DAMIS Holdings - Chapter 11 DIP Terms

$2.2M 2195 Harlem Road / Bank of New Hampshire DIP Terms

Borrower(s) / Guarantor(s)

• 2195 Harlem Road Leasing LLC and 2195 Harlem Road Real Estate LLC, as borrowers, two single-asset entities holding the leasehold interest in the mortgaged property
• The prepetition loan is guaranteed by debtors DAMIS Holdings LLC and SIMAD Holdings LLC, and by non-debtors Michael Aaron Shabsels and David Arthur Shabsels, each of whom has a Chapter 11 case pending in the same district, under separate continuing guaranties dated June 27, 2024

Agent / Lender(s)

• Bank of New Hampshire, which serves as both the prepetition secured lender under the June 27, 2024 loan agreement and the DIP lender

DIP Commitments

• $2.2 million of postpetition, superpriority secured protective advances, structured not as a new facility but as advances under Sections 4.11, 7.6, and 7.8 of the existing leasehold mortgage, which authorize the lender to advance to protect its collateral:
  • Up to $651,000 available upon entry of the interim order
  • The remaining $1,549,000 available upon entry of the final order
• The DIP obligations constitute additional obligations under the existing loan documents, secured by the prepetition liens including the leasehold mortgage, effective immediately. There is no roll-up of the prepetition debt.
• Amendments, waivers and other modifications to the DIP loan documents that are not material require no further court approval, and must be given to the U.S. Trustee and committee counsel substantially concurrently with being implemented.
• The interim order authorizes borrowing of up to $651,000 without further action by any party; it describes the final tranche as "no less than" $1,549,000, while the motion caps it at up to that amount and the term sheet calls it the remaining principal amount, with the same order's $2.2 million aggregate ceiling bounding the two tranches together.
• Where the documents conflict, the interim order controls over the motion, the term sheet and the earlier interim cash collateral orders; as between the motion and the DIP loan documents, the loan documents govern.
• The chief restructuring officer, Perry Mandarino, concluded that the borrowers require up to $2.2 million to fund preservation and operation of the property through the anticipated sale process.

Prepetition Debt

• The lender advanced $11 million under the June 27, 2024 loan agreement and promissory note; as of the petition date the borrowers and their debtor guarantors were jointly and severally liable for principal of not less than $10,682,225.41, plus accrued interest, costs, fees, and expenses.
• The prepetition liens are first-priority and encumber the borrowers' leasehold interest in 2195 Harlem Road (Thruway Plaza), Cheektowaga, New York, demised under a June 27, 2024 ground lease from Equity Holdings of Cheektowaga LLC, together with all improvements, plus all other collateral described in the existing loan documents. Barclays Capital Real Estate Inc. holds the fee mortgage, subject to a Sept. 30, 2025 recognition, subordination, non-disturbance and attornment agreement among the fee mortgagee, the ground lessor, the borrowers and the lender.

Cash Collateral

• The borrowers are authorized to use all of the lender's cash collateral, defined as all of the borrowers' cash, amounts on deposit in any account, receivable collections and other dispositions of prepetition collateral, rents collected on and after the petition date, and all proceeds of the foregoing, solely as permitted by the interim order and the approved budget.
• Cash collateral, rather than DIP proceeds, funds the categories that cannot be structured as protective advances: professional fees, general bankruptcy administration costs, and adequate protection payments.
• The court had previously authorized the borrowers' use of the lender's cash collateral on an interim basis under a series of orders entered on the separate cash collateral motion filed June 24, 2026 [D.I. 152].

Interest Rate

• 11.25% per annum, the default rate under the existing loan documents, comprising the 7.25% contract rate stated in the promissory note plus a 4.00% default premium
• Default Rate Increase: 5.0% (500 basis points) after maturity or an event of default
• Interest accrues and is added to the outstanding principal balance on the first day of each month following the first advance, calculated on actual days elapsed over a 360-day year; all accrued and unpaid interest, together with remaining accrued interest on the prepetition obligations, principal, late fees, and the lender's legal fees and disbursements, is due in cash on the maturity date.
• The term sheet has DIP interest capitalizing into principal and payable in cash only at maturity, while the budget exhibit carries DIP interest as a cash payment monthly in arrears.

Fees

• No upfront fees, commitment fees, or unused line fees.
• Lender Professional Fees: reimbursement of the reasonable and documented fees and expenses of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. and any other lender-retained professionals for negotiating, documenting, administering, monitoring, or enforcing the DIP loan documents, not subject to court approval or fee applications; prepetition fees and expenses of lender's counsel are payable on the funding date of the interim advances outside the invoice-review procedure.
• Invoices are payable within a 10-day review period after receipt by the debtors, the committee, and the U.S. Trustee; a written objection within that period limits payment to the unobjected amounts pending agreement or a court order.

Maturity

• The earliest to occur of:
  • Six months from the date of issuance, subject to an automatic 60-day extension if a sale of the loan parties' real property has been approved but remains pending closing
  • The effective date of a confirmed Chapter 11 plan
  • Closing of a sale or other disposition of all or a substantial portion of the loan parties' assets
  • Conversion of any of the cases to Chapter 7
  • Dismissal of any of the cases
  • Appointment of a Chapter 11 trustee
  • Acceleration of the DIP loan and termination of further advances following an event of default
• The parties may agree in writing to extend the maturity date. The interim order separately provides that the DIP obligations come due upon the earliest of the termination date, conversion or dismissal, acceleration following an event of default, or indefeasible payment in full in cash.
• Mandatory prepayment applies 100% of net cash proceeds to the outstanding obligations upon a non-ordinary-course sale or disposition of collateral, insurance, casualty or condemnation payments, any debt or equity issuance, and recoveries on claims and causes of action.
• The DIP obligations are not discharged by confirmation of a plan of reorganization or liquidation; they must be paid in full on the plan effective date, and the borrowers have waived discharge as to those amounts under section 1141(d)(4).
• The DIP liens, superpriority claims and remedies survive until the DIP obligations are paid in full in cash and the commitments terminate, or the debtors consummate a plan the interim order defines as acceptable: one in form and substance acceptable to the lender, paying both the DIP obligations and the prepetition obligations in full in cash on the effective date, and not impairing the lender's claims or liens without its written consent; the adequate protection obligations run until the earlier of that plan's consummation and repayment in full in cash.

Carve Out

• Consists of the sum of:
  • Clerk and U.S. Trustee fees under 28 U.S.C. § 1930(a) plus statutory interest, which are not subject to any budget
  • Chapter 7 trustee fees and expenses under section 726(b) on conversion, in an aggregate amount not to exceed $50,000
  • The cumulative amount of shared services payable by the borrowers to DAMIS Holdings LLC under the approved budget through the end of the budget period, to the extent not otherwise funded
• The carve-out is senior to all liens and claims securing the DIP obligations, the adequate protection liens and superpriority claims, and every other lien or claim granted by the interim order; any payment of the carve-out is added to the DIP obligations and secured by the DIP collateral.
• No portion of the carve-out, cash collateral, or DIP proceeds may fund a challenge to the lender's liens or claims or any action against the lender, subject to the committee's investigation rights described below. The carve-out is not a cap on Clerk or U.S. Trustee fees, professional fees, or intercompany administrative claims, though nothing in that provision increases the carve-out.
• The carve-out carries no component for the fees of professionals retained by the debtors or the committee, and the interim order provides that the lender is not responsible for paying or reimbursing any professional's fees or the fees of the U.S. Trustee or the Clerk; those fees are funded from cash collateral under the approved budget.

Use of Proceeds

• Proceeds may be used solely for the preservation, maintenance, management, operation, and re-leasing of the mortgaged property, including maintenance and repairs, capital expenditures, tenant improvements, broker's fees, ground rent, insurance, real estate taxes, and utilities, in accordance with the approved budget and as expressly authorized to be advanced under the post-default provisions of the leasehold mortgage.
• Proceeds may not fund the debtors' general bankruptcy administration costs or any cost not directly incident to the property or its income-producing capacity, and may not satisfy any obligation of a non-borrower debtor except indirectly through shared services payments made under the approved budget.

Credit Bid

• The lender may credit bid all or any portion of the DIP obligations and the prepetition obligations under section 363(k) in connection with any sale of the prepetition collateral or other borrower assets, whether under section 363 or a plan of reorganization; the term sheet requires the orders to authorize a credit bid of the full amount of the obligations without further order of the court.

Avoidance Actions

• Subject to and effective upon entry of the final order, the DIP superpriority claims are payable from, and the first-priority lien on unencumbered property extends to, the proceeds of chapter 5 avoidance actions, with the lender entitled to recover from avoidance-action proceeds only after recovering from all other DIP collateral and proceeds.

