rdd Doc 17 Filed 05/25/17 Entered 05/25/17 14:39:50 Main Document Pg 1 of 124

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1 Pg 1 of 124 Christopher Marcus, P.C. James H.M. Sprayregen, P.C. John T. Weber William A. Guerrieri (pro hac vice pending) KIRKLAND & ELLIS LLP Alexandra Schwarzman (pro hac vice pending) KIRKLAND & ELLIS INTERNATIONAL LLP KIRKLAND & ELLIS LLP 601 Lexington Avenue KIRKLAND & ELLIS INTERNATIONAL LLP New York, New York North LaSalle Street Telephone: (212) Chicago, Illinois Facsimile: (212) Telephone: (312) Facsimile: (312) Proposed Counsel to the Debtors and Debtors in Possession UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK ) In re: ) Chapter 11 ) 21st CENTURY ONCOLOGY HOLDINGS, INC., et al., 1 ) Case No (RDD) ) Debtors. ) (Joint Administration Requested) ) DEBTORS MOTION FOR ENTRY OF INTERIM AND FINAL ORDERS (I) AUTHORIZING THE DEBTORS TO OBTAIN POSTPETITION FINANCING, (II) GRANTING ADEQUATE PROTECTION TO PREPETITION SECURED PARTIES, (III) MODIFYING THE AUTOMATIC STAY, (IV) SCHEDULING A FINAL HEARING, AND (V) GRANTING RELATED RELIEF1 1 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor s federal tax identification number, include: 21C East Florida, LLC (0905); 21st Century of Florida Acquisition, LLC (7449); 21st Century Oncology Holdings, Inc. (7745); 21st Century Oncology Management Services, Inc. (7211); 21st Century Oncology of Alabama, LLC (3649); 21st Century Oncology of Harford County, Maryland, LLC (6540); 21st Century Oncology of Jacksonville, LLC (4308); 21st Century Oncology of Kentucky, LLC (3667); 21st Century Oncology of New Jersey, Inc. (9875); 21st Century Oncology of Pennsylvania, Inc. (0463); 21st Century Oncology of Prince Georges County, Maryland, LLC (2750); 21st Century Oncology of South Carolina, LLC (1654); 21st Century Oncology of Washington, LLC (3274); 21st Century Oncology Services, LLC (6866); 21st Century Oncology, Inc. (8951); 21st Century Oncology, LLC (5899); AHLC, LLC (9353); American Consolidated Technologies, LLC (4024); Arizona Radiation Therapy Management Services, Inc. (3876); Asheville CC, LLC (9175); Associates in Radiation Oncology Services, LLC (0866); Atlantic Urology Clinics, LLC (0029); Aurora Technology Development, LLC (5383); Berlin Radiation Therapy Treatment Center, LLC (3712); Boynton Beach Radiation Oncology, LLC (0780); California Radiation Therapy Management Services, Inc. (7222); Carepoint Health Solutions, LLC (7130); Carolina Radiation and Cancer Treatment Center, LLC (5493); Carolina Regional Cancer Center, LLC (6164); Derm-Rad Investment Company, LLC (4111); Devoto Construction of Southwest Florida, Inc. (3949); Financial Services of Southwest Florida, LLC (3717); Fountain Valley & Anaheim Radiation Oncology Centers, Inc. (3999); Gettysburg Radiation, LLC (8771); Goldsboro Radiation Therapy Services, LLC (2589); Jacksonville Radiation Therapy Services, LLC (6266); Maryland Radiation Therapy Management Services, LLC (0079); Medical Developers LLC (2330); MD International Investments LLC (3303); Michigan Radiation Therapy Management Services, Inc. (3965); Nevada Radiation Therapy Management Services, Incorporated (4204); New England KE

2 Pg 2 of 124 The above-captioned debtors and debtors in possession (collectively, the Debtors ) respectfully state as follows in support of this motion (this Motion ): Relief Requested 2 1. By this Motion, the Debtors seek entry of interim and final orders, substantially in the forms attached hereto as Exhibit A and Exhibit B (respectively, the Interim Order 3 and Final Order 4 and collectively, the Orders ) granting the following relief: DIP Facility: authorization for 21st Century Oncology, Inc. ( 21C Oncology or the DIP Borrower ) to (A) obtain postpetition senior secured superpriority debtor in possession financing in the form of a credit facility (the DIP Facility ) in an aggregate principal amount of up to $75,000,000 of DIP Loans (as defined below) (of which up to $25,000,000 shall be available to the Debtors upon entry of the Interim Order until entry of the Final Order), pursuant to the terms and conditions of the Orders and that certain Senior Secured Superpriority Debtor-in-Possession Credit Agreement (substantially in the form attached hereto as Exhibit 1 to Exhibit A, and as hereafter amended, restated, amended and restated, supplemented or otherwise modified from time to time in accordance with the terms thereof and hereof, the DIP Credit Agreement ), dated as of May 25, 2017 (the Closing Date ) by and among 21C Oncology, as borrower, 21st Century Oncology Holdings, Inc. ( 21C Holdings ) and certain other 21C Debtors (defined below and excluding, for the avoidance of doubt, Medical Developers LLC and MD International Investments LLC (the MDL Entities ) which shall at no time be obligors under the DIP Facility), as guarantors (collectively, and together with 21C Holdings, the DIP Guarantors ), Morgan Radiation Therapy Management Services, Inc. (6448); New York Radiation Therapy Management Services, LLC (8868); North Carolina Radiation Therapy Management Services, LLC (4741); OnCure Holdings, Inc. (1697); OnCure Medical Corp. (1053); Palms West Radiation Therapy LLC (4934); Phoenix Management Company, LLC (8644); Radiation Therapy School For Radiation Therapy Technology, Inc. (7840); Radiation Therapy Services International, Inc. (7575); RVCC, LLC (3578); Sampson Accelerator, LLC (2724); Sampson Simulator, LLC (2250); SFRO Holdings, LLC (6927); South Florida Medicine, LLC (6002); South Florida Radiation Oncology, LLC (7256); Treasure Coast Medicine, LLC (0975); U.S. Cancer Care, Inc. (3730); USCC Florida Acquisition, LLC (0485); West Virginia Radiation Therapy Services, Inc. (0691). The location of 21st Century Oncology Holdings, Inc. s corporate headquarters and the Debtors service address is: 2270 Colonial Boulevard, Fort Myers, Florida A description of the Debtors businesses, the reasons for commencing these chapter 11 cases, the relief sought from the Court to allow for a smooth transition into chapter 11, and the facts and circumstances supporting this Motion are set forth in the Declaration of Paul Rundell (I) in Support of First Day Motions and (II) Pursuant to Local Bankruptcy Rule (the First Day Declaration ), filed contemporaneously herewith. 3 Capitalized terms used herein but not otherwise defined shall have the meanings ascribed to such terms in the Interim Order. 4 The Final Order will be filed with the Bankruptcy Court in advance of the Final Hearing (as defined herein). 2

