Cerca Trova Restaurant Group Holdings - Chapter 11 DIP Terms

DIP Terms

DIP Commitments

• $5.5 million new-money revolving facility from Outback Steakhouse of Florida, LLC, with no roll-up of prepetition debt. Up to $2.5 million is available once the interim order is entered, and the balance only after both the final order and the bidding procedures order are entered.
• The facility is a contingent liquidity backstop for the Chapter 11 sale process. The debtors expect operating receipts and consensual use of cash collateral to fund most case expenditures. They may draw advances only to cover a liquidity shortfall: the greatest amount by which unrestricted cash is projected, under the budget or the latest cash flow forecast, to fall below a $2 million minimum liquidity amount at the end of any week. That cash figure excludes the Carve-Out reserve account and is measured before the requested draw.
• The budget projects the full $2.5 million interim draw in the week ending Nov. 6, 2026, and a $2 million draw in the week ending Nov. 27, 2026. The second draw assumes the final order and bidding procedures order are entered by then, and it leaves $1 million of availability for the rest of the budget period.
• The DIP lender must fund each advance within two business days of a written borrowing request certifying that the funding conditions are met. No credit agreement or note will be signed; the DIP orders themselves are the only loan documents.
• The terms below come from the proposed interim order filed with the debtors' Nov. 2, 2026 motion, which provides that it controls over the motion.

Parties

• Borrowers: the debtors, namely Cerca Trova Restaurant Group Holdings, Inc. (formerly T-Bird Restaurant Group Holdings, Inc.), Out West Restaurant Group, Inc., Cerca Trova Steakhouse, Inc., Cerca Trova Steakhouse, L.P. and Cerca Trova Southwest Restaurant Group, LLC.
• DIP lender: Outback Steakhouse of Florida, LLC. It is also the stalking horse buyer and, together with its affiliates, the franchisor under whose franchise agreements the debtors' restaurants operate.
• Prepetition secured parties: Goldman Sachs Specialty Lending Group, L.P., as administrative and collateral agent, and the lenders under the debtors' prepetition credit agreement. They declined to provide postpetition financing and consent to being primed by this facility only.

Interest Rate

• 0%: advances bear no interest, consistent with the DIP lender's stalking horse proposal.

Fees

• Commitment Fee: $50,000, fully earned and payable when the interim order is entered; the budget pays it in the week ending Nov. 6, 2026.
• Expense Reimbursement: the DIP lender's reasonable and documented out-of-pocket fees and expenses, including counsel fees.
  • After summary invoices are delivered, the debtors, the U.S. Trustee and any committee have 10 days to object to reasonableness, and disputed amounts are paid only on court order.
  • The budget's professional fee schedule accrues $150,000 of DIP lender legal fees, and its restructuring costs show a $100,000 payment to DIP lender professionals in the week ending Dec. 11, 2026.
• No origination, exit, unused line or other financing fee applies. The commitment fee and reimbursed expenses count as DIP obligations.
• The debtors also indemnify the DIP lender and its related parties, but only to the extent the DIP loan documents, which are the DIP orders themselves, provide.