Challenge Period and Budget

• The facility is expressly conditioned on the debtors' stipulation to the validity, enforceability, allowability, priority, secured status, perfection, and amount of the prepetition obligations and the first-priority status of the prepetition liens, and on their waiver and release of any right to challenge them; those stipulations bind the debtors and their estates as of the petition date and extend to all DIP loans made.
• Any other party in interest with court-granted standing must file an adversary proceeding or contested matter by Nov. 13, 2026; on conversion to Chapter 7 or appointment of a Chapter 11 trustee before that date, the period extends to the later of the time remaining and 45 days after the appointment.
• A standing motion with a draft complaint attached tolls the challenge period only as to the moving party, only as to the claims in the draft complaint, and only until two business days after the motion is resolved; a separate standing order is a prerequisite to prosecuting a challenge.
• Absent a timely challenge, or if a challenge is overruled, the prepetition obligations become allowed claims not subject to counterclaim, setoff, recoupment, reduction, subordination, recharacterization, defense, or avoidance, and the prepetition liens are deemed legal, valid, binding, and perfected as of the petition date. No challenge may be asserted against amounts advanced under the DIP facility.
• Investigation Budget: the committee or a Chapter 7 or Chapter 11 trustee may use DIP proceeds, DIP collateral, or prepetition collateral including cash collateral solely to investigate potential claims against the prepetition lender within the challenge period, subject to an aggregate cap that the interim order carries as a bracketed placeholder of $50,000.

Securities and Priorities

• Because the same institution is both prepetition and DIP lender, the DIP liens are granted pari passu with the prepetition liens to the extent they secure protective advances under the leasehold mortgage, a structure the debtors describe as consistent with the lender's existing contractual rights.
• Subject to the Carve-Out, the DIP obligations are allowed superpriority administrative expense claims under section 364(c)(1) against each borrower's estate, senior to all other administrative expenses and claims, including those under sections 503(b), 506(c), 507(a) other than 507(a)(1), 507(b), 726, 1113, and 1114, and treated as allowed section 503(b) expenses for purposes of section 1129(a)(9)(A). No other superpriority claim may be granted unless junior to the DIP superpriority claims and adequate protection claims and consented to by the lender.
• The lender is granted automatically perfected DIP liens on all prepetition and postpetition property of the borrowers and proceeds, including proceeds of claims and causes of action, with the following priorities:
  • Section 364(c)(2): first-priority senior liens on all unencumbered property, including unencumbered cash, receivables, leasehold interests, and, upon entry of the final order, avoidance-action proceeds
  • Section 364(c)(3): liens on all other property, junior only to permitted liens, limited to statutory tax liens not yet due or contested in good faith and ordinary-course mechanics', materialmen's, warehousemen's, carriers', repairmen's, and landlord's liens, with no lien securing borrowed money, funded debt, letter-of-credit obligations, or other financing obligations qualifying
  • Section 364(d)(1): first-priority senior priming liens on all DIP collateral, senior to all existing liens other than permitted liens and the prepetition liens, with holders of the primed liens deemed to have consented
  • Notwithstanding the foregoing, the DIP liens are pari passu with the prepetition liens
• The DIP liens survive conversion or dismissal, are enforceable against any trustee, may not be made junior or pari passu with any later-granted lien other than the prepetition liens, and are not subject to sections 510, 549, or 550.
• Lease and license anti-assignment provisions requiring counterparty consent or payment of fees to a governmental entity are deemed inconsistent with the Bankruptcy Code and have no effect on the grant of the DIP liens, without impairing any counterparty's right to object to assumption or assignment on other grounds; the lien-grant paragraph excepts nonresidential real property leases from that override, while a parallel provision later in the same order carries no such exception and reaches leasehold interests expressly.
• Insurance: the borrowers must maintain casualty and loss coverage on the prepetition and DIP collateral as required by the loan documents and name the lender as loss payee or additional insured until the DIP obligations are paid in full.

Adequate Protection

Bank of New Hampshire

• Monthly cash interest on the prepetition obligations at the 7.25% non-default contract rate on the $10,682,225.41 principal balance outstanding as of the petition date, as reduced over time by principal payments, payable on the first business day of each month following entry of the interim order
• Monthly principal amortization payments as set forth in the approved budget, plus payment of outstanding real estate taxes as budgeted
• Section 507(b) superpriority administrative expense claims for any diminution in value, subject and subordinate only to the Carve-Out and the DIP superpriority claims and senior to all other claims against the borrowers' estates
• Payment of the reasonable and documented out-of-pocket fees, costs, and expenses of the lender, including those of Mintz Levin as prepetition lender's counsel, without separate court approval
• Maintenance of cash management arrangements consistent with the cash management order [D.I. 219] and compliance with all reporting requirements in the DIP loan documents and the orders, with the committee entitled to request reporting; failure to comply is an event of default
• The lender is deemed to have requested stay relief and adequate protection for any diminution in value from and after the petition date, and the interim order preserves its section 507(b) rights and its right to seek additional or alternative adequate protection without any finding that the protection granted is in fact adequate

Mizzen Capital, LP

• Mizzen, which claims a security interest in certain borrower assets, receives a replacement perfected security interest under section 361(2) in all borrower assets, limited to the extent of diminution in value of its collateral, only to the extent its prepetition claim and lien are valid, and with the same priority it held as of the petition date, subordinate in all respects to the Carve-Out and the DIP liens; the motion describes those replacement liens as also subordinate to the adequate protection liens and the prepetition liens.
• The replacement lien is deemed perfected on entry of the interim order without possession or filings.
• To the extent that protection proves insufficient, Mizzen receives a section 507(b) superpriority claim for the shortfall, senior to section 507(a)(2) claims other than the Carve-Out, the DIP superpriority claims, and, where the prepetition liens are senior to Mizzen's, the lender's adequate protection claims.
• Mizzen is to receive copies of all reporting delivered to the lender, retains the adequate protection granted under the interim cash collateral orders, and reserves its right to object to the motion on a further interim basis or at the final hearing.

Waivers

• Subject to and effective upon entry of the final order, in consideration of the lender's agreement to fund the Carve-Out:
  • Section 506(c): no administration expenses may be charged against or recovered from the DIP collateral or the prepetition collateral, except to the extent of the Carve-Out, or from the lender, without its prior written consent
  • Section 552(b): the "equities of the case" exception does not apply to the proceeds, products, offspring, or profits of the prepetition or DIP collateral
  • Marshaling and similar doctrines do not apply, except that the lender must recover from avoidance-action proceeds only after exhausting all other available DIP and prepetition collateral
• Upon entry of the interim order, and subject only to third-party challenge rights, the debtors and their estates release the lender in both capacities and its affiliates, advisors, and representatives from all claims relating to the DIP and prepetition obligations, liens, and loan documents, including lender-liability and equitable subordination theories and any attack on the validity, priority, extent, enforceability, perfection, or avoidability of its liens and claims, excepting only claims a court determines by final, non-appealable order primarily result from bad faith, fraud, gross negligence, or willful misconduct.

Permitted Variance

• Operating disbursements for any one-week period may not exceed 115% of budgeted disbursements on an aggregate basis; favorable variances may be carried forward and added to permitted disbursements in a subsequent testing period.
• Testing begins two weeks after entry of the interim order and runs each Friday, measured as of the week ending two Sundays prior to the current week.
• Variance reports are due to the lender, its advisors, and committee counsel by 5:00 p.m. prevailing Eastern time each Friday beginning after the second full week, with an explanation of each material variance and whether it is temporary or permanent; beginning the third week, the reports must carry line-item commentary on every favorable and unfavorable deviation greater than $50,000.
• The approved budget, prepared by the debtors and approved by the lender, covers the period from the filing of the motion through Dec. 31, 2026 on a weekly line-item basis, though the budget exhibit itself runs as a cash flow forecast through Jan. 1, 2027; its weekly lines carry rent income of $165,800, ancillary income of $6,400 and reimbursement income of $40,400, with DIP interest payments in cash monthly in arrears of $11,100, $12,800 and $14,100.