3 Pg 3 of 124 Stanley Senior Funding, Inc., as administrative agent and collateral agent (in such capacities, the DIP Agent ) and the lenders party thereto from time to time (the DIP Lenders and, together with the DIP Agent and any other party to which DIP Obligations (as defined herein) are owed, the DIP Parties ), and (B) incur the DIP Loans and other Obligations under the DIP Credit Agreement (such Obligations, as provided for and defined in the DIP Credit Agreement, shall be referred to herein as the DIP Obligations ) (the DIP Credit Agreement, together with the Interim Order, any Final Order and any related agreements, documents, certificates, instruments, exhibits and schedules delivered or executed from time to time in connection therewith, as amended, restated, amended and restated, supplemented or otherwise modified from time to time in accordance with the terms thereof and hereof, collectively, the DIP Documents ); DIP Documents: authorization for the Debtors to execute and enter into the DIP Documents and to perform their respective obligations thereunder and such other and further acts as may be required in connection with the DIP Documents, including, without limitation, the payment of all principal, interest, fees, expenses and other amounts payable under the DIP Documents as such amounts become due and payable; DIP Liens and Claims: authorization for the Debtors to grant valid, enforceable, nonavoidable, automatically and fully perfected security interests, liens and superpriority claims, including allowed superpriority administrative expense claims pursuant to section 364(c)(1) of the Bankruptcy Code and liens pursuant to sections 364(c)(2) and 364(c)(3) of the Bankruptcy Code (and, solely as set forth in paragraph 11(a)(iii) of the Interim Order, priming liens pursuant to section 364(d)(1) of the Bankruptcy Code), to the DIP Agent, for the benefit of the DIP Parties, in the DIP Collateral (as defined in the Orders) and all proceeds thereof, including, without limitation, all property constituting Cash Collateral, as defined in section 363(a) of the Bankruptcy Code ( Cash Collateral ), to secure all DIP Obligations, as more fully set forth in the Interim Order; Cash Collateral: authorization for the Debtors use of Cash Collateral of the Prepetition Secured Parties (as defined herein) solely as provided in the Orders, and the provision of adequate protection to (i) the Prepetition 21C Parties for any Diminution in Value (as defined herein) of their interests in the Prepetition 21C Collateral (as defined herein), and (ii) the Prepetition MDL Parties for any Diminution in Value of their interests in the Prepetition MDL Collateral (as defined herein), in each case including any Cash Collateral; Adequate Protection: approval of the Forms of Adequate Protection (as defined below), to protect the Prepetition Secured Parties respective interests in the Cash Collateral, as well as to compensate the Prepetition Secured Parties for any Diminution in Value of the Prepetition Secured Parties interest in the Prepetition Collateral; 3

4 Pg 4 of 124 Automatic Stay: vacation and modification of the automatic stay imposed by section 362 of the Bankruptcy Code to the extent necessary to implement and effectuate the terms and provisions of the DIP Credit Agreement and the Orders; Interim Hearing: that this Court hold an interim hearing (the Interim Hearing ) to consider the relief sought in the Motion and entry of the proposed Interim Order; Final Hearing: that this Court schedule a final hearing (the Final Hearing ) to consider approval of the DIP Facility on a final basis and entry of the Final Order; and Immediate Effectiveness: waiver of any applicable stay, including under Bankruptcy Rule 6004, to provide for immediate effectiveness of the Interim Order (including a waiver pursuant to Bankruptcy Rule 6004(h)). Jurisdiction and Venue 2. The United States Bankruptcy Court for the Southern District of New York has jurisdiction over this matter pursuant to 28 U.S.C. 157 and 1334 and the Amended Standing Order of Reference from the United States District Court for the Southern District of New York, dated December 1, The Debtors confirm their consent, pursuant to Rule 7008 of the Federal Rules of Bankruptcy Procedure (the Bankruptcy Rules ), 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. This matter is a core proceeding within the meaning of 28 U.S.C. 157(b)(2). 3. Venue is proper in this Court pursuant to 28 U.S.C and The statutory bases for the relief requested herein are sections 105(a), 361, 362, 363(c), 363(e), 364(c)(1), 364(c)(2), 364(c)(3), 364(d)(1), 364(e), and 507(b) of title 11 of the United States Code (the Bankruptcy Code ), and Bankruptcy Rules 2002, 4001, 6003, 6004, and 9014, and rule of the Local Bankruptcy Rules for the Southern District of New York (the Local Bankruptcy Rules ). 4