Sale Process and Prepetition Debt

• The debtors filed Chapter 11 in Delaware on Nov. 2, 2026, with a stalking horse sale of substantially all operating assets to the DIP lender documented in an asset purchase agreement dated as of Nov. 1, 2026; signing that agreement is itself a condition to borrowing. The consideration is:
  • A $26.3 million cash purchase price
  • Plus the amount, if any, by which $6.1 million exceeds the specified liabilities the buyer assumes at closing
  • Plus assumption of assumed liabilities and payment of all cure costs, subject to the agreement's limitations
• Deposit: $2.63 million, payable within two business days after the later of entry of the bidding procedures order and execution of the stalking horse agreement, and credited against the price at closing.
• Break-Up Fee: $790,000 (approximately 3% of the cash purchase price), proposed and subject to approval in the bidding procedures order, payable solely from the cash proceeds of an alternative transaction as defined in the stalking horse agreement; the proposal also contemplates overbid protections.
• Before filing, the debtors retained their investment banker, Brookwood Associates, L.L.C., and marketed substantially all of their business assets. During that process, extensive discussions with the DIP lender produced the stalking horse proposal, and the DIP lender agreed to provide the facility in connection with it.
• The debtors owe not less than $319.9 million under a credit and guaranty agreement dated April 25, 2017, most recently amended by a forbearance agreement and fourth amendment effective Dec. 31, 2023. That total consists of approximately $122.5 million of term loans, $6.5 million of revolving loans and approximately $190.9 million of capitalized accrued amounts, plus interest, fees and expenses.
• The motion states that this debt far exceeds the $26.3 million cash price and that the debtors have no material unencumbered assets, so no equity cushion supports unsecured or junior-lien financing. Given those facts and the facility's small, contingent nature, Brookwood concluded that a separate DIP solicitation would have been futile.

Maturity and Repayment

• The facility runs from entry of the interim order until the earliest of:
  • Repayment in full
  • Consummation of a sale to the DIP lender
  • Occurrence of a termination event
  • Any other termination date specified in the DIP orders
• On the termination date, DIP obligations become due without notice or demand and cash collateral use ends. The termination date falls five business days after the DIP lender or the prepetition agent delivers a default notice of a termination event, unless the event is waived or cured in that period or the court orders otherwise. Closing a sale of all or substantially all assets is itself a termination event.
• If the stalking horse sale closes, outstanding DIP obligations are satisfied by a dollar-for-dollar reduction of the cash purchase price under Sections 3.3 and 3.11 of the stalking horse agreement.
• If a third party buys substantially all of the assets:
  • The DIP obligations must be paid in full in cash at or before closing. Payment comes first from proceeds of the debtors' petition-date unencumbered assets included in the sale, then from DIP collateral proceeds, without requiring any allocation of sale proceeds among assets.
  • The break-up fee, to the extent payable under the stalking horse agreement and approved in the bidding procedures order, is paid to the stalking horse from that sale's cash proceeds at closing, subject to that order's conditions, and the DIP, prepetition and adequate protection liens on those proceeds are subject to it.
• Subject to the final order, on a sale to the DIP lender, cash proceeds that are prepetition collateral go to the prepetition agent. This happens only after the DIP obligations are satisfied, the Carve-Out reserve account is funded up to the Carve-Out cap and all other Carve-Out amounts are paid or reserved.
• The stalking horse deposit and other bidder deposits are not collateral unless the debtors retain them. If the debtors become entitled to keep the stalking horse deposit, the DIP lender has no lien on it and it cannot be used to repay DIP obligations.

Milestones

• The milestones in Exhibit 2 to the proposed interim order are a continuing condition to funding, which the DIP lender may waive or extend, and missing one is an event of default. They are:
  • Sale motion, including the bidding procedures request: filed within two days after the petition date
  • Bidding procedures order: entered within 14 days after the petition date
  • Final DIP order: entered within 21 days after the petition date
  • Bid deadline: no later than Dec. 8, 2026
  • Auction (if required): on or before Dec. 11, 2026
  • Sale hearing: on or before Dec. 15, 2026, subject to court availability
  • Sale order: entered on or before Dec. 17, 2026
  • Sale closing: on or before Jan. 4, 2027
• The prepetition agent may extend the bidding procedures, bid deadline, auction and closing milestones in writing.
• The bidding procedures order, final order and sale order must each be reasonably acceptable to the DIP lender and the prepetition agent.
• If the court's calendar does not allow timely action on a court-dependent milestone, it extends automatically to three business days after the court's first available date.
• The budget anticipates a final hearing on or before Nov. 24, 2026.

