BFG Supply Co. - Chapter 11 DIP Terms

DIP Terms

Borrower(s) / Guarantor(s)

• Bamboo Purchaser, Inc., as Borrower (the "Company" and sole U.S. Borrower under the DIP credit agreement), together with any Canadian subsidiary that joins as a Canadian Borrower
• BFG Purchaser Parent, Inc. ("Holdings") and each existing and future direct and indirect subsidiary of Holdings (other than any such subsidiary acting as Borrower), jointly and severally, as Guarantors
• The chapter 11 cases are jointly administered under In re BFG Supply Co., LLC, Case No. 26-11284 (CTG) (Bankr. D. Del.); 17 debtors filed voluntary petitions on Aug. 18, 2026

Agent / Lender(s)

• ACF FINCO I LP, as Administrative Agent and Collateral Agent (also Prepetition ABL Agent)
• The lenders from time to time party thereto, as DIP Lenders

DIP Commitments

• $55 million superpriority senior secured asset-based credit facility, structured as a "creeping roll-up," comprised of:
  • Interim Financing: upon entry of the interim order, all cash, collections and proceeds of DIP collateral — other than proceeds of prepetition term loan priority collateral, which are deposited into the Term Loan Reserve, and amounts reserved for the carve out — are applied to pay down the prepetition revolving loans on a dollar-for-dollar basis, generating a corresponding amount of availability under the DIP facility
    • All banking services obligations and secured hedging obligations under the Prepetition ABL Credit Agreement are deemed DIP obligations upon entry of the interim order
    • Prior to entry of the final order, the debtors are authorized to request extensions of credit of up to $22 million in aggregate principal amount outstanding at any one time
  • DIP Roll-Up Loan: upon entry of the final order, all remaining outstanding prepetition revolving loans are automatically deemed exchanged and converted on a cashless basis into DIP obligations (the "Full Roll-Up")
• Availability is capped at the "Line Cap," the lesser of the aggregate revolving commitments and the borrowing base (90.0% of eligible accounts and eligible credit card receivables; 85.0% of eligible extended terms receivables, capped at $10 million from June 1 to Sept. 30; the lesser of 65.0% of cost or 90.0% of net orderly liquidation value of eligible inventory; less reserves established in the Administrative Agent's permitted discretion on three business days' notice). Total revolving credit exposure for these purposes includes the lenders' prepetition revolving credit exposure, so the $55 million commitment covers both the rolled-up prepetition exposure and new borrowings rather than representing $55 million of incremental liquidity; the approved budget projects combined revolver and DIP balances of approximately $45.7 million, $48.6 million, $50.8 million and $51.1 million over the first four weeks.
• As of the petition date, approximately $43,079,675.97 in prepetition revolving loans were outstanding under the $120 million Prepetition ABL Facility
• The DIP Agent and DIP Lenders would not extend credit, and the Prepetition ABL Secured Parties would not consent to the use of cash collateral, without the inclusion of the Creeping Roll-Up and the Full Roll-Up. The roll-up obligations are authorized as compensation for, and solely on account of, the Prepetition ABL Lenders' agreement to fund amounts under the DIP facility, and not as adequate protection on account of any prepetition ABL obligations.
• All accrued interest, expenses, fees and other sums constituting prepetition ABL obligations are to be paid in cash on the closing date, and all such amounts accruing through entry of the final order are to be paid in cash to the Administrative Agent on the date of entry of the final order.

Cash Collateral

• Except as otherwise provided in the prepetition credit documents, all of the debtors' cash, including cash in their deposit accounts, wherever located, whether as original collateral or proceeds of other prepetition collateral, subject to the Lien Priority Annex
• The debtors are authorized to use cash collateral solely in accordance with the approved budget (subject to permitted variances) until the DIP Credit Parties or the Prepetition ABL Secured Parties terminate such use, provided that the adequate protection payments and other adequate protection are paid and maintained, and provided that nothing impedes the debtors' ability to fund the carve out
• During the remedies notice period, the debtors may use cash collateral solely to fund the carve out in accordance with the approved budget and to (i) pay payroll (but not severance or bonuses), (ii) pay U.S. Trustee fees and fees payable to the Clerk of the Court, and (iii) subject to the DIP Agent's reasonable consent (not to be unreasonably withheld), pay other day-to-day operational expenses critical to administration of the estates, not to exceed the approved budget absent the DIP Agent's written consent and, if the payment relates to prepetition term loan priority collateral, the Prepetition Term Loan Agent's written consent
• All proceeds of prepetition term loan priority collateral are deposited into a segregated Term Loan Reserve, to which all prepetition liens attach with the same extent and priority as they attached to that collateral; the debtors may not use those funds or make distributions from the reserve without further court order (a "Term Loan Reserve Release Order") or the prior written consent of both the Prepetition Term Loan Agent and the Prepetition ABL Agent