5 Pg 5 of 124 Preliminary Statement 5. Over the course of several months, the Debtors, their advisors, and their major stakeholders from nearly all levels of the Debtors capital structure including (a) certain of the Prepetition MDL Lenders, (b) certain of the Prepetition 21C Lenders, (c) certain of the Prepetition 21C Note Parties, and (d) the majority holders of the preferred and common equity interests in the Debtors have worked diligently and in good faith to negotiate the framework of the Debtors comprehensive restructuring, the material terms of which are set forth in a restructuring support agreement (the RSA ) 5 entered into by the Debtors and the foregoing stakeholders, which hold in the aggregate over 66.67% of the principal amount outstanding in connection with the Prepetition Obligations (as defined below). These efforts have culminated in the commencement by the Debtors of the above-captioned chapter 11 cases (the Chapter 11 Cases ) to implement the the comprehensive restructuring contemplated by the RSA (the Restructuring ) that will provide the Debtors will working capital to fund their post-emergence operations to effectuate their new business plan while also reducing the Debtors net debt by more than $500 million. 6. The Restructuring contemplates a series of interdependent agreements, each one critical to the others and necessary for the Debtors overall reorganization. One such critical agreement is the DIP Credit Agreement proposed to be entered into by the 21C Debtors and the DIP Parties, which will supply the 21C Debtors with critical and necessary postpetition debtor in possession financing. The DIP Facility and the Prepetition Secured Parties consent for the Debtors to use Cash Collateral are essential to the Debtors ability to maintain their business relationships with their physicians, medical equipment technicians, administrative personnel, 5 The RSA is attached as Exhibit B to the First Day Declaration. 5

6 Pg 6 of 124 joint venture partners, vendors and suppliers, and to meet their ongoing obligations to patients. At bottom, access to the proceeds and the DIP Facility and the use of Cash Collateral is crucial to the Debtors continued viability. Any disruption in operations would likely have a grave and immediate impact on the Debtors businesses and negatively impact their restructuring efforts. 7. The DIP Facility consists of a postpetition senior secured superpriority debtor in possession credit facility in the form of a non-amortizing multiple-draw term loan facility in an aggregate principal amount of up to $75 million, with $25 million available upon entry of the Interim Order and satisfaction of certain conditions set forth in the DIP Credit Agreement. The DIP Facility will be secured by first priority liens on, and security interests in, all of the 21C Debtors unencumbered assets as of the date hereof (the Petition Date ) and superpriority priming liens on, and security interests in, all of the Debtors assets that are encumbered as of the Petition Date, except the Prepetition MDL Foreign Collateral. Obtaining access to the DIP Facility, including the use of Cash Collateral, on the first day of these Chapter 11 Cases is a prerequisite for the Debtors major stakeholders to support the Restructuring and is critical for the success of the Debtors reorganization efforts. 8. As described in greater detail herein and in the Declaration of Brendan Hayes in Support of the Debtors Motion for Entry of Interim and Final Orders (I) Authorizing the Debtors to Obtain Postpetition Financing, (II) Granting Adequate Protection to Prepetition Secured Parties, (III) Modifying the Automatic Stay, (IV) Scheduling a Final Hearing and (V) Granting Related Relief, attached hereto as Exhibit C (the Hayes Declaration ), the DIP Facility is the result of a robust marketing process and negotiation process led by the Debtors investment banker, Millco Advisors, LP ( Millstein ). In this case, obtaining access to postpetition financing was difficult because all, or substantially all, of the Debtors assets are 6

7 Pg 7 of 124 encumbered by valid and perfected liens. In order to avoid a protracted and expensive priming fight, the Debtors would need either to (a) obtain the consent of the Prepetition Secured Parties to the priming of their liens or (b) locate a third-party lender willing to provide post-petition financing on a junior or unsecured basis. Because both options were unavailable, and in their exercise of sound business judgement, the Debtors negotiated extensively with an ad hoc group of Prepetition 21C Lenders (the Ad Hoc Committee ) and an ad hoc group of Prepetition 21C Lenders and Prepetition 21C Note Parties (the Crossover Group ), at arms -length and in good faith, for access to critical and necessary postpetition financing, including the use of Cash Collateral, in the form of the DIP Facility. The DIP Facility, including the imposition of the priming liens and the Debtors use of Cash Collateral, is being consenting to by Prepetition Secured Parties. Moreover, the vast majority of the Debtors key creditor consistencies that are party to the RSA have reviewed and commented on, and consent to entry of the Interim Order. Thus, the DIP Facility pending before the Court is the Debtors best option and one supported by all of the Debtors major constituencies. 9. For the reasons set forth herein, the Debtors believe that the authority to obtain the DIP Facility, including the use of Cash Collateral, is in the best interests of the Debtors, their estates, and their creditors. Accordingly, the Debtors respectfully request approval of the Motion and authority to enter into the DIP Facility and to use Cash Collateral, as more fully detailed herein and in the Hayes Declaration, subject to the terms and conditions set forth in the Orders grant such relief. 7

8 Pg 8 of 124 Concise Statement Pursuant To Local Bankruptcy Rule Pursuant to Bankruptcy Rules 4001(b), (c) and (d), and Local Bankruptcy Rule , the following is a concise statement and summary of the proposed material terms of the DIP Documents and Orders: 6 MATERIAL TERMS OF THE PROPOSED POSTPETITION FINANCING DIP Credit Agreement Parties Fed. R. Bankr. P. 4001(c)(1)(B) Debtor Parties: Borrower: Guarantors: 21C Oncology. (DIP Agmt., Preamble). 21C Holdings and each of Borrower s direct and indirect domestic subsidiaries that are debtors and debtors in possession (excluding the MDL Entities) (the Subsidiary Guarantors, and collectively with the Borrower, the Loan Parties ). Lending Parties: DIP Agent: (DIP Credit Agmt., Preamble; 1.1). Morgan Stanley Senior Funding, Inc. (DIP Credit Agmt., Preamble). DIP Lenders: Certain Prepetition 21C Lenders that are members of either the Ad Hoc Lender Group or Crossover Group, that are parties to the DIP Credit Agreement (collectively, the DIP Lenders, and together with the DIP Agent, the DIP Parties ). (DIP Credit Agmt., Preamble; 1.1). Maturity Fed. R. Bankr. P. 4001(c)(1)(B) Stated Maturity Date: The date that is 180 days after the Closing Date (the Maturity Date ); provided that, at the Borrower s option, the Maturity Date may be extended by an additional 90 days, subject to the terms and conditions of the DIP Credit Agreement. (DIP Credit Agmt., 1.1, 2.24). 6 Capitalized terms used in this statement but not otherwise defined herein shall have the meanings ascribed to such terms in the DIP Documents or Orders, as applicable. This statement is qualified in its entirety by reference to the applicable provisions of the DIP Documents or the Orders. To the extent there exists any inconsistency between this concise statement and the provisions of the DIP Documents or the Orders, the provisions of the DIP Documents or the Orders, as applicable, shall control. 8

