DAMIS Holdings - Chapter 11 DIP Terms

$3.5M 830 County Road 64 / TriState Capital Bank DIP Terms

Borrower(s) / Guarantor(s)

• 830 County Road 64 Real Estate LLC and 830 County Road 64 Leasing LLC, as borrowers, jointly and severally liable for all obligations under the DIP loan. The borrowers hold the leasehold interest in the Big Flats Shopping Center, 831, 830, 821 and 845 County Road 64, Big Flats, New York, under the ground lease.
• No guarantors are identified in the motion, the interim or final orders, or the term sheet.
• The motion [Doc 1267] was filed Sept. 29, 2026. The interim order was entered Oct. 5, 2026 [Doc 1344], following an interim hearing held Oct. 1, 2026, and the final order was entered Oct. 23, 2026 [Doc 1487].

Agent / Lender(s)

• TriState Capital Bank, as DIP lender and as administrative agent under the existing loan documents for itself and Wayne Bank as prepetition lenders and for itself as DIP lender. Cullen and Dykman LLP acts as counsel to TriState and the agent.
• Elmira Real Estate Enterprises LLC is the landlord under the ground lease.

DIP Commitments

• A secured superpriority debtor-in-possession non-revolving line of credit in a principal amount of up to $3,500,000, approved on a final basis by the final order:
  • Up to $2,141,400 available upon entry of the interim order, pursuant to the approved budget
  • The remaining amount available upon entry of the final order, pursuant to the approved budget
• Upon entry of the final order, the borrowers are authorized to borrow up to the full amount of the protective advances, subject to the final order, the term sheet and the carve-out, without further action by the debtors or any other party.
• The interim and final orders both describe the final tranche as "no less than" $1,658,400, which together with the $2,141,400 interim tranche totals $3,799,800, exceeding the $3,500,000 aggregate cap stated in the same orders, the motion and the term sheet.
• Advances are structured as protective advances under Sections 4.3, 5.1 and 5.8 of the leasehold mortgage; the interim and final orders cite Sections 4.3 and 5.1. Repayment carries the priority of protective advances under the leasehold mortgage, and the DIP loan, with associated interest and fees, is to be repaid first out of the proceeds of any sale of the ground lease, subject to the carve-out.
• The final order defines the DIP loan documents as the existing loan documents, the term sheet, the interim order, the final order and all supplements to the existing loan documents, with the existing loan documents and supplements counting as DIP loan documents solely to the extent of the protective advances.
• Advances repaid may not be readvanced without the DIP lender's consent, which it may give or withhold in its sole discretion.
• Advance requests may be made on a form to be provided by the DIP lender no more frequently than bi-monthly and only for projected permitted uses for the subsequent two-week period under the approved budget. Each request must be accompanied by a list of the specific construction-related or other expenditures, with an explanation of why any non-construction expenditure cannot be funded from rents. To the extent cash flow from the ground lease is sufficient, shared services and other preservation expenses are paid from cash flow rather than DIP advances.
• Amendments, waivers and 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; the shared services line item in any amended approved budget may not be reduced from the prior approved budget without the committee's consent.
• Upon entry of the final order the DIP loan documents govern the facility, and until they are executed and delivered the debtors and TriState are bound by the term sheet as if executed. Where the documents conflict, the final order controls over the DIP loan documents, the motion, the interim cash collateral orders [D.I. 264, 553, 728, 980, 1185] and the interim order; as between the motion and the DIP loan documents, the loan documents govern. The term sheet governs over the existing loan documents where they conflict, but is to be interpreted whenever possible to supplement the agent's and the DIP lender's rights under them.
• The chief restructuring officer, Perry Mandarino, concluded that the borrowers require up to $3,500,000 to fund protective advances through the anticipated sale process, considering projected cash flows, construction expenditures, tenant improvement obligations, shared services and other operating costs. The motion relies on a TriState-specific DIP declaration filed contemporaneously, while the interim and final orders recite the earlier DIP declaration [D.I. 1177].
• The term sheet is captioned as subject to further party review and approval, and states that it is for discussion purposes only and non-binding. The final order nonetheless binds the debtors and TriState to its terms, pending execution and delivery of the DIP loan documents.

Roll-Up

• In consideration of the DIP loan, a portion of the existing indebtedness is converted into a secured superpriority postpetition administrative expense claim equal in right and priority to the DIP loan's administrative claim. The roll-up equals twice the amount of cash funded for the shared services agreement under the approved budget or any approved budget under any current or superseded cash collateral order, and is secured by a pari passu new lien on all of the borrowers' property.
• The DIP budget's shared services agreement line totals $522,300 through Jan. 1, 2027, twice which is approximately $1.04 million, before any amounts funded under prior cash collateral budgets. Neither the interim order nor the final order addresses the roll-up.