Interest Rate

• Alternate Base Rate + 4.75% for ABR loans, and Canadian Prime Rate + 4.75% for Canadian Prime Rate loans. The Alternate Base Rate is the highest of (i) the federal funds rate plus 0.50%, (ii) one-month Adjusted Term SOFR plus 1.00% and (iii) the prime rate.
• Adjusted Term SOFR + 5.75% for SOFR loans and Adjusted Term CORRA or Adjusted Daily Compounded CORRA + 5.75% for CORRA loans, in each case subject to a 0.50% floor, provided that no SOFR loans or CORRA loans are available under the DIP credit agreement, so all borrowings price off the Alternate Base Rate or Canadian Prime Rate
• Protective advances bear interest at the Alternate Base Rate plus the applicable rate and may not exceed 10.0% of the aggregate revolving commitment at any time
• Default Rate Increase: 2.0% (at the option of the Administrative Agent or at the direction of the required lenders, on all outstanding obligations, payable on demand)

Fees

• Commitment Fee: 0.75% per annum on the average daily amount of the unused revolving credit commitments, computed on a 360-day basis and payable in arrears on the first business day of each month and on the date the revolving credit commitments terminate
• Additional fees, including commitment fees, exit fees and collateral management fees, are payable pursuant to the DIP loan documents and two separate fee letters (a Fee Letter between the Company and the Administrative Agent and an Agent Fee Letter); the amounts are not disclosed in the interim order
• Payment of the reasonable and documented fees and disbursements of the DIP Credit Parties' attorneys (Choate, Hall & Stewart LLP and Womble Bond Dickinson (US) LLP), advisers, accountants and other consultants, without need to obtain further court approval, subject to the invoice review procedures described below

Maturity

• The earliest to occur of:
  • February 14, 2027 (the stated revolving credit maturity date)
  • 14 days after entry of an order confirming a plan of reorganization for the loan parties
  • The date of consummation of a sale of all or substantially all of the loan parties' working capital assets under section 363 of the Bankruptcy Code
  • The date the Administrative Agent, or the Administrative Agent at the direction of the requisite lenders, provides written notice of the election to terminate the commitments and/or accelerate the obligations following an event of default

Milestones

• Failure to comply with any Chapter 11 Case Milestone, as required under Section 5.15 of the DIP credit agreement and Exhibit 4 to the interim order, constitutes an event of default after giving effect to any applicable cure period
• DIP Milestones:
  • On the petition date (Aug. 18, 2026), the debtors shall file a motion seeking approval of the DIP facility
  • On or before Aug. 20, 2026 (two business days after the petition date), the court shall have entered the interim order
  • On or before Sept. 22, 2026 (35 days after the petition date), the court shall have entered the final order
• Sale Milestones:
  • On the petition date, the debtors shall file (i) a motion seeking approval of bidding procedures governing the sale of all or substantially all of their assets and (ii) a motion seeking authorization to assume the Specified Sales Agreement
  • On or before Aug. 20, 2026 (two business days after the petition date), the court shall have entered an order authorizing assumption of the Specified Sales Agreement on an interim basis
  • On or before Sept. 17, 2026 (21 business days after the petition date), the court shall have entered an order approving the bidding procedures and authorizing assumption of the Specified Sales Agreement on a final basis
  • On or before Oct. 15, 2026 (58 days after the petition date), the court shall have entered one or more orders approving the sale
  • On or before Oct. 22, 2026 (65 days after the petition date), the debtors shall have consummated the sale(s) approved pursuant to the sale order
• Each milestone is subject to terms, conditions and documentation — including forms of all applicable motions and orders — in form and substance acceptable to the DIP Agent in all respects. The DIP Agent may extend any milestone in its sole and absolute discretion for not more than 10 days, or for a longer period with the consent of the required lenders.
• The debtors must provide the DIP Agent and any agent advisor with information reasonably requested regarding progress on achieving the milestones, and must participate in bi-weekly status calls with the Administrative Agent and lenders covering the approved budget, variance reports, financial performance, the status of any specified sale transaction and milestone achievement
• Canadian Recognition Proceedings Milestones: (i) no later than 10 business days after the petition date, the Canadian Borrower, as "foreign representative," shall have commenced the Canadian recognition proceedings before the Canadian court; (ii) no later than 10 business days after the petition date, the Canadian court shall have entered the Canadian DIP Recognition Order in form and substance satisfactory to the Administrative Agent; and (iii) no later than 10 business days after entry of the final order, the Canadian court shall have entered an amended or restated Canadian DIP Recognition Order recognizing the final order