9 Pg 9 of 124 MATERIAL TERMS OF THE PROPOSED POSTPETITION FINANCING Termination Date Local Bankruptcy Rule (a)(10) Fed. R. Bankr. P. 4001(c)(1)(B) Use of Proceeds Fed. R. Bankr. P. 4001(c)(1)(B) Interest Rates Fed. R. Bankr. P. 4001(c)(1)(B) The DIP Facility terminates on the earliest of: (a) the Maturity Date, (b) if the Interim Order has not been entered by the Bankruptcy Court, the date that is five (5) calendar days after the Petition Date, (c) if the Final Order has not been entered by the Bankruptcy Court, the date that is thirty (30) calendar days after the Petition Date, (d) the date of any Disposition of all or substantially all of the Loan Parties assets, (e) the date on which the Chapter 11 Cases are converted to cases under chapter 7 of the Bankruptcy Code, (f) date on which any chapter 11 trustee or an examiner with expanded powers in the Chapter 11 Cases is appointed without the consent of the Required Lenders, (g) the Chapter 11 Plan Effective Date and (h) the date of acceleration of the Obligations in accordance with the terms hereof (such earliest date, the Termination Date ). (DIP Credit Agmt., 1.1). DIP Facility. The proceeds of the DIP Facility shall solely be used, in each case, subject to the Approved Budget, to (i) provide working capital and for general corporate purposes of the Debtors during the Chapter 11 Cases (excluding the repayment of any Indebtedness), (ii) pay interest, fees, costs and expenses related to the DIP Facility, (iii) pay the fees, costs and expenses of the estate professionals retained in the Chapter 11 Cases and approved by the Bankruptcy Court, (iv) fund the Carve-Out (as defined herein) upon the delivery of a Carve-Out Trigger Notice (as defined in the Orders), (v) pay fees, costs and expenses of the DIP Lenders (or any of their Affiliates or related funds), including the reasonable and documents fees and expenses of the DIP Lenders advisors, (vi) satisfy any adequate protection obligations owing under the Orders, (vii) make all permitted payments of costs of administration of the Chapter 11 Cases, (viii) pay such prepetition expenses as are consented to by the Required Lenders and approved by the Bankruptcy Court, and (ix) make any other payments permitted by the Approved Budget (including Permitted Variances). (Interim Order 5; DIP Credit Agmt., 4.16). Interest Rate. Interest on the DIP Loans (as defined below) shall accrue at a rate per annum equal to (i) prior to the termination of the RSA, (a) in the case of ABR Loans, ABR (i.e., base rate) plus 6.50% per annum and (b) in the case of Eurodollar Loans, LIBOR plus 7.50% per annum and (ii) upon the termination of the RSA, (a) in the case of ABR Loans, ABR plus 7.25% per annum and (b) in the case of Eurodollar Loans, LIBOR plus 8.25% per annum (a 1.00% floor applies to LIBOR and a 2.00% floor applies to prime rate). All interest shall be computed on the basis of a 360-day year consisting of twelve (12) 30-day months and payable monthly in cash in arrears. (DIP Credit Agmt., 1.1 and 2.14). Default Rate. After the occurrence and during the continuation of an Event of Default under the DIP Credit Agreement, interest on the DIP Loans shall accrue at the Interest Rate plus 2.00%. (DIP Credit Agmt., 2.14). 9

10 Pg 10 of 124 MATERIAL TERMS OF THE PROPOSED POSTPETITION FINANCING DIP Commitments Local Bankruptcy Rule (a)(1); Fed. R. Bankr. P. 4001(c)(1)(B) The DIP Facility will provide for term loans (the DIP Loans ) in an aggregate principal amount not to exceed $75 million (the Total DIP Commitments and, each DIP Lender s portion thereof, a DIP Commitment ). Borrowings under the DIP Facility shall be incurred in (x) one draw on the Closing Date in an aggregate principal amount not to exceed $25 million in accordance with the Approved Budget and (y) subject to entry of the Final Order and the borrowing conditions set forth in the DIP Credit Agreement, two (2) additional draws shall be available in an aggregate principal amount not to exceed $25 million per draw. Once repaid or prepaid, the DIP Loans incurred under the DIP Facility may not be reborrowed. (Interim Order 5; DIP Credit Agmt., 2.1, 5.1 & 5.2). Conditions Local Bankruptcy Rule (a)(2); Local Bankruptcy Rule (h); Fed. R. Bankr. P. 4001(c)(1)(B) Closing Conditions. Usual and customary conditions to effectiveness of the DIP Facility, including DIP Agent s and Required Lenders satisfaction with Loan Parties cash management arrangements, monthly financial forecasts and the Debtors postpetition financing budget (the Initial Budget ), 7 entry of an Interim Order satisfactory to the DIP Agent and Required Lenders, stipulation to the validity of prepetition liens and security interests, execution and delivery of the DIP Documents, payment of costs and fees, and accuracy of representations and warranties. (DIP Credit Agmt., 5.1, & 5.2). Funding Conditions. Each withdrawal by the Borrower from the Loan Proceeds Deposit Account is subject to usual and customary funding conditions, including delivery of notice of withdrawal, accuracy of representations, and no defaults or events of default. (DIP Credit Agmt., 5.2). 7 A copy of the Initial Budget is attached hereto as Exhibit 2 to Exhibit A. 10