Conditions Precedent

• Entry of the interim order for the interim advances or the final order for the final advances, in form and substance satisfactory to the lender in its sole discretion, including an express finding that the advances are protective advances under Sections 4.11, 7.6, and 7.8 of the leasehold mortgage that preserve the lender's rights as against the fee mortgagee
• Agreement on substantially final definitive documentation and an approved budget satisfactory to the lender in its sole discretion, provided that the lender will fund the interim advance on entry of the interim order and execution of the term sheet
• No default or event of default having occurred and continuing, compliance with any milestones and with the approved budget, prior written notice of borrowing, accuracy of representations and warranties, and payment of all out-of-pocket costs, fees, and expenses owed to the lender; the motion states the budget condition as compliance within 115% on a cumulative basis, while the interim order tests disbursements for any one-week period at 115% of budget on an aggregate basis
• The term sheet is not binding until executed and becomes null and void absent the lender's written consent if the motion seeking the interim order was not filed by Sept. 15, 2026 or the interim order is not entered by Sept. 17, 2026; the motion itself is dated and was filed Sept. 17, 2026.

Covenants and Sale Milestones

• Retention of a co-broker acceptable to the lender to market the mortgaged property within 21 days of the lender's designation of that co-broker
• Seeking court approval of a sale of substantially all of the borrowers' property, including the leasehold interest, in form and substance reasonably acceptable to the lender, by Nov. 30, 2026
• Closing of that sale by Dec. 31, 2026, extended to Jan. 31, 2027 if a binding, duly executed purchase agreement has been entered, or a later date the lender agrees to in its sole discretion
• The debtors, their professionals, and the broker must update the lender on the sale process at least weekly and deliver copies of indications of interest, letters of intent, and bids within one day of receipt; the loan documents also carry the usual affirmative and negative covenants, including limits on indebtedness, liens, investments, acquisitions, restricted payments, and asset dispositions, and reporting on the budget and permitted variances.

Events of Default and Remedies

• Events of default include:
  • Failure to make any payment on the protective advances, including interest, or any adequate protection payment on the prepetition obligations, when due
  • Failure to obtain a final order by Oct. 2, 2026
  • Breach of representations and warranties, or failure to comply with the affirmative or negative covenants, the term sheet, the approved budget including permitted variances, or the interim or final order in any respect
  • Failure to meet the co-broker retention, sale approval, or sale closing milestones
  • Dismissal of the cases, conversion to Chapter 7, or suspension under section 305
  • Appointment of a trustee or receiver, or of a responsible officer or examiner with enlarged powers
  • Any superpriority claim or lien arising pari passu with or senior to the lender's claims, charges, or liens
  • Any payment of principal or interest on prepetition indebtedness or payables other than to the lender or as authorized by orders satisfactory to it in its sole discretion
  • Stay relief permitting foreclosure on material assets or other actions with a material adverse effect on the borrowers or their estates
  • Reversal, amendment, supplementation, stay, vacatur, or modification of either order without the lender's prior written consent, or an application for such an order
  • Any DIP loan document ceasing to be valid or effective or being contested by the debtors, or the DIP liens ceasing to be valid, perfected, and enforceable
  • Filing a Chapter 11 plan that does not propose to repay the DIP obligations in full in cash on the effective date, absent the lender's written consent
  • The filing of a challenge by the debtors or by any party the debtors support
  • An assertion in any pleading that the guaranties in the existing loan documents are not valid and binding
  • Entry of an order avoiding or requiring repayment of any payments made to the lender on account of the DIP obligations
  • Any party in interest challenging, objecting to, or contesting the characterization of the advances as protective advances under the existing loan documents or the lender's authority to make them
• On an event of default the lender may deliver a termination declaration accelerating all DIP obligations, terminating or restricting the remaining commitment, ending the facility as to any future lender obligation, and terminating or restricting the use of cash collateral; the stay is modified so that 10 business days after that date, on written notice to the debtors, committee, and U.S. Trustee, the lender may exercise all rights and remedies against the DIP collateral, subject to the Carve-Out.
• During the remedies notice period the debtors may use cash collateral only to fund the Carve-Out and pay shared services and other expenses critical to preserving the estates under the approved budget, and the debtors and committee may seek an emergency hearing; absent a hearing scheduled or being scheduled on the alleged default, the stay terminates automatically at the end of the period and the debtors waive the right to seek relief impairing the lender's remedies.
• For a challenge to the protective-advance characterization, the lender's sole remedy is to terminate the remaining commitment without affecting the DIP liens or obligations, though it may seek further relief from the court.
• The lender must give written notice of an event of default to the debtors, the committee and the U.S. Trustee, but that notice is informational only and is not a prerequisite to the default's occurrence.

Indemnification

• Subject to and effective upon entry of the final order, the borrowers indemnify the lender in both capacities and its affiliates, successors, officers, directors, employees, agents, attorneys, advisors, controlling persons, and members against all losses, costs, expenses, and liabilities arising out of the financing and any actual or proposed use of proceeds, excluding amounts arising from a successful challenge or from an indemnified party's gross negligence or willful misconduct as determined by final, non-appealable judgment. The indemnity carries priority and lien status equal to the DIP superpriority claims, and no party is liable for special, indirect, consequential, or punitive damages.

Key Dates

• Petition date: June 4, 2026; the committee was appointed Aug. 21, 2026, though the term sheet dates the appointment Aug. 20, 2026
• The proposed interim order recites an interim hearing held Sept. 16, 2026, the day before the motion was filed Sept. 17, 2026
• Objection deadline: Sept. 24, 2026 at 4:00 p.m. prevailing Eastern time
• Final hearing: Oct. 1, 2026 at 12:00 p.m. prevailing Eastern time, which the court may dispense with if no objections are timely received; a final order must be entered by Oct. 2, 2026 to avoid an event of default
• Challenge period expires Nov. 13, 2026; sale approval motion by Nov. 30, 2026; sale closing by Dec. 31, 2026, or Jan. 31, 2027 with a signed purchase agreement

Governing Law and Jurisdiction

• The bankruptcy court has jurisdiction over the parties' rights under the term sheet and retains exclusive jurisdiction over implementation, interpretation, and enforcement of the interim order; if the bankruptcy court does not exercise jurisdiction, the parties submit to the federal and state courts of New Jersey, waive trial by jury, and agree that New Jersey law governs to the extent state law applies.

$10.9M Seven Mortgaged Properties / First Financial Bank DIP Terms

Borrower(s) / Guarantor(s)

• Fourteen debtor borrowers, paired as a real estate entity and a leasing entity for each of seven properties: 5707 MacCorkle Avenue Real Estate LLC and 5707 MacCorkle Avenue Leasing LLC; 771 Corporate Drive Real Estate LLC and 771 Corporate Drive Leasing LLC; 3413 Tittabawassee Road Real Estate LLC and 3413 Tittabawassee Road Leasing LLC; 4328 Bay Road Real Estate LLC and 4328 Bay Road Leasing LLC; South Loop West Real Estate LLC and South Loop West Leasing LLC; 400 Greens Road Real Estate LLC and 400 Greens Road Leasing LLC; and 2974 Coppercreek Road Real Estate LLC and 2974 Coppercreek Road Leasing LLC. The borrowers are jointly and severally liable for all DIP obligations.
• Each of the seven prepetition loans is guaranteed by David A. Shabsels and Michael A. Shabsels under continuing guaranty agreements, and cross-guaranteed by the borrower pairs under the other six loans, with each cross-guaranty added as the corresponding loan closed between March 2021 and September 2023.
• The motion is captioned in both the jointly administered lead case, DAMIS Holdings LLC, Case No. 26-16439 (CMG), and the separate case of 2974 Coppercreek Road Real Estate LLC, Case No. 26-20450 (CMG), for which joint administration is requested.

Agent / Lender(s)

• First Financial Bank, which serves as both the prepetition secured lender under the seven loans and the DIP lender. Vorys, Sater, Seymour and Pease LLP and Blank Rome LLP act as its counsel in both capacities.

