Avenger Flight Group - Chapter 11 DIP Terms

Avenger Flight Group obtained final approval for a $43.5 million super-priority DIP facility, comprised of $14.5 million in new money and a $29 million roll-up of prepetition term loan debt with a 90-day outside maturity tied to a court-supervised asset sale process.

DIP Terms

Borrower(s) / Guarantor(s)

Avenger Flight Group, LLC as Borrower
The Debtors shall be jointly and severally liable for the DIP Obligations

Agent / Lender(s)

Wilmington Trust, National Association, as Administrative and Collateral Agent (the "DIP Agent")
The Prepetition Term Loan Lenders who elect to provide DIP Term Loan Commitments
"Required DIP Lenders" refers to DIP Lenders holding at least a majority in principal amount of the outstanding DIP Loans and unfunded DIP Term Loan Commitments
The DIP Agent may be removed or replaced in accordance with the terms set forth in Section 1.5 of Exhibit C

DIP Commitments

$43.5 million senior secured super-priority term loan facility comprised of:
- $14.5 million new money multiple draw term loan facility consisting of:
  - Up to $8 million available in one draw following entry of the Interim Order (the "Interim Amount")
  - Up to an additional $6.5 million available in one or more draws upon entry of the Final Order (the "Final Amount")
- Effective upon entry of the Interim Order, a roll-up of certain Bridge Loan Obligations in the amount of $6 million on a cashless dollar-for-dollar basis into DIP Loans under the DIP Facility
- Upon entry of the Final Order, a roll-up of certain Prepetition Term Loan Obligations in the amount of $23 million for a total roll-up of $29 million on a cashless dollar-for-dollar basis into DIP Loans under the DIP Facility
As of the Petition Date, the Credit Parties were indebted to the Prepetition Term Loan Secured Parties in the aggregate principal amount outstanding under the Prepetition Term Loan Facility of not less than $273,051,488.11
As of the Petition Date, the Prepetition Term Loan Obligations include no less than $8,013,535.57 in principal amount outstanding of bridge financing provided in September and December 2025
Effective immediately upon entry of the Interim Order, Prepetition Term Loan Obligations in an aggregate amount equal to the Interim Roll-Up Amount were converted on a cashless dollar-for-dollar basis into principal obligations constituting DIP Obligations without any further action by the Debtors or any other party, which conversion is ratified by the Final Order
Immediately upon entry of the Final Order, additional Prepetition Term Loan Obligations in an aggregate amount equal to the Final Roll-Up Amount shall be converted on a cashless dollar-for-dollar basis into principal obligations constituting DIP Obligations, without any further action by the Debtors or any other party
The Roll-Up Obligations are an inextricable component of the DIP Facility, and the Prepetition Term Loan Secured Parties would not otherwise consent to the use of their Cash Collateral or the subordination of the Prepetition Term Loan Liens to the DIP Liens, and the DIP Secured Parties would not be willing to provide the DIP Facility or extend credit to the Debtors thereunder without the inclusion of the Roll-Up Obligations in the DIP Obligations
The DIP Secured Parties shall have no obligation to make any loan or advance under the DIP Documents unless all of the conditions precedent under the DIP Documents and the Final Order have been satisfied in full or waived by the Required DIP Lenders in their sole discretion in accordance with the terms of the DIP Documents

Cash Collateral

All or substantially all of the Debtors' cash and cash equivalents, including cash on deposit in any account or accounts as of the Petition Date, cash obtained at any time thereafter (including proceeds of the DIP Facility), securities, or other property, wherever located, whether subject to control agreements or otherwise, whether as original collateral or proceeds of other Prepetition Term Loan Collateral, constitutes Cash Collateral of the Prepetition Term Loan Secured Parties
The Debtors are authorized to use proceeds of the DIP Facility and Cash Collateral to:
- Provide financing for working capital and other general corporate purposes, including for bankruptcy-related costs and expenses, all to the extent provided in, and in accordance with, the Approved Budget, the Final Order, and the DIP Documents
- Make permitted adequate protection payments
- Pay the principal, interest, fees, expenses, and other amounts payable and reimbursable under the DIP Documents or the Final Order as such become due, including, without limitation, the DIP Fees and the fees and disbursements of the DIP Professionals
- Any other purpose agreed upon in the DIP Documents, in each case solely in accordance with the Approved Budget, the Final Order, and the DIP Documents
Subject to the terms and conditions of the Final Order and the DIP Documents, and in accordance with the Approved Budget (subject to the Permitted Variances), the Debtors are authorized to use Cash Collateral until the expiration of the Remedies Notice Period following the Termination Date