11 Pg 11 of 124 MATERIAL TERMS OF THE PROPOSED POSTPETITION FINANCING Fees & Payments Local Bankruptcy Rule (a)(3); Fed. R. Bankr. P. 4001(c)(1)(B) Liens and Priorities Local Bankruptcy Rule (a)(4); Fed. R. Bankr. P. 4001(c)(1)(B) OID Payments. The DIP Lenders shall receive from the Borrower (a) a nonrefundable payment (the Closing Date OID Payment ), payable in cash on the first Borrowing Date, in the aggregate amount of 2.00% of the Total DIP Commitments, which shall be fully earned on the Closing Date and (b) upon the termination of the RSA, a nonrefundable payment in an aggregate amount equal to 1.00% of the Total DIP Commitments in effect as of the Closing Date (the RSA Termination OID Payment ), which shall be fully earned upon the termination of the RSA and payable in cash within five (5) business days after the occurrence thereof. (DIP Credit Agmt., 1.1, 2.8). Agency Fee. The DIP Agent shall be entitled to the payment of a customary administrative fee and customary out-of-pocket expenses and disbursements, as set forth in a letter between the DIP Agent and Borrower (the DIP Facility Letter ). (DIP Credit Agmt., 2.8). Unfunded Facility Fee. The Debtors shall pay to the DIP Lenders an unused facility fee of 0.75% per annum on the unused portion of the DIP Commitments from and after the Closing Date. Accrued unused facility fees will be payable on the last business day of each month in cash in arrears. (DIP Credit Agmt., 2.8). DIP Liens. Subject to the Carve-Out, the obligations of each Loan Party under the DIP Facility, shall be secured by the following liens (the DIP Liens ): a. First Priority Liens: secured pursuant to section 364(c)(2) of the Bankruptcy Code, valid, enforceable, non-avoidable automatically and fully perfected first priority liens on and security interests in all DIP Collateral that is not otherwise subject to a valid, perfected and nonavoidable security interest or lien as of the Petition Date; b. Junior Priority Liens: secured pursuant to section 364(c)(3) of the Bankruptcy Code, valid, enforceable, non-avoidable automatically and fully perfected junior liens on and security interests in all DIP Collateral (other than as set forth in clauses (a) above and (c) below) that are subject only to certain legal, valid, properly-perfected, non-avoidable and senior in priority liens otherwise expressly permitted by the Prepetition MDL Documents and the Prepetition 21C Documents and certain valid perfected unavoidable security interests or liens in existence as of the Petition Date or that are perfected subsequent thereto as permitted by section 546(b) of the Bankruptcy Code that were senior to the Prepetition MDL Liens and the Prepetition 21C Liens; c. Priming Liens: secured pursuant to section 364(d)(1) of the Bankruptcy Code, valid, enforceable, non-avoidable automatically and fully perfected first priority senior priming liens on and security interests in all DIP Collateral that also constitutes Prepetition Domestic Collateral securing the Prepetition Secured Obligations, wherever located, which senior priming liens and security interests in favor of the DIP Agent shall be senior to (a) the Prepetition 21C Liens, (b) the Prepetition MDL Liens on the Prepetition Domestic Collateral, and (c) the adequate protection liens granted pursuant to the DIP Orders. The First Priority Priming Liens (x) are senior in all respects to the interests in such property of the Prepetition Secured Lenders and (y) also 11

12 Pg 12 of 124 MATERIAL TERMS OF THE PROPOSED POSTPETITION FINANCING prime the Adequate Protection Liens (as defined herein). The Primed Liens shall be primed by and made subject and subordinate to the perfected first priority senior priming liens to be granted to the DIP Agent, which senior priming liens in favor of the DIP Agent shall also prime any liens granted after the commencement of the Chapter 11 Cases to provide adequate protection in respect of any of the Primed Liens, but shall not prime liens, if any, to which the Primed Liens are subject at the time of the commencement of these Chapter 11 Cases. The DIP Liens shall be effective and perfected as of the entry of the Interim Order and without requiring the execution, filing or recording of mortgages, security agreements, pledge agreements, control agreements, financing statements or other agreements or instruments, or the taking of any action to obtain possession or control of any collateral. However, if the Requisite Lenders so require, the Loan Parties shall use their commercially reasonable efforts to execute, file or record any or all of the documents described in the preceding sentence and/or take any action so that the DIP Agent obtains possession or control of any collateral. For the avoidance of doubt, DIP Collateral shall not include any assets or property of the MDL Entities. (Interim Order 10 & 11; DIP Credit Agmt., 4.19). DIP Facility Priorities. Pursuant to section 364(c)(1) of the Bankruptcy Code, the DIP Facility will be entitled to superpriority administrative expense claim status in the chapter 11 case of such Loan Party. (Interim Order 9; DIP Credit Agmt., 4.19). Adequate Protection. The Prepetition Secured Parties are entitled, pursuant to sections 361, 363(e), and 364(d)(1) of the Bankruptcy Code, to adequate protection of their interest in their respective Prepetition Collateral (including Cash Collateral) for, and in an aggregate amount equal to, the diminution in value (collectively, Diminution in Value ) of such interests from and after the Petition Date for, among other things, the Debtors sale, lease, or use of the Prepetition Collateral (including Cash Collateral), the priming of the Prepetition Liens as set forth herein and the imposition of the automatic stay pursuant to section 362 of the Bankruptcy Code. The Prepetition Secured Parties are granted adequate protection, which include (i) the payment of contract interest, and all reasonable fees and expenses, on a post-petition basis to the Prepetition MDL Lenders; (ii) the payment of contract interest, and all reasonable fees and expenses, on a post-petition basis to the Prepetition 21C Lenders, (iii) the MDL Adequate Protection Liens; (iv) the 21C Adequate Protection Liens; (v) the MDL Adequate Protection Claims; and (vi) the 21C Adequate Protection Claims (collectively, the Adequate Protection Obligations ). The Prepetition Secured Parties reserve their rights to seek further or different adequate protection. (Interim Order 12). Carve-Out Local Bankruptcy Rule (a)(5) Local Bankruptcy Rule (d) As set forth in the Interim Order, customary for postpetition financings of this size, providing for a carve-out (the Carve-Out ) from pre- and postpetition claims, liens and interests for: fees to the Clerk of the Bankruptcy Court and to the U.S. Trustee; any chapter 7 trustee fees subject to a $50,000 cap; all unpaid fees, costs, disbursements and expenses (the Debtors Professional Fees ) of professionals retained by the Debtors in these Cases (collectively, the Debtors Professionals ) or retained by any official committee of unsecured creditors appointed in the chapter 11 cases (the Committee Professionals and, together with the Debtors Professionals, the Professionals and the fees and expenses of such Professionals, the 12