Events of Default and Remedies

• An "Event of Default" under the DIP credit agreement, including failure to comply with any Chapter 11 Case Milestone, constitutes an event of default under the interim order after giving effect to any applicable cure period
• Immediately upon and during the continuation of an event of default, notwithstanding section 362 and without any application, motion, notice, hearing or further court order — but subject to funding of the carve out, the remedies notice period and the notice and grace period provisions of Article VII of the DIP credit agreement — the DIP Agent may declare in writing (a "DIP Termination Declaration") that (i) all DIP obligations are immediately due and payable, (ii) any further commitment to extend credit is terminated, reduced or restricted, (iii) the DIP facility and DIP loan documents are terminated as to future liability, and/or (iv) carve-out funding obligations are triggered through delivery of a carve-out trigger notice; and may declare a termination, reduction or restriction on the debtors' use of cash collateral except solely to fund the ABL Carve Out Reserve and seek a remedies determination
• A DIP Termination Declaration is not effective until notice is provided by electronic mail to counsel to the debtors, counsel to any committee, the U.S. Trustee and counsel to each of the Prepetition Agents. The automatic stay is modified so that five business days after the termination declaration date (the "Remedies Notice Period"), and following funding of the carve out, the DIP Agent and the applicable Prepetition Agent may exercise their rights and remedies.
• During the remedies notice period, the debtors and all other parties-in-interest may seek an emergency hearing (a "Remedies Determination"). If the debtors seek an emergency hearing but the court schedules it for a later date without the debtors' request, the remedies notice period is tolled and the automatic stay is not modified until the hearing occurs. The court may fashion an appropriate remedy, with all parties' rights to contest such relief expressly preserved. All fees and costs incurred by the debtors in connection with any remedies determination, including professional fees, are funded solely by the carve out.
• Unless the court orders otherwise before expiration, the automatic stay terminates automatically at the end of the remedies notice period without further notice or order
• The DIP Agent's and Prepetition Agents' exercise of remedies is subject, as applicable, to any written agreement with a landlord, pre-existing rights under applicable non-bankruptcy law, the applicable landlord's written consent, or further court order following notice and a hearing
• On a termination declaration date, all DIP obligations become immediately due and payable and all commitments terminate, in each case subject to funding of the carve out

Carve Out

• All unpaid professional fees and disbursements incurred by the debtors and any committee under sections 327 and 1103 prior to delivery of a carve-out trigger notice, to the extent allowed by the court and incurred in accordance with the approved budget, including fees of Cole Schotz P.C., as debtors' restructuring counsel, and Reflect Advisors, in its capacity providing services and additional staff to the chief restructuring officer (together, the "Case Professionals")
• Post Carve Out Trigger Notice Cap: $250,000 for debtor professionals and $50,000 for committee professionals
• Chapter 7 Trustee Fee: $50,000
• U.S. Trustee fees under 28 U.S.C. § 1930(a) and any fees payable to the Clerk of the Court, which are not limited to amounts set forth in the approved budget
• A carve-out trigger notice may be delivered by the DIP Agent only following the occurrence and during the continuation of an event of default, by email to the debtors, Cole Schotz P.C., the U.S. Trustee, counsel to the Prepetition Term Loan Secured Parties and lead counsel to any committee
• Within three business days of delivery of a carve-out trigger notice, the debtors shall fund the outstanding amount of the carve out into the Professional Fee Escrow Account, first using cash on hand and, to the extent of any shortfall, proceeds of the DIP facility, which funding may take the form of additional DIP loans
• Payments of allowed professional fees made before the termination declaration date do not reduce the carve out; payments made on or after that date permanently reduce it on a dollar-for-dollar basis. Any funding or payment of the carve out is added to and becomes part of the DIP obligations, except that amounts that already constituted DIP obligations are not added again and amounts funded with proceeds of prepetition term loan priority collateral do not constitute DIP obligations.
• Until the DIP obligations and prepetition secured obligations are paid in full, allowed case professional fees are payable solely from the Professional Fee Escrow Account or retainers. Until an event of default or the termination declaration date, the debtors may borrow weekly under the DIP facility to fund the escrow account.
• The DIP Agent is entitled at all times to maintain an ABL Carve Out Reserve against the borrowing base in an amount not to exceed the carve out limit, and may additionally reserve for case professional fees and expenses to be included in the Professional Fee Escrow Account to the extent not timely funded
• The DIP Secured Parties, Prepetition ABL Secured Parties and Prepetition Term Loan Secured Parties reserve their rights as to the allocation of proceeds used to fund the carve out among the prepetition ABL priority collateral, the prepetition term loan priority collateral and the DIP collateral

Use of Proceeds

• Repay the prepetition ABL obligations pursuant to the Creeping Roll-Up and, subject to entry of the final order, the Full Roll-Up
• Fund working capital requirements in accordance with the approved budget (including permitted variances)
• Fund the costs, fees and expenses of administering the chapter 11 cases in accordance with the approved budget
• Pay reasonable and documented out-of-pocket costs, fees and expenses required by the DIP loan documents, including fees, costs and expenses incurred in connection with the transactions on the closing date
• Pay court-approved prepetition liabilities of the DIP loan parties in accordance with the approved budget
• Fund the Professional Fee Escrow Account and obligations benefitting from the carve out
• Fund such other costs and expenses of the debtors and their estates as the DIP Agent may approve in writing in its sole discretion

