Clintwood JOD - Chapter 11 DIP Terms

DIP Terms

Borrower(s)

• Clintwood JOD, LLC and JOD Mineral Properties, L.L.C. (collectively, the "Debtors"), as Borrowers
• The Debtors are jointly and severally liable for their obligations under the DIP Facility

DIP Lender

• Square Resources US LLC or affiliate, as DIP Lender

DIP Commitments

• $3.5 million senior secured multiple-draw term loan facility, funded on an interim and final basis as follows:
  • $500,000 available immediately upon entry of the interim order to pay GLPL insurance and security costs, funded via escrow to the Debtors' insurance broker, with any residual funds forwarded to the Debtors and evidence thereof provided to the DIP Lender
  • An additional $1.5 million available on an interim basis upon the DIP Lender's receipt of the Debtors' most recent report showing the volumes, quality, and locations of all coal on any stockpiles
  • $500,000 in advanced loading costs on April 9, 2026, subject to no events of default and provision of required information, including loading and approval of quality-adjusted market price contracts of Paid Coal
  • An additional $1 million available upon entry of the final order (in form and substance reasonably satisfactory to the DIP Lender in its sole discretion), subject to no events of default that the DIP Lender has not deemed cured or waived and the Debtors' compliance with all terms of the DIP Term Sheet, including loading and approval of quality-adjusted market price contracts of Paid Coal and provision of information set out in the DIP Term Sheet
• Early repayment or prepayment prior to the maturity date is permitted; however, no repaid amounts may be reborrowed without the DIP Lender's consent, and no optional prepayments shall reduce the Total Commitment.
• During the DIP Period, each contract between either or both Debtors and Square Resources US LLC (the "Square Contracts") shall remain in full force and effect, except as to any specific modification set forth in the DIP Term Sheet, the interim order, or the final order, including: (i) an Exclusive Coal Sales and Marketing Agreement, (ii) a Master Coal Purchase and Sale Marketing Agreement and related confirmations, and (iii) a Working Capital Annex. No action shall be taken during the DIP Period to reject the Square Contracts, nor shall they be deemed assumed. All parties' rights are reserved with respect to the Square Contracts following the DIP Period.

Cash Collateral

• The Debtors are authorized to use DIP loan proceeds and all cash collateral solely to the extent and for the purposes permitted in the approved budget, subject to permitted variances and the terms of the DIP Loan Documents and the interim order.
• All proceeds of coal sales, whether of Paid Coal or Unpaid Coal, constitute DIP Collateral and are subject to Square's liens and proceeds controls.

Interest Rate

• 8% per annum
• Default Rate: 10% per annum

Fees

• Loading Costs: The DIP Lender shall advance $13.00 per ton each week for estimated Paid/Stockpile Coal shipments from existing clean stockpiles, to be recouped from sale proceeds upon receipt of payment from customers.
  • If tons are not loaded per the weekly forecast, advanced loading costs roll forward to the following week's forecasted deliveries, and loading payments shall not be made twice
  • If additional loading is scheduled beyond the estimated weekly shipments, the Debtors shall act reasonably to accept and the DIP Lender shall advance additional loading costs
• Revenue Percentage: The DIP Lender shall receive 5% of revenue from each Unpaid Coal sale, inclusive of marketing fees due under the Square Contracts, payable on Friday of the week following receipt of customer payment.
• Marketing Fees: Square will earn 2% of sales amounts invoiced directly by the Debtor to a customer, payable immediately upon receipt of funds from customers. Marketing fees are included in the Revenue Percentage for Unpaid Coal.
• All fees, costs, and expenses under the DIP Loan Documents, including the DIP Lender's attorneys' fees, are approved and not subject to disgorgement.

Maturity

• The earliest to occur of:
  • The consummation of any sale of the Debtors' assets
  • The substantial consummation of a confirmed plan of reorganization
  • May 29, 2026, unless otherwise extended by agreement of the Debtors and the DIP Lender
  • Acceleration of the DIP Facility following an event of default

Carve Out

• The relative priority of all amounts owed under the DIP Facility is subject to a carve-out for the following:
  • Chapter 7 Trustee Fees: up to $25,000
  • Allowed Professional Fees of Debtor Professionals and Committee Professionals up to the amounts set forth in the approved budget, incurred at any time on or before one business day following delivery of a Carve-Out Trigger Notice
  • Post Carve-Out Trigger Notice Cap: $50,000 for Debtor Professionals and $25,000 for Committee Professionals
  • Payment of fees pursuant to 28 U.S.C. § 1930
  • Pre-existing liens set forth in paragraphs 4 and 6 of the interim order
• Prior to delivery of a Carve-Out Trigger Notice, the Debtors shall fund a Professional Fee Escrow on a weekly basis in an amount equal to, but not to exceed, the professional fees and costs set forth in the approved budget for each such week. Payments made prior to delivery of a Carve-Out Trigger Notice shall reduce the amounts available under the Carve-Out, and the Professional Fee Escrow shall not increase the Carve-Out. Upon exhaustion of the escrow, professional fees shall be paid from the Carve-Out pursuant to interim fee procedures established in the cases. DIP Liens shall attach to any excess funds in the Professional Fee Escrow after satisfaction of the Carve-Out, and such funds shall be used to satisfy outstanding DIP Facility amounts.