13 Pg 13 of 124 MATERIAL TERMS OF THE PROPOSED POSTPETITION FINANCING Professional Fees ) that are incurred at any time before or on the first business day after the delivery of a Carve-Out Trigger Notice by the DIP Agent on behalf of the Lenders and are allowed by the Bankruptcy Court under sections 105(a), 330, or 331 of the Bankruptcy Code or otherwise (whether allowed by the Bankruptcy Court prior to or after delivery of a Carve-Out Trigger Notice) and remain unpaid after application of any available funds remaining in the Debtors estates for such Professionals, subject to the Investigation Budget Cap (the Pre-Carve-Out Amounts ); and after the first business day following the delivery by the Agent of the Carve- Out Trigger Notice (the Trigger Date ), to the extent allowed at any time, whether by interim order, procedural order or otherwise, the payment of all Professional Fees of Professionals not to exceed $2,000,000 incurred on and after the Trigger Date (this amount being the Post Carve-Out Trigger Notice Cap ) (plus all unpaid fees, costs, disbursements, and expenses of the Professionals allowed by the Bankruptcy Court at any time that were incurred on or prior to the first business day following the delivery of the Carve-Out Trigger Notice). The Carve-Out Trigger Notice shall be deemed a draw request and notice of borrowing by the DIP Borrower and the DIP Guarantors for DIP Loans under the unfunded Total Loan Commitments, if any, on a pro rata basis in an aggregate amount equal to the Pre- Carve-Out Amounts and the Post-Carve-Out Amounts, and shall also constitute a demand to the Debtors to utilize all cash on hand as of such date, in each case, to fund the segregated accounts described in the Orders (together, the Carve-Out Reserves ). The amounts held in the Carve-Out Reserves shall be held in trust for the Professionals and are not subject to control, foreclosure, or sweeping by the DIP Agent or DIP Lenders (it being understood that the DIP Agent on behalf of the DIP Lenders shall have a lien and security interest in any residual amount of such segregated account) immediately on the day in which a Carve-Out Trigger Notice is given to the Debtors. (Interim Order 14; DIP Credit Agmt., 4.19 & 4.24). Covenants Local Bankruptcy Rule (a)(8); Fed. R. Bankr. P. 4001(c)(1)(B) Affirmative Covenants. Usual and customary for financings of this type (subject to certain additional changes and modifications), including delivery of financial statements, delivery of cash flow forecasts, delivery of a weekly and monthly variance report setting forth cash receipts, expenditures, and net cash flow and variance from the Approved Budget, maintenance of existence, legal compliance, properties, insurance, and books and records, and inspection rights, as well as compliance with milestones. (DIP Credit Agmt., Art. 6). Negative Covenants. Usual and customary for financings of this type (subject to certain additional changes and modifications), including limitations on indebtedness, liens, nature of business, consolidation and mergers, asset sales, investments and acquisitions, prepayment of indebtedness (except as provided in first day or other Court orders), transactions with affiliates, sale and leaseback transactions, accounting changes, and creating or permitting other superpriority claims to exist. (DIP Credit Agmt., Art. 7). Financial Covenants. The DIP Credit Agreement contains financial covenants that are usual and customary for transactions of this type reasonably satisfactory to the Required Lenders (the Financial Covenants ), including, without limitation, to ensure that at no time shall: actual total receipts for the most recently ended Rolling Test Period be less than 13

14 Pg 14 of 124 MATERIAL TERMS OF THE PROPOSED POSTPETITION FINANCING 90% of the projected total receipts line item for such Rolling Test Period in the then in-effect Approved Budget (the Receipts Variance ); actual Total Operating Disbursements for the most recently ended Four Week Rolling Test Period exceed 110% of the projected Total Operating Disbursements line item for such Four Week Rolling Test Period in the then ineffect Approved Budget (the Disbursements Variance ); the variance in actual Net Cash Flow before Total Special Payments for the most recently ended Cumulative Test Period as compared to the Net Cash Flow before Total Special Payments line-item for such Cumulative Test Period in the then in-effect Approved Budget be more unfavorable than the greater of (i) $2.0 million and (ii) 10% of the Net Cash Flow before Total Special Payments line-item for such Cumulative Test Period in the then ineffect Approved Budget (the Net Cash Flow Variance and, together with the Receipts Variance and the Disbursements Variance, the Permitted Variances ); permit non-cash accruals, charges or expenses in respect of Total Special Payments for any Cumulative Test Period to exceed $25.0 million (the Special Payments Accrual Covenant ); or permit the sum of the following to exceed $5.0 million for any Three-Month Rolling Test Period: (i) bad debt expense for such Three-Month Rolling Test Period in excess of $5.5 million; (ii) post-petition litigation and/or settlement expenses or charges and/or expenses or charges ancillary or related thereto for such Three-Month Rolling Test Period; (iii) non-cash accruals, charges or expenses for such Three-Month Rolling Test Period that are incurred outside the ordinary course of business (excluding in respect of professional fees and expenses); and (iv) non-cash accruals, charges or expenses for such Three- Month Rolling Test Period incurred in the ordinary course of business in excess of the historical run-rate amount of such non-cash accruals, charges or expenses for such period (the Non-Cash Accrual Covenant ). (DIP Credit Agmt., 7.1). Limitations on Use of DIP Facility and Cash Collateral Fed. R. Bankr. P (a)(9) No proceeds of the DIP Facility shall be used to investigate, challenge, object to, contest or raise any defense to, the validity, security, perfection, priority, extent or enforceability of any amount due under or the liens or claims granted under or in connection with the Prepetition 21C Credit Agreement or the Prepetition MDL Credit Agreement; provided, however, that the DIP Orders shall provide for a customary investigation budget of not more than $50,000 that may be utilized by an official committee of unsecured creditors appointed in the Chapter 11 Cases to investigate, challenge, object to, contest or raise any defense to, the validity, security, perfection, priority, extent or enforceability of any amount due under or the liens or claims granted under or in connection with the Prepetition 21C Credit Agreement or the Prepetition MDL Credit Agreement. (Interim Order 15; DIP Credit Agmt., 4.16). 14

