Ascend Elements, Inc., et al. - Chapter 11 DIP Terms

DIP Terms

Borrower(s) / Guarantor(s)

• Ascend Elements, Inc. (the "Parent Borrower") and Ascend Elements US, LLC, as Borrowers
• Battery Resourcers LLC; Ascend Elements UK, Ltd.; Ascend Elements Poland SP Z O.O.; Ascend Elements Poland Holdings SP. Z O.O.; and Ascend Elements Poland 2 SP Z O.O., as Guarantors

Agent / Lender(s)

• Bluegrass Infrastructure Partners Holdings, LLC, as DIP Lender

DIP Commitments

• $30.0 million senior secured superpriority priming new-money term loan facility, with the full $30.0 million available upon entry of the Interim Order
• Approximately $18 million of the proceeds is specifically earmarked for the exercise of the Polish land option by non-Debtor subsidiary Ascend Elements Poland 2 SP Z O.O.
• Any principal amount of the Term Loans that is repaid or prepaid may not be reborrowed

Cash Collateral

• All cash of the Debtors, wherever located, and all cash equivalents, including cash in deposit accounts, as income, proceeds, products, rents or profits of other Prepetition Collateral, constitutes cash collateral of the Secured Noteholder Parties within the meaning of section 363(a) of the Bankruptcy Code
• The Debtors are authorized to use Cash Collateral solely in accordance with the Interim Order, the Approved Budget, and the DIP Loan Documents (including permitted variances)
• On April 13, 2026, the Court entered the Interim Cash Collateral Order [Docket No. 74] authorizing the Debtors to use Cash Collateral on a consensual basis in exchange for certain adequate protection to the Prepetition Secured Parties; the Debtors and Secured Noteholder Parties intend to seek entry of a separate order approving usage of cash collateral on a final basis

Interest Rate

• 8.00% per annum, compounded daily, payable in kind monthly in arrears and on the maturity date
• Default Rate Increase: 2.0%

Fees

• Upfront / Funding Fee: 5.00% of the principal amount of the DIP Lender's commitment, fully earned and payable in kind upon entry of the Interim Order
• Expenses: payment of all reasonable and documented out-of-pocket fees and expenses, including attorneys' fees, costs and disbursements, incurred by the DIP Lender in connection with the Chapter 11 Cases

Maturity

• The earliest to occur of:
  • 84 days after the Petition Date (i.e., 12 weeks after the Petition Date)
  • 34 days after the date of filing of the motion to approve the DIP Facility, if the Final Order has not been entered
  • The closing of a section 363 sale
  • The plan effective date
  • Any dismissal or conversion to chapter 7
  • Any acceleration after an event of default

Milestones

• May 5, 2026: Debtors shall file a DIP financing motion (Interim and Final) acceptable to the DIP Lender
• May 5, 2026: Debtors shall execute the Stalking Horse Purchase Agreement, pursuant to which Newco will serve as the Stalking Horse Bidder
• May 5, 2026: Debtors file a stalking horse notice proposing the bid protections for the Stalking Horse Purchase Agreement with the DIP Lender
• May 9, 2026: the bid deadline under the Bidding Procedures Order shall have occurred
• May 12, 2026: the Interim Order approving the Loan Agreement and other DIP Documents shall be entered, and the Bankruptcy Court shall have entered an order designating Purchaser as the stalking horse bidder and approving the bid protections
• May 13, 2026: the Borrowers shall have conducted an auction (or cancelled the auction and named Purchaser the winning bidder) for substantially all of the Loan Parties' assets, if required
• May 21, 2026: the Final Order approving the Loan Agreement and other DIP Documents shall be entered, and the Bankruptcy Court shall have entered an order approving the sale of the Acquired Assets to Purchaser, or an order approving an alternative sale that results in payment of the Obligations in full in cash prior to the Maturity Date
• June 5, 2026: the sale of the Acquired Assets to Purchaser or other winning bidder shall have been consummated in full

Carve Out

• Statutory Fees payable to the Clerk of the Court and the U.S. Trustee under section 1930(a) of title 28 of the United States Code, plus interest at the statutory rate
• Chapter 7 Trustee Carve-Out: up to $50,000 in fees and expenses incurred by a trustee under section 726(b) of the Bankruptcy Code
• Pre-Trigger Carve-Out Cap: all unpaid Allowed Professional Fees of Debtor Professionals and Committee Professionals incurred at any time before or on the first business day following delivery of a Carve-Out Trigger Notice, subject to the Approved Budget
• Post-Carve-Out Trigger Notice Cap: $500,000 of Allowed Professional Fees of Professional Persons incurred after the Trigger Date (inclusive of any prepetition retainer not previously applied or returned)

Use of Proceeds

• Pay costs and professional fees of the Chapter 11 Cases (including to fund the Carve-Out)
• Pay amounts authorized by first day orders, and any adequate protection
• Pay interest, premiums, fees and expenses payable to the DIP Lender as provided under the DIP Orders
• Fund general corporate and working capital needs of the Loan Parties
• Fund the exercise of the option of Ascend Elements Poland 2 sp. z. o.o. to acquire the Opole Property in Poland (the "Opole Option"), which must be exercised by entry of the Final Order; the DIP Facility proceeds are the only available source of funding for this payment
• Proceeds may not be used by any Loan Party to make a Restricted Payment
• Up to $25,000 in the aggregate of proceeds of the DIP Facility, DIP Collateral, or Cash Collateral may be used by any Committee in connection with the investigation or litigation of any potential Challenge
• No proceeds of the DIP Facility, the Carve-Out, the DIP Collateral, or any Cash Collateral may be used:
  • To finance any investigation, initiation, or prosecution of any action adverse to the DIP Lender or its rights and remedies under the DIP Facility
  • In connection with challenging, invalidating, disallowing, recharacterizing, setting aside, avoiding, or subordinating the liens, claims, interests, and adequate protection of the DIP Lender, or contesting the obligations and liens under the Prepetition Documents
  • For any purpose prohibited under the Bankruptcy Code, the Interim Order, the Final Order, or the DIP Documents
  • To make any payment in settlement of any claim, action, or proceeding not provided for in the Approved Budget (subject to Permitted Variances), without the prior written consent of the DIP Lender