DIP Commitments

• A secured superpriority debtor-in-possession non-revolving line of credit in an aggregate principal amount of up to $10,943,100.00, consisting of:
  • $6,899,300.00 in new money DIP loans, comprising up to $3,655,700.00 in interim advances available upon entry of the interim order and the balance upon entry of the final order
  • $4,043,800.00 in roll-up DIP loans, equal to twice the amount of cash funded for the shared services agreements identified in the approved budget
• The interim order describes the final new money tranche as "no less than" $3,243,600.00, while the motion and the term sheet describe it as the remaining amount of the total commitment, with the $10,943,100.00 aggregate ceiling bounding the tranches together.
• Borrowing is further capped by property-level draw caps, with a stated portion of each cap available before entry of the final order: MacCorkle $772,900.00 (of which $284,200.00 pre-final); Corporate Drive $652,800.00 ($13,400.00); Tittabawassee $1,568,300.00 ($1,103,300.00); Bay Road $1,118,900.00 ($827,900.00); South Loop $1,042,200.00 ($575,000.00); Greens Road $1,002,600.00 ($436,400.00); and Coppercreek Road $741,600.00 ($415,600.00). The seven caps total $6,899,300.00, matching the new money commitment, while the seven pre-final amounts total $3,655,800.00, or $100 more than the stated $3,655,700.00 interim availability.
• The roll-up converts up to $4,043,800.00 of prepetition obligations into DIP obligations on a cashless 2:1 basis, without novation, repayment or release, effective upon entry of the final order and the funding of the new money DIP loans; the same paragraph nonetheless recites that the lender would not extend credit "without approval of the Roll-Up upon entry of this Interim Order," and describes the roll-up as consideration for the agreement of the prepetition lender, rather than the DIP lender, to fund under the facility. The roll-up is expressly subject to third-party challenge.
• Advances made and repaid may not be reborrowed without the lender's consent, which it may give or withhold in its sole discretion, and the borrowers waive any right to challenge that decision.
• Borrowing requests may be submitted no more frequently than every other week and only for projected uses for the subsequent two-week period.
• Amendments, waivers, consents and other modifications that are not material require no further court approval, and must be provided to the U.S. Trustee and committee counsel substantially concurrently with being implemented.
• Where the documents conflict, the interim order controls over the term sheet and the motion, and the term sheet controls over the motion; the interim order also controls over the sixth interim cash collateral order and its predecessors [D.I. 263, 427, 582, 727, 974].
• The chief restructuring officer, Perry Mandarino, analyzed projected cash flows, capital expenditure requirements, tenant improvement obligations and other operating costs across all seven property groups and concluded that the borrowers require up to $10,943,100.00 to fund preservation and operation of the properties through the anticipated sale process.
• The proposed interim order attached as Exhibit A is marked as a draft subject in all respects to further review, revision and approval by the debtors, the prepetition lender and the DIP lender, with several provisions, including the carve-out, one event of default and the remedies paragraph, carried in double brackets.

Prepetition Debt

• Seven separate loans made to special purpose entities holding leasehold interests in income-producing commercial real estate, each evidenced by a promissory note and governed by a loan agreement, recorded leasehold mortgage or deed of trust, assignment of rents and leases and related documents identified on Schedule A to the term sheet.
• As of the petition date the borrowers are jointly and severally indebted for principal, accrued interest, fees, costs and expenses as follows: MacCorkle Loan $8,443,545.00; Corporate Drive Loan $6,949,994.00; Tittabawassee Loan $15,035,523.00; Bay Road Loan $9,449,836.00; South Loop Loan $11,271,548.00; Greens Road Loan $14,077,147.00; and Coppercreek Loan $13,031,637.00, aggregating $78,259,230.00. The interim order heads that section "Outstanding Obligations (Amounts Reserved)" and describes the amounts as "to be provided," and the term sheet's conditions precedent make the stipulated amounts subject to the lender's review and confirmation.
• The mortgaged properties are 5707 MacCorkle Avenue, Charleston, West Virginia; 771 Corporate Drive, Lexington, Kentucky; 3413 Tittabawassee Road (with 3175 Westbay Drive and 3343 Tittabawassee Road), Saginaw, Michigan; 4328-4460 Bay Road, Saginaw, Michigan; 2616-2626 S. Loop W., Houston, Texas; 400 Greens Road, Houston, Texas; and the Coppercreek property. The motion's introduction locates the Coppercreek property at 2974 Coppercreek Road, Fort Worth, Texas, while the debtors' stipulations, the loan documents schedule and the recorded deed of trust place it at 2974 Coppercreek Road, St. Louis, Missouri, together with 9406 Canfield Court and 2907 Caddiefield Road, Ferguson, Missouri.
• The lender holds properly perfected first-priority security interests in each property group's leasehold interests, improvements, appurtenances, fixtures, personal property and proceeds, together with an assignment of and security interest in the rents, leases, occupancy agreements, issues, profits and other income.
• Because the real property collateral consists of leasehold interests, the collateral structure for each loan includes ground lease recognition, subordination, non-disturbance, estoppel and attornment agreements, which give the lender as leasehold mortgagee notice of tenant defaults, cure periods for monetary and non-monetary defaults before termination becomes effective, and, subject to their terms, the option to require a replacement ground lease on substantially the same terms and remaining term if the ground lease is terminated or rejected in bankruptcy.

Cash Collateral

• The borrowers are authorized to continue using all of the lender's cash collateral, defined to include the rents and other income generated from the collateral and proceeds thereof, solely for the purposes set forth in the interim order and consistent with the approved DIP budgets, including to make the adequate protection payments, through termination of the term sheet.
• The debtors acknowledge that the lender's prepetition security interest in rents and other income continues postpetition under section 552(b)(2), and in proceeds, products, offspring and profits under section 552(b)(1), to the extent provided by applicable law.
• The court previously granted the cash collateral motion filed June 24, 2026 [D.I. 152] on an interim basis in a series of orders, certain of which authorized the borrowers' use of the lender's cash collateral.

Interest Rate

• 7.0% per annum (700 basis points), fixed, on all advances under the DIP loan
• Default Rate Increase: an additional 5.0% (500 basis points) after maturity or the occurrence of an event of default
• Accrued interest is due and payable monthly in arrears on the first day of each month following the first advance, calculated on actual days elapsed over a 360-day year; all remaining accrued and unpaid interest, together with principal, late fees, the lender's reasonable and documented legal fees and disbursements, and any other charges, is due in cash on the maturity date.
• The seven budget exhibits carry both a weekly DIP interest accrual at 7% that is added to the ending DIP balance and a separate line for DIP interest payments in cash monthly in arrears.
• Adequate protection interest on the prepetition obligations accrues at the contractual non-default rate.

Fees

• Finance fee: a non-refundable 1% of the aggregate of all advances made under the DIP loan. No commitment fees or unused line fees.
• Lender Professional Fees: non-refundable payment of all reasonable and documented fees and expenses arising from negotiating, documenting, approving, administering, monitoring or enforcing rights under the term sheet or related to the cases, including those of Vorys, Sater, Seymour and Pease LLP, Blank Rome LLP and any other lender-retained professionals, not subject to court approval or interim or final fee applications.
• The interim order sets a 10-business-day review period after receipt of an invoice by counsel for the borrowers, the committee and the U.S. Trustee, with a timely written objection limiting payment to the unobjected amounts pending agreement or a court order; the motion's concise statement describes the period as ten days, and the term sheet as five days. The review period does not apply to fees paid on the effective date of a plan or at the closing of a sale that pays the prepetition and DIP obligations in full.
• Separately, the borrowers are authorized and directed to pay on the funding date of the interim advances all reasonable and documented fees, costs and expenses of the lender's professionals incurred on or after the petition date, outside the review procedure.
• Invoices need not follow any particular format or the U.S. Trustee guidelines, but must carry sufficient detail to assess reasonableness, including a general description of matters, timekeepers, hourly rates, hours billed and, for law firms, year of law school graduation, with redactions for privilege preserved.

Maturity

• All DIP obligations are immediately due and payable upon the earliest to occur of:
  • The effective date of a confirmed Chapter 11 plan
  • Closing on the final sale or other disposition of all or a substantial portion of the borrowers' assets securing the prepetition obligations and the DIP loan
  • Conversion of any of the cases to Chapter 7
  • Dismissal of any of the cases
  • Appointment of a Chapter 11 trustee
  • Acceleration of the DIP loan and termination of further advances following an event of default
  • Six months from the date of issuance, subject to an automatic 60-day extension if a sale of the borrowers' real property has been approved but remains pending closing
• The parties may agree in writing to extend the maturity date.
• On the closing of a sale of all or substantially all of any borrower's assets, that borrower may request no further draws and the lender has no further obligation to lend to it, and net proceeds are distributed first to outstanding principal under that borrower's prepetition promissory note, second to outstanding interest under that note, third to outstanding principal under the DIP loan, and fourth to outstanding interest under the DIP loan, with any remainder held by the estate pending further order of the court.
• Net proceeds are gross sale price less court-allowed broker commissions, less reductions or closing payments for real estate taxes on the assets sold, less all carve-out amounts included but unpaid at closing in the applicable approved budget, and less other costs customarily allocated to seller under the purchase agreement and reflected on the settlement statement.
• Any unused amounts allocated in the approved budget for the lender's legal fees are redistributed equally among the borrowers whose assets remain in their estates, equally increasing each such borrower's draw cap and legal fee allocation.
• The DIP obligations are not discharged by confirmation of a plan of reorganization or liquidation; they must be paid in full on the plan effective date, and the borrowers have waived discharge as to those amounts under section 1141(d)(4).
• The DIP liens, superpriority claims and remedies continue until consummation of an "Acceptable Plan," defined as a plan in form and substance acceptable to both the DIP lender and the prepetition lender that pays all DIP obligations and all prepetition obligations in full in cash on the effective date and does not impair either party's claims or liens without prior written consent, or until the DIP obligations are paid in full in cash and the commitments terminate; the adequate protection liens and obligations run until the earlier of consummation of an Acceptable Plan and repayment in full in cash.