Prepetition Debt

• TriState and Wayne Bank made a loan in the original principal amount of $28,000,000 under a Credit Agreement dated Sept. 27, 2024 and two mortgage notes, with TriState's commitment at $23,000,000 and Wayne Bank's at $5,000,000.
• As of the petition date, the borrowers were jointly and severally indebted for principal of not less than $26,777,860, plus at least $143,552.65 of accrued and unpaid interest, plus fees, costs, expenses and other charges. The debtors made their stipulations under the interim order and reaffirm them in the final order.
• The prepetition obligations are secured by first-priority liens on substantially all of the borrowers' assets under the existing loan documents, including:
  • The Leasehold Mortgage, Security Agreement and Fixture Filing dated Sept. 27, 2024
  • The ground lease dated Sept. 27, 2024
  • A ground lease recognition, subordination, non-disturbance, estoppel and attornment agreement dated Sept. 27, 2024

Cash Collateral

• The final order authorizes the borrowers to use all of the prepetition lenders' cash collateral, solely for the purposes set forth in the final order and consistent with the approved budget, including to make the adequate protection payments, through the termination date. Cash collateral is defined as all of the borrowers' cash, deposits, receivable collections and other dispositions of prepetition collateral, rents collected on and after the petition date, and proceeds of the foregoing.
• The court previously authorized use of the agent's cash collateral on an interim basis under orders [D.I. 264, 553, 728, 980, 1185] entered on the cash collateral motion filed June 24, 2026 [D.I. 152].
• The borrowers stipulate, and reaffirm in the final order, that as of the petition date they maintained no bank accounts other than those listed on Exhibit 1 to the cash management order [D.I. 219].
• Unauthorized use of DIP advances or cash collateral, including any transfer to a debtor or affiliate, is an event of default under the term sheet.

Interest Rate

• 12.00% per annum, fixed, on principal and the finance fee, paid by the DIP lender debiting the borrowers' debtor-in-possession operating account at the DIP lender
• Default Rate Increase: an additional 5.0% (500 basis points) on principal and the finance fee after maturity or an event of default
• A 5% late fee applies to any amount not paid within five days of its due date.
• Accrued interest is due 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 DIP lender's legal fees and disbursements and other charges, is due in cash on the maturity date.
• The budget carries both a weekly DIP interest accrual at 12% added to the ending DIP balance and a separate line for DIP interest payments in cash monthly in arrears of $15,400, $23,900 and $27,200.

Fees

• Finance fee: 2.00% of the aggregate of all advances. The budget carries DIP fees of $64,300 against the initial $2,141,400 draw, or 3% of that amount. No commitment fees or unused line fees are specified.
• Lender Professional Fees: non-refundable payment of the reasonable and documented attorneys' fees, disbursements and out-of-pocket expenses of the DIP lender and the agent, including those of Cullen and Dykman LLP, in connection with the DIP loan, the existing indebtedness and the Chapter 11 cases of the borrowers and their affiliates. These fees are not subject to court approval or fee applications.
• The final order sets a 10-calendar-day review period after receipt of invoices by debtors' counsel, the committee and the U.S. Trustee. A served written objection limits payment to unobjected amounts, and invoices must carry the same detail required under the other facilities. The term sheet instead requires an objecting party to file its objection with the court within ten days, and provides that statements are payable regardless of whether reflected in the approved budget and are not counted against the permitted variance.

Maturity

• The earliest to occur of:
  • The effective date of a confirmed plan
  • Closing on a sale or other disposition of all or a substantial portion of either borrower's assets
  • Conversion of either case to Chapter 7
  • Dismissal of either case
  • Appointment of a Chapter 11 trustee or an examiner
  • Notice from the landlord threatening or purporting to cancel or terminate the ground lease that is not stayed by the court within 15 days of the borrowers' or their counsel's receipt
  • Acceleration following an event of default
  • Dec. 31, 2026
• The DIP lender may extend the maturity date in writing only, in its sole discretion.
• The final order provides that, following an acceleration or termination of further advances, all DIP obligations are immediately due and payable, the commitments terminate, and authority to use cash collateral ceases, subject to limited use during the remedies notice period.
• The DIP obligations are not discharged by plan confirmation and must be paid in full on the plan effective date, with discharge waived under section 1141(d)(4).
• The DIP protections continue until consummation of an acceptable plan, meaning one that:
  • Is acceptable to TriState, the agent and the prepetition lenders
  • Pays the DIP obligations in full in cash
  • Does not impair their claims or liens without written consent
  Alternatively, they continue until the DIP obligations are paid in full and the commitments terminate. The adequate protection obligations run until the earlier of that plan's consummation and repayment in full in cash of the prepetition obligations and adequate protection obligations. The DIP protections survive conversion and dismissal, with the court retaining jurisdiction under section 349(b), and bind any trustee.