Conditions to Borrowing

• The DIP lender has no obligation to fund any advance unless:
  • The interim order (for interim advances) or the final order (for anything beyond them) has been entered and remains in effect
  • The debtors have signed the stalking horse agreement naming the DIP lender or its affiliate as stalking horse bidder and have filed the sale motion; advances beyond the interim amount also require a bidding procedures order reasonably satisfactory to the DIP lender
  • No termination event or event of default is continuing or would result from the advance
  • The advance does not exceed the liquidity shortfall certified in the borrowing request
  • The advance will be used under the budget, and no prohibited variance exists after giving effect to it
• Most significantly, the backstop depends on the DIP lender staying in the sale process. The funding obligation falls away in any of these cases:
  • The DIP lender is not the active stalking horse bidder, successful bidder or back-up bidder when a draw is requested
  • The debtors consummate an alternative transaction
  • The stalking horse agreement is terminated, other than as a result of a breach by the DIP lender or its affiliate purchaser, including a termination by the debtors under Section 10.2(h) of that agreement

Cash Collateral

• The prepetition secured parties consent to the debtors using cash collateral in line with the budget, subject to variances short of a prohibited variance. Use runs from entry of the interim order through the earlier of Jan. 4, 2027 (or another date the prepetition agent consents to in writing) and the termination date.
• Using cash collateral for any purpose the order does not expressly authorize requires a further court order.

Budget

• The budget is a nine-week cash flow forecast (Exhibit 1) running from the petition date through the week ending Jan. 1, 2027. It opens with approximately $3.4 million of cash: a bank balance of approximately $3.6 million as of the week ending Oct. 30, less approximately $0.2 million of outstanding payroll checks.
• Projected operating results over the nine weeks:
  • Receipts: approximately $51.8 million
  • Operating disbursements: approximately $46.1 million
  • Net operating cash flow: approximately $5.7 million
• After approximately $1.7 million of non-operating disbursements and approximately $6.3 million of restructuring costs, including approximately $5.2 million of critical vendor payments, the debtors project a net cash outflow of approximately $2.2 million.
• After approximately $2.2 million of professional fee escrow funding and $4.5 million of DIP draws, the budget ends with approximately $3.5 million of cash. That falls to approximately $2.4 million after a reserve of approximately $1.1 million for November stub rent, which is held for payment as a cure cost at closing in connection with lease assumptions.
• Ending cash after reserves hits its low of approximately $879,000 in the week ending Dec. 18, 2026. In that week, total liquidity including undrawn DIP availability is approximately $1.9 million.
• Other large budget items:
  • Approximately $1.7 million in the week ending Nov. 27 for 90-day extensions of property, casualty and liability policies
  • Approximately $1.8 million of October sales and use taxes, paid under the tax order
  • An approximately $373,000 utility adequate assurance deposit
• Budget amendments need the written approval of the DIP lender and the prepetition agent.
  • Approval may not be unreasonably withheld, but the prepetition agent's determination that an update is materially adverse to the prepetition secured parties does not count as unreasonable.
  • Approval is deemed given if no objection is made within four business days.
  • Until an update is approved, the debtors stay bound by the existing budget, and the DIP lender need not fund against an unapproved one.

Use of Proceeds

• Working capital, payroll, vendor obligations, Chapter 11 administrative expenses and other expenditures authorized by the budget and the DIP orders, including budgeted franchise fees owed to the DIP lender as franchisor.
• DIP advances are drawn only when cash collateral and operating receipts cannot cover budgeted spending while keeping the $2 million minimum liquidity amount.

Franchise Fees

• Prepetition franchise fee payments are capped at $1.5 million until the final order is entered.
• The debtors are authorized, but not directed, to pay budgeted royalty, advertising and marketing and other fees owed to the DIP lender or its affiliates as franchisor, whether incurred before or after the petition date, so that they stay current through a sale closing.
• Excluded are amounts deferred, capitalized or evidenced by a promissory note under the Amended and Restated Holistic Resolution Agreement, the Amended and Restated Deferred Payment Agreement or any other prepetition agreement with the franchisor that are not due and payable.
• Paying the fees does not assume any franchise agreement under section 365 and does not waive the debtors' rights, claims or defenses, including setoff and recoupment.
• The franchisor has made staying current on these fees a condition of its continued forbearance under the franchise agreements and the stalking horse agreement. In exchange, when a sale to the DIP lender closes, it will waive cure amounts and release approximately $13.9 million of deferred obligations.
• The budget carries approximately $2.67 million of franchisor fees over nine weeks. This includes approximately $1.44 million of prepetition royalty and marketing fees for fiscal period P10 (Sept. 28 to Oct. 25), paid in the week ending Nov. 20 under the cap.