Use of Proceeds

• As set forth in the approved budget, subject only to the approved variance.
• Other than court-approved equipment sales, unless and until the DIP Facility is fully paid and terminated, the Debtors shall not:
  • Make payments or distributions outside of the approved budget without the DIP Lender's consent
  • Make payments or distributions to any member, shareholder, or related party of Clintwood or Mine and Rail Corporation LLC, other than budgeted ordinary-course compensation on prepetition terms
  • Support or file a reorganization plan or transaction not approved by the DIP Lender
  • Enter into material contracts without the DIP Lender's consent

Paid/Stockpile Coal Proceeds

• The Debtors stipulate, acknowledge, and agree that pursuant to the Square Contracts, Square owns and has title to all tons of clean coal stockpiles as of the petition date, which amount is approximately 75,000 tons (the "Paid/Stockpile Coal").
• Paid/Stockpile Coal sale proceeds are allocated in the following waterfall:
  • Repayment of relevant advances under the Working Capital Annex
  • Recoupment of Loading Costs paid to the Debtors
  • Payment of Square's marketing fees under the Working Capital Annex
  • Remaining amounts split equally between Square and the Debtors (the "Paid Coal True-Up Split"), with the Debtors' portion used for operating expenses under the approved budget and Square's portion applied to firstly reduce amounts outstanding to Square under the Working Capital Annex and secondarily to reduce amounts owing under the DIP Loan. Interest and other fees accruing on the Advances shall continue to accrue. Due to a disputed existing Suspension Event under the Working Capital Annex, Square will not be obliged to provide further Inventory Advances during the DIP Period.

Unpaid Coal Proceeds

• Unpaid Coal — extracted coal for which Square has not advanced funds to the Debtors as of the petition date, whether previously mined or mined thereafter, raw coal or otherwise — is to be sold in accordance with the Square Contracts.
• The DIP Lender shall receive a 5% Revenue Percentage from each such sale, with the DIP Lender's portion applied to reduce the DIP Obligations and the Debtors' share used for operating expenses under the approved budget (the "Unpaid Coal Revenue Split").
• For Unpaid Coal sales mined or sourced by the Debtors, funds shall be paid directly to the Debtors by the customer.
• Other than court-approved equipment sales not subject to Square's priming lien or superpriority claim, any sale of the Debtors' assets shall be sufficient to repay the DIP Obligations in full, unless otherwise agreed by the DIP Lender.

Credit Bid

• The DIP Lender shall have the right to credit bid in any transaction under section 363 of the Bankruptcy Code.
• Subject to court approval, the DIP Lender shall be a consultation party in the sale process and in the selection of a winning bidder at any sale.

Avoidance Actions

• The DIP Collateral excludes recoveries from claims or causes of action arising under sections 502(d), 542, 544, 545, 547, 548, 549, 550, and 553 of the Bankruptcy Code and any other avoidance or similar action under the Bankruptcy Code or similar state law avoidance action under chapter 5 of the Bankruptcy Code.

Securities and Priorities

• The DIP Lender is granted perfected first-priority priming liens on and security interests in all property, assets, and interests in property or assets of each Debtor (the "DIP Collateral"), subject to the carve-out, with the DIP Liens ranking senior to all prepetition liens.
  • The DIP Liens do not extend to certain leasehold interests between the Debtors and Natural Resource Partners, L.P., ACIN LLC, and/or WPP LLC (the "Excepted Property"). At the final hearing, the DIP Lender may request a lien on the Excepted Property, and the lessors may oppose such request.
• The DIP Obligations constitute allowed superpriority administrative expense claims against each Debtor's estate, with priority over any and all other administrative expense claims, adequate protection claims, and all other claims.
• Square is granted a security interest in and a superpriority lien on all Unpaid Coal until the DIP Facility is repaid in full.