Carve Out

• Consists of the sum of:
  • Clerk and U.S. Trustee fees under 28 U.S.C. § 1930(a) owed by the borrowers, plus statutory interest, not subject to any budget
  • On conversion, chapter 7 trustee fees and expenses not to exceed $10,000; the interim and final orders cite section 726(b), while the term sheet and the motion cite section 726(c)
  • The cumulative amount of shared services payable by the borrowers 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 granted by the final order, and any payment of it is added to the DIP obligations. It carries no component for debtor or committee professional fees, and neither TriState, the agent nor the prepetition lenders are responsible for those fees; it is not a cap on them.
• Investigation Budget: no more than $50,000 of shared services proceeds of the DIP facility, DIP collateral or prepetition collateral, including cash collateral, may be used by the committee or a Chapter 7 or Chapter 11 trustee solely to investigate claims against the agent or prepetition lenders within the challenge period. The committee's investigation rights are otherwise preserved, but any use of those sources for an investigation may not exceed the investigation budget.

Use of Proceeds

• Under the term sheet, the DIP loan may be used solely as protective advances under the leasehold mortgage and other existing loan documents for the preservation, maintenance, management, operation, re-leasing and sale of the ground lease, as permitted in the approved budget. Permitted uses include:
  • Construction-related costs for tenant improvements at the shopping center that the borrowers became or will become contractually obligated to complete as debtors in possession
  • Shared services payable to DAMIS Holdings LLC for professional and employee services related to the contemplated sale
  • The DIP lender's professional fees in connection with the borrowers' defaults and the contemplated sale
  • Maintenance and repairs, capital expenditures, broker's, attorneys' and other professionals' fees related to leasing or a sale, ground rent, insurance, real estate taxes and utilities
• The final order limits proceeds to the preservation, maintenance, management, operation and re-leasing of the mortgaged property, as expressly authorized to be advanced under the post-default provisions of the leasehold mortgage. It excludes the debtors' general bankruptcy administration costs and costs not directly incident to the property or its income-producing capacity.
• No proceeds may satisfy any obligation of a non-borrower debtor except indirectly through shared services under the approved budget, or be used to assert claims against or challenge the claims or liens of TriState, the agent or the prepetition lenders, subject to the committee's investigation rights.

Credit Bid

• Under the term sheet, the agent and the DIP lender may collectively credit bid all or any portion of the DIP loan obligations and the existing indebtedness under section 363(k) in any sale of the ground lease or other collateral, and the DIP lender is deemed a qualified bidder under the bid procedures order [D.I. 1048]. The interim and final orders contain no credit bid paragraph.

Avoidance Actions

• Under the final order, the DIP superpriority claims are payable from, and the first-priority lien on unencumbered property extends to, avoidance-action proceeds, with TriState recovering from those proceeds only after all other DIP collateral and proceeds. The term sheet provides that the DIP liens extend only to the proceeds of the borrowers' causes of action, not the causes of action themselves.

Challenge Period

• Under the term sheet, the debtors stipulate to the following:
  • The existing indebtedness of $26,777,860.00 in principal and $143,552.65 in interest, plus other charges, is valid, binding and not subject to offset, defense, counterclaim, recharacterization, subordination or other challenge, subject to application of certain postpetition payments.
  • The agent holds valid, perfected, first-priority liens on the ground lease and the borrowers' other collateral and proceeds.
  • They are not aware of any claims or defenses against the agent, and waive any that exist.
  • They will not contest the existing indebtedness or the related liens.
• Under the term sheet, the stipulations bind the committee and other non-debtor parties after a challenge deadline of 60 calendar days after entry of the interim order, which places it at Dec. 4, 2026, unless a party commences and actively prosecutes a challenge proceeding or a standing motion by that date. Challenge rights extend only to the existing indebtedness and to the leasehold mortgage lien to the extent it secures the existing indebtedness, not to the DIP loan.
• The interim and final orders set the challenge deadline at Nov. 30, 2026, four days before the term sheet's 60-day period expires. That date extends, on conversion or appointment of a trustee, to the later of the time remaining and 45 days after appointment. A standing motion with a draft complaint attached tolls the period only for the moving party, as to the claims in the draft complaint, until two business days after the motion is resolved, and a separate standing order is a prerequisite to prosecuting a challenge.
• Absent a timely challenge, the prepetition obligations become allowed claims and the prepetition liens are deemed valid 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, and on a successful challenge the court may fashion an appropriate remedy.
• Upon entry of the final order, and subject to third-party challenge rights, the debtors release the agent, the prepetition lenders and their affiliates and representatives from all claims relating to the DIP and prepetition obligations, liens and loan documents, excepting claims found by final order to result primarily from bad faith, fraud, gross negligence or willful misconduct. The release does not limit TriState's obligations under the DIP loan documents or the final order.