Carve Out

• Carried in double brackets in the draft interim order, and consisting of the sum of:
  • All fees payable to the Clerk of the Court and the U.S. Trustee under 28 U.S.C. § 1930(a), plus interest at the statutory rate, which are not subject to any budget
  • An amount, whether funded from DIP loans, operating cash flow or proceeds of disposition of the prepetition or DIP collateral, equal to the cumulative amount of shared services payable by the borrowers as set forth in the approved DIP budget
• The carve-out is reduced on a dollar-for-dollar basis weekly by amounts actually paid, reserved or set aside on its account, without duplication, and nothing in the carve-out provision increases the amount of DIP loans the lender is committed to fund, increases budgeted shared services, or requires funding after expiration of the default remedies period.
• The carve-out carries no component for the fees of professionals retained by the debtors or the committee, and the interim order provides that neither the DIP lender nor the prepetition lender is responsible for paying or reimbursing any professional's fees or Clerk and U.S. Trustee fees. It is not a cap on those fees or on intercompany administrative claims payable from a source other than the prepetition or DIP collateral.
• Investigation Budget: the motion and the term sheet permit up to $35,000.00 of the carve-out to be used by the committee solely to investigate claims against the prepetition lender within the challenge period, while the interim order frames the same $35,000.00 as an aggregate cap on proceeds of the DIP facility, DIP collateral or prepetition collateral including cash collateral used for that purpose, and requires such use to comply with the approved DIP budget.

Use of Proceeds

• DIP proceeds may be used solely for maintenance and repairs and other costs of maintaining the mortgaged properties, providing adequate protection to the secured lender, operating expenses, funding the carve-out, and other related costs, in each case in accordance with the approved DIP budgets and the DIP orders.
• No proceeds may satisfy any claim or obligation of a non-borrower debtor except indirectly through the borrowers' payment of shared services agreement amounts under the approved DIP budget.
• Neither DIP proceeds nor the lender's cash collateral may be used to assert claims or causes of action against the DIP lender or the prepetition lender or their agents, to challenge the DIP loan, the prepetition obligations or the related liens, to investigate, initiate, prosecute, join or finance any such litigation, or to seek relief impairing either lender's rights or recovery on the collateral, subject only to the $35,000.00 investigation budget.

Credit Bid

• Subject to the lien priorities set forth in the interim order and to section 363(k), the DIP lender may credit bid all or any portion of the DIP obligations in any sale of the DIP collateral, and the prepetition lender may credit bid up to the full amount of the prepetition obligations, including any adequate protection obligations, in any sale of the prepetition collateral, in each case in accordance with any bidding or sale procedures order and without further court order, whether the sale is effectuated under section 363(k), 1123 or 1129(b), by a Chapter 7 trustee under section 725, or otherwise.
• It is an event of default if any debtor files or supports a motion asserting that either lender lacks the right to credit bid under section 363(k).

Avoidance Actions

• The DIP liens do not extend to chapter 5 avoidance actions, but upon entry of the final order extend to the proceeds thereof, with the lender required to look last to avoidance-action proceeds and to seek recovery first from other DIP collateral.
• Subject to and effective upon entry of the final order, the DIP superpriority claims are payable from proceeds or property recovered in connection with avoidance actions and section 724(a) claims, and the adequate protection liens likewise extend to avoidance-action proceeds.

Challenge Period and Budget

• The facility is conditioned on the debtors' stipulations, effective upon entry of the interim order, to the amount, allowance and non-avoidability of the prepetition obligations as set forth in the prior cash collateral orders and Schedule A, to the validity, binding effect, enforceability, non-avoidability and perfection of the prepetition liens and their seniority over all other liens on the prepetition collateral, to the absence of any offsets, defenses, counterclaims or estate claims against the lender, and to a waiver, discharge and release of any right to challenge them. One clause states that the prepetition obligations are legal, valid, binding and non-avoidable obligations "of the Prepetition Lender" rather than of the debtors.
• The stipulations bind the debtors and their estates irrevocably as of the petition date, and bind all other parties in interest unless a party with standing granted by court order files an adversary proceeding or contested matter within 60 days after entry of the interim order; if the cases convert to Chapter 7 or a Chapter 11 trustee is appointed before that date, the challenge period extends to the later of the time remaining and 30 days after the appointment.
• A separate standing order is a prerequisite to prosecution of a challenge by the committee or any other party in interest, and nothing in the interim order confers standing.
• Absent a timely challenge, or if a challenge is overruled, the prepetition obligations become allowed claims not subject to counterclaim, setoff, recoupment, reduction, subordination, recharacterization, defense or avoidance, and the prepetition liens are deemed legal, valid, binding and perfected as of the petition date. A timely challenge leaves the stipulations binding on all other parties except as expressly challenged; an appointed trustee is not bound by the debtors' stipulations for purposes of a challenge proceeding.
• Where a challenge is asserted as to any borrower's prepetition obligations or liens, net proceeds of a sale of all or substantially all of that borrower's assets are distributed to repay the DIP obligations under the term sheet before becoming property of the estate under section 551.
• Each of the seven property groups operates under its own approved DIP budget, approved by and in form and substance reasonably acceptable to the lender; the budgets are attached as Exhibit 2 to the interim order, though the motion elsewhere describes them as attached as Exhibits B-1 through B-7. The budgets run as weekly cash flow forecasts through Jan. 1, 2027, and project aggregate draws equal to each property group's full draw cap, with aggregate ending DIP balances of roughly $7.06 million against the $6,899,300.00 new money commitment, reflecting the capitalized finance fee and accrued interest.
• The budget exhibits' beginning total debt balances for five of the seven property groups differ from the stipulated petition-date obligations for the corresponding loans.

Securities and Priorities

• Because the same institution is both prepetition and DIP lender, the DIP liens are granted junior to the prepetition liens so that the prepetition liens retain their status as "Qualified Mortgages" under the applicable ground leases; the DIP liens do not constitute a Qualified Mortgage and do not negate, void or modify the lender's status as a Qualified Mortgagee or the status of any mortgage or deed of trust securing the prepetition obligations.
• Subject to the Carve-Out, the DIP obligations are allowed superpriority administrative expense claims under section 364(c)(1) against each borrower's estate, with priority over all administrative expenses, adequate protection claims and diminution claims, including those under sections 105, 328, 330, 331, 503(b), 506(c), 507(a) other than 507(a)(1), 507(b), 726, 1113 and 1114, and treated as allowed section 503(b) expenses for purposes of section 1129(a)(9)(A), payable from all prepetition and postpetition property and, upon entry of the final order, avoidance-action proceeds, subject to the carve-out and the lender's senior prepetition liens. The term sheet instead cites section 364(d)(1) as the basis for the superpriority claim.
• No other superpriority claim may be granted unless junior to the DIP superpriority claims and the adequate protection claims and consented to by the lender.
• The lender is granted automatically perfected DIP liens, without any filing or recording, on all prepetition and postpetition property of the borrowers and proceeds, including accounts, inventory, equipment, fixtures, commercial tort claims, deposit accounts, cash, investment property, intellectual property, insurance rights, intercompany claims, real property, leaseholds, rents and profits, and claims and causes of action, with the following priorities, in each case subject to the Carve-Out and to the prepetition lender's liens:
  • Section 364(c)(2): first-priority senior liens on all unencumbered property, including unencumbered cash, receivables, leasehold interests and, upon entry of the final order, avoidance-action proceeds
  • Section 364(c)(3): second-priority liens on all DIP collateral, which the interim order states are senior to all existing liens other than the prepetition liens and permitted liens, with holders of the primed liens deemed to have consented; the motion and term sheet cite section 364(d) for the priming grant
  • Section 364(c)(3): liens junior only to permitted liens, limited to statutory tax liens not yet due or contested in good faith and ordinary-course mechanics', materialmen's, warehousemen's, carriers', repairmen's and landlord's liens, with no lien securing borrowed money, funded debt, letter-of-credit obligations or other financing obligations qualifying, and each permitted lien remaining subject to avoidance, recharacterization, subordination, surcharge, reduction, disallowance and challenge
• The DIP liens are senior to any lien avoided and preserved under section 551, are enforceable against any trustee and upon conversion or dismissal, may not be made subject to or pari passu with any later-granted lien other than the adequate protection liens, and are not subject to sections 510, 549 or 550.
• Lease and license anti-assignment provisions requiring counterparty consent or payment of fees to a governmental entity are deemed inconsistent with the Bankruptcy Code and have no effect on the grant of the DIP liens and adequate protection liens, without impairing any counterparty's right to object to assumption or assignment on other grounds; the lien-grant paragraph excepts nonresidential real property leases from that override, while the parallel perfection provision carries no such exception, excepts stamp taxes instead, and reaches leasehold interests expressly.
• The lender may, but need not, file financing statements, mortgages, control agreements or notices of lien, or record a certified copy of the interim order, with the date of perfection in all events being the date of the interim order; the borrowers must use commercially reasonable efforts to cooperate, at their own cost.
• Insurance: until the DIP obligations are paid in full, the borrowers must maintain casualty and loss coverage on the prepetition and DIP collateral as required by the prepetition loan documents and name the DIP lender as loss payee or additional insured.