Interest Rate

DIP Term Loans: Term SOFR + 9.00% per annum, compounded monthly, paid in kind
Roll-Up Loans: Term SOFR + 9.50% per annum, compounded monthly, paid in kind
Floor: 1.00%
Interest payable shall be computed on the basis of a year of three hundred sixty (360) days, in each case for the actual number of days elapsed in the period during which it accrues
Interest on each DIP Loan shall accrue and shall be payable in kind by being capitalized to the principal balance of the DIP Loans on each Interest Payment Date
Default Rate Increase: 2.0%

Fees

Fees are applicable to the new money commitments only:
- Upfront Fee: 2.00% on the principal amount of the DIP Term Loan Commitments, payable in kind
- Exit Fee: 2.00% on the principal amount of the DIP Term Loan Commitments, payable on the Maturity Date, payable in kind
The DIP Financing Fees and the Agency Fees shall be fully earned upon entry of the Interim Order
The Debtors shall reimburse the DIP Agent and the DIP Lenders for:
- Counsel to the DIP Agent (limited to one lead counsel and one local counsel)
- Counsel to the DIP Lenders (limited to one lead counsel and one local counsel for the DIP Lenders taken as a whole)
- One financial advisor to the DIP Lenders taken as a whole
- Specialty or local counsel to the DIP Lenders taken as a whole in each relevant jurisdiction
The Debtors shall indemnify and hold harmless the DIP Agent and each DIP Lender (and each of their respective directors, officers, members, employees, advisors and agents) against any loss, liability, cost, or expense incurred in respect of the financing contemplated hereby or the use or the proposed use of proceeds thereof (except to the extent resulting from the gross negligence or willful misconduct of the indemnified party, as determined by a final, non-appealable judgment of a court of competent jurisdiction)
No DIP Financing Fees shall be earned on account of any of the Roll-Up Loans

Maturity

The earliest to occur of:
- 90 days following the Petition Date (i.e., May 12, 2026)
- 30 days following the Petition Date if the Final Order has not been entered by the Bankruptcy Court on or prior to such date (i.e., March 13, 2026)
- The date a sale of all or substantially all of the assets of the Debtors is consummated
- The termination of the Asset Purchase Agreement for a material breach thereof by any seller thereunder without the prior written consent of the Required DIP Lenders
- The effective date of a plan of reorganization or liquidation
- Entry of an order by the Bankruptcy Court approving (i) a motion seeking conversion or dismissal of the Chapter 11 Cases or (ii) a motion seeking the appointment or election of a trustee, a responsible officer, or examiner with enlarged powers relating to the operation of the Debtors' business
- The date any or all of the DIP Obligations are accelerated in accordance with the DIP Orders

Carve Out

All statutory fees required to be paid to the Clerk of the Court and to the Office of the United States Trustee pursuant to 28 U.S.C. § 1930(a)
All reasonable fees and expenses incurred by a trustee, if any, under section 726(b) of the Bankruptcy Code in an aggregate amount not exceeding $25,000
Subject in all cases to the Approved Budget, to the extent allowed at any time, whether by interim order, procedural order, or otherwise, all unpaid fees, disbursements, costs, and expenses (including any restructuring, sale, success, or other transaction fee allowed and payable by the Debtors to Seabury Aviation Partners pursuant to that certain engagement letter dated December 19, 2025, and excluding any restructuring, sale, success, or other transaction fee of any other investment bankers or financial advisors retained by the Debtors or the Committee) incurred by Professional Persons at any time before or on the first business day following delivery by the Required DIP Lenders or the DIP Agent (at the direction of the Required DIP Lenders) of a Carve-Out Trigger Notice
Post-Carve-Out Trigger Notice Cap:
- Professional Fees of the Debtors not to exceed $150,000
- Professional Fees of the Committee not to exceed $50,000
Proceeds from the DIP Facility or Cash Collateral not to exceed $50,000 in the aggregate (the "Investigation Budget") may be used on account of Professional Fees incurred by Professional Persons of the Committee during the Challenge Period in connection with the investigation of avoidance actions or any other claims or causes of action (but not the prosecution of such actions) on account of the Prepetition Term Loan Obligations, the Prepetition Term Loan Liens, and Prepetition Term Loan Secured Parties (but not the DIP Facility and DIP Secured Parties)