Carve Out

• Post Carve-Out Trigger Notice Cap: $200,000 for allowed professional fees incurred after the DIP lender or the prepetition agent gives written notice, including by email, of a termination event or event of default.
• Chapter 7 Trustee Cap: up to $25,000 of a trustee's fees and expenses
• The Carve-Out also covers:
  • U.S. Trustee statutory fees
  • Allowed fees and costs of the claims and noticing agent
  • Allowed fees of debtor and committee professionals incurred before a trigger notice, up to the lesser of budgeted and actual amounts; the budget is applied weekly by line item, with all debtor professionals as one line and a pro rata amount for a mid-week notice
  • Any court-approved transaction or success fee owed to Brookwood under its engagement letter, without regard to the budget
• Before the termination date, any professional's budget surplus may be carried forward or backward to cover overruns in other periods.
• The Carve-Out reserve account is a segregated account the debtors must fund, from cash collateral or DIP advances:
  • Weekly and in advance, in the budgeted professional fee amount, until a trigger notice is delivered
  • After a trigger notice, even if termination has occurred, up to the Carve-Out cap, which is the pre-trigger professional fee amounts plus the $200,000 post-trigger cap
  • For any shortfall at the time of the notice, within two business days from cash collateral, without reducing the post-trigger cap
• The account is held in trust for the professionals and is not collateral, though the debtors' reversionary interest stays subject to the DIP and adequate protection liens.
• Carve-Out amounts are paid first from cash proceeds of the debtors' petition-date unencumbered assets, before DIP advances or cash collateral are used, but no unencumbered assets have to be sold to do so. The Carve-Out cap is reduced dollar for dollar by amounts funded or paid.
• The budget accrues approximately $2.4 million of professional fees over nine weeks, funded weekly into escrow. That includes:
  • KTBS Law LLP: $940,000
  • Stout Risius Ross, LLC: $720,000
  • Committee counsel: $218,750
  • Pachulski Stang Ziehl & Jones LLP: $160,000
  • Stretto, Inc.: $126,000
  • Brookwood: $50,000

Securities and Priorities

• The DIP lender receives automatically perfected liens under sections 364(c)(2), 364(c)(3) and 364(d) on all of the debtors' real and personal property. Avoidance actions and their proceeds are excluded until the final order is entered.
• The DIP liens are subject only to the Carve-Out and permitted prior liens, meaning valid, perfected liens existing at the petition date that are senior to the prepetition liens under non-bankruptcy law. The DIP liens prime the prepetition liens with the prepetition secured parties' consent.
• Lien priority under Exhibit 3 is as follows:
  • On prepetition collateral: first, the Carve-Out and permitted prior liens; second, the DIP liens, solely to the extent not secured by unencumbered assets; third, the prepetition liens and adequate protection liens
  • On unencumbered assets: first, the Carve-Out and permitted prior liens; second, the DIP liens; third, the adequate protection liens
• DIP obligations are superpriority administrative expense claims under section 364(c)(1), senior to all other administrative claims.
  • They are subject only to the Carve-Out and the break-up fee, to the extent the fee is payable under the stalking horse agreement and approved in the bidding procedures order.
  • Until the final order is entered, they are not payable from avoidance actions.
• Apart from the Carve-Out, the break-up fee and permitted prior liens, the debtors may not grant any lien or claim senior to or equal with the DIP liens, the prepetition liens or either set of superpriority claims without the consent of the DIP lender and the prepetition agent.
• Advances made after the termination date do not prime the prepetition liens or rank ahead of the prepetition obligations unless the prepetition agent agrees. The exception is advances for permitted post-termination payroll, critical expenses and Carve-Out reserve funding.