Securities and Priorities

• Under the term sheet, the DIP loan constitutes additional obligations under the existing loan documents secured by the leasehold mortgage, and the DIP liens are granted under sections 364(c)(2) and 364(d). The DIP liens carry the priority of the leasehold mortgage and are senior to all other liens granted in the cases and to any liens or claims of the DAMIS debtors, including intercompany advances by DAMIS Holdings or its affiliates. They are deemed perfected without further filings.
• The orders are to provide that the leasehold mortgage remains a "Qualifying Mortgage" and the agent remains a "Qualifying Mortgagee" under the ground lease and the recognition agreement after the protective advances are made. The interim and final orders each contain that finding.
• The final order grants the DIP lender liens, effective as of its entry and automatically perfected, on the following basis:
  • Senior liens on unencumbered assets
  • Liens pari passu with the prepetition lenders on encumbered assets, including proceeds of claims and causes of action
  • Under section 364(c)(2), first-priority liens on unencumbered property, including avoidance-action proceeds
  • Under section 364(c)(3), liens junior only to permitted tax and ordinary-course statutory liens
  • Under section 364(d)(1), priming liens senior to all existing liens other than permitted liens and the prepetition liens, with the DIP liens pari passu with the prepetition liens
• Subject to the carve-out, the DIP obligations constitute superpriority administrative expense claims under section 364(c)(1) in the interim and final orders, while the term sheet cites section 364(d)(1). These claims have priority over all other claims, including those under sections 503(b), 506(c), 507(a) other than 507(a)(1), 507(b), 726, 1113 and 1114 and administrative claims arising under the final cash management order [D.I. 1322]. The term sheet makes the DIP superpriority claim senior to any superpriority claims of the agent, subject to the carve-out.
• No lien or claim senior to or pari passu with the DIP protections may be granted without the DIP lender's consent. The anti-assignment override, surety bond reservation and insurance requirements, naming TriState and the agent as loss payees, follow the Bank of New Hampshire order.

Adequate Protection

TriState Capital Bank, as Agent for TriState Capital Bank and Wayne Bank

• Monthly cash interest on the outstanding principal of the prepetition obligations at the non-default rate under the existing loan documents. The final order makes the payments due on the first business day of each month following its own entry, while the interim order ran them from entry of the interim order; neither order states the rate.
• Monthly principal amortization and outstanding real estate taxes as set forth in the approved budget; the budget carries monthly interest expense of $160,200 and principal repayment of $34,800
• Section 507(b) superpriority administrative expense claims for diminution in value, subordinate only to the carve-out and the DIP superpriority claims and senior to all other claims, including administrative expense claims under the final cash management order
• Payment of the reasonable and documented fees and expenses of TriState and the agent, including Cullen and Dykman LLP, without court approval
• Maintenance of cash management consistent with the final cash management order and compliance with reporting requirements, with the committee entitled to request reporting
• The agent is deemed to have requested stay relief and adequate protection from the petition date, with section 507(b) rights and the right to seek further adequate protection preserved, and without a finding that the protection granted is adequate or that the prepetition lenders are entitled to postpetition interest under section 506(b)

Waivers

• The term sheet waives the borrowers' rights under section 506(c), the section 552(b) equities-of-the-case doctrine and marshaling as to the existing indebtedness and the DIP loan.
• The final order, in consideration of the lenders' agreement to permit the carve-out and the use of their cash collateral, applies all three waivers:
  • Section 506(c): no administration expenses may be charged against the DIP collateral or the prepetition collateral, except to the extent of the carve-out, or against TriState or the prepetition lenders, without prior written consent
  • Section 552(b): the "equities of the case" exception does not apply to the proceeds, products, offspring or profits of the collateral
  • Marshaling and similar doctrines do not apply, except that recovery from avoidance-action proceeds comes only after all other DIP and prepetition collateral

Permitted Variance

• Tenant improvement construction disbursements may not vary on a cumulative basis by more than 10% of the approved budget, measured weekly. Other disbursements may not vary by more than 15%. The final order tests operating disbursements for any one-week period against the term sheet's permitted variances.
• Testing begins two weeks after entry of the interim order, each Friday, as of the week ending two Sundays prior. Variance reports are due to TriState, the agent, their advisors and committee counsel by 5:00 p.m. prevailing Eastern time each Friday, with commentary on deviations greater than $50,000 beginning the third week.
• The budget filed with the motion, prepared for 830 County Road 64 Leasing LLC, is dated Sept. 28, 2026, marked as a draft subject to change, and runs weekly from the week ending Oct. 9, 2026 through Jan. 1, 2027. Over that period it projects:
  • Total receipts of $1,633,500, including rent income of $1,262,500 in three monthly installments of $420,800 and reimbursement income of $360,400
  • Operating disbursements of $2,474,100, including real estate taxes of $816,700 in the first week, shared services of $522,300, ground rent of $350,000 and commissions and fees of $226,200
  • Capital expenditures of $1,457,400, of which $1,167,400 in the first week
  • Interest expense of $480,600 and principal repayment of $104,400
• The budget projects DIP draws of $2,909,400 and an ending DIP balance of $3,040,300 at Jan. 1, 2027, inclusive of $64,300 in DIP fees and $73,500 in accrued interest. It carries total debt rising from $26,777,900 to $29,818,100.