Use of Proceeds

From and after the Petition Date, the Debtors shall use advances of credit under the DIP Facility only for the purposes specifically set forth in the Final Order and the DIP Documents, and only in compliance with the Approved Budget (subject to the Permitted Variances) and the terms and conditions in the Final Order and the DIP Documents:
- To pay transaction costs, fees and expenses that are incurred in connection with the DIP Facility
- To pay professional fees of the Debtors and their Estates and the Committee
- For working capital and other general corporate purposes permitted by the DIP Documents
- To pay Statutory Fees
Upon entry of the Interim Order, the deemed proceeds of the DIP Facility were used to refinance (on a cashless basis) the Interim Roll-Up Amount of the Bridge Loan Obligations held by the DIP Lenders in their capacity as Prepetition Term Loan Lenders (or their affiliates) reducing the amount of the "Obligations" (as defined in the Prepetition Credit Agreement) by such amount
Immediately upon entry of the Final Order, the deemed proceeds of the DIP Facility shall be used to refinance (on a cashless basis) the Final Roll-Up Amount of the Prepetition Term Loan Obligations held by the DIP Lenders in their capacity as Prepetition Term Loan Lenders (or their affiliates) reducing the amount of the "Obligations" (as defined in the Prepetition Credit Agreement) by such amount

Credit Bid

In connection with any sale or other disposition of the DIP Collateral or Prepetition Term Loan Collateral including any sales occurring under or pursuant to section 363 of the Bankruptcy Code, any plan of reorganization or plan of liquidation under section 1129 of the Bankruptcy Code, or a sale or disposition by a chapter 7 trustee for any of the Debtors under section 725 of the Bankruptcy Code, the DIP Agent (at the direction of the Required DIP Lenders) and the Prepetition Term Loan Agent (at the direction of the Required Lenders (as defined in the Prepetition Credit Agreement)) shall be authorized subject to section 363(k) of the Bankruptcy Code to credit bid on a dollar-for-dollar basis any or all of the outstanding DIP Obligations (including the Roll-Up Obligations) and Prepetition Term Loan Obligations (and any other applicable obligations) up to the full amount of the DIP Obligations and Prepetition Term Loan Obligations (and any other applicable obligations held by the DIP Secured Parties and Prepetition Term Loan Secured Parties), respectively, including any accrued interest, expenses, and fees, in a Sale (including any deposit in connection with such sale) of any DIP Collateral or Prepetition Term Loan Collateral, whether such sale is effectuated through section 363 or 1129 of the Bankruptcy Code, by a chapter 7 trustee under section 725 of the Bankruptcy Code, or otherwise, without the need for further court authorization
The DIP Agent (at the direction of the Required DIP Lenders) and the Prepetition Term Loan Agent (at the direction of the Required Lenders (as defined in the Prepetition Credit Agreement)) shall each have the absolute right to assign, transfer, sell, or otherwise dispose of their respective rights to credit bid to any acquisition vehicle formed in connection with such bid or other designee
No Debtor or any controlled affiliate of any Debtor (or any successor to any of the foregoing) shall object to any DIP Secured Party's or Prepetition Term Loan Secured Party's right to credit bid up to the full amount of its DIP Obligations, Prepetition Term Loan Obligations, and Term Loan Adequate Protection Obligations, in each case including, without limitation, any accrued interest and expenses, in any sale of the DIP Collateral or Prepetition Term Loan Collateral under section 363 or section 1129 of the Bankruptcy Code, as applicable, whether such sale is effectuated through section 363 of the Bankruptcy Code, under section 1129 of the Bankruptcy Code, by a chapter 11 trustee, or otherwise

