
pursuant to the terms set forth in this Motion, the DIP Term Sheet, the Interim Order and the Final
Order. Specifically, the Debtor seeks, among other things: (i) to grant to the DIP Lender first
priority security interests in and liens on all of the property, assets or interests in property of the
Debtor and the Debtor’s estate (the “DIP Collateral”), subordinate only to any Permitted Priming
Liens (as defined below) and the Carve Out (the “DIP Liens”); (ii) upon the entry of the Final
Order, to grant to the DIP Lender a perfected, first priority lien on the proceeds of the Debtor’s
claims and causes of action under sections 502(d), 544, 545, 547, 548, 549, 550 and 553 of the
Bankruptcy Code, and any other avoidance or similar actions under the Bankruptcy Code or similar
state law (the “Avoidance Actions”) whether received through judgment, avoidance or otherwise;
(iii) to grant the priming of any liens on the DIP Collateral for the benefit of the DIP Lender; (iv)
a ruling that the DIP Liens will be valid and enforceable against any trustee appointed in the
Chapter 11 Case, upon the conversion of the Chapter 11 Case to a case under Chapter 7 of the
Bankruptcy Code or in any other proceedings related to any of the foregoing; (v) authorization to
use the advances under the DIP Facility and to use Cash Collateral during the period commencing
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immediately after the entry of the Interim Order and terminating upon the occurrence of an Event
of Default (as defined the DIP Term Sheet and Interim DIP Order); (vi) findings that the Interim
Order and Final Order are sufficient and conclusive evidence of the validity, perfection, and
priority of the DIP Liens; (vii) authorization to provide adequate protection to the DIP Lender on
account of its interest in the DIP Collateral on account of the Prepetition Secured Note; (viii) a
ruling that the DIP Liens are subordinate only to the Carve Out (as defined in the DIP Term Sheet
and Interim Order) and any Permitted Priming Liens; (ix) subject to and only effective upon the
entry of a Final Order, a waiver by the Debtor of any right to surcharge against the DIP Collateral
pursuant to Section 506(c) of the Bankruptcy Code or otherwise; (x) subject to entry of the Final
Order, a ruling that upon the occurrence of an Event of Default and upon specified notice by the
DIP Lender to the Debtor, counsel to the Debtor, counsel to the Committee (if appointed) and the
U.S. Trustee of the occurrence of such Event of Default, subject to an ability to cure, if such Event
of Default is capable of being cured during the Notice Period, the automatic stay shall be deemed
modified to permit the DIP Lender to take any and all actions and remedies to proceed against,
take possession of, protect and realize upon the DIP Collateral and any other property of the estate
of the Debtor upon which the DIP Lender has been or may hereafter be granted liens and security
interests to obtain repayment of the DIP Obligations; (xi) a finding that the DIP Lender has acted
in good faith in connection with negotiating the DIP Facility; (xii) to schedule a preliminary
hearing on this Motion pursuant to Bankruptcy Rule 4001 and authority for entry of the Interim
Order to obtain credit under the terms of the DIP Facility and in accordance with the Interim Order;
and (xiii) to schedule the final hearing (the “Final Hearing”) on the Motion as soon as practicable,
but in no event later than thirty (30) days from the Petition Date.
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MATERIAL TERMS OF THE DIP FACILITY
18. Bankruptcy Rule 4001(c)(1)(B) requires that a motion for authority to obtain credit
list or summarize, and set out the location within the relevant documents, all material provisions
of the proposed credit agreement and form of order, including interest rate, maturity, events of
default, liens, borrowing limits and borrowing conditions. Fed. R. Bankr. P. 4001(c)(1)(B). The
principal terms of the DIP Facility are as follows:5
Required Disclosures Summary of Material Terms

DIP Credit Parties Borrower: Alpha Entertainment LLC (“Borrower” or “Debtor”)
DIP Term Sheet Lender: Vincent K. McMahon, an individual (the “DIP Lender”)
Preamble
Borrowing Limits Borrowings under the DIP Facility shall be incurred as follows: (i)
following the entry of an order by the Bankruptcy Court (in form and
DIP Term Sheet at p. 2 substance reasonably satisfactory to the DIP Lender) approving the DIP
Facility on an interim basis (the “Interim DIP Order”) one or more draws
Interim Order, preamble of the DIP Facility in an amount not to exceed $750,000 in accordance
& ¶5 with the Approved DIP Budget (the “Initial Availability”); and (ii) the
remaining portion of the DIP Commitment will be made available from
time to time following the entry of an order (in form and substance
reasonably satisfactory to the DIP Lender) by the Bankruptcy Court
approving the DIP Facility on a final basis (the “Final DIP Order”), in
bi-weekly draws in accordance with the Approved DIP Budget, in each
case subject to the terms and conditions set forth herein.
The aggregate principal amount of the DIP Facility shall not exceed
$3,500,000.
5
This summary is qualified, in its entirety, by the provisions of the DIP Term Sheet and the Interim Order. Unless
otherwise defined within this Motion, capitalized terms used within this summary only shall have the meanings
ascribed to them in the DIP Term Sheet or the Interim Order, as applicable.
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Interest Rate and Interest Rate: 4.25% per annum.
Default Interest
Default Interest: two (2) percentage points above the Interest Rate per
DIP Term Sheet at p. 2. annum.
Borrowing Conditions Standard and customary conditions to the borrowing of funds for
and Restrictions on Use financings of this type, including the requirement for a Budget prior to
of Proceeds borrowing. Additional conditions include:
DIP Term Sheet at p. 3-4 Budget and Variance: Actual expenditures made by the Debtor may not
& 6-7 exceed the amount set forth in the DIP Budget by (a) fifteen percent
(15%) for any line item and (b) ten percent (10%) in the aggregate for
Interim Order at ¶¶ each week (the “Permitted Variance”); provided, however, that if the
F(iv), 7, 11 & 13 actual aggregate disbursements for a given week do not exceed 100% of
the aggregate budgeted disbursements for such week, then the aggregate
permitted disbursements for the next week shall be increased by such
aggregate deficiency on a rolling, cumulative basis. The Permitted
Variance for professional fees and expenses shall be measured on a
monthly basis after the issuance of the invoices to the Debtor by any such
professional firm.
Use of Proceeds: Subject to the Approved DIP Budget, to pay, together

with the Debtor’s existing cash on hand, (i) the operating expenses of the
Debtor during the Chapter 11 Case, and (ii) the allowed fees, costs, and
expenses of the Debtor’s estate professionals incurred in connection with
the administration of the Chapter 11 Case.
Adequate Protection to DIP Lender: As adequate protection to be

provided to the DIP Lender on account of the Prepetition Secured Note,
the DIP Lender shall receive:
To the extent of any post-petition diminution in the value of the collateral

securing the Notes, (i) replacement liens (subject to the DIP liens and the
Carve-Out) on all of the DIP Collateral (including, subject only to entry
of a final order approving the DIP Facility, proceeds of avoidance
actions); and (ii) Section 507(b) claims (subject to the DIP claims and the
Carve-Out) with recourse against all assets of the Debtor (including
Avoidance Actions).
Restrictions on Use of Proceeds of DIP Facility. No proceeds from the

DIP Facility or the Carve-Out may be used (1) to investigate or challenge
in any respect the validity, priority, perfection, extent, or enforceability
of the liens securing the DIP Facility or the Prepetition Secured Note or
(2) to investigate or pursue any claims or causes of action of any kind
against the DIP Lender; provided, that the proceeds from the DIP Facility
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or the Carve-Out may be used to pay the fees of professionals retained by
a Committee, if any, to investigate the liens securing the Prepetition
Secured Note, in an amount not to exceed $20,000.
Fees and Credit Party DIP Lender Fees and Expenses. The Borrower shall be obligated to pay
Expenses the reasonable and documented fees, costs, and expenses incurred by the
DIP Lender in connection with the DIP Facility (the “DIP Fees and
DIP Term Sheet at p. 3 Expenses”), which amounts shall be added to the total amount due under
the DIP Facility and payable on the Maturity Date. None of the DIP Fees
and Expenses shall be subject to Court approval or required to be
maintained in accordance with Guidelines of the United States Trustee
and no recipient of any such payment shall be required to file with respect
thereto any interim or final fee application with the Court.
Maturity Maturity Date: The maturity date of the DIP Facility (the “Maturity
Date”) shall be the earliest of (i) if a final order with respect to the DIP
DIP Term Sheet at p. 3 Facility has not yet been entered, May 12, 2020, (ii) the effective date of
a Chapter 11 plan, (iii) the date of consummation of any sale of all or
substantially all of the assets of the Debtor pursuant to Sections 363 or
1141 of the Bankruptcy Code, and (iv) the date of acceleration of the DIP
Facility and the termination of the DIP Commitment following the
occurrence of an Event of Default (defined herein).
Termination Termination: All DIP Obligations shall be immediately due and payable
on the earlier to occur of (i) Maturity Date and (ii) the occurrence of an
DIP Term Sheet at p. 6 Event of Default, in full and in cash without deduction or setoff, and all
of the DIP Lender’s commitments under the DIP Facility will terminate,
Interim Order at ¶ 14 including any further obligation to extend credit.
Events of Default; Availability under the DIP Facility shall terminate immediately upon the
Milestones earliest to occur of the following: (i) the Maturity Date; and (ii) the
occurrence of one of the following (each an “Event of Default”): (A) the
DIP Term Sheet at p. 6 date that any chapter 11 plan is filed by the Debtor with the Bankruptcy
Court that does not provide for the indefeasible payment of the DIP
Interim Order at ¶16 Obligations in full in cash on the effective date, without the express
written consent of the DIP Lender; (B) the filing of any motion or other
pleading by the Debtor that seeks to sell any portion of the DIP Collateral
or any DIP Collateral is sold, in each instance, without the prior written
consent of the DIP Lender; (C) the date that the Chapter 11 Case is
converted to a case under chapter 7 of the Bankruptcy Code or dismissed;
(D) the Debtor’s filing of a motion to appoint, any other party’s filing of
a motion to appoint if such motion is not resolved within thirty (30) days,
or the appointment of, a trustee or examiner with expanded powers in the
Chapter 11 Case; (E) failure to meet any of the Milestones; (F) the filing
of a motion or other pleading by the Debtor that seeks to grant a lien on
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the DIP Collateral that is equal or senior to the liens granted to the DIP
Lender hereunder and under the order approving the DIP Facility; (G)
entry of an order lifting or modifying the automatic stay of section 362(a)
of the Bankruptcy Code to allow for foreclosure on any DIP Collateral
with an aggregate book value in excess of $150,000; or (H) the Debtor’s
failure to pay any DIP Obligations when due in accordance with the
applicable DIP Documents.
Milestones: The DIP Lender’s obligation to fund advances to the Debtor

under the DIP Facility shall be subject to the Debtor’s satisfaction of the
following (the “Milestones”):
(a) on or before April 21, 2020, a motion (the “Sale Motion”) shall have
been filed seeking approval of bidding procedures and the sale of
substantially all of the Debtor’s assets pursuant to Section 363 of the
Bankruptcy Code (the “Sale”), in form and substance satisfactory to
the DIP Lender;
(b) on or before May 15, 2020, the Bankruptcy Court shall have entered
on the docket of the Final Order approving the DIP Motion on a final
basis, in form and substance satisfactory to the DIP Lender;
(c) on or before May 15, 2020, the Bankruptcy Court shall have entered
on the docket an order bidding procedures for the Sale, in form and
substance satisfactory to the DIP Lender; and
(d) on or before July 15, 2020, the Bankruptcy Court shall have entered
on the docket an order approving the Sale, in form and substance
satisfactory to the DIP Agent.
Priority of and Security DIP Liens:

for DIP Financing
Liens (a) As security for the DIP Obligations, effective and perfected upon the
date of the Interim Order and without the necessity of the execution
Interim Order at ¶ 9 or recordation of filings by the DIP Lender of mortgages, security
agreements, control agreements, pledge agreements, financing
statements, or other similar documents, or the possession or control
by the DIP Lender over any DIP Collateral, the following security
interests and liens are hereby granted by the Debtor to the DIP Lender
(the “DIP Liens”):
(i) a priming, first priority, and perfected security interest in, and
lien, under sections 364(c)(2) and 364(d) of the Bankruptcy
Code, upon all DIP Collateral of the Debtor and the Debtor’s
estate, which liens shall be senior to and prime any and all
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liens on the Debtor DIP Collateral that are not Permitted
Priming Liens (as defined below);
(ii) a junior lien, under section 364(c)(3) of the Bankruptcy Code,