Conditions Precedent

• Entry of the interim order for initial availability, or the final order for the remaining amounts, in form and substance satisfactory to the DIP lender in its sole discretion, including a finding that the advances are protective advances under the leasehold mortgage. The entered interim and final orders each contain that finding, though in each an earlier statement of it breaks off mid-sentence.
• The DIP lender's internal approval
• Acknowledgments, satisfactory to the DIP lender and the agent in their sole discretion, from the following parties:
  • From Wayne Bank, that the advances are protective advances and that the DIP lender is to be repaid first from sale proceeds
  • From the landlord, that the advances are protective advances and that the leasehold mortgage remains a Qualifying Mortgage and the agent a Qualifying Mortgagee
• The absence of a default or event of default and compliance with the approved budget, subject to the permitted variances
• An order approving use of the agent's cash collateral satisfactory to it, and the landlord's consent to the interim order
• Except as provided in the carve-out, TriState has no obligation to make any advance unless all conditions precedent are satisfied in full or waived.
• The term sheet is not binding until executed by the DIP lender, the agent and the borrowers, and becomes null and void, absent their written consent, if the interim order is not entered by Oct. 2, 2026. The interim order was entered Oct. 5, 2026 [Doc 1344], and neither it nor the final order recites any such consent.

Covenants and Sale Milestones

• Seeking court approval of a sale of substantially all of the borrowers' real property, including the leasehold interest, in form and substance reasonably acceptable to TriState and the agent, by Nov. 30, 2026, and closing by Dec. 31, 2026, with no extension for a signed purchase agreement
• Paying the DIP lender in full for the DIP loan and the agent in full for the existing indebtedness at the closing of any such sale
• Moving to assume the ground lease, or to extend the time to do so, within the section 365(d)(4) period
• The debtors, their professionals and the broker must provide weekly sale-process updates and copies of indications of interest, letters of intent and bids within one day of receipt. The court-approved broker must hold status calls with the DIP lender and the agent no more than weekly. TriState and the agent also have reasonable access to books, records, personnel and premises.
• Obtaining a final order by Oct. 23, 2026; the final order was entered that day

Events of Default and Remedies

• Events of default under the term sheet and the final order include:
  • Unauthorized use of DIP advances or cash collateral, including any transfer to a debtor or affiliate
  • Failure to comply with the approved budget, subject to the permitted variance, the term sheet, any covenant of the existing loan documents, or the interim or final order
  • Failure to obtain a final order by Oct. 23, 2026
  • Conversion or dismissal of either case, or appointment of a trustee, receiver or examiner with enlarged powers
  • Failure to maintain adequate insurance, to make monthly DIP interest or adequate protection payments, or to repay the DIP loan at maturity
  • A landlord notice threatening or purporting to cancel or terminate the ground lease that is not stayed within 15 days, termination or cancellation of the ground lease, or failure to move to assume the ground lease or extend the time to do so under section 365(d)(4)
  • Failure to meet the sale approval and closing milestones, or to pay the DIP loan and existing indebtedness in full at the closing of any sale
  • Filing a Chapter 11 plan that does not propose to repay the DIP loan and the existing indebtedness in full in cash, absent the DIP lender's consent
  • Seeking postpetition financing from another lender, or use of cash collateral, without consent
  • Modification of the interim or final order without the consent of the DIP lender and the agent, or any superpriority claim or lien pari passu with or senior to the DIP protections
  • Breach of representations and warranties, unauthorized payments on prepetition debt, stay relief for foreclosure on material assets, invalidity of DIP loan documents or liens, a debtor-supported challenge, or an order avoiding payments on the DIP obligations
  • Any challenge to the characterization of the advances as protective advances or to TriState's authority to make them; as in the Bank of New Hampshire order, the lender's sole remedy for that default is to terminate the remaining commitment without affecting the DIP liens or obligations, though it may seek further relief from the court
• Under the term sheet, upon an event of default the DIP lender and the agent may act on five business days' email notice to borrowers' counsel, with copies to the U.S. Trustee and the committee. They may stop funding, terminate the commitment, accelerate, terminate cash collateral use and exercise all rights and remedies, without further order or stay relief.
• The final order likewise modifies the stay five business days after delivery of a termination declaration, with written notice to debtors' counsel, the committee and the U.S. Trustee, consistent with the motion.
• The borrowers and the committee may seek an emergency hearing during the notice period, and remedies may not be exercised if the court has scheduled or is scheduling a hearing on the alleged default. During the remedies notice period cash collateral may be used only for the carve-out, shared services and critical preservation expenses. Notice of an event of default is informational only.