Credit Bid

• In connection with any court-authorized sale process, and subject to the challenge provisions and the rights of parties-in-interest under section 363(k), the Prepetition Agents may seek to credit bid some or all of their claims for their respective priority collateral
• A credit bid may be applied only to reduce the cash consideration with respect to those assets in which the bidding party holds a senior, perfected security interest
• Unless and until the prepetition term loan obligations are paid in full, the Prepetition ABL Secured Parties may not credit bid for prepetition term loan priority collateral; unless and until the prepetition ABL obligations are paid in full, the Prepetition Term Loan Secured Parties may not credit bid for prepetition ABL priority collateral

Avoidance Actions

• The DIP collateral includes all claims, causes of action and proceeds thereof to avoid a transfer of property under section 549 of the Bankruptcy Code
• Subject to and effective upon entry of the final order, the DIP collateral includes all other avoidance actions and any proceeds thereof, including under chapter 5 and section 724(a) of the Bankruptcy Code, as well as the debtors' rights under sections 506(c) and 552 of the Bankruptcy Code
• The DIP superpriority claim and the adequate protection superpriority claims shall be payable from and have recourse to avoidance proceeds, subject to entry of the final order

Challenge Period and Budget

• The challenge deadline is 75 calendar days after entry of the interim order, subject to:
  • Extension in writing by the applicable prepetition secured creditor in its sole discretion, or by the court for good cause shown
  • Tolling if a party-in-interest files a standing motion attaching one or more draft complaints, until the court decides such motion, solely with respect to the filing party and the contents of the attached complaint
  • A 60-day extension of any unexpired portion of the challenge deadline if the cases are converted to chapter 7 or a trustee is appointed or elected prior to expiration
• No portion of the carve out, DIP collateral or prepetition collateral (including cash collateral) may be used to investigate, initiate or prosecute claims against the DIP Lenders, DIP Agent or prepetition secured creditors, to challenge their obligations or liens, to seek to modify their rights, to object to, seek reconsideration of or appeal any order regarding the DIP facility, or to prevent, hinder or delay enforcement against DIP collateral following an event of default and expiration of the remedies notice period
• As an exception, a committee, if appointed, may use DIP loan proceeds and DIP collateral (including cash collateral) prior to the challenge deadline to investigate, but not prosecute, the claims and liens of the prepetition secured creditors and potential claims, counterclaims, causes of action or defenses against them, subject to an aggregate cap of no more than $50,000
• Approved Budget:
  • The initial approved budget is a four-week debtor-in-possession budget in the form annexed to the DIP credit agreement, furnished on or before the closing date and commencing as of the week of Aug. 30, 2026; each updated budget covers 13 weeks unless the Administrative Agent consents otherwise
  • The budget is to be updated from time to time upon written request of the Administrative Agent and otherwise every two weeks; on or before the fourth business day of the first week (and in any event not later than Friday of such week) of each successive two-week period following the closing date (commencing with the week of August 30, 2026), the borrowers shall submit an updated budget for the next successive 13-week period, adding projections only for periods not previously covered
  • Each updated, modified or supplemented budget must be prepared in consultation with the Company Advisors, certified by the loan parties' chief restructuring officer, and approved by and in form and substance satisfactory to the DIP Agent in its sole discretion, with the Administrative Agent to provide written approval or disapproval within five business days after receipt of the updated budget together with all reasonably requested supporting documentation
  • No updated budget is effective until so approved in writing; failure of the DIP Agent and the debtors, acting in good faith, to agree on a new approved budget gives rise to an event of default once the period covered by the most recent approved budget has terminated
  • Each approved budget must be prepared in good faith, with due care and based on assumptions the borrowers believe to be reasonable, and accompanied by such supporting documentation as reasonably requested by the Administrative Agent
  • In the event of a material change in the sale strategy being pursued in the chapter 11 cases (including a shift from a going-concern sale to a liquidation or vice versa, or any other change reasonably expected to have a material impact on projected receipts or disbursements), the Administrative Agent must, before requiring a corresponding budget update, engage in good faith consultation with the Company Advisors (including Reflect Advisors) regarding the impact of the change and the appropriate methodology for reflecting it
  • By 5:00 p.m. on Wednesday of each week (commencing with the first such day of the first full calendar week following the petition date), the borrower shall deliver a compliance certificate certifying as to the occurrence of any default or event of default and attaching an approved budget variance report
  • The Administrative Agent and the lenders may assume the loan parties will comply with the approved budget, have no duty to monitor such compliance and are not obligated to pay any unpaid expenses incurred or authorized under any approved budget
  • Material DIP amendments — those that shorten or lengthen maturity, increase or decrease aggregate commitments, or increase the interest rate — must be provided to the U.S. Trustee, the Prepetition Agents and any committee, who have five days to object in writing, and must be filed with the court for approval; waivers for the debtors' benefit, extensions of case milestones and budget-testing waivers or budget updates are not "material" and may become immediately effective