Adequate Protection

First Financial Bank

• Payment of ground rent, including prepetition delinquent rent, to the applicable ground lessors, or alternatively to the applicable fee mortgagee, which when made satisfies the ground rent obligations under the applicable recognition agreement and ground lease, to the extent provided in the approved DIP budget
• Payment of real estate taxes per the approved DIP budgets
• Continued payment of postpetition interest on the prepetition obligations at the contractual non-default rate, to the extent provided in the approved DIP budget
• Section 507(b) superpriority administrative expense claims for any net postpetition diminution in value, subject and subordinate only to the Carve-Out and the DIP superpriority claims and senior to all other claims against the borrowers' estates. The term sheet separately provides that the lender may not assert a section 507(b) claim on account of use of cash collateral consistent with the approved budget.
• Automatically perfected replacement adequate protection liens in the DIP collateral in the amount of any diminution in value, and, subject to entry of the final order, liens on avoidance-action proceeds; the interim order describes those liens as senior to all other liens on and claims against the DIP collateral and subordinate only to the Carve-Out, while the same order elsewhere subordinates the DIP liens to the prepetition liens and makes the adequate protection liens subject to the challenge provisions
• Payment of the reasonable and documented out-of-pocket fees, costs and expenses of the prepetition lender, including those of Vorys, Sater, Seymour and Pease LLP and Blank Rome LLP, incurred after the petition date, without separate court approval or fee applications
• Maintenance of cash management arrangements consistent with the cash management order and compliance with all reporting requirements in the prepetition loan documents; failure to comply with the term sheet covenants is an event of default
• The lender is deemed to have requested stay relief and adequate protection for any diminution in value from and after the petition date, and the interim order preserves its section 507(b) rights and its right to seek additional or alternative adequate protection without any finding that the protection granted is in fact adequate

Waivers

• Subject to and effective upon entry of the final order, and provided the lender funds in accordance with the term sheet and the orders:
  • Section 506(c): no administration expenses may be charged against or recovered from the DIP collateral or the prepetition collateral, except to the extent of the Carve-Out, or from either lender, without prior written consent, and no consent may be implied from any other action, inaction or acquiescence
  • Section 552(b): the "equities of the case" exception does not apply to the proceeds, products, offspring or profits of the prepetition or DIP collateral
  • Marshaling and similar doctrines do not apply to the DIP collateral or the prepetition collateral
• Subject to and effective upon entry of the final order, and subject to third-party challenge rights as to the prepetition lender, the debtors and their estates release the DIP lender and the prepetition lender and their affiliates, advisors and representatives from all claims relating to the DIP and prepetition obligations, liens, claims and loan documents, including lender-liability and equitable subordination theories and any attack on the validity, priority, extent, enforceability, perfection or avoidability of their liens and claims. The release in favor of the DIP lender as to the interim advances and the related DIP liens and obligations is effective upon entry of the interim order and is not subject to the challenge period. Excluded are claims a court determines by final, non-appealable order primarily result from bad faith, fraud, gross negligence or willful misconduct.

Permitted Variance

• The interim order provides that actual disbursements for each line item of each approved DIP budget, measured cumulatively from the petition date through the end of each weekly measurement period and on a borrower-by-borrower basis, may not vary by more than 15% of the projected amount without the written consent of both the prepetition lender and the DIP lender, which may be given by email; the term sheet tests cumulative disbursements at 15% of the applicable approved budget measured weekly, without the line-item qualifier.
• A weekly variance report setting forth actual results for each line item as of two Sundays prior to the current week is due to the prepetition lender, the DIP lender and the committee by 5:00 p.m. prevailing Eastern time each Friday.
• The borrowers must also provide the lender and its advisors with all reporting and diligence information requested, and reasonable access during normal business hours to books, records, personnel and management.

Conditions Precedent

• Entry of the interim order for the interim availability, or the final order for the remaining amounts, in form and substance satisfactory to the lender and its counsel, including the debtors' stipulations effective upon entry of the interim order to the amount, allowance and non-avoidability of the prepetition obligations as set forth in the prior cash collateral orders and Schedule A, subject to the lender's review and confirmation and to the 60-day challenge period
• Compliance with the approved DIP budget within the 15% permitted variance on a cumulative basis, no event of default having occurred and continuing, submission of a borrowing request on the prescribed form, and all other conditions in the term sheet
• Except for the carve-out, the lender has no obligation to make any DIP loan unless all conditions precedent are satisfied in full or waived
• The term sheet is not binding until executed and becomes null and void absent the lender's written consent if the borrowers did not file a motion seeking entry of the interim order by Sept. 15, 2026 or if the interim order is not entered by Sept. 17, 2026; the motion was filed Sept. 17, 2026.

Covenants and Sale Milestones

• Seeking bankruptcy court approval of a sale of substantially all of the borrowers' real property, including their leasehold interests, by Nov. 30, 2026
• Closing of that sale by Dec. 31, 2026, extended to Jan. 31, 2027 if a binding, duly executed purchase agreement has been entered, or a later date the lender agrees to in its sole discretion
• Obtaining a final order by Oct. 2, 2026
• Maintaining adequate insurance on the property subject to the DIP liens, making monthly interest payments on the DIP loan, making monthly payments on the prepetition obligations in accordance with the applicable approved budget, and paying net proceeds in accordance with the term sheet and the orders
• Bid procedures, stalking horse selections and stalking horse agreements, any amendment to them, and the sale itself must be acceptable to the lender, and any sale of all or substantially all of the borrowers' property must provide for indefeasible payment in full in cash of both the prepetition obligations and the DIP obligations

Events of Default and Remedies

• Events of default include:
  • Failure to make any payment on the DIP loans, including interest, or any adequate protection payment on the prepetition obligations, when due
  • Failure to obtain a final order by Oct. 2, 2026
  • Breach of representations and warranties, failure to comply with the affirmative or negative covenants, the term sheet, the approved DIP budget including permitted variances, or the interim or final order in any respect
  • Failure to meet the sale approval or sale closing milestones
  • Dismissal of the cases, conversion to Chapter 7, or suspension under section 305
  • Appointment of a trustee or receiver, of a responsible officer or examiner with enlarged powers, of a fiduciary with management authority over senior management, or substantive consolidation of a borrower's estate with another estate
  • Any superpriority claim or lien arising pari passu with or senior to the lender's claims, charges or liens
  • Stay relief permitting foreclosure on material assets or other actions with a material adverse effect on the borrowers or their estates
  • Entry of any non-consented order revoking, reversing, staying, vacating, rescinding, modifying, supplementing or amending the cash management order or other first day orders in a manner materially adverse to either lender, or reversing, amending, supplementing, staying, vacating or modifying either DIP order without the lender's prior written consent, or an application for such an order
  • Any DIP loan document or loan document ceasing to be valid, binding or effective or being contested by a debtor, any debtor seeking or supporting disallowance of either lender's claim or a challenge to its liens, or the DIP liens ceasing to be valid, perfected and enforceable with the priority set forth in the order
  • Filing a Chapter 11 plan that does not propose to repay the DIP obligations in full in cash on the effective date, absent the lender's written consent
  • The filing of a challenge by the debtors, or by any party where the challenge is supported by the debtors, a provision carried in double brackets in the draft interim order
  • Any payment of principal or interest on prepetition indebtedness or payables other than to the lenders or as authorized by orders satisfactory to the DIP lender in its sole discretion
  • Seeking postpetition financing secured by the prepetition collateral from another party, or to use the lender's cash collateral, without its written consent
  • Seizure, garnishment or governmental taking of any portion of the collateral, or the borrowers' title becoming the subject of litigation or garnishment
  • Any sale, transfer, lease, encumbrance or other disposition of collateral without a court order and the lender's written consent
  • Entry of an order avoiding or requiring repayment of any payments made on account of the DIP obligations
• On an event of default the lender may deliver a termination declaration accelerating all DIP obligations, terminating, reducing or restricting any remaining commitment, ending the facility as to any future lender obligation without affecting the DIP liens or obligations, and terminating, reducing or restricting the use of cash collateral, in each case without application to the court, and may charge the default rate and exercise setoff rights against collateral in its possession.
• The stay is modified so that five business days after delivery of the termination declaration, with written notice to the debtors, the committee and the U.S. Trustee, the lender may exercise its rights and remedies against the DIP collateral and the prepetition collateral subject to the carve-out, unless the court determines before expiration of the period that an event of default has not occurred or is not continuing. The term sheet's remedies provision refers both to ten business days' prior notice and to the default continuing on the fifth business day; the motion and interim order use five business days.
• During the remedies notice period the borrowers may use cash collateral solely to fund the carve-out and pay shared services and other expenses critical to administration of the estates under the approved DIP budget, and the debtors and the committee may seek an emergency hearing; absent a contrary determination, the stay terminates automatically at the end of the period, and the debtors waive the right to seek relief impairing either lender's remedies. The term sheet adds that the lender may not exercise remedies if the court has scheduled or is in the process of scheduling a hearing on the alleged default.
• Remedies available on foreclosure include taking possession and control of the leasehold estates, exercising rights as assignee of leases and rents directly or through a receiver, and collecting rental income and profits.
• The lender must give written notice of an event of default to the debtors, the committee and the U.S. Trustee, which may be by email, but that notice is informational only and is not a prerequisite to the default's occurrence.