Indemnification

• Under the final order, the borrowers indemnify TriState, the agent, the prepetition lenders and their affiliates and representatives against losses arising out of the financing. The indemnity excludes successful challenges and gross negligence or willful misconduct determined by final, non-appealable judgment, ranks equally with the DIP superpriority claims, and excludes special, indirect, consequential and punitive damages. 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.
• TriState, the agent and the prepetition lenders are not deemed to control the debtors or to be responsible persons, owners or operators under CERCLA by reason of the financing.

Key Dates

• Petition date: June 4, 2026; joint administration orders entered June 12, 2026 and Sept. 25, 2026, as applicable; committee appointed Aug. 21, 2026 [D.I. 518]; cash collateral motion filed June 24, 2026 [D.I. 152]
• Motion filed Sept. 29, 2026 [Doc 1267]; interim hearing held Oct. 1, 2026; interim order entered Oct. 5, 2026 [Doc 1344], three days after the term sheet's Oct. 2, 2026 entry deadline
• Objection deadline for the final hearing: Oct. 15, 2026 at 4:00 p.m. prevailing Eastern time
• Final hearing scheduled for Oct. 22, 2026 at 12:00 p.m. prevailing Eastern time, though the final order recites the record of a final hearing held Oct. 1, 2026, the date of the interim hearing
• Final order entered Oct. 23, 2026 [Doc 1487], the date by which the term sheet required a final order. The order is effective immediately upon entry and, except as the context otherwise requires, as of the petition date.
• Challenge deadline Nov. 30, 2026 under the interim and final orders (Dec. 4, 2026, 60 calendar days after entry of the interim order, under the term sheet); sale approval motion by Nov. 30, 2026; sale closing and DIP maturity 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 final order. If the bankruptcy court does not have or does not exercise jurisdiction, the parties submit to the federal and state courts of New York, waive trial by jury, and agree that New York law governs to the extent state law applies. The Bank of New Hampshire, First Financial and S&T facilities instead specify New Jersey courts and New Jersey law.

$255K 7335 Gladiolus and 1101 East Glendale Boulevard / Busey Bank DIP Terms

Borrower(s) / Guarantor(s)

• 7335 Gladiolus LLC, a Florida limited liability company that owns real property at 7335 Gladiolus Drive, Fort Myers, Lee County, Florida, and 1101 East Glendale Boulevard Real Estate LLC and 1101 East Glendale Boulevard Leasing LLC, Indiana limited liability companies whose collateral includes real property at 1101 East Glendale Boulevard, Valparaiso, Porter County, Indiana, as borrowers.
• The DIP loan agreement makes the borrowers jointly and severally liable for all postpetition obligations. The final order makes the Gladiolus debtor liable for the new money and roll-up loans attributable to the Glendale debtors, and the Glendale debtors liable for those relating to the Gladiolus debtor, to the extent set forth in the term sheet. The DIP liens and superpriority claims, however, secure each borrower's respective share of the DIP obligations.
• The prepetition loans were guaranteed by Michael A. Shabsels and David A. Shabsels. They executed unlimited commercial guaranties dated Jan. 19, 2016 for the Gladiolus loan and commercial guaranties dated May 24, 2019 for the Glendale loan.
• The term sheet was approved on an interim basis by a consent order entered Aug. 27, 2026 [D.I. 937], on the DAMIS debtors' application in lieu of motion [D.I. 928], which also sought approval of a term sheet with Heartland Bank and Trust Company. The final order was entered Oct. 28, 2026 [Doc 1504] on that application and the cash collateral motion [D.I. 152].

Agent / Lender(s)

• Busey Bank, an Illinois banking corporation, as prepetition lender and DIP lender, with no administrative agent. Brown & Connery, LLP acts as counsel to Busey Bank.