Securities and Priorities

• The DIP obligations are granted allowed superpriority administrative expense claims under section 364(c)(1) in each of the chapter 11 cases and any successor cases, subject and subordinate only to the carve out and the relative priorities set forth on the Lien Priority Annex
  • The DIP superpriority claim has priority over all other obligations, liabilities and indebtedness of each debtor, including administrative expenses of the kinds specified in or ordered pursuant to sections 105, 326, 328, 330, 331, 503(a), 503(b), 506(c) (upon entry of the final order), 507(a), 507(b), 546(c), 546(d), 726 and 1114 of the Bankruptcy Code
• Effective immediately upon entry of the interim order, pursuant to sections 364(c)(3) and 364(d) of the Bankruptcy Code, the DIP Agent is granted continuing, valid, binding, enforceable, non-avoidable and automatically and properly perfected postpetition security interests in and liens on all tangible and intangible prepetition and postpetition assets and real property of the DIP loan parties, whether existing on the petition date or thereafter acquired, and the proceeds, products, rents and profits thereof, including:
  • All accounts; goods, including equipment, inventory and fixtures; documents, instruments and chattel paper; letters of credit and letter-of-credit rights; securities collateral; investment property; intellectual property assets; commercial tort claims; general intangibles (including payment intangibles); deposit accounts, money, cash and cash equivalents; supporting obligations; credit balances, deposits and other property held or received by or in transit to the DIP Agent or any other depository institution
  • All real property and rights, title and interests therein (including both fee and leasehold interests) and proceeds thereof
  • The prepetition collateral
  • All receivables and all present and future claims, rights, interests, assets and properties recovered by or on behalf of the DIP loan parties
  • All books, records and information relating to the foregoing and to the operation of the DIP loan parties' business, and all rights of access thereto
  • All other personal property, whether tangible or intangible, and all proceeds and products of each of the foregoing, together with accessions, substitutions, replacements, rents and profits, and any proceeds of insurance, indemnity, warranty or guaranty payable to the DIP loan parties
• Pursuant to section 364(d), the DIP liens are first and senior in priority to all other interests and liens of every kind, subject to the Prepetition Permitted Liens, the carve out and the relative priorities set forth on the Lien Priority Annex
• With respect to the prepetition term loan priority collateral, the DIP liens shall not prime and are instead subject and subordinate to the prepetition term loan liens, provided that the prepetition term loan liens are in all cases subject and subordinate to the carve out. The Prepetition ABL Secured Parties have consented to the use of cash collateral and to the subordination of the prepetition ABL liens to the DIP liens and the carve out.
• Exclusions from DIP Collateral:
  • Any leasehold interest in non-residential real property that prohibits or restricts the granting of liens thereon (except as permitted under applicable non-bankruptcy law), though proceeds of the sale or other disposition of such leases are included
  • Any security deposits held by a landlord under any non-residential real property lease or the debtors' interest in any pre-paid rent, unless expressly permitted under such lease, though the debtors' reversionary interests therein are included
  • Any liens granted on the debtors' insurance policies shall not interfere with landlord rights under such policies to insurance proceeds for damage to the landlord's property. These exclusions apply to both the DIP liens and the adequate protection liens.
• Other than as set forth in the interim order, the DIP liens, DIP superpriority claims, carve out, adequate protection liens and adequate protection superpriority claims shall not be made subject to or pari passu with any lien, security interest or claim granted in the cases or any successor cases, any claim for reclamation or return, any lien avoided and preserved under section 551, or any intercompany or affiliate lien or claim, and shall not be subject to challenge under sections 510, 549, 550 or 551, provided that the DIP Roll-Up Loan remains subject to the challenge provisions
• The interim order is sufficient and conclusive evidence of the priority, perfection and validity of the DIP liens and adequate protection liens, effective as of the petition date, without any further act or perfection requirement
• Except as required to fund the Professional Fee Escrow Account or as otherwise required under the interim order, no DIP Credit Party is obligated to make any loan or advance unless all conditions precedent under the DIP loan documents and the interim order have been satisfied in full or waived
• Prepetition Capital Structure:
  • Prepetition ABL Facility: ABL Credit Agreement dated as of Nov. 5, 2021, with ACF FINCO I LP as administrative agent and collateral agent, providing up to $120 million in aggregate revolving commitments and maturing Dec. 31, 2028. As of the petition date, approximately $43,079,675.97 in prepetition revolving loans were outstanding, plus letters of credit, accrued and default-rate interest, fees, treasury, cash management, bank product and derivative obligations, and indemnification and guarantee obligations.
  • Prepetition Term Loan Facility: Credit Agreement dated as of Nov. 5, 2021, among BFG Purchaser Parent, Inc., Bamboo Purchaser, Inc. and the other loan parties, with Ares Capital Corporation as administrative agent and collateral agent. As of the petition date, the aggregate outstanding principal amount was not less than $299,456,012.99, consisting of Term Loans A of not less than $137,608,289.31 and Term Loans B of not less than $161,847,723.68, plus all other obligations and amounts allowable under section 506(b).
  • The prepetition ABL obligations are secured by first priority liens on the prepetition ABL priority collateral and junior liens on the prepetition term loan priority collateral, in each case pursuant to the Intercreditor Agreement
  • The prepetition term loan obligations are secured by first priority liens on the prepetition term loan priority collateral and second priority liens on the prepetition ABL priority collateral, in each case pursuant to the Intercreditor Agreement
  • The Intercreditor Agreement, dated as of Nov. 5, 2021, between the Prepetition ABL Agent and the Prepetition Term Loan Agent, acknowledged and agreed to by Holdings, the Borrower and the other loan parties, governs the respective priority rights of the prepetition secured creditors in the prepetition collateral
• Upon dismissal of any of the chapter 11 cases or successor cases, the DIP liens, prepetition liens and adequate protection liens continue in full force and effect, subject to the carve out and the Lien Priority Annex, until the DIP obligations, prepetition secured obligations and/or adequate protection superpriority claims are paid in full, and the court retains jurisdiction to enforce such claims and liens