15 Pg 15 of 124 MATERIAL TERMS OF THE PROPOSED POSTPETITION FINANCING Events of Default Local Bankruptcy Rule (a)(10); Fed. R. Bankr. P. 4001(c)(1)(B) Change of Control Local Bankruptcy Rule (a)(11) Milestones Local Bankruptcy Rule (a)(12); Fed. R. Bankr. P. 4001(c)(1)(B)(v-vi) Repayment Local Bankruptcy Rule (a)(13) Usual and customary for financings of this type, and substantially identical to the events of default included in the Prepetition 21C Credit Agreement (subject to certain additional changes and modifications), including non-payment of obligations, defaults under covenants, breaches of representations and warranties, judgment defaults, failure to comply with ERISA rules and regulations, appointment of bankruptcy trustee or examiner, modification to Orders, dismissal or conversion of the bankruptcy cases, lifting of stay as to material assets of the Debtors, non-permitted prepetition debt payments, failure to comply with Milestones, invalidity of DIP financing documentation, a cross-default under the RSA, and confirmation of a chapter 11 plan (other than the chapter 11 plan contemplated by the RSA (each, an Event of Default ). (DIP Credit Agmt., 8.1). Usual and customary change of control provisions for financings of this type and substantially identical to the definitions included in the Prepetition 21C Loan Documents (subject to certain additional changes and modifications). A change of control occurs when the current holders of equity interests in 21C Holdings cease to have the majority voting power for the election of the directors of 21C Holdings or 21C Holding shall cease to own 100% of 21C Oncology. (DIP Credit Agmt., 1.1). The DIP Credit Agreement shall contain the Milestones set forth in the RSA and the Debtors shall comply with the Milestones. Voluntary Prepayment. The DIP Loans may be voluntarily prepaid, in whole or in part, at any time prior to the Maturity Date or the acceleration of the DIP Loans ( Voluntary Prepayments ). Voluntary Prepayments will result in permanent reduction of the DIP Facility (DIP Credit Agmt., 2.10). Mandatory Repayment. The DIP Credit Agreement shall be prepaid in an amount equal to 100% of the net cash proceeds from (i) any asset sale (or series of related asset sales) with certain exceptions to be agreed and consummated after the Closing Date (subject to the right of the Loan Parties to reinvest such net cash proceeds in replacement assets located in the U.S. within a time period to be mutually agreed among the Borrower and the Requisite DIP Lenders); provided that the Loan Parties and/or their subsidiaries shall be permitted to sell assets with a fair market value not to exceed $25 million in the aggregate outside the ordinary course of business and be able to use the net cash proceeds therefrom for working capital and general corporate purposes, (ii) casualty and condemnation proceeds (subject to the right of the Loan Parties to reinvest such net cash proceeds in replacement assets located in the U.S. within a time period to be mutually agreed among the Borrower and the Requisite DIP Lenders), (iii) permitted equity issuances by the Debtors (subject to the right of the Loan Parties to reinvest such net cash proceeds in replacement assets located in the U.S. within a time period to be mutually agreed among the Borrower and the Requisite DIP Lenders), (iv) debt issuances to the extent such debt issuances are not otherwise permitted pursuant to the terms of the DIP Documents and (v) extraordinary receipts, in each case, received by any of the Loan Parties (clauses (i) through (v), collectively, the Mandatory Prepayments ). Mandatory Prepayments will result in a permanent reduction of the DIP Facility. 15

16 Pg 16 of 124 MATERIAL TERMS OF THE PROPOSED POSTPETITION FINANCING (DIP Credit Agmt., 2.11). Joint Liability Local Bankruptcy Rule (a)(14); Local Bankruptcy Rule (e) Acknowledgements Local Bankruptcy Rule (f) Fed. R. Bankr. P. 4001(c)(1)(B)(iii); Automatic Stay Fed. R. Bankr. P. 4001(c)(1)(B)(iv) Waivers and Consents Fed. R. Bankr. P. 4001(c)(1)(B)(v); Fed. R. Bankr. P. 4001(c)(1)(B)(vii-x) All obligations of the Borrower are guaranteed, on a joint and several basis, by 21C Holdings and the Subsidiary Guarantors. (DIP Credit Agmt., 3.1). The Debtors make certain customary admissions and stipulations with respect to the aggregate amount of prepetition indebtedness owing to the Prepetition Secured Parties and the validity, enforceability and priority of the liens and security interests granted to the Prepetition Agents to secure such indebtedness. (Interim Order D). The Interim Order provides for lifting of the automatic stay to allow the DIP Agent and the DIP Lenders to exercise upon the occurrence and during the continuance of an Event of Default, and five (5) business days prior written notice, all rights and remedies against the Collateral provided for in the DIP Documents. (Interim Order 24). Upon execution and delivery of the DIP Documents, the Debtors obligations under the DIP Documents shall constitute valid and binding obligations of the Debtors, enforceable against each Debtor party thereto in accordance with their terms. No obligation, payment, transfer, or grant of security under the DIP Documents or the Interim Order shall be stayed, restrained, voidable, or recoverable under the Bankruptcy Code or under any applicable law, or subject to any defense, reduction, setoff, recoupment, or counterclaim. (Interim Order 3). Indemnification. Usual and customary for financings of this type, and substantially the same as set forth in the Prepetition Loan Documents, including fees, charges and disbursements of counsel to the Prepetition Agent. (Interim Order 8; DIP Credit Agmt., 9.12). 506(c) Waiver. Subject to entry of the Final Order, no costs or expenses of administration shall be surcharged against or recovered from or against any or all of the DIP Parties, the Prepetition Secured Parties, the DIP Collateral and the Prepetition Collateral (including Cash Collateral) pursuant to section 506(c) of the Bankruptcy Code or otherwise. (Interim Order 18). No Marshaling. In no event shall the DIP Parties or the Prepetition Secured Parties, subject to entry of the Final Order, be subject to the equitable doctrine of marshaling or any other similar doctrine with respect to the DIP Collateral or the Prepetition Collateral. (Interim Order 19). 552 Waiver: Subject to entry of the Final Order, each of the DIP Parties and the Prepetition Secured Parties are entitled to all the rights and benefits of section 552(b) of the Bankruptcy Code, and the equities of the case exception will not apply. (Interim Order 20). 16