DIP Commitments

• Under the Debtor-in-Possession Loan and Security Agreement dated Oct. 26, 2026, a senior secured non-revolving term loan facility in an aggregate principal amount of $255,000, with advances available until the advance period end date of Dec. 30, 2026:
  • Up to $150,000 to the Glendale borrowers
  • Up to $105,000 to the Gladiolus borrower
• The final order approves on a final basis new money term loans of up to $93,000 to the Gladiolus debtor and $133,400 to the Glendale debtors, as set forth in the approved budget, for a total of $226,400, together with the roll-up. Initial advances of $12,400 to the Gladiolus debtor and $20,800 to the Glendale debtors had been approved on an interim basis.
• The budget projects new DIP draws of $95,700 for Gladiolus and $149,200 for Glendale, which exceed the final order's new money amounts by approximately $2,700 and $15,800, respectively, but fall within the loan agreement's borrower-level commitments.
• Amounts repaid may not be reborrowed. Each advance requires an irrevocable written request from an authorized officer, including the chief restructuring officer, delivered three business days before the desired funding date. The request must be accompanied by a disbursement authorization and invoices for the obligations to be paid. Funds are disbursed to the borrowers' deposit account at Busey Bank.
• Within one business day after receiving proceeds of any disposition of collateral, including a section 363 sale, or of any casualty or condemnation, the borrowers must prepay the loan with 100% of those proceeds. Prepayments are applied ratably to the applicable borrower's loan and then to the remaining obligations. The final order separately directs that all proceeds of any sale of DIP collateral be paid to Busey Bank until the DIP loan is paid in full in cash, and that any sale order condition the sale on that payment.
• Voluntary prepayment in full is permitted on irrevocable notice received by 11:00 a.m. three business days before the prepayment date. Payments are applied first to fees, charges and attorneys' fees, then to accrued interest, then to principal.
• Proposed budget modifications and amendments to the DIP loan documents must be provided to the U.S. Trustee and committee counsel at least three business days before effectiveness. Material DIP amendments, meaning those that shorten maturity or increase the commitments or interest rate, must be filed with the court and are deemed approved absent objection within three business days. The shared services line item in the approved budget may not be reduced from the prior approved budget without the committee's consent.
• The final order controls over the term sheet, the application, the DIP loan documents, the interim cash collateral orders [D.I. 293, 457, 580, 725] and the interim DIP order. As among the application, the term sheet and the DIP loan documents, the DIP loan documents govern.
• The court found that the borrowers need cash collateral and the DIP facility to continue their businesses, maintain vendor, supplier and customer relationships, implement a marketing and sale process, make adequate protection payments, and pay administration costs and working capital needs.

Roll-Up

• Prepetition secured obligations equal to twice the amount funded for the shared services agreement under the approved budget are converted into postpetition roll-up DIP loans on a cashless basis, subject to minimums of $175,400 for the Gladiolus debtor and $134,000 for the Glendale debtors. Upon entry of the final order and full funding of the new money DIP loans, those minimum amounts are automatically deemed converted, and any additional amounts are converted as and when the shared services amounts are advanced.
• The budget's shared services agreement line totals $68,200 for Gladiolus and $32,000 for Glendale through Jan. 1, 2027. Twice those amounts is approximately $136,400 and $64,000, respectively, below the minimums, which total $309,400. The roll-up DIP loans form part of the postpetition obligations secured by the DIP liens and the DIP superpriority claims.

Prepetition Debt

• Gladiolus: Busey Bank extended a commercial loan in the original principal amount of $4,040,000 under a Business Loan Agreement and Promissory Note dated Feb. 1, 2016. As of the petition date, the Gladiolus debtor was indebted for not less than $1,722,300.
• Glendale: the Glendale debtors and RDM Camps LLC, a non-debtor, executed a $4,700,000 Promissory Note dated May 24, 2019, bearing interest at 4.860% with an original maturity of May 24, 2022, together with a Business Loan Agreement of the same date. The note was amended by Change in Terms Agreements dated May 24, 2022, Aug. 24, 2022, Dec. 5, 2022, June 3, 2023, June 5, 2025 and Sept. 5, 2025. As of the petition date, the Glendale debtors were indebted for not less than $2,749,086.53.
• The Gladiolus obligations are secured by first-priority liens on substantially all of the Gladiolus debtor's real and personal property, under collateral documents each dated Feb. 1, 2016:
  • A mortgage on the Fort Myers property, recorded in Lee County, which also grants a UCC security interest in related personal property and rents and secures up to $4,040,000 of principal at any one time, plus interest and protective advances
  • An assignment of rents
  • A commercial security agreement, plus a contractual security interest in the debtor's deposit accounts at Busey Bank
• The Glendale obligations are secured by first-priority liens under collateral documents each dated May 24, 2019:
  • A mortgage granted by 1101 East Glendale Boulevard Real Estate LLC on the Valparaiso property, modified Sept. 5, 2025
  • An assignment of rents from the same property
  • A commercial security agreement covering substantially all of the Glendale debtors' personal property, including inventory, equipment, accounts, deposit accounts and general intangibles
• The budget's beginning debt balances of $2,792,000 for Gladiolus and $1,742,300 for Glendale do not match the stipulated amounts. Each is closer to the other borrower's stipulated figure.