upon all of the DIP Collateral of the Debtor and the Debtor’s
estate that is, as of the Petition Date, subject to Permitted
Priming Liens.
(b) The DIP Liens shall be senior priming liens on all DIP Collateral
senior to all other liens thereon, but subject only to (i) the Carve-Out
and (ii) Permitted Priming Liens.
(c) The DIP Collateral shall not include any claims or causes of action
arising under sections 542, 544, 545, 547, 548, 550, 551, 553(b), or
724(a) of the Bankruptcy Code (collectively, “Avoidance Actions”).
(d) For purposes of the Interim Order, “Permitted Priming Liens” means
valid, perfected, and non-avoidable Permitted Liens (as defined
below) in existence on the Petition Date that are not subject to
subordination and were either properly perfected as of the Petition
Date or subsequently perfected pursuant to section 546(b) of the
Bankruptcy Code. For purposes of the Interim Order, “Permitted
Liens” means: (a) liens arising by operation of law in favor of
warehousemen, landlords, carriers, mechanics, materialmen, laborers
or suppliers, in each case incurred in the ordinary course of business
and not in connection with the borrowing of money, (b) liens incurred
in the ordinary course of business in connection with workers’
compensation and other unemployment insurance, or to secure the
performance of tenders, surety and appeal bonds, bids, leases,
government contracts, trade contracts and other similar obligations
(exclusive of obligations for the payment of borrowed money), and
(c) rights of setoff or bankers’ liens upon deposits of cash in favor of
banks or other depository institutions.
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Superpriority Superpriority Claims. Pursuant to Section 364(c)(1) of the Bankruptcy
Administrative Expense Code, but subject to the Carve-Out (as defined below), all of the DIP
Claim Status Obligations shall constitute allowed superpriority administrative expense
claim (a “Superpriority Claim”) against the Debtor (the “DIP
Interim Order at ¶ 8 Superpriority Claims”) with priority over any and all administrative
expense claims, adequate protection claims, diminution claims, and all
other claims against the Debtor or its estate in the Case, at any time
existing or arising, of any kind or nature whatsoever, including without
limitation, administrative expenses of the kinds specified in or arising
under Bankruptcy Code Sections 105, 326, 328, 330, 331, 364(c), 365,
503(a), 503(b), 506(c) (subject to entry of the Final Order), 507(a),
507(b), 546(c), 546(d), 552(b) (subject to entry of the Final Order), 726,
1113, and 1114, and any other provision of the Bankruptcy Code, as
provided under Section 364(c)(1) of the Bankruptcy Code, whether or not
such expenses or claims may become secured by a judgment lien or other
non-consensual lien, levy, or attachment, whether now in existence or
hereafter incurred by the Debtor, and shall at all times be senior to the
rights of the Debtor, the Debtor’s estate, and any successor trustee, estate
representative, or any creditor, in the Case or any successor case.
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Carve-Out Carve-Out:
Interim Order at ¶ 12 (a) The DIP Liens, Adequate Protection Liens, and Prepetition Liens, and
the DIP Superpriority Claims and the Adequate Protection
Superpriority Claims, shall be subject to a carve-out (the “Carve-
Out”) for the following, and in the following priority (i) all fees
required to be paid to the Clerk of the Bankruptcy Court and to the
United States Trustee; (ii) subject to the restrictions in Paragraph 13
of the Interim Order, the amount of allowed and unpaid fees, costs,
and expenses of the estate’s court-approved professionals in the Case
incurred from and after the occurrence of an Event of Default, in an
aggregate amount not to exceed (x) $175,000 in the case of the
Debtor’s court-approved professionals and (y) $30,000 in the case of
court-approved professionals retained by a committee, if any,
appointed in the Case under Section 1102 of the Bankruptcy Code (a
“Committee”); and (iii) the amount of allowed and unpaid fees, costs,
and expenses of the estate’s court-approved professionals in the Case
incurred prior to the occurrence of an Event of Default, not to exceed
the amounts set forth in applicable lines of the Approved DIP Budget
as of any applicable date of determination; provided that in no event
shall the DIP Lender be obligated to loan funds to pay any claims to
the extent that such amounts would, when combined with the amounts
advanced under the DIP Facility, exceed the maximum principal
amount of commitments under the DIP Facility.
(b) Upon the occurrence and continuance (beyond any applicable grace
period) of an Event of Default (as defined in the DIP Term Sheet), the
right of the Debtor to pay fees and expenses of professionals retained
by order of the Bankruptcy Court outside of the Carve-Out shall
immediately terminate (a “Carve-Out Event”), and upon such
occurrence, the Debtor shall provide immediate notice by facsimile
and e-mail to all professionals informing them that a Carve-Out Event
has occurred and further advising them that the Debtor’s ability to pay
estate professionals is subject to the Carve-Out.
(c) Notwithstanding anything herein to the contrary, prior to a Carve-Out

Event, the Debtor shall, in accordance with the Approved DIP Budget
and the terms of the DIP Term Sheet and subject to the terms of the
Interim Order and any other relevant orders of the Bankruptcy Court,
be permitted to pay compensation and reimbursement of expenses to
professionals allowed and payable under sections 330 and 331 of the
Bankruptcy Code and such orders of the Bankruptcy Court
authorizing the payment of compensation and reimbursement of
expenses that have been incurred prior to the occurrence of such
Carve-Out Event.
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(d) Nothing herein or in the DIP Term Sheet shall constitute a cap on the
amount of professional fees and expenses that may be incurred or
allowed in the Case; provided that no payments of such fees and
expenses shall be made in excess of the amounts contained within or
inconsistent with the Approved DIP Budget and the Budget
Covenant.
Adequate Protection Adequate Protection for Prepetition Secured Note. The DIP Lender, on
account of the Prepetition Secured Note, is entitled pursuant to Sections
Interim Order at ¶ 11 361, 363(c)(2), and 364(d)(1) of the Bankruptcy Code to adequate
protection of the DIP Lender’s interest in the collateral for the Prepetition
Secured Note (the “Prepetition Collateral”), including Cash Collateral,
in an amount equal to the diminution in value of the Prepetition
Collateral, including any such diminution resulting from the sale, lease,
or use by the Debtor (or other decline in value) of the Prepetition
Collateral, the priming by the DIP Liens of the liens securing the
Prepetition Secured Note (the “Prepetition Liens”), as well as the
imposition of the automatic stay (such diminution, the “Adequate
Protection Obligations”). As adequate protection and security for the
payment of the Adequate Protection Obligations, the DIP Lender, on
account of the Prepetition Secured Note, is shall have the following:
(a) Adequate Protection Liens. The DIP Lender is hereby granted
(effective and perfected upon the date of the Interim Order and
without the necessity of the execution by the Debtor of security
agreements, pledge agreements, mortgages, financing statements, or
other agreements) a valid, perfected replacement security interest in
and lien on all of the DIP Collateral (the “Adequate Protection
Liens”), subject and subordinate only to (i) the DIP Liens, (ii)
Permitted Priming Liens, and (iii) the Carve Out.
(b) Section 507(b) Claim. The Adequate Protection Obligations shall

constitute superpriority claims as provided in section 507(b) of the
Bankruptcy Code (the “Adequate Protection Priority Claims”), with
priority in payment over any and all administrative expenses of the
kinds specified or ordered pursuant to any provision of the
Bankruptcy Code, including without limitation, sections 326, 328,
330, 331, and 726 of the Bankruptcy Code, subject and subordinate
only to (i) the Carve Out and (ii) the DIP Superpriority Claims.
Acknowledgments The Debtors stipulate to the amount due under the DIP Facility and the
Interim Order at ¶¶ 3 - 4 enforceability of, and liens granted under, the DIP Facility and the
obligations thereunder.
Waivers and Consents Modification of Automatic Stay. The automatic stay imposed under
Section 362(a) of the Bankruptcy Code is hereby modified solely (i) to
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Interim Order at ¶¶ 10, the extent necessary to authorize the Debtor to pay from time to time
21 & 24 following the Petition Date, and DIP Lender to retain and apply payments
made, in accordance with the terms of the Interim Order and the DIP
Term Sheet, including, without limitation, payments of accrued interest
and payments of principal amounts outstanding under the DIP Facility
and (ii) subject to entry of the Final Order, upon the occurrence of an
Event of Default and following five (5) business days’ written notice (the
“Notice Period”) by the DIP Lender to the Debtor, counsel to the Debtor,
counsel to the Committee (if appointed) and the United States Trustee of
the occurrence of such Event of Default, subject to an ability to cure, if
such Event of Default is capable of being cured during the Notice Period,
to permit the DIP Lender to take any and all actions and remedies to
proceed against, take possession of, protect and realize upon the DIP
Collateral and any other property of the estate of the Debtor upon which
the DIP Lender has been or may hereafter be granted liens and security
interests to obtain repayment of the DIP Obligations to the DIP Lender;
provided, that such notice by the DIP Lender shall not prejudice the rights
of the Debtor to file a motion (the “Opposition Motion”) with the Court
opposing the termination of the automatic stay; provided, further, that
upon the filing of such motion the DIP Lender shall be stayed from taking
any actions or remedies against the DIP Collateral until the Court hears
and disposes of such motion. During the Notice Period and during the
period following the filing of an Opposition Motion, the Debtor may use
Cash Collateral to pay the following amounts and expenses in accordance
with the Approved DIP Budget: (i) expenses that the Debtor has
determined in good faith are in the ordinary course and critical to the
preservation of the Debtor and its estate, and (ii) such other amounts as
have been approved in advance in writing by the DIP Lender. Interim
Order at ¶ 21.
Perfection of DIP Liens. The DIP Liens shall be and hereby are fully
perfected liens and security interests, effective and perfected upon the
date of the Interim Order. The Interim Order shall be sufficient and
conclusive evidence of the validity, perfection, and priority of the DIP
Liens, without the necessity of filing or recording any financing
statement, mortgage, notice, or other instrument or document that may
otherwise be required under the law or regulation of any jurisdiction or
the taking of any other action to validate or perfect (in accordance with
applicable non-bankruptcy law) the DIP Liens, or to entitle the DIP
Lender to the priorities granted herein. Notwithstanding the foregoing,
the DIP Lender is authorized to file, in the DIP Lender’s sole discretion
as it deems necessary, such financing statements, deeds of trust,
mortgages, notices of liens, and other similar documents to perfect in
accordance with applicable non-bankruptcy law or to otherwise evidence
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the DIP Liens, and all such financing statements, deeds of trust,
mortgages, notices, other documents, and approvals shall be deemed to
have been filed or recorded as of the Petition Date; provided, however,
that no such filing or recordation shall be necessary or required in order
to create or perfect the DIP Liens. The Debtor is authorized and directed
to execute, as applicable, and deliver promptly upon demand to the DIP
Lender all such financing statements, mortgages, notices, and other
documents as the DIP Lender may reasonably request. The DIP Lender
in its discretion may file a photocopy of the Interim Order as a financing
statement with any filing or recording office or with any registry of deeds
or similar office, in addition to or in lieu of such financing statements,
notices of lien, or similar instrument. Any provision of any lease, loan
document, easement, use agreement, proffer, covenant, license, contract,
organizational document, or other instrument or agreement that requires
the consent or approval of one or more landlords, licensors, or other
parties, or requires the payment of any fees or obligations to any
governmental entity, non-governmental entity or any other person, for the
Debtor to pledge, grant, mortgage, sell, assign, or otherwise transfer any
fee or leasehold interest or the proceeds thereof or other collateral, shall
have no force or effect with respect to the transactions granting in favor
of the DIP Lender a priority security interest in such fee, leasehold, or
interest or other collateral or the proceeds of any assignment, sale, or
other transfer thereof, by the Debtor in favor of the DIP Lender in
accordance with the terms of the DIP Term Sheet and the Interim Order.
Interim Order at ¶ 10.
Bankruptcy Code Section 506(c). Subject to entry of the Final Order, the
Debtor’s waive the right to seek to surcharge the DIP Collateral under
section 506(c) of the Bankruptcy Code, to the extent such section applies.
Interim Order at ¶ 24.
REQUIREMENTS UNDER LOCAL RULE 4001-2
19. Local Rule 4001-2 requires that certain provisions contained in the DIP Credit
Agreement be highlighted and that the Debtor provide justification for the inclusion of such
highlighted provisions. The Debtor hereby identifies and discusses the following provisions of the
DIP Credit Agreement and the Interim Order:
20. Waiver of Section 506(c) of the Bankruptcy Code: Local Rule 4001-2(a)(i)(C)
requires disclosure of provisions that constitute a waiver, without notice, of whatever rights the
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estate may have under section 506(c) of the Bankruptcy Code. See Del. Bankr. L.R. 4001-
2(a)(i)(C).
21. The Interim Order provides that the waiver of any rights under section 506(c) of
the Bankruptcy Code is subject to entry of the Final Order. Because this waiver will only be
effective upon entry of the Final Order and to the extent such order so provides, the Debtor
respectfully submits that parties in interest will have an opportunity to be heard and, as such, the
waiver will not be “without notice,” but the Debtor discloses the provision out of an abundance of
caution.
22. Carve-Out: Local Rule 4001-2(a)(i)(F) requires disclosure of disparate treatment
between the professionals retained by the Debtor and the professionals retained by the unsecured
creditors’ committee with respect to a professional fee carve out. See Del. Bankr. L.R. 4001-
2(a)(i)(F).
23. Budgeted professional fees comprise the primary component of the Carve-Out. The
Budget provides different amounts for Committee professionals and Debtor professionals. The
Debtor submits the proposed amounts are common in cases of similar size before the Court,
accurately accounts for the increased administrative tasks required of Debtor professionals, and
are reasonable and appropriate under the circumstances.
24. Waiver of Section 552(b)(1): Pursuant to Local Rule 4001-2(a)(i)(H), a movant
must identify any provisions that seek to affect the Court’s power to consider the equities of the
case under section 552(b)(1) of the Bankruptcy Code. The Interim Order provides in light of the
agreement to subordinate its liens and superpriority claims to the Carve Out in the case of the DIP
Lender, upon entry of the Final Order, the DIP Lender shall be entitled to all of the rights and
benefits of section 552(b) of the Bankruptcy Code and the “equities of the case” exception shall
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19
not apply with respect to proceeds, product, offspring or profits of any of the DIP Collateral. See
Interim Order at ¶ 8. The Debtor believes that such relief is often provided, and appropriate, upon
entry of the Final Order.
REQUEST FOR APPROVAL OF THE DIP FACILITY AND RELATED ACTIONS
A. Sections 364(c) and (d) of the Bankruptcy Code
25. As described above, it is essential to the success of the Chapter 11 Case that the
Debtor immediately obtain access to sufficient postpetition financing and use of cash collateral.
The preservation of estate assets and the Debtor’s ability to maximize value for stakeholders
through the sale process depends heavily upon the expeditious approval of the relief requested
herein.
26. Section 364 of the Bankruptcy Code distinguishes among (i) obtaining unsecured
credit in the ordinary course of business, (ii) obtaining unsecured credit outside of the ordinary
course of business and (iii) obtaining credit with specialized priority or with security. See 11 U.S.C.
§ 364. If a debtor in possession cannot obtain postpetition credit on an unsecured basis, pursuant
to section 364(b) of the Bankruptcy Code, a court may authorize a debtor to obtain credit or to
incur debt, the repayment of which is entitled to superpriority administrative expense status, or is
secured by a senior lien on unencumbered property, or a junior lien on encumbered property, or a
combination of the foregoing. See 11 U.S.C. § 364(c).6 In addition, pursuant to section 364(d)
6
Section 364(c) of the Bankruptcy Code provides as follows:
(c) If the trustee is unable to obtain unsecured credit allowable under
section 503(b)(1) of this title as an administrative expense, the court, after notice
and a hearing, may authorize the obtaining of credit or the incurring of debt—
(1) with priority over any or all administrative expenses of the kind specified
in section 503(b) or 507(b) of this title;
(2) secured by a lien on property of the estate that is not otherwise subject to
a lien; or
(3) secured by a junior lien on property of the estate that is subject to a lien.
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of the Bankruptcy Code,7 a court may authorize a debtor to obtain postpetition credit secured by a
lien that is equal or senior in priority to existing liens on encumbered property (a “priming” lien)
when a debtor is unable to obtain credit on other terms and the interests of existing lienholders are
adequately protected, or if the existing lienholders consent to such priming.
B. Approval Under Section 364(c) of the Bankruptcy Code
27. The statutory requirement for obtaining postpetition credit under section 364(c) of
the Bankruptcy Code is a finding, made after notice and hearing, that the debtor in possession is
“unable to obtain unsecured credit allowable under § 503(b)(1) of [the Bankruptcy Code] as an
administrative expense.” 11 U.S.C. § 364(c); see In re Ames Dep’t Stores, 115 B.R. 34, 37–38
(Bankr. S.D.N.Y. 1990) (a debtor must show that it has made a reasonable effort to seek other
sources of financing under sections 364(a) and (b) of the Bankruptcy Code); In re Crouse Grp.,
Inc., 71 B.R. 544, 549 (Bankr. E.D. Pa. 1987) (debtor seeking secured credit under section 364(c)
of the Bankruptcy Code must prove that it was unable to obtain unsecured credit pursuant to
section 364(b) of the Bankruptcy Code), modified on other grounds, 75 B.R. 553 (Bankr. E.D. Pa.
1987).
11 U.S.C. § 364(c).
7
Section 364(d) of the Bankruptcy Code provides as follows:
(d)(1) The court, after notice and a hearing, may authorize the obtaining of
credit or the incurring of debt secured by a senior or equal lien on property of the
estate that is subject to a lien only if—
(A) the trustee is unable to obtain such credit otherwise; and
(B) there is adequate protection of the interest of the holder of the
lien on the property of the estate on which such senior or equal lien is proposed
to be granted.
(2) In any hearing under this subsection, the trustee has the burden of proof
on the issue of adequate protection.
11 U.S.C. § 364(d).
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28. Courts have articulated a three-part test to determine whether a debtor may obtain
financing under section 364(c) of the Bankruptcy Code:
(a) the debtor is unable to obtain unsecured credit under