Adequate Protection

The prepetition secured creditors are entitled to adequate protection solely to the extent of any diminution in value arising from the granting of the DIP liens, the incurrence of the DIP obligations, the subordination of the prepetition liens to the carve out, the debtors' use of cash collateral, the imposition of the automatic stay, and the debtors' use, sale, lease, depreciation or disposition of the prepetition collateral.

Prepetition ABL Secured Parties

• Replacement and additional postpetition liens on the DIP collateral, granted to the Prepetition ABL Agent to secure the prepetition ABL obligations, subject to the carve out, the relative priorities on the Lien Priority Annex and the Prepetition Permitted Liens
  • Deemed valid, binding, non-avoidable and fully perfected as of the petition date, payable from and with recourse to all DIP collateral
  • Not subject to sections 506(c) (upon entry of the final order), 510, 549 or 550, and no lien avoided and preserved under section 551 shall be made pari passu with or senior to the adequate protection liens
• Allowed administrative claims under section 503 with priority over all administrative expense and unsecured claims, as provided by section 507(b), to the extent the adequate protection liens do not adequately protect against diminution in value, subject to the carve out and the Lien Priority Annex
• Continued accrual and payment in cash, monthly in arrears on the first business day of each calendar month commencing with the first such date after entry of the interim order, of all claims arising from or related to the prepetition ABL obligations (including principal, interest at the default rate specified in Section 2.12(c) of the Prepetition ABL Credit Agreement, and letter of credit fees, costs and other charges)
• Payment of all reasonable and documented fees, costs, expenses and charges of the Prepetition ABL Agent to the extent payable under the Prepetition ABL Credit Agreement, with out-of-pocket expenses incurred prior to and unpaid as of the closing date to be paid indefeasibly upon the closing date without any invoice requirement

Prepetition Term Loan Secured Parties

• Replacement and additional postpetition liens on the DIP collateral, granted to the Prepetition Term Loan Agent to secure the prepetition term loan obligations, on the same terms and subject to the same limitations as described above
• Allowed administrative claims under section 503 with priority over all administrative expense and unsecured claims, as provided by section 507(b), to the extent the adequate protection liens do not adequately protect against diminution in value, subject to the carve out and the Lien Priority Annex
• Continued accrual of interest at the applicable rate provided for in the prepetition term loan documents through the chapter 11 cases on all claims arising from or related to the prepetition term loan obligations, including principal, interest at the default rate, and letter of credit fees, costs and other charges
• Payment of all reasonable and documented fees, costs, expenses and charges of the Prepetition Term Loan Agent to the extent payable under the Prepetition Term Loan Credit Agreement, payable solely from and to the extent of funds in the Term Loan Reserve until payment in full of the DIP obligations and prepetition ABL obligations, and thereafter without limitation
• All estate-retained case professionals must use reasonable efforts to indicate in their monthly, interim and final fee applications whether and to what extent fees or expenses were incurred in connection with preserving or disposing of the prepetition term loan priority collateral. All parties' rights, claims and defenses with respect to gross cash proceeds received in connection with any sale or disposition of prepetition term loan priority collateral, and the allocation of costs, fees and expenses incurred in connection therewith, are fully reserved and preserved.
• Pamplona Equity Partners, L.P., the debtors' principal equity investor, holds a minority position under the Prepetition Term Loan Facility.