Avoidance Actions

"DIP Collateral" means all property of the Estates under section 541 of the Bankruptcy Code, including all real and personal property, whether now existing or hereafter arising and wherever located, tangible and intangible, of the Debtors, including:
- All cash, cash equivalents, deposit accounts, securities accounts, accounts, other receivables (including credit card receivables), chattel paper, contract rights, inventory (wherever located), instruments, documents, securities (whether or not marketable) and investment property (including all of the issued and outstanding capital stock of each of its subsidiaries), hedge agreements, real estate, furniture, fixtures, equipment (including documents of title), goods, franchise rights, trade names, trademarks, servicemarks, copyrights, patents, license rights, intellectual property, general intangibles (including, for the avoidance of doubt, payment intangibles), rights to the payment of money (including tax refunds and any other extraordinary payments), supporting obligations, guarantees, letter of credit rights, commercial tort claims, causes of action, and all substitutions, indemnification rights, all present and future intercompany debt, books and records related to the foregoing, accessions and proceeds of the foregoing, wherever located, including insurance or other proceeds
- The proceeds of any avoidance actions brought pursuant to chapter 5 of the Bankruptcy Code or applicable state law equivalents
- Proceeds from the Debtors' exercise of rights under section 506(c) and 550 of the Bankruptcy Code ("Avoidance Proceeds")
- All Prepetition Term Loan Collateral
- All EDC Collateral
- All property of the Debtors that was not otherwise subject to valid, perfected, enforceable, and unavoidable liens on the Petition Date
- All proceeds from the sale, assignment, or other disposition of any leased real property
Notwithstanding the foregoing, DIP Collateral shall not include:
- The Debtors' real property leases (but shall include all proceeds of such leases) solely to the extent that the grant of a DIP Lien is prohibited or restricted by the terms of such real property lease or applicable nonbankruptcy law to attach to any such real property lease
- Any insurance proceeds arising from damage to a leased property to the extent that under the applicable lease and insurance policy such insurance proceeds are payable to, or for the benefit of, the applicable landlord
- Any security deposits in the possession of a landlord, unless liens on such security deposits are expressly permitted pursuant to the underlying lease documents

Challenge Period and Budget

The Debtors' Stipulations and Debtors' Releases were binding in all circumstances upon the Debtors upon entry of the Interim Order, as ratified by the Final Order, and shall be binding on the Committee, the Debtors' Estates and any successor thereto in all circumstances for all purposes immediately upon the Challenge Period Termination Date
The Committee expressly waives all rights to assert a Challenge
The deadline to bring a Challenge is the earlier of:
- One business day before the hearing to consider approval of a sale of all or substantially all of the Debtors' assets
- April 29, 2026
Notwithstanding any provision to the contrary in any other order of the Court, the Challenge Period Termination Date with respect to the Committee is the date of the Final Order, the Committee's Challenge Period has terminated upon entry of the Final Order, and the Committee shall not file a Challenge or a motion seeking standing to file a Challenge on or after the date hereof
Proceeds from the DIP Facility or Cash Collateral not to exceed $50,000 in the aggregate (the "Investigation Budget") may be used on account of Professional Fees incurred by Professional Persons of the Committee during the Challenge Period in connection with the investigation of avoidance actions or any other claims or causes of action (but not the prosecution of such actions) on account of the Prepetition Term Loan Obligations, the Prepetition Term Loan Liens, and Prepetition Term Loan Secured Parties (but not the DIP Facility and DIP Secured Parties)