section 364(b) (i.e., by granting a lender administrative
expense priority);
(b) the credit transaction is necessary to preserve the assets of

the estate; and
(c) the terms of the transaction are fair, reasonable and adequate,
given the circumstances of the debtor-borrower and the
proposed lender.
In re Aqua Assocs., 123 B.R. 192, 195-96 (Bankr. E.D. Pa. 1991) (applying the above test); In re
Ames Dep't Stores, 115 B.R. at 39.
i. The Debtor Was Unable to Obtain Necessary

Postpetition Financing from Third-Party Sources
29. To show that the credit required is not obtainable on an unsecured basis, a debtor
need only demonstrate “by a good faith effort that credit was not available without” the protections
of sections 364(c) of the Bankruptcy Code. Bray v. Shenandoah Fed. Sav. & Loan Ass'n (In re
Snowshoe Co.), 789 F.2d 1085, 1088 (4th Cir. 1986). Thus, “[t]he statute imposes no duty to seek
credit from every possible lender before concluding that such credit is unavailable.” Id. Moreover,
where few lenders are likely to be able and willing to extend the necessary credit to the debtor, “it
would be unrealistic and unnecessary to require [the debtor] to conduct . . . an exhaustive search
for financing.” In re Sky Valley, Inc., 100 B.R. 107, 113 (Bankr. N.D. Ga. 1988), aff'd sub nom.
Anchor Sav. Bank FSB v. Sky Valley, Inc., 99 B.R. 117, 120 n.4 (N.D. Ga. 1989).
30. As described above, all of the Debtor’s assets constitute the collateral of the DIP
Lender under the Prepetition Secured Note. In negotiating the terms of the DIP Facility, the DIP
Lender was unwilling to consent to the priming of his prepetition lien by a third-party lender, even
if such third-party lender was willing to lend. The DIP Facility was negotiated by the Debtor and
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the Independent Manager, on the one hand, and the DIP Lender, on the other, in good faith and at
arms’ length and includes certain highly favorable terms under the circumstances that the Debtor
believes a different lender would likely be unwilling to offer, including (i) no fees such as unused
line or closing fees and (ii) no postpetition debt-service payments. In light of the foregoing, the
Debtor does not believe the necessary post-petition financing could have been obtained from
another source.
ii. The DIP Facility is Necessary to Administer, Maximize and

Preserve the Assets of the Debtor’s Estate
31. It is essential that the Debtor immediately obtain the financing necessary to
administer, maximize and preserve the assets of its estate. If the Debtor is without sufficient funds
to operate administer the Chapter 11 Case and conduct a fulsome chapter 11 sale process, the
Debtor would be forced into an immediate liquidation, to the detriment of the Debtor, its estate, its
creditors and its other stakeholders.
iii. The Terms of the DIP Facility are Fair, Reasonable and
Appropriate Under the Circumstances
32. The terms and conditions of the DIP Facility must be judged in light of the debtor’s
financial circumstances and alternatives. In re W. Pac. Airlines, Inc., 223 B.R. 567, 572 (Bankr.
D. Colo. 1997) (although terms of financing facility fees were “onerous, costly, and tough,” facility
was approved because it fairly reflected the debtor’s “situation and the market in which the debtor
is forced to participate as a result of its financial circumstances and the deadlines it faces”).
33. Judged from that perspective, the terms of the DIP Facility are fair and reasonable
under the circumstances. The DIP Facility provides sufficient liquidity to the Debtor in its overall
chapter 11 efforts because it provides the Debtor the time, breathing spell, and resources necessary
to pursue the sale of its assets with the overarching goal of maximizing the value of its estate for
the benefit of its creditors and other stakeholders. Additionally, the Budget will cover all
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anticipated administrative claims. After having engaged in arm’s-length negotiations with the DIP
Lender through its Independent Manager, counsel and other advisors, the Debtor believes that the
DIP Facility is the best solution for the Debtor’s immediate liquidity needs and its chapter 11
strategy.
34. In addition, the DIP Facility does not directly or indirectly deprive the Debtor’s
estates or other parties in interest of possible rights and powers by restricting the services for which
chapter 11 professionals may be paid. See In re Tenney Vill. Co., 104 B.R. 562, 568-69 (Bankr.
D.N.H. 1989) (denying approval of a financing facility that, among other things, did not provide a
carve-out for professional fees). Instead, the DIP Facility and the proposed Interim Order provide
generally that the security interests and superpriority administrative expense claims granted to the
DIP Lender are subject to the Carve-Out, which provides for (a) all unpaid fees of the Clerk of the
Court and the Office of the United States Trustee and (b) fees and expenses for any professional
retained pursuant to sections 327, 328 or 1103 of the Bankruptcy Code of the Debtor and any
statutory committee of unsecured creditors. In Ames Department Stores, the bankruptcy court
found that such “carve-outs” are not only reasonable but are necessary to ensure that official
committees and debtors’ estates are adequately assisted by counsel and other professionals. In re
Ames Dep’t Stores, 115 B.R. at 40.
35. Finally, there is nothing in the DIP Facility to prevent the Debtor from considering
alternative sources of financing prior to entry of the Final Order. Should a superior alternative
materialize, the Debtor, subject to repayment of all DIP Obligations owing to the DIP Lender, may
take it.
36. For these reasons, in the Debtor’s business judgment, the terms of the DIP Facility
are fair and reasonable in light of the circumstances of this case.
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iv. The DIP Facility is in the Best Interests of the Debtor’s

Estate and Creditors
37. The Debtor believes that the approval of the DIP Facility is in the best interests of
its estate and creditors. As stated above, without immediate access to the cash collateral and the
funds available under the DIP Facility, the Debtor would quickly face a liquidity shortage and be
forced to run a sale process on an expedited timeline or to initiate a Chapter 7 proceeding and
liquidate all of its assets.
C. Approval Under Section 364(d) of the Bankruptcy Code
38. The statutory requirement for obtaining postpetition credit under section 364(d)(1)
of the Bankruptcy Code is a finding, made after notice and hearing, that the debtors in possession
are “unable to obtain such credit otherwise.” See Shaw Indus., Inc. v. First Nat'l Bank of PA (In
re Shaw Indus., Inc.), 300 B.R. 861, 863, 865 (Bankr. W.D. Pa. 2003). As fully described above,
the Debtor believes that, under the circumstances, it would have been unable to obtain the
necessary postpetition financing to fund the Chapter 11 Case and the sale process from a third-
party, and that the terms of the DIP Facility, which was negotiated at arms’-length and in good
faith, are reasonable and, in many ways, favorable to the Debtor and its estate.
39. Through the DIP Facility, the DIP Lender will receive, pursuant to section 364(d)(1)
of the Bankruptcy Code, superpriority administrative expense claims in the Chapter 11 Case and
any Successor Cases, as well as automatically perfected security interests in and liens on all of the
DIP Collateral (as defined in the Interim DIP Order), including all property constituting “cash
collateral.”
40. Thus, the requirements of section 364(d)(1)(B) of the Bankruptcy Code have been
fulfilled, to the extent applicable, and the proposed DIP Facility should be approved at the Final
Hearing.
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D. Application of the Business Judgment Standard
i. Entry into the DIP Credit Agreement is a Sound Exercise of

the Debtor’s Business Judgment
41. As described above and in the First Day Declaration, after appropriate diligence
and analysis, the Debtor, acting through the Independent Manager, has concluded that the DIP
Facility is the best and only option available under the circumstances. Bankruptcy courts routinely
defer to a debtor’s business judgment on most business decisions, including the decision to borrow
money, unless such decision is arbitrary and capricious. See In re YL West 87th Holdings I LLC,
423 B.R. 421, 441 (Bankr. S.D.N.Y. 2010) (stating that “[c]ourts have generally deferred to a
debtor’s business judgment in granting section 364 financing”); Trans World Airlines, Inc. v.
Travellers Int'l AG (In re Trans World Airlines, Inc.), 163 B.R. 964, 974 (Bankr. D. Del. 1994)
(noting that the interim loan, receivables facility and asset-based facility were approved because
they “reflect[ed] sound and prudent business judgment on the part of TWA . . . [were] reasonable
under the circumstances and in the best interest of TWA and its creditors”); cf. In re Filene’s
Basement, LLC, 2014 WL 1713416, at *12 (Bankr. D. Del. Apr. 29, 2014) (stating “[t]ransactions
under § 363 must be based upon the sound business judgment of the debtor or trustee.”). In fact,
“[m]ore exacting scrutiny would slow the administration of the debtor’s estate and increase its cost,
interfere with the Bankruptcy Code’s provision for private control of administration of the estate,
and threaten the court’s ability to control a case impartially.” Richmond Leasing Co. v. Capital
Bank, N.A., 762 F.2d 1303, 1311 (5th Cir. 1985).
42. The Debtor has exercised sound business judgment in determining that a
postpetition credit facility is appropriate and has satisfied the legal prerequisites to incur debt under
the DIP Facility. In light of the Debtor’s overall circumstances and the fact that the Debtor could
not obtain postpetition financing from another lending source, much less on terms superior to the
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DIP Facility, the Debtor’s decision to enter into the DIP Facility is a sound exercise of its business
judgment. Accordingly, the Court should grant the Debtor authority to enter into the DIP Facility
and obtain funds from the DIP Lender on the basis described above, pursuant to sections 364(c)
and 364(d) of the Bankruptcy Code.
CASH COLLATERAL, PRIMING, AND ADEQUATE PROTECTION
43. The principal purpose of adequate protection is to safeguard the interests of the
secured creditor in the collateral against diminution in the value of that interest postpetition. See
In re 495 Cent. Park, 136 B.R. at 631 (stating that the goal of adequate protection is to safeguard
the secured creditor from diminution in value of its interest during the chapter 11); In re Mosello,
195 B.R. 277, 288 (Bankr. S.D.N.Y. 1996) (same).
44. The means by which adequate protection can be provided are addressed in
section 361 of the Bankruptcy Code, which sets forth three non-exclusive forms of adequate
protection:
(a) lump sum cash payments to the extent the use of property results in a diminution
in value of an entity’s interest in property;
(b) provision of additional or replacement liens to the extent the use of property
results in a diminution in value of an entity’s interest in property; and
(c) such other relief as will result in an entity realizing the indubitable equivalent
of its interest in property.
11 U.S.C. § 361. As the foregoing is neither exclusive nor exhaustive, there is a great deal of
flexibility in terms of what may constitute adequate protection. MBank Dallas, N.A. v. O'Connor
(In re O'Connor), 808 F.2d 1393, 1396-97 (10th Cir. 1987). Ultimately, adequate protection is
determined on a case-by-case basis in light of the particular facts and circumstances presented. Id.
(stating that “the courts have considered ‘adequate protection’ a concept which is to be decided
flexibly on the proverbial ‘case-by-case’ basis.”) (citations omitted); In re 495 Cent. Park,
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136 B.R. at 631 (stating that, “although section 361 presents some specific illustrations of adequate
protection, the statute is not exclusive” and “suggests a broad and flexible definition”); Pagano v.
Cooper (In re Cooper), 22 B.R. 718, 720 n.3 (Bankr. E.D. Pa. 1982) (“While adequate protection
is not defined in the Bankruptcy Code, the legislative history of § 361 reflects the intent of
Congress to give the courts the flexibility to fashion the relief in light of the facts of each case and
general equitable principles.” (citing H.R. Rep. No. 95-595, 95th Cong., 1st Sess. 339 (1977)); see
also 3 COLLIER ON BANKRUPTCY ¶ 363.05 (Alan N. Resnick & Henry J. Sommer eds., 16th ed.)
(stating that, although section 361 provides examples of adequate protection, “[t]hese examples
are not intended to be limiting, and the circumstances of the case will dictate the necessary relief
to be given”).
45. As adequate protection and in exchange for consent to use Cash Collateral, the
Debtor proposes to provide the DIP Lender, on account of the Prepetition Secured Note, with
(A) replacement liens on the DIP Collateral junior to (i) the Carve-Out, (ii) the DIP Liens, and (iii)
Permitted Priming Liens and (B) a superpriority administrative expense claim under section 507
of the Bankruptcy Code, junior to the DIP Superpriority Claim. The Debtor submits that, under
the circumstances, the proposed adequate protection is reasonable and sufficient under the
circumstances.
46. Further, with respect to Permitted Priming Liens (to the extent any exist), the DIP
Liens and the Adequate Protection Liens provided for in the proposed Interim DIP Order will be
junior to such Permitted Priming Liens, leaving them in place with their existing prepetition
seniority (if any).
47. If funds are not made available to pay essential items on an emergency basis, the
value of the Debtor’s assets will be eroded to the detriment of all parties in interest. On the other
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hand, use of limited cash collateral in accordance with the Budget, combined with the funds
available under the DIP Facility, will allow the Debtor to administer, preserve and even enhance
the value of the DIP Collateral. Accordingly, there is no harm done to any holders of Permitted
Priming Liens (to the extent any exist) by the Debtor’s proposed use of cash collateral, and the
Debtor believes that no other or further adequate protection is required.8
REQUEST FOR MODIFICATION OF THE AUTOMATIC STAY
48. The Debtor seeks a modification of the automatic stay imposed by operation of
section 362 of the Bankruptcy Code to the extent contemplated by the provisions of the DIP Term
Sheet as described above.
49. Such stay modification provisions are customary features of postpetition financing
facilities and, in the Debtor’s business judgment, are reasonable under the circumstances.
Accordingly, the Debtor respectfully requests that the Court modify the automatic stay to the extent
contemplated by the DIP Facility and the proposed Interim Order.
GOOD FAITH
50. The terms and conditions of the DIP Facility and the use of cash collateral are fair
and reasonable and were negotiated by the parties in good faith and at arms’ length. Therefore,
the DIP Lender should be accorded the benefits of section 364(e) of the Bankruptcy Code to the
extent any or all of the provisions of the DIP Facility, or any interim or final order of this Court
8
For the avoidance of doubt, the DIP Lender has consented to the priming of its prepetition liens on the DIP Collateral
on account of the Prepetition Secured Note and to the adequate protection provided in respect of the same under the
Interim DIP Order (and Final DIP Order).
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pertaining thereto, are hereafter modified, vacated, stayed or terminated by subsequent order of
this or any other court.
REQUEST FOR HEARING AND AUTHORITY TO