Fee Review Procedures and Reservations

• For fees and expenses incurred after the closing date, counsel and professionals to the Prepetition Agents shall deliver summary-form invoices, which need not include time entry detail but must include a general description of the nature of the matters for which services were performed and may be redacted for privileged information. The debtors, the U.S. Trustee and any committee reserve the right to request additional detail.
• If no written objection is received within 10 days after delivery of such invoice, the debtors shall promptly pay such fees and expenses in full; if an objection is timely received, the debtors shall promptly pay the undisputed amount and the court retains jurisdiction to determine the disputed portion.
• The debtors are authorized to pay all reasonable and documented out-of-pocket costs and expenses of the DIP Credit Parties in connection with the DIP facility, including costs and expenses incurred prior to the petition date, and the DIP Agent is authorized to make advances or charges against the loan account to pay them
• The DIP Agent's professionals shall deliver summary-form invoices, which need not include time entry detail and may be redacted for privileged information but must include a general description of the nature of the matters for which services were performed and sufficiently detailed information to permit the Review Parties — the debtors, the Prepetition Term Loan Agent, the U.S. Trustee and any committee — to determine whether the fees and expenses are reasonable. The Review Parties reserve the right to request unredacted copies and additional detail. If no written objection is received within 10 calendar days after receipt, the debtors shall promptly pay in full; if an objection is timely received, the debtors shall pay the undisputed amount and the court retains jurisdiction over the disputed portion. Out-of-pocket expenses incurred by the DIP Agent prior to and unpaid as of the closing date are paid indefeasibly on the closing date without any invoice requirement.
• No adequate protection payment is subject to further court approval or U.S. Trustee guidelines, and professionals to the Prepetition Agents need not file fee applications or motions (other than with respect to disputed amounts). Such payments are not subject to avoidance, subordination or disgorgement, but remain subject to the challenge provisions.
• Nothing in the interim order impairs the prepetition secured creditors' rights under section 507(b) in the event the adequate protection provided proves insufficient, constitutes an admission as to the extent of any diminution in value, or impairs the rights of any party to contest any assertion of diminution in value or any request for additional adequate protection.

Waivers

• Subject to and upon entry of the final order:
  • Section 506(c): No costs or expenses of administration shall be charged against the DIP Credit Parties, the DIP collateral (other than the prepetition term loan priority collateral pursuant to subsequent court order), the Prepetition ABL Secured Parties or the prepetition ABL priority collateral, and all surcharge rights are finally and irrevocably waived and binding on the debtors and all parties-in-interest
  • Section 552(b): The "equities of the case" exception shall not apply to the DIP Credit Parties or the prepetition secured creditors with respect to proceeds, products, offspring or profits of the prepetition collateral or DIP collateral. The DIP Agent and the other DIP Credit Parties are entitled to all rights and benefits of section 552(b).
  • Marshaling: None of the DIP Credit Parties or the prepetition secured creditors shall be subject to the equitable doctrine of "marshaling" or any similar doctrine with respect to the DIP collateral or prepetition collateral
  • The DIP Credit Parties and Prepetition ABL Secured Parties shall also receive a waiver of unjust enrichment and similar equitable relief
• Releases: Effective upon entry of the interim order and subject to the challenge provisions, the debtors release the DIP Agent, the DIP Credit Parties, the Prepetition ABL Agent and Secured Parties, the Prepetition Term Loan Agent and Secured Parties, and their respective related parties from all claims and causes of action arising under, in connection with or relating to the DIP obligations, DIP loan documents, prepetition secured obligations or prepetition credit documents, including "lender liability" and equitable subordination claims, claims arising under the Bankruptcy Code, and all offsets, defenses, counterclaims, setoff rights and avoidance or recharacterization claims. Nothing in the release relieves the DIP Agent, the other DIP Lenders or the debtors of their obligations under the interim order or the DIP obligations.
• Subject to the challenge provisions, the debtors have waived, discharged and released any right to challenge the prepetition secured obligations, the priority of their obligations thereunder and the validity, extent and priority of the prepetition liens. The prepetition secured obligations constitute allowed, secured claims within the meaning of sections 502 and 506.
• Reclamation: The extension of the DIP facility and the repayment and refinancing of the prepetition ABL obligations with proceeds of the DIP loans are part of an integrated transaction. Based on the integrated nature of the transaction and the relation back of the DIP liens, no alleged right of reclamation or return (whether under section 546(c) or otherwise) shall be deemed to have any additional or greater rights and priority with respect to the prepetition ABL liens than such claim had on the petition date.
• Debtors' Covenants: It is an event of default for the debtors to seek authority, prior to payment in full of the DIP obligations and prepetition secured obligations and absent the written consent of the DIP Agent or applicable Prepetition Agent, to: (i) use cash collateral under section 363; (ii) obtain postpetition loans or other financial accommodations under sections 364(c) or 364(d); (iii) challenge the application of any payments under section 506(b), or assert that the value of the prepetition ABL priority collateral is less than the prepetition ABL obligations or that the value of the prepetition term loan priority collateral is less than the prepetition term loan obligations; (iv) propose, support or have a plan that does not provide for payment in full of all DIP obligations and prepetition secured obligations on the effective date; (v) seek relief, including under section 105, that would restrict or impair the DIP Credit Parties' rights and remedies; (vi) challenge or seek to impair the validity, extent, enforceability or priority of the DIP Agent's postpetition liens and claims; or (vii) take any action prohibited under Section 5.11 or 7.01(l) of the DIP credit agreement
• Except as otherwise ordered by the court, after the remedies notice period the debtors waive their right to seek relief, including under section 105, to the extent such relief would impair or restrict the rights and remedies of the DIP Agent, the DIP Lenders or the prepetition secured creditors
• No Modification: Until the DIP obligations are paid in full and all commitments terminated, it is an event of default for the debtors to seek, without the DIP Agent's prior written consent, any reversal, modification, stay, vacatur or amendment of the interim order, or any priority administrative expense or unsecured claim equal or superior to the DIP superpriority claims or adequate protection superpriority claims (other than the carve out); any order other than the interim or final order allowing use of cash collateral resulting from DIP collateral; or, except as set forth in the interim or final order, any lien on the DIP collateral or prepetition collateral with priority equal or superior to the DIP liens, adequate protection liens or prepetition liens
• Waiver of Claim: To the extent permitted by applicable law, no party to the DIP credit agreement shall assert, and each waives, any claim against any other party or related party thereof, on any theory of liability, for special, indirect, consequential or punitive damages arising out of the agreement, the transactions, any loan or letter of credit or the use of proceeds thereof, except, in the case of a claim by an indemnitee against a borrower, to the extent such damages would otherwise be subject to indemnification