Indemnification

• Subject to and effective upon entry of the final order, the borrowers indemnify the DIP lender and the prepetition lender and their affiliates, successors, assigns, officers, directors, managers, employees, agents, attorneys, advisors, controlling persons and members against all losses, costs, expenses and liabilities arising out of the financing and any actual or proposed use of proceeds, excluding amounts arising from a successful challenge or, as determined by final, non-appealable judgment, from an indemnified party's gross negligence or willful misconduct; a following sentence limits liability to conduct found to have resulted solely from gross negligence, fraud, willful misconduct or breach of obligations under the DIP facility. The indemnity carries priority and lien status equal to the DIP superpriority claims, and no party is liable for special, indirect, consequential or punitive damages.
• Neither lender is deemed to control the debtors' operations or to act as a responsible person, owner or operator under CERCLA or similar statutes by reason of making loans or permitting the use of cash collateral, and neither is liable for claims arising from the debtors' prepetition or postpetition activities.

Key Dates

• Petition date: June 4, 2026, or Sept. 14, 2026 as applicable; joint administration was approved June 12, 2026 [D.I. 35], with a further joint administration order for the later-filed case left undated in the draft interim order
• Committee appointed Aug. 21, 2026 [D.I. 518]
• Motion filed Sept. 17, 2026 [Doc 1146]; the proposed interim order recites an interim hearing held Sept. 22, 2026, five days after filing, and the term sheet conditions its effectiveness on entry of an interim order by Sept. 17, 2026
• Objection deadline: Sept. 24, 2026 at 4:00 p.m. prevailing Eastern time; the debtors must file a notice of the final hearing within two business days after entry of the interim order
• Final hearing: Oct. 1, 2026 at 12:00 p.m. prevailing Eastern time, which the court may dispense with if no objections are timely filed; a final order must be entered by Oct. 2, 2026 to avoid an event of default
• Challenge period: 60 days after entry of the interim order; sale approval motion by Nov. 30, 2026; sale closing by Dec. 31, 2026, or Jan. 31, 2027 with a signed purchase agreement; budgets run through Jan. 1, 2027

Governing Law and Jurisdiction

• The bankruptcy court has jurisdiction over the parties' rights under the term sheet and retains exclusive jurisdiction over implementation, interpretation and enforcement of the interim order, including after dismissal of the cases; if the bankruptcy court does not have or does not exercise jurisdiction, the parties submit to the federal and state courts of New Jersey, waive trial by jury, and agree that New Jersey law governs to the extent state law applies.

$0.5M 2547 Brindle Drive / S&T Bank DIP Terms

Borrower(s) / Guarantor(s)

• 2547 Brindle Drive Real Estate LLC and 2547 Brindle Drive Leasing LLC, as borrowers, jointly and severally liable for all obligations under the DIP loan. No guarantors are identified in the consent order or the term sheet.

Agent / Lender(s)

• S&T Bank, which serves as both the prepetition lender to the borrowers and the DIP lender.

DIP Commitments

• A secured superpriority debtor-in-possession non-revolving line of credit in an initial principal amount of up to $500,000, with the option to increase through over-advances subject to the lender's approval:
  • $419,900 available upon entry of the consent order approving the term sheet on an interim basis
  • Upon entry of the final order, the remaining initial amount of the DIP loan, and, upon the borrowers' request, up to $490,000 in over-advances, subject to the lender's approval in all respects
• The consent order's recitals describe the lender's commitment as a $419,900 advance, while the term sheet frames that amount as the interim availability under a facility of up to $500,000 before over-advances.
• Advances made and repaid may not be reborrowed without the lender's consent, which it may give or withhold in its sole discretion.
• Borrowing requests may be submitted on a prescribed form no more frequently than bi-monthly and only for projected permitted uses for the subsequent two-week period under the approved budget.
• The term sheet is captioned for discussion purposes only, non-binding and subject to Federal Rule of Evidence 408, and preliminary and subject to further review and approvals; the consent order nonetheless approves it on an interim basis.
• Nothing in the consent order prejudices the rights of any party in interest, including any other party asserting a lien on the borrowers' assets, the committee and the U.S. Trustee, to object to approval of the term sheet or any subsequent DIP loan from the lender on a final basis.

Prepetition Debt

• The borrowers owe prepetition obligations to S&T Bank, described in the bankruptcy court's orders granting use of cash collateral; neither the consent order nor the term sheet states the outstanding amount. The DIP budget shows a beginning total debt balance of approximately $14,097,000 as of Sept. 4, 2026, rising to approximately $14,989,600 by Jan. 1, 2027.
• The collateral is described only as the property that is the subject of the existing loan documents; the property is identified in the budget exhibit as 2547 Brindle Drive Real Estate LLC (Susquehanna), and the budget carries ground rent of $87,500 per month, indicating a leasehold structure consistent with the other DAMIS property-level financings.

Cash Collateral

• The borrowers' use of cash collateral continues on the terms of the operative cash collateral order, the third interim order entered Sept. 1, 2026 [D.I. 979], as amended by the consent order in two respects: paragraph 2(a) is deemed amended to replace "September 11, 2026" with "October 2, 2026," and references to the "Budget" are deemed to refer to the DIP budget attached as Exhibit 2 to the consent order.
• The interim and final orders are to provide for the use of cash collateral pursuant to the approved budget and adequate protection for the lender's prepetition liens; the term sheet does not specify the components of that adequate protection.
• The lender is not entitled to assert a section 507(b) claim on account of use of cash collateral consistent with the approved budget.

Interest Rate

• 6.56% per annum, the non-default rate for the prepetition obligations, on all advances made under the DIP loan
• Default Rate Increase: an additional 5.0% (500 basis points) after maturity or the occurrence of an event of default
• Accrued interest is due and payable monthly in arrears on the first day of each month following the first advance, calculated on actual days elapsed over a 360-day year; all remaining accrued and unpaid interest, together with principal, late fees, the lender's reasonable legal fees and disbursements, and any other charges, is due in cash on the maturity date.
• The budget exhibit carries the DIP interest accrual line at 7%, not the 6.56% rate stated in the term sheet, and reflects both a weekly accrual added to the ending DIP balance and a separate monthly cash interest payment.

Fees

• Finance fee: 1% of the aggregate of all advances made under the DIP loan. No commitment fees or unused line fees are specified.
• Lender Professional Fees: reasonable and documented attorneys' fees and disbursements and all out-of-pocket expenses incurred by the lender in its DIP capacity in connection with the DIP loan, as set forth in the budget, payable within ten days of delivery of a statement to counsel for the borrowers, the U.S. Trustee and the committee. Statements need not be filed with the court and are not subject to court approval.
• An objecting party must file its objection within the same ten days, after which the objection is subject to resolution by the court; the parties are to endeavor in good faith to resolve objections consensually, and the borrowers must pay any unobjected portion.
• Statements are payable regardless of whether they are reflected in the approved budget, and such payments are not counted in determining the permitted variance.