MAKE INTERIM BORROWINGS UNDER THE DIP FACILITY
51. Pursuant to Bankruptcy Rule 4001(b), the Debtor requests that the Court conduct
an interim hearing and authorize the Debtor’s use of the DIP Facility and cash collateral in order
to (a) maintain and finance the Debtor’s operations during the Chapter 11 Case and (b) avoid
immediate and irreparable harm and prejudice to the Debtor’s estate and all parties in interest.
52. Bankruptcy Rule 4001(c) provides that a final hearing on a motion to obtain credit
pursuant to section 364 of the Bankruptcy Code may not be commenced earlier than fourteen (14)
days after the service of such motion. Fed. R. Bankr. P. 4001(c). Upon request, however, the
Court is empowered to conduct a preliminary expedited hearing on the motion and authorize the
obtaining of credit to the extent necessary to avoid immediate and irreparable harm to a debtor’s
estate. In examining requests for interim relief under this rule, courts apply the same business
judgment standard applicable to other business decisions. See, e.g., In re Simasko, 47 B.R. 444,
449 (Bankr. D. Colo. 1985); see also In re Ames Dep't Stores, 115 B.R. at 38. After the fourteen
(14)-day period, the request for financing is not limited to those amounts necessary to prevent
disruption of the debtor’s business, and the debtor is entitled to borrow those amounts that it
believes prudent in the operation of its business. See, e.g., In re Simasko, 47 B.R. at 449; In re
Ames Dep't Stores, 115 B.R. at 36.
53. Pursuant to Bankruptcy Rule 4001(c), the Debtor respectfully requests that the
Court conduct a preliminary hearing on the Motion and authorize the Debtor, from the entry of the
Interim Order until the Final Hearing, to obtain access to interim borrowing under the terms
contained in the DIP Facility, and to utilize cash collateral.
304682624
30
SCHEDULING FINAL HEARING
54. The Debtor respectfully requests that the Court schedule the Final Hearing for a
date no later than thirty (30) days from the Petition Date, and set a deadline to object to entry of
the Final Order as set forth in the proposed Interim Order.
NOTICE
55. Notice of this Motion has been provided to: (i) the Office of the United States
Trustee for the District of Delaware; (ii) the Office of the United States Attorney for the District
of Delaware; (iii) the Internal Revenue Service; (iv) the Debtors’ twenty-five (25) largest
unsecured creditors (excluding insiders); (v) the Securities and Exchange Commission; (vi)
counsel to the DIP Lender; (vii) all parties that have filed a financing statement asserting a lien in
any of the Debtor’s assets; and (viii) the Cash Management Banks. Notice of this Motion and any
order entered hereon will be served in accordance with Local Rule 9013-1(m). In light of the
nature of the relief requested herein, the Debtors submit that no other or further notice is necessary.
[Remainder of this page intentionally left blank]
304682624
31
CONCLUSION
WHEREFORE, the Debtor respectfully requests that the Court (a) enter an Interim Order
substantially in the form attached hereto as Exhibit B, (b) set a date for a hearing to consider entry
of the Final Order, and (c) grant any other or further relief that the Court deems just and proper.
Dated: April 13, 2020 YOUNG CONAWAY STARGATT & TAYLOR, LLP
Wilmington, Delaware
/s/ Shane M. Reil
Michael R. Nestor (No. 3526) (mnestor@ycst.com)
Matthew B. Lunn (No. 4119) (mlunn@ycst.com)
Kenneth J. Enos (No. 4544) (kenos@ycst.com)
Travis G. Buchanan (No. 5595) (tbuchanan@ycst.com)
Shane M. Reil (No. 6195) (sreil@ycst.com)
Matthew P. Milana (No. 6681) (mmilana@ycst.com)
1000 N. King Street
Rodney Square
Wilmington, Delaware 19801
Telephone: (302) 571-6600
Facsimile: (302) 571-1253
Proposed Counsel to the Debtor and Debtor in Possession
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32
EXHIBIT A
Budget
304682624
ALPHA ENTERTAINMENT, LLC

CASH FLOW ($ in thousands)
13 WEEK BUDGET
Week 1 Week 2 Week 3 Week 4 Week 5 Week 6 Week 7 Week 8 Week 9 Week 10 Week 11 Week 12 Week 13 Total
Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast
Week Starting 4/13/2020 4/20/2020 4/27/2020 5/4/2020 5/11/2020 5/18/2020 5/25/2020 6/1/2020 6/8/2020 6/15/2020 6/22/2020 6/29/2020 7/6/2020 4/13/2020
Week Ending 4/19/2020 4/26/2020 5/3/2020 5/10/2020 5/17/2020 5/24/2020 5/31/2020 6/7/2020 6/14/2020 6/21/2020 6/28/2020 7/5/2020 7/12/2020 7/12/2020
Receipts $ 65 $ 100 $ 135 $ 175 $ 500 $ 100 $ - $ - $ - $ - $ - $ - $ - $ 1,075
Disbursements 924 263 330 308 179 180 45 351 164 169 45 274 187 3,419
Ticket Refunds 3,500 - - - - - - - - - - - - 3,500
Operating Cash Flow (4,359) (163) (195) (133) 321 (80) (45) (351) (164) (169) (45) (274) (187) (5,844)
Young Conway Stargatt & Taylor, LLP - - - 142 - - - - 142 - - - 142 425
Committee of Unsecured Creditors - - - - - - - - 100 - - - 100 200
Donlin Recano - - - 33 - - - - 33 - - - 33 100
Banker - - - - - - - - - - - - 75 75
John Brecker - - 15 - - - - 15 - - - 15 - 45
Trustee Fees - - - - - - - - - - - - 150 150
Total Restructuring Disbursements - - 15 175 - - - 15 275 - - 15 500 995
DIP Proceeds 750 875 875 - 1,000 3,500

Principal Payments -
Other Payments and Fees -
Total Financing 750 - - - 875 - - - 875 - - - 1,000 3,500
Net Cash Flow $ (3,609) $ (163) $ (210) $ (308) $ 1,196 $ (80) $ (45) $ (366) $ 436 $ (169) $ (45) $ (289) $ 313 $ (3,339)
Beginning Cash Balance $ 5,600 $ 1,991 $ 1,828 $ 1,618 $ 1,310 $ 2,506 $ 2,426 $ 2,380 $ 2,014 $ 2,450 $ 2,282 $ 2,237 $ 1,947 $ 5,600
Ending Cash Balance 1,991 1,828 1,618 1,310 2,506 2,426 2,380 2,014 2,450 2,282 2,237 1,947 2,261 2,261
Beginning DIP Balance - 750 750 750 750 1,625 1,625 1,625 1,625 2,500 2,500 2,500 2,500 -
Draw / (Paydown) 750 - - - 875 - - - 875 - - - 1,000 3,500
Ending DIP Balance $ 750 $ 750 $ 750 $ 750 $ 1,625 $ 1,625 $ 1,625 $ 1,625 $ 2,500 $ 2,500 $ 2,500 $ 2,500 $ 3,500 $ 3,500
ALPHA ENTERTAINMENT CONFIDENTIAL

EXHIBIT B
Interim Order
304682624
IN THE UNITED STATES BANKRUPTCY COURT

FOR THE DISTRICT OF DELAWARE
In re: )
) Chapter 11
ALPHA ENTERTAINMENT LLC, ) Case No. 20-10940 (LSS)
)
Debtor. )
) Ref. Docket No.
INTERIM ORDER PURSUANT TO 11 U.S.C. §§ 105, 362, 363, 364