Securities and Priorities

To secure the DIP Obligations, effective as of entry of the Interim Order, pursuant to sections 361, 362, 364(c)(2), 364(c)(3), and 364(d) of the Bankruptcy Code, the DIP Agent (for the benefit of the DIP Lenders) were granted (and such grant is hereby ratified and approved on a final basis) continuing, valid, binding, enforceable, non-avoidable, and automatically and properly perfected postpetition first priority and other security interests in and liens (collectively, the "DIP Liens") on the DIP Collateral in accordance with the relative lien priorities set forth in Exhibit B to the Final Order and all cash and non-cash proceeds, rents, profits, and offspring of DIP Collateral
The DIP Liens securing the DIP Obligations are valid, automatically perfected, non-avoidable, senior in priority to the Prepetition Term Loan Liens on the Prepetition Term Loan Collateral, and superior to any security, mortgage, collateral interest, lien, or claim to any of the DIP Collateral (whether currently existing or hereafter created), except that the DIP Liens shall be subject only to:
- The Carve-Out
- The Prepetition Permitted Liens
- Any liens expressly identified in Exhibit B to the Final Order to be senior to the DIP Liens on the collateral specified therein
Other than as expressly set forth in the Final Order (including Exhibit B thereto), the DIP Liens shall not be made subject to or pari passu with any lien or security interest heretofore or hereinafter granted in the Chapter 11 Cases or any Successor Cases and shall be valid and enforceable against any trustee appointed in the Chapter 11 Cases or any Successor Cases upon the conversion of any of the Chapter 11 Cases to a case under chapter 7 of the Bankruptcy Code (or in any other Successor Case), or upon the dismissal of any of the Chapter 11 Cases or Successor Cases
The DIP Liens shall not be subject to section 510, 549, or 550 of the Bankruptcy Code
No lien or interest avoided and preserved for the benefit of any Estate pursuant to section 551 of the Bankruptcy Code shall be pari passu with or senior to the DIP Liens
Subject to the Carve-Out, effective as of entry of the Interim Order, the DIP Secured Parties were granted (and such grant is hereby ratified and approved on a final basis), pursuant to section 364(c)(1) of the Bankruptcy Code, allowed superpriority administrative expense claims in each of the Chapter 11 Cases and any Successor Cases (collectively, the "DIP Superpriority Claims") for all DIP Obligations:
- Except as expressly set forth in the Final Order (including with respect to the Carve-Out), with priority over any and all administrative expense claims and unsecured claims against the Debtors or their Estates in any of the Chapter 11 Cases and any Successor Cases, at any time existing or arising, of any kind or nature whatsoever, including, without limitation, administrative expenses of the kinds specified in or ordered pursuant to sections 105, 326, 328, 330, 331, 364, 503(a), 503(b), 507(a), 507(b), 546(c), 546(d), 726, 1113, and 1114 of the Bankruptcy Code, and any other provision of the Bankruptcy Code, as provided under section 364(c)(1) of the Bankruptcy Code
- Which shall at all times be senior to the rights of the Debtors and their Estates, and any successor trustee or other estate representative to the extent permitted by law

Adequate Protection

Prepetition Term Loan Secured Parties

As adequate protection for any Diminution of the Prepetition Term Loan Secured Parties' interests in the Prepetition Term Loan Collateral, the Prepetition Term Loan Agent shall receive or has received, effective as of entry of the Interim Order, for the benefit of the Prepetition Term Loan Secured Parties, the following:
- Continuing valid, binding, enforceable, and perfected postpetition replacement liens pursuant to sections 361, 363(e), and 364(d)(1) of the Bankruptcy Code (the "Term Loan Replacement Liens") on the DIP Collateral, which shall be subject only to the Carve-Out and those liens expressly identified as senior in right of priority in Exhibit B to the Final Order and which (x) shall otherwise be senior to all other security interests in, liens on, or claims against the DIP Collateral, and (y) shall not be made subject to or pari passu with any other lien or security interest heretofore or hereinafter granted in the Chapter 11 Cases or any Successor Cases, and shall be valid and enforceable against any trustee appointed in any of the Chapter 11 Cases or any Successor Cases, and shall not be subject to sections 510, 549, or 550 of the Bankruptcy Code
- Administrative superpriority expense claims in each of the Chapter 11 Cases (the "Term Loan Adequate Protection Superpriority Claims"), subject only to the Carve-Out and the DIP Obligations (including the DIP Superpriority Claims), pursuant to section 507(b) of the Bankruptcy Code with priority over any and all other administrative expenses, administrative expense claims, and unsecured claims against the Debtors or their Estates, now existing or hereafter arising, of any kind or nature whatsoever as to and to the extent provided by sections 503(b) and 507(b) of the Bankruptcy Code
- Subject to the procedures set forth in paragraph 38 of the Final Order, monthly payment of the Prepetition Term Loan Secured Parties' respective reasonable and documented fees, costs, and expenses when due and payable in accordance with the Final Order, including the professional fees and disbursements of Proskauer Rose LLP, Landis Rath & Cobb LLP, Alston & Bird LLP, and any other Prepetition Term Loan Professionals, in each case without the need for the filing of formal fee applications, including as to any amounts arising before or after the Petition Date
- The unqualified and unconditional right to credit bid the Prepetition Term Loan Obligations in connection with any sale or other disposition of Prepetition Term Loan Collateral