Avoidance Actions

• Avoidance actions are excluded until the final order is entered. Until then, neither the DIP collateral nor the adequate protection collateral includes avoidance actions or their proceeds, and neither set of superpriority claims is payable from them.
• The proposed orders do not decide how Chapter 5 causes of action are disposed of, owned, transferred, treated or released in any future sale. Any transfer or release is subject to the final order and any approved sale.

Adequate Protection

• To the extent their interests in prepetition collateral lose value after the petition date, Goldman Sachs Specialty Lending Group, as prepetition agent, and the prepetition lenders receive:
  • Replacement liens on postpetition property with the same priority as the prepetition liens, junior to the Carve-Out, permitted prior liens, the break-up fee and the DIP liens
  • Second-priority liens on the DIP collateral, subject only to the Carve-Out and junior only to the DIP liens
  • Section 507(b) superpriority claims, subject to the Carve-Out and the break-up fee and junior only to the DIP superpriority claims
  • Payment of the reasonable and documented pre- and postpetition fees and expenses of Goldberg Kohn Ltd. and Richards, Layton & Finger, P.A., only as budgeted and subject to a 10-day reasonableness objection period
  • Monthly and quarterly financial statements and certain notices under the prepetition credit agreement through a sale closing, copies of all reporting delivered to the DIP lender, and inspection and access rights
• Any party in interest may seek to recharacterize the fee payments as principal if the prepetition lenders are found to be undersecured.
• The budget's prepetition lender line shows no amounts over the nine-week period.
• Until the final order is entered, the adequate protection liens and claims do not reach avoidance actions or their proceeds.

Challenge Period and Investigation Budget

• Any committee or other party in interest has 75 days from entry of the interim order to obtain standing and file an adversary proceeding. A challenge may contest the prepetition or DIP obligations and liens, or assert estate claims against the prepetition secured parties or the DIP lender.
• The deadline may be extended in writing by the prepetition agent (or, for challenges against the DIP lender, by the DIP lender). The court may also extend it for cause on a motion filed before it expires.
• The debtors will seek, subject to entry of a final order granting the relief, to shorten the challenge period so the deadline coincides with the hearing approving a sale of substantially all assets or confirming a plan.
• The debtors waive all challenges as of the petition date, and a challenge by the debtors is a termination event. The order gives no party standing.
• Investigation Budget: committee professionals' costs of investigating a potential challenge are capped at $50,000. Otherwise, no cash collateral, collateral or DIP proceeds may be used to:
  • Prosecute claims against the DIP lender or the prepetition secured parties
  • Contest their obligations or liens
  • Hinder their remedies
• If no timely challenge is filed, the stipulations and releases bind all parties, and the DIP and prepetition obligations become allowed claims. A timely challenge keeps open only the matters expressly raised in the original complaint.

Stipulations and Releases

• The debtors stipulate that the prepetition obligations total not less than $319.9 million and are valid and binding, with no offset, defense, avoidance, recharacterization or subordination. Third parties keep their challenge rights.
• The debtors release Goldman Sachs Specialty Lending Group, the prepetition lenders and their affiliates, shareholders and representatives from all claims relating to the prepetition obligations, loan documents and liens. The release covers lender liability, equitable subordination and Chapter 5 claims. It binds the debtors when the interim order is entered and binds the estates only when the challenge period expires.
• On the same timing, the debtors release Outback Steakhouse of Florida and its affiliates, shareholders and representatives from claims arising from the negotiation, documentation, implementation or performance of the DIP facility. This release does not reach the debtors' rights under the stalking horse agreement, any franchise agreement or any other agreement with the DIP lender or its affiliates.
• The stipulations are deemed filed proofs of claim, so neither the DIP lender nor the prepetition secured parties need to file proofs of claim.