AND 507 (A) AUTHORIZING POST-PETITION FINANCING,
(B) AUTHORIZING USE OF CASH COLLATERAL, (C) SCHEDULING
A FINAL HEARING, AND (D) GRANTING RELATED RELIEF
THIS MATTER having come before the Court upon the motion (the “DIP Motion”) of
Alpha Entertainment LLC (the “Debtor”) in the above-captioned chapter 11 case (the “Case”)
pursuant to Sections 105, 362, 363, 364(c) and (d), and 507 of title 11 of the United States
Code, 11 U.S.C. §§ 101 et seq. (as amended, the “Bankruptcy Code”), Rules 2002, 4001, 6004,
and 9014 of the Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”), and the
Local Bankruptcy Rules for the District of Delaware (the “Local Rules”), seeking, among other
things:
(i) authorization for the Debtor to obtain a secured post-petition financing facility (the
“DIP Facility”), in the form of a delayed draw, multiple draw term loan in the aggregate amount
of up to $3,500,000 (plus interest, costs, fees, and other expenses and amounts provided for in
the DIP Term Sheet and this Interim Order) pursuant to the terms and conditions set forth in that
certain General Term Sheet for Post-Petition Debtor-in-Possession Financing attached as
Exhibit A hereto (the “DIP Term Sheet”),1 by and between the Debtor and Vincent K. McMahon
(“DIP Lender”);
1
Capitalized terms not otherwise defined herein shall have the meaning ascribed to them in the DIP Term Sheet.
304661676 v1
(ii) authorization for the Debtor to use cash collateral, as defined by Section 363(a) of
the Bankruptcy Code (“Cash Collateral”);
(iii) authorization for the Debtor to execute and deliver the DIP Term Sheet and to
perform such other and further acts as may be required in furtherance of the DIP Facility and the
DIP Term Sheet;
(iv) authorization for the Debtor to draw on the DIP Facility in an amount not to
exceed the Initial Availability (as defined below), subject to the conditions precedent set forth in
the DIP Term Sheet, and to use proceeds of the DIP Facility to pay for, among other things,
working capital, general corporate purposes of the Debtor, and the expenses associated with
administration of the Case, but only in accordance with the then-current Approved DIP Budget
(as defined in the DIP Term Sheet and a copy of which is attached hereto as Exhibit B);
(v) subject to the Carve-Out (as defined below), the granting of allowed superpriority
administrative expense claim status in the Case to the DIP Facility and all obligations arising
thereunder (collectively, the “DIP Obligations”);
(vi) subject to the Carve-Out (as defined below), the granting to the DIP Lender of
first-priority security interests in and liens on all of the property, assets or interests in property of
the Debtor and the Debtor’s “estate” (as defined in the Bankruptcy Code) (collectively, the “DIP
Collateral”) to secure all DIP Obligations;
(vii) subject to the Carve-Out, the granting to the DIP Lender, as adequate protection
for amounts advanced to the Debtor prepetition under a Senior Secured Promissory Note dated
March 25, 2020 (as amended, the “Prepetition Secured Note”), adequate protection in the form
of replacement liens and superpriority administrative expense claims as set forth in this Interim
Order;
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(viii) subject to and only effective upon the entry of a Final Order granting such relief,
the waiver by the Debtor of any right to surcharge against the DIP Collateral pursuant to
Section 506(c) of the Bankruptcy Code or otherwise;
(ix) modification of the automatic stay imposed by Section 362 of the Bankruptcy
Code solely to the extent necessary to provide the DIP Lender with the relief necessary to
implement and effectuate the terms and provisions of the DIP Term Sheet;
(x) pursuant to Bankruptcy Rule 4001, that an interim hearing on the Motion (the
“Interim Hearing”) be held before this Court to consider entry of this proposed interim order
annexed to the Motion (the “Interim Order”); and
(xi) that a final hearing (the “Final Hearing”) be held on or before May [--], 2020, to
consider entry of a final order (the “Final Order”) authorizing the balance of the credit available
under the DIP Term Sheet and any requested relief not granted under this Interim Order on a
final basis, all as set forth in the DIP Motion and the DIP Term Sheet.
NOW THEREFORE, the Court having considered the DIP Motion, the DIP Term Sheet,
and any evidence submitted at the Interim Hearing, including the First Day Declaration; and
due and appropriate notice of the DIP Motion, the relief requested therein, and Interim Hearing
having been given in accordance with Bankruptcy Rules 2002, 4001, and 9014 and under the
circumstances; and the Interim Hearing to consider the interim relief requested in the DIP
Motion having been held and concluded; and all objections, if any, to the interim relief
requested in the DIP Motion having been withdrawn, resolved, or overruled by the Court; and it
appearing to the Court that granting the interim relief requested is necessary to avoid immediate
and irreparable harm to the Debtor and its estate pending the Final Hearing, and otherwise is
fair and reasonable and in the best interests of the Debtor, its estate, and its creditors and equity
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holders, and is essential to the Debtor’s efforts to preserve and maximize the value of its assets
during the course of the Case; and it further appearing, that the Debtor’s estate is unable to
obtain unsecured credit for money borrowed allowable as an administrative expense under
Section 503(b)(1) of the Bankruptcy Code; and after due deliberation and consideration, and for
good and sufficient cause appearing therefor;
BASED UPON THE RECORD ESTABLISHED AT THE INTERIM HEARING BY
THE DEBTOR, THE COURT HEREBY MAKES THE FOLLOWING FINDINGS OF FACT
AND CONCLUSIONS OF LAW:
A. Petition Date. On April 13, 2020 (the “Petition Date”), the Debtor filed a
voluntary petition under chapter 11 of the Bankruptcy Code in the United States Bankruptcy
Court for the District of Delaware (this “Court”) commencing the Case.
B. Debtor-in-Possession. The Debtor is currently operating its business as debtor-
in-possession pursuant to section 1101 of the Bankruptcy Code.
C. Jurisdiction and Venue. This Court has jurisdiction, pursuant to 28 U.S.C.
§§ 157(b) and 1334, over the Case, and over the persons and property affected hereby.
Consideration of the DIP Motion constitutes a core proceeding under 28 U.S.C. § 157(b)(2).
Venue for the Case is proper in this district pursuant to 28 U.S.C. §§ 1408 and 1409.
D. Official Committees. The United States Trustee for the District of Delaware (the
“United States Trustee”) has not yet appointed any official committees in the Case pursuant to
Section 1102 of the Bankruptcy Code.
E. Notice. Under the circumstances, the notice given by the Debtor of the DIP
Motion, the relief requested therein, and the Interim Hearing constitutes appropriate, due, and
sufficient notice thereof and complies with the Bankruptcy Rules and Local Rules, and no
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further notice of the relief sought at the Interim Hearing and the relief granted herein is
necessary or required.
F. Findings Regarding the Post-petition Financing.
(i) Cause. Good cause has been shown for entry of this Interim Order.
(ii) Need for Post-petition Financing. The Debtor has an immediate and
critical need to obtain the DIP Financing to facilitate its efforts to preserve and maximize the
value of its assets pursuant to a Court-approved sale and marketing process. Without the
financing proposed by the DIP Motion, the Debtor would not have sufficient funds to meet its
payroll obligations or to pay operating and other expenses during this period and would be
forced to immediately liquidate. Failure to obtain the relief requested in the DIP Motion will
immediately and irreparably harm the Debtor, its estate, and creditors.
(iii) No Credit Available on More Favorable Terms. The Debtor is unable to
obtain financing on terms more favorable than those offered by the DIP Lender under the DIP
Facility and is unable to obtain unsecured credit allowable under Section 503(b)(1) of the
Bankruptcy Code as an administrative expense or to obtain secured credit under Section 364(c)
of the Bankruptcy Code on equal or more favorable terms than those offered by the DIP Lender
under the DIP Facility. A credit facility in the amount and under the terms provided under the
DIP Facility is not available from the DIP Lender without the Debtor (a) granting to the DIP
Lender, subject to the Carve-Out (as defined below), the DIP Liens and DIP Superpriority
Claims (each as defined below) and (b) the other protections set forth in this Interim Order.
(iv) Use of Proceeds of the DIP Facility. As a condition to the extension of
credit under the DIP Facility, the DIP Lender and the Debtor have agreed that proceeds of any
advance made under the DIP Facility shall be used exclusively in a manner consistent with the
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terms of the DIP Facility, the DIP Term Sheet, and the Approved DIP Budget, including for
ordinary and necessary operating costs and expenses arising during the Case or other payments
as may be agreed to by the DIP Lender. No portion of the proceeds of any advance under the
DIP Facility shall be used, directly or indirectly, to make any payment or prepayment that is
prohibited under the DIP Term Sheet or that is not provided for or included in the Approved
DIP Budget.
(v) Interim Relief. Absent the relief sought by this Interim Order, the
Debtor’s estate will be immediately and irreparably harmed. Consummation of the DIP Facility
in accordance with the DIP Term Sheet is therefore in the best interests of the Debtor and its
estate, and is consistent with the Debtor’s fiduciary duties.
G. Good Faith of the DIP Lender.
(i) Willingness to Provide Financing. The DIP Lender has indicated a
willingness to provide financing to the Debtor, subject to: (a) the entry of this Interim Order and
the Final Order; and (b) the approval of the terms and conditions of the DIP Facility and the DIP
Term Sheet.
(ii) Business Judgment and Good Faith Pursuant to Section 364(e). The terms
and conditions of the DIP Facility and the DIP Term Sheet are fair, reasonable, and the best
available to the Debtor under the circumstances, reflect the exercise of prudent business
judgment by the Debtor consistent with its fiduciary duties, and are supported by reasonably
equivalent value and consideration. The DIP Term Sheet and DIP Facility were negotiated
without collusion, in good faith and at arm’s length between the Debtor (under the supervision of
an independent manager acting in his capacity as the liquidating agent of the Debtor under the
Debtor’s limited liabability company agreement) and the DIP Lender. Use of credit to be
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extended under the DIP Facility and use of Cash Collateral shall be deemed to have been so
allowed, advanced, made, used, or extended in good faith, within the meaning of Section 364(e)
of the Bankruptcy Code and in express reliance on the protections offered by 364(e) of the
Bankruptcy Code, and the DIP Lender is entitled to the protection and benefits of 364(e) of the
Bankruptcy Code.
Based upon the foregoing findings and conclusions, the DIP Motion and the record
before the Court with respect to the DIP Motion, and good and sufficient cause appearing
therefor,
IT IS HEREBY ORDERED that:
1. Interim Financing Approved. The DIP Motion is granted on an interim basis in
accordance with the terms of this Interim Order. to the extent set forth herein.
2. Objections Overruled. All objections to the DIP Motion to the extent not
withdrawn or resolved, and all reservations of rights included therein, are hereby overruled.
3. Authorization of the DIP Facility. The Debtor is expressly and immediately
authorized to incur and to perform the DIP Obligations in accordance with, and subject to, the
terms of this Interim Order and the DIP Term Sheet, which is expressly approved and
incorporated herein by reference. The Initial Availability (defined below) is hereby approved
upon the terms and conditions set forth herein and in the DIP Term Sheet. The DIP Obligations
shall represent valid and binding obligations of the Debtor, enforceable against its estate in
accordance with their terms.
4. Authorization to Execute Documentation. The Debtor is hereby authorized to
execute, enter into, and deliver the DIP Documents and all instruments and documents that may
be required or reasonably necessary for the performance under the DIP Facility and the creation
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and perfection of the DIP Liens (as defined herein) as described in and provided for by this
Interim Order and the DIP Term Sheet and as may be required by the DIP Lender. Pending the
execution of the DIP Documents and entry of the Final Order, the DIP Term Sheet and this
Interim Order shall evidence the validity and binding effect of the DIP Obligations and shall
govern the financial accommodations to be provided by the DIP Lender.
5. Authorization to Borrow. Subject to the terms, conditions, and limitations on
availability set forth in the DIP Term Sheet and this Interim Order, and to prevent immediate and
irreparable harm to the Debtor’s estate, the Debtor is hereby authorized to request one or more
advances under the DIP Facility in an aggregate amount not to exceed $750,000 (the “Initial
Availability”) in the manner prescribed in and subject to the terms of the DIP Term Sheet.
6. No Obligation to Extend Credit. The DIP Lender shall have no obligation to
make any loan or advance under the DIP Term Sheet unless all of the conditions precedent to the
making of such extension of credit under the DIP Term Sheet and this Interim Order have been
satisfied in full or waived by the DIP Lender in its sole discretion.
7. Budget; Use of DIP Facility Proceeds. From and after the entry of the Interim
Order, the Debtor shall use advances under the DIP Facility only for the purposes specifically set
forth in this Interim Order and the DIP Term Sheet and in compliance with the Approved DIP
Budget. Actual expenditures made by the Debtor shall not exceed the amounts set forth in the
Approved DIP Budget in any week by more than fifteen percent (15%) for any single line item
or ten percent (10%) in the aggregate for any appilcable period (the “Permitted Variance”);
provided, however, that if the actual aggregate disbursements for a given week do not exceed
100% of the aggregate budgeted disbursements for such week, then the aggregate permitted
disbursements for the next week shall be increased by such aggregate deficiency on a rolling,
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cumulative basis. Except for the professional fees and expenses, the Permitted Variance shall be
tested at the end of each week beginning with the end of the first week following April 20, 2020,
both for the preceding week and cumulatively from the Petition Date through the end of the most
recently completed week. The Permitted Variance for professional fees and expenses shall be
measured on a monthly basis after the issuance of the invoices to the Debtor by the applicable
professional firm. The terms of this paragraph 7 are hereinafter referred to as the “Budget
Covenant”).
8. Superpriority Claims. Pursuant to Section 364(c)(1) of the Bankruptcy Code, but
subject to the Carve-Out (as defined below), all of the DIP Obligations shall constitute allowed
superpriority administrative expense claim (a “Superpriority Claim”) against the Debtor (the
“DIP Superpriority Claims”) with priority over any and all administrative expense claims,
adequate protection claims, diminution claims, and all other claims against the Debtor or its
estate in the Case, at any time existing or arising, of any kind or nature whatsoever, including
without limitation, administrative expenses of the kinds specified in or arising under Bankruptcy
Code Sections 105, 326, 328, 330, 331, 364(c), 365, 503(a), 503(b), 506(c) (subject to entry of
the Final Order), 507(a), 507(b), 546(c), 546(d), 552(b) (subject to entry of the Final Order), 726,
1113, and 1114, and any other provision of the Bankruptcy Code, as provided under
Section 364(c)(1) of the Bankruptcy Code, whether or not such expenses or claims may become
secured by a judgment lien or other non-consensual lien, levy, or attachment, whether now in
existence or hereafter incurred by the Debtor, and shall at all times be senior to the rights of the
Debtor, the Debtor’s estate, and any successor trustee, estate representative, or any creditor, in
the Case or any successor case.
9. DIP Liens.
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(a) As security for the DIP Obligations, effective and perfected upon the date
of this Interim Order and without the necessity of the execution or recordation of filings by the
DIP Lender of mortgages, security agreements, control agreements, pledge agreements,
financing statements, or other similar documents, or the possession or control by the DIP Lender
over any DIP Collateral, the following security interests and liens are hereby granted by the
Debtor to the DIP Lender (the “DIP Liens”):
(i) a priming, first priority, and perfected security interest in, and lien,
under sections 364(c)(2) and 364(d) of the Bankruptcy Code, upon all DIP Collateral of the
Debtor and the Debtor’s estate, which liens shall be senior to and prime any and all liens on the
Debtor DIP Collateral that are not Permitted Priming Liens (as defined below);
(ii) a junior lien, under section 364(c)(3) of the Bankruptcy Code,
upon all of the DIP Collateral of the Debtor and the Debtor’s estate that is, as of the Petition
Date, subject to Permitted Priming Liens.
(b) The DIP Liens shall be senior priming liens on all DIP Collateral senior
to all other liens thereon, but subject only to (i) the Carve-Out and (ii) Permitted Priming Liens.
(c) The DIP Collateral shall not include any claims or causes of action
arising under sections 542, 544, 545, 547, 548, 550, 551, 553(b), or 724(a) of the Bankruptcy
Code (collectively, “Avoidance Actions”).
(d) For purposes of this Interim Order, “Permitted Priming Liens” means
valid, perfected, and non-avoidable Permitted Liens (as defined below) in existence on the
Petition Date that are not subject to subordination and were either properly perfected as of the
Petition Date or subsequently perfected pursuant to section 546(b) of the Bankruptcy Code. For
purposes of this Interim Order, “Permitted Liens” means: (a) liens arising by operation of law in
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favor of warehousemen, landlords, carriers, mechanics, materialmen, laborers or suppliers, in
each case incurred in the ordinary course of business and not in connection with the borrowing
of money, (b) liens incurred in the ordinary course of business in connection with workers’
compensation and other unemployment insurance, or to secure the performance of tenders,
surety and appeal bonds, bids, leases, government contracts, trade contracts and other similar
obligations (exclusive of obligations for the payment of borrowed money), and (c) rights of
setoff or bankers’ liens upon deposits of cash in favor of banks or other depository institutions.
10. Perfection of DIP Liens. The DIP Liens shall be and hereby are fully perfected
liens and security interests, effective and perfected upon the date of this Interim Order. This
Interim Order shall be sufficient and conclusive evidence of the validity, perfection, and priority
of the DIP Liens, without the necessity of filing or recording any financing statement, mortgage,
notice, or other instrument or document that may otherwise be required under the law or
regulation of any jurisdiction or the taking of any other action to validate or perfect (in
accordance with applicable non-bankruptcy law) the DIP Liens, or to entitle the DIP Lender to
the priorities granted herein. Notwithstanding the foregoing, the DIP Lender is authorized to file,
in the DIP Lender’s sole discretion as it deems necessary, such financing statements, deeds of
trust, mortgages, notices of liens, and other similar documents to perfect in accordance with
applicable non-bankruptcy law or to otherwise evidence the DIP Liens, and all such financing
statements, deeds of trust, mortgages, notices, other documents, and approvals shall be deemed
to have been filed or recorded as of the Petition Date; provided, however, that no such filing or
recordation shall be necessary or required in order to create or perfect the DIP Liens. The Debtor
is authorized and directed to execute, as applicable, and deliver promptly upon demand to the
DIP Lender all such financing statements, mortgages, notices, and other documents as the DIP
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Lender may reasonably request. The DIP Lender in its discretion may file a photocopy of this
Interim Order as a financing statement with any filing or recording office or with any registry of
deeds or similar office, in addition to or in lieu of such financing statements, notices of lien, or
similar instrument. Any provision of any lease, loan document, easement, use agreement, proffer,
covenant, license, contract, organizational document, or other instrument or agreement that
requires the consent or approval of one or more landlords, licensors, or other parties, or requires
the payment of any fees or obligations to any governmental entity, non-governmental entity or
any other person, for the Debtor to pledge, grant, mortgage, sell, assign, or otherwise transfer any
fee or leasehold interest or the proceeds thereof or other collateral, shall have no force or effect
with respect to the transactions granting in favor of the DIP Lender a priority security interest in
such fee, leasehold, or interest or other collateral or the proceeds of any assignment, sale, or
other transfer thereof, by the Debtor in favor of the DIP Lender in accordance with the terms of
the DIP Term Sheet and this Interim Order.
11. Adequate Protection for Prepetition Secured Note. The DIP Lender, on account of
the Prepetition Secured Note, is entitled pursuant to Sections 361, 363(c)(2), and 364(d)(1) of the
Bankruptcy Code to adequate protection of the DIP Lender’s interest in the collateral for the
Prepetition Secured Note (the “Prepetition Collateral”), including Cash Collateral, in an amount
equal to the diminution in value of the Prepetition Collateral, including any such diminution
resulting from the sale, lease, or use by the Debtor (or other decline in value) of the Prepetition