Adequate Protection

Other Pre-Petition Secured Parties

• The DIP Liens are subject and subordinate to valid and existing liens and interests of:
  • Honor Capital Corporation dba AFS/IBEX Financial Services, in the unearned premium and related collateral under its prepetition Premium Finance Agreements, which liens shall remain unaltered and continue at the same extent, priority, and validity as of the petition date. Nothing in the interim order shall alter, impair, or otherwise affect AFS's liens, security interests, claims, or priority ranking. All carriers under the financed policies shall reinstate the financed policies in accordance with AFS's notice of request for reinstatement.
  • Community Trust Bank, Caterpillar Financial Services Corporation, and Align Equipment Finance (collectively, the "Equipment Lenders"), in the equipment financed under their respective prepetition contracts, including any enforceable cross-collateralization provisions
• Each prepetition secured party holding valid, enforceable, and properly perfected liens (the "Other Pre-Petition Secured Parties") is granted replacement liens on its collateral, junior to the DIP Liens, as security for the complete payment and performance of prepetition obligations. Such replacement liens are limited to the extent and priority of the Other Pre-Petition Secured Parties' valid prepetition liens.
• The Debtors agree to negotiate in good faith with the Equipment Lenders to set and pay additional adequate protection, including but not limited to cash payments, beginning after the interim period or at a time agreeable to the Equipment Lenders. The Equipment Lenders may move the court for adequate protection or other relief at any time, provided that any amounts beyond those provided in the interim order shall not become due until after the interim period.
• Nothing in the interim order prohibits or adversely affects the rights of the Debtors, the DIP Lender, or any committee from investigating, objecting to, or contesting the validity, extent, amount, perfection, priority, or enforceability of any lien or security interest claimed in or against the Debtors' assets by any of the Other Pre-Petition Secured Parties.

Reporting Requirements

• Weekly Variance Report and Weekly Payment Report, approved by the Debtors' CEO or equivalent, attesting to accuracy and compliance with the DIP Term Sheet
• Updated 30-day rolling weekly cashflow projections, delivered by Wednesday at 9:00 a.m. ET each week
• Weekly financial reporting as required by the approved budget procedures, and such other financial reports and information as reasonably requested by the DIP Lender, with participation in calls as requested by the DIP Lender
• Detailed forecast of projected deliveries per buyer for the upcoming two weeks and, per the Square Contracts, a rolling six-week forecast
• Data reports on coal volume and quality, as received by the Debtors
• A third-party survey at Square's cost on March 31, 2026, and at the Debtors' cost at the end of the DIP Period
• All material pleadings, motions, applications, and other documents filed with the Bankruptcy Court, with pleadings related to sections 363 or 365, the DIP Facility, bidding procedures, or any plan delivered no less than two business days in advance of filing to the extent reasonably practicable

Events of Default

• Events of Default include:
  • Failure of any DIP lien to remain a valid and perfected lien with required priority, or if any other lien or interest is provided superpriority status without the DIP Lender's consent
  • Dismissal or conversion of the Chapter 11 cases to Chapter 7, or filing of a motion seeking dismissal or appointment of a trustee not dismissed or overruled within 30 days, unless with the DIP Lender's consent
  • Any breach of the terms of the DIP Term Sheet, the interim order, or the final order
  • Failure to meet Chapter 11 Milestones by the specified times, unless the DIP Lender consents to an extension
  • Non-compliance with the approved budget that is not curable or, if curable, not cured within 2 business days
  • Granting of relief from stay allowing a third party to proceed against assets in excess of $100,000 in the aggregate
  • Filing of a motion by the Debtors, without the DIP Lender's written consent, to incur debt secured by a lien with priority equal to or superior to the DIP Liens or superpriority administrative expense status, unless proceeds are used to pay the DIP Facility in full
  • Other customary Events of Default to be set forth in additional Loan Documents
  • Any material breach by the Debtors of their obligations under the Square Contracts during the DIP Period

h5>Remedies

• Upon the occurrence and continuance of an Event of Default, the DIP Lender may, without further order of or application to the Bankruptcy Court:
  • Declare all outstanding principal and accrued interest immediately due and payable
  • Implement the default rate of interest on all outstanding DIP Loans
  • Terminate the DIP Facility
  • Terminate the Paid Coal True-Up Split and retain Square's portion and the Debtors' portion of all funds paid by customers for Paid Coal
  • Terminate the Unpaid Coal Revenue Split and be directly paid Square's portion and escrow the Debtors' portion of all proceeds of Unpaid Coal, including from all clean and/or raw coal sales
  • Take any other action or exercise any other right or remedy permitted under the applicable loan documents or by applicable law
• Upon an Event of Default and five business days' prior written notice (a "Termination Notice") to the Debtors, counsel to any Committee, and the U.S. Trustee, the DIP Lender shall be entitled to exercise customary remedies including the right to realize on all Collateral, unless the Bankruptcy Court enters an order to the contrary within such five-business-day period. The Debtors and any Committee are entitled to an emergency hearing within five calendar days after the Termination Notice, and if such hearing is requested, the Default Notice Period shall automatically extend until the Bankruptcy Court hears and rules.