Waivers

Subject to entry of the Final Order:
- Section 506(c): The Debtors waive their right to surcharge the DIP or prepetition collateral. No costs or expenses related to the cases will be charged against the DIP Collateral, DIP Secured Parties, Prepetition Term Loan Collateral (including Cash Collateral), or Prepetition Term Loan Secured Parties
- Section 552(b): The "equities of the case" exception shall not apply. The DIP Secured Parties and the Prepetition Term Loan Secured Parties shall each be entitled to all of the rights and benefits of section 552(b) of the Bankruptcy Code, and the "equities of the case" exception under section 552(b) of the Bankruptcy Code shall not apply to the DIP Secured Parties or the Prepetition Term Loan Secured Parties, as applicable, with respect to proceeds, product, offspring, or profits of any of the DIP Collateral or Prepetition Term Loan Collateral, as applicable
- No equitable doctrine of "marshalling" shall be used with respect to the DIP or prepetition collateral. Subject to paragraph 44 of the Final Order, the Debtors are deemed to have irrevocably waived and relinquished all Challenges as of the Petition Date
- The Debtors and their Estates have no claims, objections, challenges, causes of action, or choses in action, including, without limitation, avoidance claims under chapter 5 of the Bankruptcy Code or applicable state law equivalents or actions for recovery or disgorgement, against any of the Prepetition Term Loan Secured Parties or any of their respective affiliates, agents, attorneys, advisors, professionals, officers, consultants, directors, and employees arising out of, based upon, or related to the Prepetition Term Loan Facility
- The Debtors have waived, discharged, and released any right to, and are forever barred from bringing, any Challenge to any of the Prepetition Term Loan Obligations, the priority of the Prepetition Term Loan Obligations, and the legality, validity, extent, and priority of the Prepetition Term Loan Liens
Subject only to the application of proceeds of DIP Collateral in accordance with the relative lien priorities set forth in the Lien Priority Exhibit, prior to seeking payment or satisfaction of any DIP Obligations or DIP Superpriority Claims from any cash or property constituting Litigation Trust Assets (as defined in the Committee Resolution), including Avoidance Proceeds, the DIP Secured Parties shall first satisfy such obligations and claims from all other DIP Collateral

Permitted Variance

"Permitted Variances" shall mean, as of any Testing Date, a Receipts Variance up to 15% in the aggregate for all line items contained in the Approved Budget or a Disbursement Variance up to 15% for each line item contained in the Approved Budget (including professional fees of the Debtors and the Committee (including any holdback)), in each case calculated weekly commencing as of the Petition Date; provided that to the extent:
- The Debtor's actual operating disbursements or actual capital expenditures are less than the projected disbursements provided for such line items in the Approved Budget, or
- The Debtor's actual receipts are greater than the projected receipts on an aggregate basis in the Approved Budget
such positive variance may be rolled forward (to the applicable line item with respect to positive variances in clause (i) and on an aggregate basis with respect to positive variances in clause (ii)) to any succeeding week for purposes of compliance with the Final Order and the DIP Term Sheet; provided, further, that any such rolled forward positive variance shall only be applied once
The term "Testing Period" means the two-week period beginning on Sunday and ending on the Saturday immediately prior to the First Testing Date, the three-week period beginning on Sunday and ending on the Saturday immediately prior to the Second Testing Date, and on a rolling four-week period beginning on Sunday and ending on the Saturday immediately prior to the applicable Testing Date thereafter