Collateral, the priming by the DIP Liens of the liens securing the Prepetition Secured Note (the
“Prepetition Liens”), as well as the imposition of the automatic stay (such diminution, the
“Adequate Protection Obligations”). As adequate protection and security for the payment of the
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Adequate Protection Obligations, the DIP Lender, on account of the Prepetition Secured Note, is
shall have the following:
(a) Adequate Protection Liens. The DIP Lender is hereby granted (effective
and perfected upon the date of this Interim Order and without the necessity of the execution by
the Debtor of security agreements, pledge agreements, mortgages, financing statements, or other
agreements) a valid, perfected replacement security interest in and lien on all of the DIP
Collateral (the “Adequate Protection Liens”), subject and subordinate only to (i) the DIP Liens,
(ii) Permitted Priming Liens, and (iii) the Carve Out.
(b) Section 507(b) Claim. The Adequate Protection Obligations shall
constitute superpriority claims as provided in section 507(b) of the Bankruptcy Code (the
“Adequate Protection Priority Claims”), with priority in payment over any and all administrative
expenses of the kinds specified or ordered pursuant to any provision of the Bankruptcy Code,
including without limitation, sections 326, 328, 330, 331, and 726 of the Bankruptcy Code,
subject and subordinate only to (i) the Carve Out and (ii) the DIP Superpriority Claims.
12. Carve-Out.
(a) The DIP Liens, Adequate Protection Liens, and Prepetition Liens, and the
DIP Superpriority Claims and the Adequate Protection Superpriority Claims, shall be subject to a
carve-out (the “Carve-Out”) for the following, and in the following priority (i) all fees (and
interest) required to be paid to the Clerk of the Bankruptcy Court and to the United States
Trustee; (ii) subject to the restrictions in Paragraph 13 of this Interim Order, the amount of
allowed and unpaid fees, costs, and expenses of the estate’s court-approved professionals in the
Case incurred from and after the occurrence of an Event of Default, in an aggregate amount not
to exceed (x) $175,000 in the case of the Debtor’s court-approved professionals and (y) $30,000
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in the case of court-approved professionals retained by a committee, if any, appointed in the
Case under Section 1102 of the Bankruptcy Code (a “Committee”); and (iii) the amount of
allowed and unpaid fees, costs, and expenses of the estate’s court-approved professionals in the
Case incurred prior to the occurrence of an Event of Default, not to exceed the amounts set forth
in applicable lines of the Approved DIP Budget as of any applicable date of determination;
provided that in no event shall the DIP Lender be obligated to loan funds to pay any claims to the
extent that such amounts would, when combined with the amounts advanced under the DIP
Facility, exceed the maximum principal amount of commitments under the DIP Facility.
(b) Upon the occurrence and continuance (beyond any applicable grace
period) of an Event of Default (as defined in the DIP Term Sheet), the right of the Debtor to pay
fees and expenses of professionals retained by order of the Bankruptcy Court outside of the
Carve-Out shall immediately terminate (a “Carve-Out Event”), and upon such occurrence, the
Debtor shall provide immediate notice by facsimile and e-mail to all professionals informing
them that a Carve-Out Event has occurred and further advising them that the Debtor’s ability to
pay estate professionals is subject to the Carve-Out.
(c) Notwithstanding anything herein to the contrary, prior to a Carve-Out
Event, the Debtor shall, in accordance with the Approved DIP Budget and the terms of the DIP
Term Sheet and subject to the terms of this Interim Order and any other relevant orders of the
Bankruptcy Court, be permitted to pay compensation and reimbursement of expenses to
professionals allowed and payable under sections 330 and 331 of the Bankruptcy Code and such
orders of the Bankruptcy Court authorizing the payment of compensation and reimbursement of
expenses that have been incurred prior to the occurrence of such Carve-Out Event.
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(d) Nothing herein or in the DIP Term Sheet shall constitute a cap on the
amount of professional fees and expenses that may be incurred or allowed in the Case; provided
that no payments of such fees and expenses shall be made in excess of the amounts contained
within or inconsistent with the Approved DIP Budget and the Budget Covenant.
13. Restrictions on Use of Proceeds of DIP Facility. No proceeds from the DIP Facility or the
Carve-Out may be used (1) to investigate or challenge in any respect the validity, priority, perfection,
extent, or enforceability of the liens securing the DIP Facility or the Prepetition Secured Note or (2) to
investigate or pursue any claims or causes of action of any kind against the DIP Lender; provided, that the
proceeds from the DIP Facility or the Carve-Out may be used to pay the fees of professionals retained by
a Committee, if any, to investigate the liens security the Prepetition Secured Note, in an amount not to
exceed $20,000.
14. Termination. All DIP Obligations shall be immediately due and payable on the
earlier to occur of (i) Maturity Date and (ii) the occurrence of an Event of Default, in full and in
cash without deduction or setoff, and all of the DIP Lender’s commitments under the DIP
Facility will terminate, including any further obligation to extend credit.
15. Milestones. The DIP Lender’s obligation to fund advances to the Debtor under the
DIP Facility shall be subject to the Debtor’s satisfaction of the following (the “Milestones”):
(a) on or before April 21, 2020, a motion (the “Sale Motion”) shall have been
filed seeking approval of bidding procedures and the sale of substantially
all of the Debtor’s assets pursuant to Section 363 of the Bankruptcy Code
(the “Sale”), in form and substance satisfactory to the DIP Lender;
(b) on or before May 15, 2020, the Bankruptcy Court shall have entered on
the docket of the Final Order approving the DIP Motion on a final basis, in
form and substance satisfactory to the DIP Lender;
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(c) on or before May 15, 2020, the Bankruptcy Court shall have entered on
the docket an order bidding procedures for the Sale, in form and substance
satisfactory to the DIP Lender; and
(d) on or before July 15, 2020, the Bankruptcy Court shall have entered on the
docket an order approving the Sale, in form and substance satisfactory to
the DIP Lender.
16. Events of Default. The occurrence of any of the following events shall constitute
an “Event of Default” under the DIP Facility:
(a) The Debtor’s failure to make any payments of fees, principal, or interest
on any amounts owed hereunder or in accordance with this Interim Order
or the DIP Term Sheet;
(b) The Case shall be dismissed or converted to a case under chapter 7 of the
Bankruptcy Code;
(c) This Interim Order shall be stayed, amended, modified, reversed, or
vacated without the written consent of the DIP Lender (which consent
shall not be unreasonably withheld, conditioned or delayed), which stay is
not vacated, or which amendment, modification, reversal, or vacatur is not
stayed within three (3) business days following the imposition of such stay
or the effective date of such amendment, modification, reversal or vacatur;
(d) Any DIP Collateral is sold without the prior written consent of the DIP
Lender;
(e) The failure by the Debtor to achieve any of the Milestones;
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(f) The Debtor shall file any application in support of any of (a) through (d)
above;
(g) The Debtor’s filing of a motion to appoint, any other party’s filing of a
motion to appoint if such motion is not resolved within thirty (30 days), or
the appointment of, a trustee or examiner with expanded powers in the
Case;
(h) The Debtor shall file a motion or other pleading seeking to grant a lien on
the DIP Collateral that is equal or senior to the DIP Liens;
(i) The Court shall enter an order granting relief from the automatic stay to
allow for foreclosure on any DIP Collateral with an aggregate book value
in excess of $150,000;
(j) The Debtor’s failure to perform, in any respect, any of the terms,
conditions, covenants, or obligations under the DIP Term Sheet or this
Interim Order; or
(k) Any other Event of Default as set forth in the DIP Term Sheet.
17. Good Faith Under Section 364(e) of the Bankruptcy Code; No Modification or
Stay of this Interim Order. The DIP Lender has acted in good faith in connection with the DIP
Facility, DIP Term Sheet, and this Interim Order and the DIP Lender’s reliance on this Interim
Order is in good faith. Based on the findings set forth in this Interim Order and the record made
during the Interim Hearing, and in accordance with Section 364(e) of the Bankruptcy Code, in
the event any or all of the provisions of this Interim Order are hereafter modified, amended, or
vacated by a subsequent order of this Court or any other court, the DIP Lender is entitled to the
protections provided in Section 364(e) of the Bankruptcy Code.
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18. Proofs of Claim. The DIP Lender will not be required to file proofs of claim in the
Case for any claim allowed herein in relation to the DIP Facility or the Prepetition Secured Note.
The DIP Lender is hereby authorized and entitled, in its sole discretion, but not required, to file
(and amend or supplement, as applicable and as it sees fit) a proof of claim in the Case for any
claim allowed herein in relation to the DIP Facility or the Prepetition Secured Note.
19. Limitations on the DIP Facility and the DIP Collateral. The DIP Facility and the
Collateral may not be used in connection with: (a) preventing, hindering, or delaying any of the
DIP Lender’s enforcement or realization upon any of the DIP Collateral once an Event of
Default has occurred; (b) selling or otherwise disposing of the DIP Collateral without the prior
written consent of the DIP Lender; (c) using or seeking to use any insurance proceeds
constituting DIP Collateral without the prior written consent of the DIP Lender; (d) objecting or
challenging in any way any claims, liens, or the DIP Collateral, as the case may be, held by or on
behalf of the DIP Lender with respect to the DIP Facility; or (e) prosecuting an objection to,
contesting in any manner, or raising any defenses to (but not the investigation of), the validity,
extent, amount, perfection, priority, or enforceability of any of the DIP Obligations, the DIP
Liens, or any other rights or interests of the DIP Lender.
20. Prohibition on Liens/Subordination. Except as otherwise provided in the DIP
Term Sheet or this Interim Order, the DIP Liens shall not at any time be (i) made subject or
subordinated to, or made pari passu with, any other lien, security interest, or claim existing as of
the Petition Date, or created under Sections 363 or 364(d) of the Bankruptcy Code or otherwise,
or (ii) subject to any lien or security interest that is avoided and preserved for the benefit of the
Debtor’s estate under Section 551 of the Bankruptcy Code.
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21. Modification of Automatic Stay. The automatic stay imposed under
Section 362(a) of the Bankruptcy Code is hereby modified solely (i) to the extent necessary to
authorize the Debtor to pay from time to time following the Petition Date, and DIP Lender to
retain and apply payments made, in accordance with the terms of this Interim Order and the DIP
Term Sheet, including, without limitation, payments of accrued interest and payments of
principal amounts outstanding under the DIP Facility and (ii) subject to entry of the Final Order,
upon the occurrence of an Event of Default and following five (5) business days’ written notice
(the “Notice Period”) by the DIP Lender to the Debtor, counsel to the Debtor, counsel to the
Committee (if appointed) and the United States Trustee (collectively, the “Notice Parties”) of the
occurrence of such Event of Default, subject to an ability to cure, if such Event of Default is
capable of being cured, during the Notice Period, to permit the DIP Lender to take any and all
actions and remedies to proceed against, take possession of, protect and realize upon the DIP
Collateral and any other property of the estate of the Debtor upon which the DIP Lender has
been or may hereafter be granted liens and security interests to obtain repayment of the DIP
Obligations to the DIP Lender; provided, that such notice by the DIP Lender shall not prejudice
the rights of the Notice Parties to file a motion (the “Opposition Motion”) with the Court
opposing the termination of the automatic stay or the occurrence of an Event of Default;
provided, further, that upon the filing of such motion the DIP Lender shall be stayed from taking
any actions or remedies against the DIP Collateral until the Court hears and disposes of such
motion. During the Notice Period and during the period following the filing of an Opposition
Motion, the Debtor may use Cash Collateral to pay the following amounts and expenses in
accordance with the Approved DIP Budget: (i) expenses that the Debtor has determined in good
faith are in the ordinary course and critical to the preservation of the Debtor and its estate, and
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(ii) such other amounts as have been approved in advance in writing by the DIP Lender.
Notwithstanding the foregoing, nothing herein shall limit or restrict issued to be decided by the
Court upon an Event of Default.
22. No Third Party Rights. Except as explicitly provided for herein, this Interim Order
does not create any rights for the benefit of any third party, creditor, equity holder or any direct,
indirect, or incidental beneficiary.
23. DIP Fees and Expenses. The Debtor is authorized and directed to pay all fees
payable under the DIP Term Sheet and the professional fees and expenses of the DIP Lender in
connection with the DIP Facility, as provided in the DIP Term Sheet and the DIP Budget (the
“DIP Fees and Expenses”). The Debtor shall pay all DIP Fees and Expenses invoiced and
outstanding as of the date of entry of this Interim Order on or immediately following the Closing
Date. Thereafter, the Debtor shall pay DIP Fees and Expenses from time to time within fifteen
(15) business days (if no written objection is received within ten (10) business days) after such
professional has delivered a summary invoice providing reasonable detail with respect to the fees
and expenses incurred to the Debtor (which invoice may be redacted to protect privileged,
confidential, or proprietary information), with a copy of such invoice delivered simultaneously to
the United States Trustee and the Committee (if appointed). Written objections to the payment of
DIP Fees and Expenses must contain a specific basis for the objection and quantification of the
undisputed amount of the DIP Fees and Expenses invoiced. None of the DIP Fees and Expenses
shall be subject to Court approval or required to be maintained in accordance with guidelines
promulgated by the United States Trustee and no recipient of any such payment shall be required
to file with respect thereto any interim or final fee application with the Court; provided however,
that the Debtor shall be required to pay (i) the undisputed amount of any invoice on or prior to
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the fifteenth (15th) business day following delivery of such invoice, notwithstanding any
objection to other amounts on such invoice, and (ii) any disputed amounts within five (5)
business days following resolution of the dispute with respect to such amounts.
24. Bankruptcy Code Section 506(c). Subject to entry of the Final Order, the Debtor’s
waive the right to seek to surcharge the DIP Collateral under section 506(c) of the Bankruptcy
Code, to the extent such section applies.
25. Rights Preserved. Entry of this Interim Order is without prejudice to any party in
interest with respect to the terms and approval of the Final Order and any other position that such
parties deem appropriate to raise in the Case.
26. No Waiver by Failure to Seek Relief. The failure of the DIP Lender to seek relief
or otherwise exercise its rights and remedies under this Interim Order, the DIP Term Sheet, or
applicable law, as the case may be, shall not constitute a waiver of any of the rights hereunder,
thereunder, or otherwise.
27. Binding Effect of Interim Order. Immediately upon entry of this Interim Order by
this Court, the terms and provisions of this Interim Order shall become valid and binding upon
and inure to the benefit of the Debtor, the DIP Lender, all other creditors of the Debtor, and all
other parties in interest and their respective successors and assigns, including upon dismissal of
the Case.
28. Priority of Terms. To the extent of any conflict between or among (a) the DIP
Motion, any other order of this Court (other than the Final Order), the DIP Term Sheet, or any
other agreements, on the one hand, and (b) the terms and provisions of this Interim Order, on the
other hand, the terms and provisions of this Interim Order shall govern.
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29. No Modification of Interim Order. Until and unless the DIP Obligations have
been indefeasibly paid in full in cash (such payment being without prejudice to any terms or
provisions contained in the DIP Facility which survive such discharge by their terms) and all
commitments to extend credit under the DIP Facility have been terminated, the Debtor
irrevocably waives the right to seek and shall not, without the DIP Lender’s prior written
consent, seek, or consent to, directly or indirectly: (a) any modification, stay, vacatur, or
amendment to this Interim Order; or (b) the granting of any lien on any of the DIP Collateral
with priority equal or superior to the DIP Liens, except as specifically provided herein or in the
DIP Term Sheet.
30. Modifications of DIP Term Sheet and Approved DIP Budget. The Debtor and the
DIP Lender may implement non-material modifications of the DIP Documents (after
consultation with the Committee) on at least seven (7) calendar days prior notice to the
Committee and the United States Trustee, both of which shall have the right to object on grounds
that the proposed modification is material and should be subject to the notice procedures set forth
in this Interim Order with respect to material modifications. The Debtor and the DIP Lender may
implement material modifications of the DIP Documents only after prior notice to the Committee
and the United States Trustee and only after notice and a hearing.
31. Headings. Section headings used herein are for convenience only and are not to
affect the construction of or to be taken into consideration in interpreting this Interim Order.
32. Survival. The terms and provisions of this Interim Order, including the claims,
liens, security interests, and other protections granted to the DIP Lender pursuant to this either or
both this Interim Order and the DIP Term Sheet, notwithstanding the entry of any such order,
shall continue in the Case, or following dismissal of the Case, and shall maintain their priority as
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provided by this Interim Order until all the DIP Obligations, pursuant to the DIP Term Sheet and
this Interim Order, have been indefeasibly paid in full (such payment being without prejudice to
any terms or provisions contained in the DIP Facility that survive such discharge by their terms),
and all commitments to extend credit under the DIP Facility are terminated.
33. Final Hearing. The Final Hearing to consider entry of the Final Order and final
approval of the DIP Facility is scheduled for ______ on _____________________________,
2020 at the United States Bankruptcy Court for the District of Delaware. On or before
_______________________, 2020, the Debtor shall serve, by either or both electronic filing and
by United States mail, first-class postage prepaid, notice of the entry of this Interim Order and of
the Final Hearing (the “Final Hearing Notice”), together with copies of this Interim Order, the
proposed Final Order and the DIP Motion, on the parties having been given notice of the Interim
Hearing as specified above, including but not limited to: (i) counsel to the Debtor; (ii) the United
States Trustee; (iii) the Internal Revenue Service; (iv) creditors holding the twenty-five (25)
largest unsecured claims against the Debtor; (v) parties asserting liens against the DIP Collateral;
(vi) all relevant taxing authorities; (vii) the Securities and Exchange Commission; (viii) parties
requesting notice in the Case; and (ix) counsel to the DIP Lender. The Final Hearing Notice shall
state that any party in interest objecting to the entry of the proposed Final Order shall file written
objections with the Clerk of the Court no later than on ____________________, 2020 at
________, which objections shall be served so as to be received on or before such date by:
(i) counsel to the Debtor Young Conaway Stargatt & Taylor, LLP, Rodney Square, 1000 North
King Street, Wilmington, DE 19801, Attn: Michael R. Nestor, Matthew B. Lunn and Kenneth J.
Enos (mnestor@ycst.com, mlunn@ycst.com and kenos@ycst.com); (ii) the Office of the United
States Trustee for the District of Delaware, J. Caleb Boggs Building, 844 King Street, Suite
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2207, Lockbox 35, Wilmington, DE 19801, Attn: Richard L. Schepacarter
(Richard.Schepacarter@usdoj.gov); and (iii) counsel to the DIP Lender, K&L Gates, LLP, 599
Lexington Avenue, New York, NY 10022, Attn: John A. Bicks (john.bicks@klgates.com),
James A. Wright III (james.wright@klgates.com), and Aaron S. Rothman
(aaron.rothman@klgates.com).
34. Bankruptcy Rule 7052. This Interim Order shall constitute findings of fact and
conclusions of law pursuant to Bankruptcy Rule 7052. Any findings of fact shall constitute a
finding of fact even if it is stated as a conclusion of law, and any conclusion of law shall
constitute a conclusion of law even if it is stated as a finding of fact.
35. Retention of Jurisdiction. The Court has and will retain jurisdiction to enforce this
Interim Order according to its terms.
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Exhibit A
DIP Term Sheet
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GENERAL TERM SHEET