Permitted Variance

• Tested weekly at the time required for delivery of a compliance certificate, commencing with the first full calendar week following the petition date (i.e., the week ending Aug. 22, 2026), and, in the case of the borrowing variance, at all times:
  • Receipt Variance: Actual cash receipts for any line item, for each of the cumulative period and any cumulative four-week period, shall not be less than (i) 85.0% of budgeted cash receipts for the first two cumulative four-week periods following the petition date, (ii) 87.5% for the third cumulative four-week period, and (iii) 90.0% for each cumulative four-week period thereafter
  • Expense Variance: Actual disbursement amounts for any line item (other than fees, expenses and disbursements to the Administrative Agent and the lenders and their respective counsel and advisors), for each of the cumulative period and any cumulative four-week period, shall not exceed (i) 115.0% of budgeted disbursement amounts for the first two cumulative four-week periods following the petition date, (ii) 112.5% for the third cumulative four-week period, and (iii) 110.0% for each cumulative four-week period thereafter
  • Borrowing Variance: Total revolving credit exposure on any business day shall not exceed 115.0% of the budgeted total revolving credit exposure set forth in the most recent approved budget for the week including such business day
• The cumulative period runs from the petition date through the Saturday of the most recent week ended; a cumulative four-week period is the four-week period through the Saturday of the most recent week ended, or such shorter period since the petition date if four weeks have not elapsed
• Permitted variances are reported by the debtors on the Wednesday following the last Saturday of each completed week, with a variance report delivered to the DIP Agent, the Prepetition ABL Agent, the Prepetition Term Loan Agent and their advisors. The approved budget variance report shows, by line item, actual cash receipts, actual disbursement amounts, actual net cash flow, actual total liquidity (including excess availability) and actual total revolving credit exposure for the prior week, the most recent cumulative four-week period and the most recent cumulative period, noting all variances on a line-item basis together with explanations for all material variances.
• The foregoing covenants may, at the request of the borrower representative, be waived or modified solely with the prior written consent of the Administrative Agent

Final Hearing

• The final hearing is scheduled for Sept. 16, 2026 at 10:00 a.m. ET before Judge Craig T. Goldblatt
• Objections are due Sept. 9, 2026 at 4:00 p.m. ET, to be served on proposed debtors' counsel (Cole Schotz P.C.), counsel to the DIP Agent and Prepetition ABL Agent (Choate, Hall & Stewart LLP and Womble Bond Dickinson (US) LLP), counsel to the Prepetition Term Loan Secured Parties (Proskauer Rose LLP and Landis Rath & Cobb LLP), the U.S. Trustee and counsel to any committee
• If no timely objections are received, the court may enter the final order without a final hearing
• The interim order takes effect nunc pro tunc to the petition date and is immediately effective and enforceable upon entry, with no stay of execution