Maturity

• The earliest to occur of:
  • The effective date of a confirmed plan in the cases
  • Closing on a sale or other disposition of all or a substantial portion of the assets of any of the borrowers
  • Conversion of any of the cases to Chapter 7
  • Dismissal of any of the cases
  • Appointment of a Chapter 11 trustee
  • Acceleration of the DIP loan and termination of further advances following an event of default
  • Six months from the date of issuance, subject to an automatic 60-day extension if a sale of the borrowers' real property has been approved but remains pending closing
• The parties may agree in writing to extend the maturity date.

Carve Out

• The DIP superpriority claim is subject to a carve out for the Case Administration Fees set forth in the approved budget, defined as the total of:
  • Fees payable to the Clerk of the Court and the U.S. Trustee under 28 U.S.C. § 1930(a), plus interest at the statutory rate
  • The cumulative amount of shared services set forth in the approved budget through the end of the budget period
• As with the other two facilities, the carve-out carries no component for the fees of professionals retained by the debtors or the committee, and no investigation budget is provided.

Use of Proceeds

• Proceeds may be used solely for maintenance and repairs and other costs of maintaining the borrowers' properties and operating expenses, including shared services and other related costs, in accordance with the approved budget.
• No portion of the DIP loan may be used in connection with asserting claims or causes of action against the lender or its agents, or in challenging the DIP loan, the prepetition obligations or any of the lender's rights with respect to them.

Avoidance Actions

• The DIP liens do not extend to the borrowers' or their estates' causes of action, but do extend to the proceeds of any causes of action, with the lender required to look last to those proceeds and to seek recovery first from other DIP loan collateral. Unlike the First Financial facility, the extension to proceeds is not conditioned on entry of a final order.

Securities and Priorities

• To secure all amounts owing under the DIP loan and the roll-up, the lender receives liens on all prepetition and postpetition property of the borrowers, personal and real, including the property that is the subject of the existing loan documents, granted under sections 364(c)(2), 364(c)(3) and 364(d) and deemed perfected without any further filings, though the lender may make state, UCC or mortgage filings and the borrowers must cooperate.
• The DIP liens are senior in all respects to any other liens granted in the cases, including any pre- and postpetition liens granted to the lender itself and any liens or claims of the borrowers. That structure differs from the First Financial facility, where the DIP liens are junior to the prepetition liens to preserve Qualified Mortgage status, and from the Bank of New Hampshire facility, where they are pari passu.
• The lender receives an allowed superpriority administrative expense claim under section 364(d)(1) in each case for all amounts owing under the DIP loan and the roll-up, with priority over all other claims and liens against the borrowers, including administrative expenses under sections 105(a), 326, 328, 330, 331, 503(a), 503(b), 506(c), 507(a), 507(b), 546(c), 546(d), 552(b), 726, 1113 and 1114, payable from and with recourse to all prepetition and postpetition property and proceeds, subject to the carve out for Case Administration Fees.

Roll-Up

• In consideration of the DIP loan, the lender receives a conversion of a portion of the prepetition obligations into secured superpriority postpetition obligations equal in right and priority to the DIP loan, in an amount equal to twice the amount of cash funded for the shared services agreement identified in the approved budget. No dollar cap on the roll-up is stated, and the term sheet contains no challenge period or reservation of rights as to it.

Waivers

• The borrowers waive the estate's rights under section 506(c), the section 552(b) "equities of the case" doctrine, and the equitable doctrine of marshaling, subject to the limitations set forth in the term sheet, with respect to the prepetition obligations and the DIP loan, in each case for amounts actually funded under the approved budget. The final order is to contain provisions protecting the lender from those provisions and doctrines.

Permitted Variance

• Disbursements set forth in the approved budget on a cumulative basis may not vary by more than 15% of the projected amount, measured weekly.
• The borrowers must provide the lender with financial information it reasonably requests, including a weekly report showing uses of all DIP loan advances and cash collateral and any variances to the approved budget, in form reasonably satisfactory to the lender.
• The budget is a weekly cash flow forecast for 2547 Brindle Drive Real Estate LLC (Susquehanna) dated Aug. 31, 2026 and running through Jan. 1, 2027, carrying monthly rent income of $191,700, ancillary income of $2,300, reimbursement income of $41,600, ground rent of $87,500, interest expense of $75,500 and principal repayment of $33,700. It reflects a beginning DIP balance of $107,600 in the week ended Sept. 4, 2026, aggregate DIP draws of approximately $863,400 over the forecast period and an ending DIP balance of approximately $1,000,300 at Jan. 1, 2027, inclusive of $14,600 in DIP fees and $15,800 in capitalized interest, against an initial facility of $500,000 plus up to $490,000 in discretionary over-advances available only after entry of the final order.

Conditions Precedent

• Entry of an interim order in form and substance satisfactory to the lender and its counsel
• Entry of an order approving use of the lender's cash collateral in form and substance satisfactory to the lender and its counsel, which may be the interim order itself
• The term sheet is not binding until executed and becomes null and void absent the lender's written consent if the borrowers have not filed a request for entry of the interim order by Sept. 16, 2026 or if the interim order is not entered by Sept. 17, 2026; the consent order was entered Sept. 16, 2026.

Events of Default and Remedies

• Events of default include:
  • Failure to comply with the approved budget, subject to the permitted variance, or with the final term sheet or any of its other provisions
  • Failure to obtain a final order by Oct. 2, 2026
  • Conversion or dismissal of any of the cases
  • Failure to maintain adequate insurance on the property subject to the DIP liens
  • Failure to make monthly interest payments on the DIP loan, or to pay the DIP loan and all related obligations at maturity
  • Failure to seek court approval of a sale of substantially all of the borrowers' real property, including their leasehold interest, by Nov. 30, 2026 and to close on a sale by Dec. 31, 2026; unlike the other two facilities, this milestone carries no extension to Jan. 31, 2027 for a signed purchase agreement
  • Filing a Chapter 11 plan that does not propose to repay the DIP loan in full in cash on the effective date, absent the lender's consent
  • Seeking postpetition financing secured by the prepetition collateral from another party, or to use the lender's cash collateral, without its written consent
  • Entry of any order reversing, amending, supplementing, staying, vacating or modifying the interim or final order, or an application for such an order, without the lender's prior written consent
  • Entry of any order granting another superpriority administrative expense claim or lien pari passu with or senior to the lender's DIP protections
• On an event of default, and on ten business days' prior notice by email to counsel for the borrowers, with copies to the U.S. Trustee and committee counsel, the lender may stop funding the DIP loan, terminate any remaining commitment, accelerate the maturity of the DIP loan, terminate any consent to further use of cash collateral, exercise all rights and remedies against the property subject to the DIP liens, and exercise all other available rights and remedies under the existing loan documents, any one or more in its sole discretion.
• The borrowers and the committee may seek an emergency hearing during that ten-business-day period, with all of their rights reserved, and the lender may not exercise remedies if the court has scheduled or is in the process of scheduling a hearing on the alleged default.

Terms Not Addressed

• The term sheet and consent order contain no debtor stipulations to the validity or amount of the prepetition obligations, no challenge period or investigation budget, no release of the lender, no indemnification provision, no credit bid provision, no express mandatory prepayment or net proceeds waterfall, no plan-discharge waiver under section 1141(d)(4), and no specified components of adequate protection. The consent order expressly reserves all parties' rights to object on a final basis.

Key Dates

• Petition date: June 4, 2026; cash collateral motion filed June 24, 2026 [D.I. 152]; operative cash collateral order entered Sept. 1, 2026 [D.I. 979]
• Term sheet dated and executed by counsel Sept. 15, 2026; consent order entered Sept. 16, 2026 [Doc 1121]; the debtors must file a notice of the final hearing within two business days after entry
• Proposed form of final order due no later than Sept. 24, 2026
• Initial objection deadline: Sept. 24, 2026 at 4:00 p.m. prevailing Eastern time; supplemental objection deadline for objections that could not have been raised earlier: Sept. 28, 2026 at 4:00 p.m. prevailing Eastern time
• Final hearing on the consent order, the term sheet and the cash collateral motion: Oct. 1, 2026 at 12:00 p.m. prevailing Eastern time; if no objections are timely filed, the court may enter the final order without further notice or hearing
• Final order required by Oct. 2, 2026; sale approval motion by Nov. 30, 2026; sale closing by Dec. 31, 2026; budget runs through Jan. 1, 2027

Governing Law and Jurisdiction

• The bankruptcy court has jurisdiction over the parties' rights under the term sheet and retains exclusive jurisdiction over implementation, interpretation and enforcement of the consent order; if the bankruptcy court does not have or does not exercise jurisdiction, the parties submit to the federal and state courts of New Jersey, waive trial by jury, and agree that New Jersey law governs to the extent state law applies.