17 Pg 17 of 124 Key Provisions 11. As a condition to obtaining the proposed financing, the DIP Lenders have required, and the Debtors have agreed to, certain provisions that may be considered key provisions to be highlighted to the Court. These provisions include the following: Proceeds of Avoidance Actions. The Superpriority Claims shall be chargeable against the Debtors and, subject to entry of the Final Order, the DIP Liens shall include liens on the proceeds of the Debtors claims and causes of action (but not on the actual claims and causes of action) arising under sections 502(d), 544, 545, 547, 548, 549, and 550 of the Bankruptcy Code. (Interim Order 9). Automatic Stay Relief. The Interim Order lifts the automatic stay to allow on five days prior written notice to the Debtors (with copy to the Office of the United States Trustee for the Southern District of New York (the U.S. Trustee ) and counsel to any official committee appointed in these chapter 11 cases (the Committee ) during the continuance of an Event of Default, the exercise of rights and remedies against the DIP Collateral. (Interim Order 24). Carve-Out. The DIP Facility provides for a Carve-Out of any chapter 7 trustee and Professional Fees. The Carve-Out is subject to a $50,000 cap in the case of a chapter 7 trustee and a cap of $2 million with respect to Professional Fees incurred by Professional Persons retained by the Debtors and Professional Persons retained by the Committees at any time after the first business day after the occurrence and during the continuance of an Event of Default and delivery of a Carve-Out Trigger Notice by the DIP Agent. (Interim Order 14). The Carve-Out does not provide for disparate treatment of the Debtors and the Committees professionals and therefore is in compliance with Local Bankruptcy Rule (d). 506(c) and 552 Waiver. Subject to the entry of the Final Order, (i) the Debtors waive their rights to surcharge against the DIP Collateral and Prepetition Collateral pursuant to section 506(c) of the Bankruptcy Code, and (ii) the Debtors waive their rights to assert an equities of the case claim against the DIP Agent, the DIP Lenders, and Prepetition Secured Parties pursuant to section 552 of the Bankruptcy Code. (Interim Order 18 & 20). Fees. The Debtors have agreed, subject to Court approval, to pay certain fees to the DIP Lenders in exchange for their making financing available under the DIP Facility, as set forth in greater detail in paragraph 47 through 48 below. (Interim Order J). Committee Investigation. The Debtors have agreed that the limitations on use of Cash Collateral or proceeds of the DIP Facility or Carve-Out to fund challenges to the DIP Liens, the Prepetition MDL Liens, the Prepetition 21C Liens or claims against the DIP Lenders and/or Prepetition Secured Parties shall not apply to Committee investigations in an aggregate amount not to exceed $50,000. The Interim Order also 17

18 Pg 18 of 124 provides that the Debtors stipulations as to the Prepetition MDL Liens and the Prepetition 21C Liens shall be binding upon all parties, including the Committee, unless a party in interest has filed an adversary proceeding or contested matter within 60 days from the date of entry of the Final Order in accordance with Local Rule (f). (Interim Order 17). Adequacy of the Budget (Pursuant to Local Bankruptcy Rule (h)). The Borrower is required to deliver to the DIP Lenders a budget for the 13 weeks commencing with the week that includes the Petition Date. Such budget will be updated and extended in the following months. (Interim Order 6; DIP Agmt. 5.1 & 6.10). The Debtors have reason to believe that the Approved Budget will be adequate, considering all available assets, to pay all administrative expenses due or accruing during the period covered by the financing or the budget. Prepetition Capital Structure 12. As of the Petition Date, the Debtors outstanding funded debt obligations are in the aggregate amount of approximately $1.1 billion. The primary components of the Debtors outstanding funded debt obligations are described in greater detail as follows: I. The Prepetition MDL Obligations. 13. Pursuant to (a) that certain Amended and Restated Credit and Guaranty Agreement, dated as of March 6, 2017 (as amended, supplemented, amended and restated or otherwise modified from time to time in accordance with the terms thereof, the Prepetition MDL Credit Agreement ), by and among Debtor MDL, as Borrower thereunder, each subsidiary and affiliate of MDL party thereto as Guarantors thereunder, the financial institutions and other entities party thereto as Lenders thereunder (collectively, the Prepetition MDL Lenders ), and Wilmington Savings Fund Society, FSB, as Administrative Agent and as Collateral Agent thereunder (in such capacities, the Prepetition MDL Agent and, together with the Prepetition MDL Lenders, the Prepetition MDL Secured Parties ), and (b) the other Credit Documents (each as defined in the Prepetition MDL Credit Agreement and, together with the Prepetition MDL Credit Agreement, the Prepetition MDL Documents ), the Prepetition MDL 18