Credit Bid

• Pursuant to section 363(k) of the Bankruptcy Code, the DIP Lender shall have the right to credit bid the full amount of the DIP Obligations in connection with the Interim Order and any sale of the Debtors' assets pursuant to the Bidding Procedures Order or otherwise
• Newco's stalking horse bid consists of a credit bid of (i) all accrued obligations under the DIP Facility, (ii) all accrued obligations under the Senior Notes Agreement, and (iii) $30 million of accrued obligations under the Junior Notes Agreement

Avoidance Actions

• Subject to entry of the Final Order, the DIP Collateral shall include the proceeds of any Avoidance Actions, and the DIP Lender shall be granted DIP Liens on the proceeds of all claims and causes of action, including all commercial tort claims and all claims and causes of action arising under sections 502(d), 542, 544, 545, 547, 548, 549, 550, 551, 553(b), and 724(a) of the Bankruptcy Code

Challenge Period and Budget

• The Challenge Period shall mean the later of:
  • 60 calendar days after entry of the Interim Order
  • Such later date as set by an order of the Court for cause shown
• If a chapter 11 trustee is appointed or the Chapter 11 Cases are converted to chapter 7 prior to expiration of the Challenge Period, the trustee shall have until the later of (i) the expiration of the Challenge Period and (ii) 30 days after such appointment or conversion to commence a Challenge
• No more than $25,000 in the aggregate of proceeds of the DIP Facility, DIP Collateral, or Cash Collateral may be used by any Committee in connection with the investigation or litigation of any potential Challenge

Securities and Priorities

• The DIP Lender is granted allowed superpriority administrative expense claims pursuant to sections 364(c)(1), 503(b)(1), and 507(b) of the Bankruptcy Code in respect of all DIP Obligations, subject only to the Carve-Out, having priority over any and all other administrative expenses or priority claims, payable from and with recourse to all prepetition and postpetition property of the Debtors and all proceeds thereof (including, subject to entry of the Final Order, proceeds of Avoidance Actions) (the "DIP Superpriority Claim")
• Pursuant to sections 364(c)(2), 364(c)(3), and 364(d) of the Bankruptcy Code, the DIP Lender is granted valid, enforceable, non-avoidable, automatically and fully perfected security interests in and liens (the "DIP Liens") in and upon all DIP Collateral, subject and subordinate only to the Carve-Out and Permitted Priority Encumbrances, comprised of:
  • All property and assets comprising Prepetition Collateral
  • All other property and assets of the Debtors, including any property or assets consisting of "Excluded Property" under any Prepetition CLN Obligations documents, and (subject to entry of the Final Order) the proceeds of Avoidance Actions
• The DIP Liens shall prime and be senior to (i) the Prepetition Liens of the Secured Noteholder Parties on the Prepetition Collateral, (ii) the M&M Liens, and (iii) the Cash Collateral Order Adequate Protection Liens

Adequate Protection

Prepetition Senior Secured Noteholder Parties and Junior Secured Noteholder Parties

• Cash Collateral Order Adequate Protection Liens, on the same terms set forth in the Interim Cash Collateral Order
• Superpriority administrative expense claims to the extent of any Diminution in Value, senior to all other administrative expense claims, junior only to the Carve-Out, the DIP Liens, and the DIP Superpriority Claim (the "Adequate Protection Superpriority Claims")
• Payment of the reasonable professional fees, expenses, and disbursements of the advisors to the Senior Secured Noteholders and the collateral agents
• The Senior Secured Noteholders and Junior Secured Noteholders have consented, or have been deemed to consent, to the priming of their liens and such subordination in exchange for the adequate protection provided

M&M Lienholders

• The Debtors submit that the M&M Lienholders are adequately protected by the DIP Facility, which will provide the liquidity necessary to preserve the going-concern value of the Debtors' business and assets, including the property subject to the M&M Liens, and that no further adequate protection is required at this time

Waivers

• Subject to entry of the Final Order:
  • Section 506(c): No costs or expenses of administration shall be charged against the DIP Lender, the DIP Obligations, or the DIP Collateral pursuant to sections 105 or 506(c) of the Bankruptcy Code without the prior express written consent of the affected DIP Lender
  • Section 552(b): The "equities of the case" exception under section 552(b) of the Bankruptcy Code shall not apply to the DIP Lender or the Secured Noteholder Parties with respect to proceeds, products, offspring, or profits of the DIP Collateral or Prepetition Collateral
  • The DIP Lender shall not be subject to the equitable doctrine of "marshaling" or any similar doctrine with respect to the DIP Collateral

Permitted Variance

• Use of cash collateral and DIP proceeds is subject to the Approved Budget, with budget and variance testing acceptable to the DIP Lender and the Senior Secured Noteholders
• For the first three variance testing dates (each Friday commencing with the first full week after entry of the Interim Order), the Variance Testing Period is the period commencing on the date of entry of the Interim Order and ending on such variance testing date; thereafter, the Variance Testing Period is the two-week period ending on such variance testing date
• Permitted Variance: 20% in respect of the aggregate amount of Actual Disbursement Amounts for such Variance Testing Period