FOR POSTPETITION
DEBTOR-IN-POSSESSION FINANCING
TO
ALPHA ENTERTAINMENT LLC (“Borrower” or “Debtor”)
FROM
VINCENT K. MCMAHON (the “DIP Lender”)
April 13, 2020
THE PROPOSAL SET FORTH HEREIN IS SUBJECT TO THE FOLLOWING:
(1) THE ENTRY BY THE BANKRUPTCY COURT ON THE DOCKET OF

INTERIM AND FINAL DIP ORDERS SATISFACTORY TO THE DIP LENDER; AND
(2) THE APPROVAL BY THE DIP LENDER OF AN “APPROVED DIP

BUDGET” SHOWING PROJECTED WEEKLY CASH RECEIPTS, CASH
DISBURSEMENTS, AND OTHER FINANCIAL INFORMATION REQUIRED BY THE DIP
LENDER FOR EACH WEEK FROM THE PETITION DATE, APRIL 13, 2020 THROUGH
JULY 12, 2020.
304672091.2
ALPHA ENTERTAINMENT LLC

SUPERPRIORITY SECURED DEBTOR-IN-POSSESSION CREDIT FACILITY
Proposal for DIP Financing

April 13, 2020
Borrower: Alpha Entertainment LLC (“Alpha”).

Debtor: Alpha, which shall commence a chapter 11 case (the “Chapter 11 Case”) in the United
States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”).
DIP Lender: Vincent K. McMahon, an individual (the “DIP Lender”).
DIP Facility: A superpriority secured post-petition credit facility (the “DIP Facility”) in an
aggregate principal amount not to exceed $3,500,000 (the “DIP Commitment”) as
follows:
The DIP Facility shall be a delayed draw, multiple draw term loan facility that will
provide funding for the Debtor’s ongoing operations and administrative expenses,
including professional fees, in an amount not to exceed the DIP Commitment, with
the following interest rate:
• Interest Rate: 4.25% per annum;
• Default Interest Rate: 2% per annum above the contract interest rate.
Borrowings under the DIP Facility shall be incurred as follows: (i) following the entry
of an order by the Bankruptcy Court (in form and substance satisfactory to the DIP
Lender) approving the DIP Facility on an interim basis (the “Interim DIP Order”) one
or more draws of the DIP Facility in an amount not to exceed $750,000 in accordance
with the Approved DIP Budget (defined below) (the “Initial Availability”); and (ii)
the remaining portion of the DIP Commitment will be made available from time to
time following the entry of an order (in form and substance reasonably satisfactory
to the DIP Lender) by the Bankruptcy Court approving the DIP Facility on a final
basis (the “Final DIP Order”), in bi-weekly draws in accordance with the Approved
DIP Budget, in each case subject to the terms and conditions set forth herein.
The DIP Lender shall not be obligated to fund any borrowing requests more
frequently than bi-weekly. The DIP Lender shall not be obligated to fund an aggregate
amount under the DIP Facility exceeding the aggregate principal amount of the DIP
Commitment.
In the initial drawing of the DIP Facility, the amount of the borrowing request shall
be the sum of the current week and the next succeeding week for expenditures under
the Approved DIP Budget. After the initial drawing of the DIP Facility, the maximum
amount of each borrowing request shall not exceed the sum of the following: (i) the
aggregate amount of expenditures set forth in the Approved DIP Budget for the next
succeeding two (2) weeks, minus (ii) the Debtor’s cash balance as set forth in the
Variance Report, plus (iii) $100,000.
Requests for borrowings under the DIP Facility shall be made concurrently with the
delivery of the Variance Report. To the extent that all conditions for such borrowing
have been satisfied, the DIP Lender shall cause the requested amounts to be funded
within three (3) business days of such request.
DIP Documents This DIP Term Sheet, the motion and proposed form of order to be filed by the Debtor
with the Bankruptcy Court seeking approval, on an interim and final basis, of the DIP
Facility and, inter alia, the use of cash collateral (including such terms and conditions
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304672091.2
relating to adequate protection in connection therewith) consistent in all respects with

this DIP Term Sheet, the orders approving the DIP Facility on an interim and final
basis, and each other document or agreement prepared or executed in connection
therewith (collectively, the “DIP Documents”).
DIP Lender Fees The Borrower shall be obligated to pay the reasonable and documented fees, costs,
and Expenses and expenses incurred by the DIP Lender in connection with the DIP Facility (the
“DIP Fees and Expenses”), which amounts shall be added to the total amount due
under the DIP Facility and payable on the Maturity Date. None of the DIP Fees and
Expenses shall be subject to Court approval or required to be maintained in
accordance with Guidelines of the United States Trustee and no recipient of any such
payment shall be required to file with respect thereto any interim or final fee
application with the Court.
Closing Date: Immediately following the satisfaction of the conditions precedent to the Initial
Availability, expected to be on or about April 15, 2020 (the “Closing Date”).
Maturity Date: The maturity date of the DIP Facility (the “Maturity Date”) shall be the earliest of
(i) if a final order with respect to the DIP Facility has not yet been entered, May 12,
2020, (ii) the effective date of a Chapter 11 plan, (iii) the date of consummation of
any sale of all or substantially all of the assets of the Debtor pursuant to Sections 363
or 1141 of the Bankruptcy Code, and (iv) the date of acceleration of the DIP Facility
and the termination of the DIP Commitment following the occurrence of an Event of
Default (defined herein).
All DIP Obligations (as defined herein) shall be due and payable on the Maturity
Date.
Use of Proceeds: Subject to the Approved DIP Budget, to pay, together with the Debtor’s existing cash
on hand, (i) the operating expenses of the Debtor during the Chapter 11 Case, and (ii)
the allowed fees, costs, and expenses of the Debtor’s estate professionals incurred in
connection with the administration of the Chapter 11 Case.
Actual expenditures made by the Debtor may not exceed the amount set forth in the
DIP Budget by (a) fifteen percent (15%) for any line item and (b) ten percent (10%)
in the aggregate for each week (the “Permitted Variance”); provided, however, that
if the actual aggregate disbursements for a given week do not exceed 100% of the
aggregate budgeted disbursements for such week, then the aggregate permitted
disbursements for the next week shall be increased by such aggregate deficiency on
a rolling, cumulative basis. The Permitted Variance for professional fees and
expenses shall be measured on a monthly basis after the issuance of the invoices to
the Debtor by any such professional firm.
Except as specifically set forth in the Interim or Final DIP Order, as applicable, no
proceeds of the DIP Facility or any cash collateral shall be used to challenge, object
to, contest, or raise any defense to the validity, security, perfection, priority, extent,
or enforceability of (i) any amount due under the DIP Facility or the Prepetition
Secured Note or (ii) the liens or claims granted under the DIP Facility or the
Prepetition Secured Note; provided that the proceeds from the DIP Facility or the
Carve-Out (as defined herein) may be used to pay the fees of professionals retained
by a Committee, if any, to investigate the liens securing the Prepetition Secured Note,
in an amount not to exceed $20,000.
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DIP Budget: The Debtor will prepare and deliver on or prior to the Closing Date a budget, in form
and substance satisfactory to the DIP Lender (the “DIP Budget”), that shall reflect
line item projected receipts and expenditures on a weekly basis, for the 13-week
period following the Closing Date. The DIP Budget as approved by the Bankruptcy
Court pursuant to the Interim and Final DIP Orders and as may be amended or
updated by the Debtor with the consent of the DIP Lender shall be known as the
“Approved DIP Budget”).
Security: All obligations of the Debtor under the DIP Facility (the “DIP Obligations”) shall
(A) be secured by
(1) priming first-priority perfected liens and security interests in all of
the Debtor’s assets (the “DIP Collateral”) pursuant to
Sections 364(c)(2) and (d) of the Bankruptcy Code,
(2) second priority perfected liens and security interests in all of the
Debtor’s assets that are subject to Permitted Prepetition Liens
pursuant to Section 364(c)(3), and
(B) constitute allowed administrative expense claims, pursuant to Section
364(c)(1), senior to any pre- or post-petition claims, with priority over all
other costs and expenses of administration of any kind, with recourse to all
of the Debtor’s assets (including, subject to entry of the Final Order, proceeds
of Avoidance Actions (defined below)), subject, in each case, only to the
Carve-Out (defined below) and such other provisions of the Interim Order;
provided, however, that the DIP Collateral shall not include claims or causes of action
arising under chapter 5 of the Bankruptcy Code (the “Avoidance Actions”), but shall
include all proceeds of such Avoidance Actions subject to entry of the Final DIP
Order.
Closing Conditions, The DIP Lender’s obligation to fund the DIP Facility with the DIP Commitment shall
Draw Conditions be conditioned on the following conditions precedent.
With respect to draws of the Initial Availability:
(i) entry of the Interim DIP Order, in form and substance reasonably
satisfactory to the DIP Lender, which order shall remain in full
force and effect, unstayed, and unmodified except as expressly
agreed to by the DIP Lender in writing;
(ii) the DIP Lender shall have received such financial and other
information regarding the Debtor as the DIP Lender may request;
(iii) the DIP Lender shall have received and approved the initial DIP
Budget; and
(iv) no Event of Default shall then be existing.
Conditions precedent to each subsequent borrowing shall be as follows:

(i) the DIP Lender shall have received a notice from the Debtor setting
forth amount of the draw (the “Borrowing Notice”);
(ii) the amount requested in the Borrowing Notice shall not exceed the
total amount of expenditures as set forth in the Approved DIP
Budget then in effect for the next succeeding two (2) weeks by
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304672091.2
more than ten percent (10%);

(iii) after giving effect to the amount requested in the Borrowing
Notice, the total amount of borrowings outstanding under the DIP
Facility will not exceed the DIP Commitment;
(iv) the Final DIP Order, in form and substance reasonably satisfactory
to the DIP Lender, shall have been entered by the Bankruptcy
Court, which order shall be in full force and effect, unstayed, and
unmodified except as expressly agreed to by the DIP Lender; and
(v) no Event of Default shall have occurred and be continuing on the
applicable borrowing date or would occur as a result of the
requested borrowing.
The DIP Lender reserves the right, in its sole and absolute discretion, to waive any of
the above conditions, which waiver shall be in writing and signed by the DIP Lender.
Milestones: The DIP Lender’s obligations under the DIP Facility shall be subject to the Debtor’s
compliance with the following case milestones (the “Milestones”):
(i) on or prior to April 13, 2020, the Chapter 11 Case shall have been
commenced with the Bankruptcy Court (the “Petition Date”);
(ii) on the Petition Date, the Debtor shall have filed with the Bankruptcy
Court appropriate “First Day Motions” in form and substance
satisfactory to the DIP Lender, including without limitation, a motion
to approve the DIP Facility (the “DIP Motion”);
(iii) on or before April 21, 2020, a motion shall have been filed seeking
approval of bidding procedures and commencement of the sale
process contemplated therein (the “Sale Motion”);
(iv) on or before May 15, 2020, the Bankruptcy Court shall have entered
the Final DIP Order in form and substance reasonably satisfactory to
the DIP Lender;
(v) on or before May 15, 2020, the Bankruptcy Court shall have entered
an order approving bidding procedures for the sale of substantially
all of the Debtor’s assets pursuant to Section 363 of the Bankruptcy
Code (the “Sale”), in form and substance satisfactory to the DIP
Lender; and
(vi) on or before July 15, 2020, the Bankruptcy Court shall have entered
an order approving the Sale, in form and substance satisfactory to the
DIP Lender.
Financial Reporting: On or before 6:00 p.m. (ET) on Wednesday of each week commencing the week of
April 20, 2020, the Debtor shall provide the DIP Lender with a report in form and
substance reasonably acceptable to the DIP Lender (the “Variance Report”) setting
forth, with respect to the immediately preceding week (through Saturday of such
week), an analysis of receipts and expenditures, comparing actual receipts and
disbursements for such weekly period (and on a cumulative basis for the 13-week
period of the Approved DIP Budget then in effect) to the projected receipts and
disbursements set forth in the Approved DIP Budget for such weekly or 13-week
period, as applicable, including without limitation, all variances in actual
expenditures from those projected in the Approved DIP Budget, by line item, together
with an explanation of all material variances.
5
304672091.2
Events of Default, Availability under the DIP Facility shall terminate immediately upon the earliest to
Termination occur of the following: (i) the Maturity Date; and (ii) the occurrence of one of the
following (each an “Event of Default”): (A) the date that any chapter 11 plan is filed
by the Debtor with the Bankruptcy Court that does not provide for the indefeasible
payment in full of the DIP Obligations without the express written consent of the DIP
Lender; (B) the filing of any motion or other pleading by the Debtor that seeks to sell
any portion of the DIP Collateral or any DIP Collateral is sold, in each instance,
without the prior written consent of the DIP Lender; (C) the date that the Chapter 11
Case is converted to a case under chapter 7 of the Bankruptcy Code or dismissed; (D)
the Debtor’s filing of a motion to appoint, any other party’s filing of a motion to
appoint if such motion is not resolved within thirty (30) days, or the appointment of,
a trustee or examiner with expanded powers in the Chapter 11 Case; (E) failure to
meet any of the Milestones; (F) the filing of a motion or other pleading by the Debtor
that seeks to grant a lien on the DIP Collateral that is equal or senior to the liens
granted to the DIP Lender hereunder and under the order approving the DIP Facility;
(G) entry of an order lifting or modifying the automatic stay of section 362(a) of the
Bankruptcy Code to allow for foreclosure on any DIP Collateral with an aggregate
book value in excess of $150,000; or (H) the Debtor’s failure to pay any DIP
Obligations when due in accordance with the applicable DIP Documents.
Upon an Event of Default, the DIP Commitment shall terminate and all amounts due
under the DIP Facility shall become immediately due and payable, in full, in cash,
without any further notice or the need for any action by the DIP Lender, without
defense or offset, and the Debtor shall immediately repay the aggregate principal
amount outstanding under the DIP Facility, together with all interest accrued thereon
and all fees related thereto. Effective immediately upon an Event of Default, all
amounts then due under the DIP Facility shall accrue interest at the Default Interest
Rate.
The Final DIP Order shall include relief from the automatic stay with respect to the
exercise of rights and remedies upon the occurrence of an Event of Default, subject
to a five Business Day notice period.
Amendments; No provision of this DIP Term Sheet or any DIP Documents may be amended or
Waivers waived without the prior written consent of the DIP Lender.
Carve-Out: A carve-out from the DIP Lender’s collateral, including, without limitation, all assets
of the Debtor (the “Carve-Out”), for the following, and in the following priority:
(i) first, all fees required to be paid to the Clerk of the Bankruptcy Court and to the
United States Trustee; (ii) second, the amount of allowed and unpaid fees, costs, and
expenses of the estate’s court-approved professionals in the Chapter 11 Case incurred
from and after the occurrence of an Event of Default in an aggregate amount not to
exceed (x) in the case of the Debtor’s court-approved professionals, $175,000 and (y)
in the case of the court-approved professionals retained by a Committee, if any,
$30,000; and (iii) third, the amount of allowed and unpaid fees, costs, and expenses
of the estate’s court-approved professionals in the Chapter 11 Case incurred prior to
the occurrence of an Event of Default, not to exceed the amounts set forth in the
Approved DIP Budget as of any applicable date of determination.
Adequate Protection As adequate protection to be provided to the DIP Lender on account of the Prepetition
to DIP Lender: Secured Note, the DIP Lender shall receive:
To the extent of any post-petition diminution in the value of the collateral securing
the Notes, (i) replacement liens (subject to the DIP liens and the Carve-Out) on all of
the DIP Collateral (including, subject only to entry of a final order approving the DIP
6
304672091.2
Facility, proceeds of avoidance actions); and (ii) Section 507(b) claims (subject to the
DIP claims and the Carve-Out) with recourse against all assets of the Debtor
(including Avoidance Actions).
Miscellaneous: Among other customary miscellaneous provisions, the following:
• Upon entry of the Final DIP Order, waiver of Section 506(c), marshalling, and
Section 552(b) equities of the case exception.
• Governing Law: Delaware
• Forum Selection: Bankruptcy Court
• Jury Trial Waiver
7
304672091.2
Borrower:
ALPHA ENTERTAINMENT LLC
By: ________________________________
Name: John Brecker
Title: Liquidating Agent
304672091.2
DIP Lender:
______________________________
Name: Vincent K. McMahon
304672091.2
Exhibit B
Approved DIP Budget
26
304661676 v1
ALPHA ENTERTAINMENT, LLC

CASH FLOW ($ in thousands)
13 WEEK BUDGET
Week 1 Week 2 Week 3 Week 4 Week 5 Week 6 Week 7 Week 8 Week 9 Week 10 Week 11 Week 12 Week 13 Total
Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast
Week Starting 4/13/2020 4/20/2020 4/27/2020 5/4/2020 5/11/2020 5/18/2020 5/25/2020 6/1/2020 6/8/2020 6/15/2020 6/22/2020 6/29/2020 7/6/2020 4/13/2020
Week Ending 4/19/2020 4/26/2020 5/3/2020 5/10/2020 5/17/2020 5/24/2020 5/31/2020 6/7/2020 6/14/2020 6/21/2020 6/28/2020 7/5/2020 7/12/2020 7/12/2020
Receipts $ 65 $ 100 $ 135 $ 175 $ 500 $ 100 $ - $ - $ - $ - $ - $ - $ - $ 1,075
Disbursements 924 263 330 308 179 180 45 351 164 169 45 274 187 3,419
Ticket Refunds 3,500 - - - - - - - - - - - - 3,500
Operating Cash Flow (4,359) (163) (195) (133) 321 (80) (45) (351) (164) (169) (45) (274) (187) (5,844)
Young Conway Stargatt & Taylor, LLP - - - 142 - - - - 142 - - - 142 425
Committee of Unsecured Creditors - - - - - - - - 100 - - - 100 200
Donlin Recano - - - 33 - - - - 33 - - - 33 100
Banker - - - - - - - - - - - - 75 75
John Brecker - - 15 - - - - 15 - - - 15 - 45
Trustee Fees - - - - - - - - - - - - 150 150
Total Restructuring Disbursements - - 15 175 - - - 15 275 - - 15 500 995
DIP Proceeds 750 875 875 - 1,000 3,500

Principal Payments -
Other Payments and Fees -
Total Financing 750 - - - 875 - - - 875 - - - 1,000 3,500
Net Cash Flow $ (3,609) $ (163) $ (210) $ (308) $ 1,196 $ (80) $ (45) $ (366) $ 436 $ (169) $ (45) $ (289) $ 313 $ (3,339)
Beginning Cash Balance $ 5,600 $ 1,991 $ 1,828 $ 1,618 $ 1,310 $ 2,506 $ 2,426 $ 2,380 $ 2,014 $ 2,450 $ 2,282 $ 2,237 $ 1,947 $ 5,600
Ending Cash Balance 1,991 1,828 1,618 1,310 2,506 2,426 2,380 2,014 2,450 2,282 2,237 1,947 2,261 2,261
Beginning DIP Balance - 750 750 750 750 1,625 1,625 1,625 1,625 2,500 2,500 2,500 2,500 -
Draw / (Paydown) 750 - - - 875 - - - 875 - - - 1,000 3,500
Ending DIP Balance $ 750 $ 750 $ 750 $ 750 $ 1,625 $ 1,625 $ 1,625 $ 1,625 $ 2,500 $ 2,500 $ 2,500 $ 2,500 $ 3,500 $ 3,500
ALPHA ENTERTAINMENT CONFIDENTIAL

XFL Chapter 11 - Motion To Pay Employee Wages

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XFL Chapter 11 - Motion To Pay Employee Wages

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Case 20-10940-LSS Doc 7 Filed 04/13/20 Page 1 of 71

IN THE UNITED STATES BANKRUPTCY COURT

MOTION FOR INTERIM AND FINAL ORDERS, PURSUANT TO 11 U.S.C. §§ 105,

a chapter 11 sale process.

2. Prior to the commencement of the Chapter 11 Case, the Debtor appointed an

JURISDICTION AND VENUE

pursuant to 28 U.S.C. §§ 1408 and 1409.

for the appointment of a trustee or examiner.

7. Additional factual background relating to the Debtor’s business, capital structure,

9. On April 9, 2020, the Debtor borrowed an additional $4 million under the

ordinary course under applicable state law.

principally finance and accounting services.3

C. The Debtor’s Immediate Need for Liquidity

liquidation to the detriment of all stakeholders.

a Court-approved sale process in a non-compressed timeline and facilitate the administration of

Debtor to avoid immediate and irreparable harm.

D. Lack of Available Alternative Financing

no postpetition debt-service payments.

MATERIAL TERMS OF THE DIP FACILITY

principal terms of the DIP Facility are as follows:5

Required Disclosures Summary of Material Terms

Required Disclosures Summary of Material Terms

Use of Proceeds: Subject to the Approved DIP Budget, to pay, together

Adequate Protection to DIP Lender: As adequate protection to be

To the extent of any post-petition diminution in the value of the collateral

Restrictions on Use of Proceeds of DIP Facility. No proceeds from the

Required Disclosures Summary of Material Terms

Required Disclosures Summary of Material Terms

Milestones: The DIP Lender’s obligation to fund advances to the Debtor

Priority of and Security DIP Liens:

Required Disclosures Summary of Material Terms

(ii) a junior lien, under section 364(c)(3) of the Bankruptcy Code,

Required Disclosures Summary of Material Terms

(c) Notwithstanding anything herein to the contrary, prior to a Carve-Out

Required Disclosures Summary of Material Terms

(b) Section 507(b) Claim. The Adequate Protection Obligations shall

Required Disclosures Summary of Material Terms

Required Disclosures Summary of Material Terms

REQUIREMENTS UNDER LOCAL RULE 4001-2

DIP Credit Agreement and the Interim Order:

22. Carve-Out: Local Rule 4001-2(a)(i)(F) requires disclosure of disparate treatment

are reasonable and appropriate under the circumstances.

24. Waiver of Section 552(b)(1): Pursuant to Local Rule 4001-2(a)(i)(H), a movant

entry of the Final Order.

REQUEST FOR APPROVAL OF THE DIP FACILITY AND RELATED ACTIONS

A. Sections 364(c) and (d) of the Bankruptcy Code

secured by a senior lien on unencumbered property, or a junior lien on encumbered property, or a

adequately protected, or if the existing lienholders consent to such priming.

B. Approval Under Section 364(c) of the Bankruptcy Code

financing under section 364(c) of the Bankruptcy Code:

(a) the debtor is unable to obtain unsecured credit under

(b) the credit transaction is necessary to preserve the assets of

Ames Dep't Stores, 115 B.R. at 39.

i. The Debtor Was Unable to Obtain Necessary

ii. The DIP Facility is Necessary to Administer, Maximize and

creditors and its other stakeholders.

Ames Dep’t Stores, 115 B.R. at 40.

are fair and reasonable in light of the circumstances of this case.

iv. The DIP Facility is in the Best Interests of the Debtor’s

liquidate all of its assets.

C. Approval Under Section 364(d) of the Bankruptcy Code

D. Application of the Business Judgment Standard

i. Entry into the DIP Credit Agreement is a Sound Exercise of