Waivers

• Subject to entry of the final order:
  • Section 506(c): the DIP, prepetition and adequate protection collateral cannot be surcharged without the consent of the DIP lender or the prepetition agent, as applicable
  • Section 552(b): the "equities of the case" exception will not apply
  • Marshaling: the DIP lender and the prepetition secured parties are not subject to marshaling or similar doctrines

Permitted Variance and Reporting

• A prohibited variance occurs if cumulative net cash flow from operations falls below 85% of the budgeted amount. The measurement runs from the petition date through the week before the report date.
• The test runs every two weeks, starting with the variance report delivered Nov. 20, 2026, which covers the two weeks ended Nov. 13, 2026.
• Budgeted expenditures not paid in their period may be carried forward, and insurance premiums paid early are treated as paid in the period they were budgeted for.
• Starting Nov. 6, 2026, and every Friday after that, the debtors must deliver the following to the DIP lender, the prepetition secured parties and any committee:
  • A rolling nine-week cash flow forecast
  • A CFO-certified variance report, cumulative and by line item
  • A budget compliance certificate explaining any prohibited variance

Termination Events and Events of Default

• The debtors' right to use cash collateral and the DIP lender's funding obligation end automatically five business days after the DIP lender or the prepetition agent delivers a default notice, unless the event is waived or cured or the court orders otherwise. The termination events are:
  • Dismissal of the cases or conversion to Chapter 7
  • Appointment of a trustee or an examiner with enlarged powers, or the debtors' consent to such an appointment
  • Suspension of the cases under section 305
  • Any challenge by the debtors, other than actions to enforce the DIP orders or the stalking horse agreement (including its franchise agreement terms), compliance with discovery or court orders, or providing information to a committee
  • Consummation of a sale of all or substantially all assets
  • A debtor motion for section 364(d) financing secured by the collateral that does not repay the prepetition and DIP obligations in full
  • Any event of default, after written notice to the debtors
• Events of default, which the DIP lender and the prepetition agent may waive, include:
  • Failure to perform material obligations, including unauthorized use of cash collateral or failure to deliver required reporting
  • Materially false representations in documents delivered after the petition date
  • A third party obtaining a cash collateral order without the consent of the DIP lender and the prepetition agent
  • A prohibited variance
  • Failure to meet any milestone
  • Termination of the stalking horse agreement for any reason
  • Amendment of the stalking horse agreement, without the prepetition agent's consent, that reduces the consideration or is otherwise materially adverse
  • Materially adverse changes to the DIP terms without the prepetition agent's consent
  • The interim order ceasing to be effective other than by being replaced with a final order, or being modified without the consent of the DIP lender and the prepetition agent
  • Stay relief on assets worth more than $250,000 without consent, other than recoveries solely from insurance or relief on rejected or abandoned property
  • Postpetition liens outside the ordinary course
  • Nonconsensual priming of the prepetition, DIP or adequate protection liens
  • Any claim equal or senior to either set of superpriority claims, other than the Carve-Out and the break-up fee
  • Shutdown of all or a material part of operations, other than closure of suspended stores or stores closed under the stalking horse agreement, or a shutdown on a sale closing

Remedies

• Before exercising remedies, the DIP lender or the prepetition agent must file an emergency motion, on at least five business days' notice, asking the court to lift the stay or to dismiss or convert the cases.
• Subject to the final order, the debtors may argue only two points against that motion: whether an uncured termination event occurred, and whether collateral value has declined. They waive section 105 relief that would impair the lenders' remedies.
• During the five-business-day default notice period, the debtors may seek nonconsensual use of cash collateral on shortened notice. The debtors and the prepetition secured parties may agree to keep the interim order in effect through that hearing.
• After termination, the debtors or a trustee may still use cash collateral or request DIP advances for:
  • Payroll and payroll-related expenses accrued through the termination date
  • CFO-certified critical expenses, up to budgeted amounts
  • Funding the Carve-Out reserve account
• All DIP and adequate protection liens and claims survive termination until the DIP, adequate protection and prepetition obligations are paid in full in cash.