Cash Collateral

• Cash collateral is defined as the borrowers' cash and cash equivalents on hand as of the petition date, cash received postpetition and proceeds, to the extent Busey Bank or other putative prepetition secured parties have an interest in it. The court previously authorized its use under interim cash collateral orders [D.I. 293, 457, 580, 725].
• The final order authorizes use of new money DIP proceeds and prepetition collateral, including cash collateral, solely for the purposes permitted in the approved budget, subject to the permitted variance.
• The borrowers may not sell, transfer, lease or encumber cash collateral or DIP collateral without Busey Bank's written consent, except as permitted by the sale procedures order [Docket No. 1048] or another court order. Collateral and proceeds not used under the approved budget are held in trust for and paid over to Busey Bank, subject to third-party challenge rights.
• The borrowers must maintain their primary operating, disbursement and treasury management accounts at Busey Bank, which may charge those accounts for principal, interest and fees due.

Interest Rate

• Floating rate equal to The Wall Street Journal prime rate plus 2.00%, with a 9.00% floor
• Default Rate Increase: an additional 5.0% (500 basis points) upon an event of default or after the maturity date, whether or not the loan has been accelerated
• A late charge equal to the greater of $25 or 5% applies to any amount not paid within ten days of its due date, other than principal due at maturity.
• Interest accrues from the day of each advance and is payable in arrears at the time of each advance after the first, calculated on actual days elapsed over a 360-day year. The events of default, however, refer to failure to make monthly interest payments.
• The budget accrues DIP interest weekly at 9.0% and carries DIP interest payments in cash monthly in arrears totaling $1,200 for Gladiolus and $2,200 for Glendale.

Fees

• Finance fee: 1.00% of the aggregate of all advances, payable on the maturity date. The budget instead carries new borrowing fees at the time of each draw, totaling $1,000 for Gladiolus and $1,500 for Glendale.
• Lender Professional Fees: the borrowers pay the lender's costs, including filing fees, appraisal costs and reasonable counsel fees, for the loan documents and the lender's actions in the bankruptcy case. Payment of the lender's reasonable and documented attorneys' fees and out-of-pocket expenses as provided in the approved budget requires no fee applications, U.S. Trustee guideline compliance or court approval.
• Summary invoices, which may be redacted for privilege, go to borrowers' counsel, the U.S. Trustee and committee counsel, who have a 10-calendar-day review period. Written objections must state their grounds with particularity and are submitted to the professional. Undisputed amounts are paid promptly, and disputed amounts await agreement or court order. Invoices are payable regardless of whether reflected in the approved budget and do not count toward the permitted variance.

Maturity

• The earliest to occur of:
  • The effective date of a confirmed plan
  • Closing on a sale or other disposition of all or a substantial portion of the assets of any borrower
  • Conversion of any of the cases to Chapter 7
  • Dismissal of any of the cases
  • Appointment of a Chapter 11 trustee
  • Acceleration and termination of further advances following an event of default
  • Dec. 31, 2026
• The borrowers and Busey Bank may extend the maturity date by written agreement.
• The DIP loan documents bind any Chapter 11 or Chapter 7 trustee. The DIP liens and priorities are not impaired by any dismissal or conversion or by any other financing.

Carve Out

• The prepetition liens, DIP liens, adequate protection liens and superpriority claims are subordinate to a carve-out consisting of the sum of:
  • Clerk and U.S. Trustee fees under 28 U.S.C. § 1930(a), plus statutory interest
  • The cumulative amount of shared services payable by the borrowers under the approved budget through the end of the budget period
  • Reasonable fees and expenses of a trustee under section 726(c) up to $25,000
• Neither the carve-out nor the approved budget caps court fees, U.S. Trustee fees, fees of debtor or committee professionals retained under sections 327, 328, 363 or 1103, or intercompany administrative claims payable by the borrowers.

Use of Proceeds

• The loan agreement limits proceeds to funding the bankruptcy proceeding in accordance with the approved budget, subject to permitted variances, including professional fees and expenses provided in the budget.
• No new money DIP proceeds or collateral may be used for any purpose prohibited by the Bankruptcy Code or the DIP orders, or to assert claims against Busey Bank or challenge the DIP facility, the DIP liens or the prepetition obligations and liens. The limitation does not affect the committee's right of investigation in connection with its challenge rights.

Credit Bid

• Subject to any challenge determination, Busey Bank may credit bid up to the full amount of the prepetition secured obligations and the DIP obligations in any sale of the prepetition or DIP collateral, including section 363 sales and plan sales under section 1129(b)(2)(A)(iii). It is automatically deemed a qualified bidder in any section 363 sale, plan sale or Chapter 7 sale under section 725.
• Under the loan agreement, credit bids are borrower-specific: Glendale collateral against the Glendale loan and Glendale prepetition obligations, and Gladiolus collateral against the Gladiolus loan and Gladiolus prepetition obligations.
• Filing bidding procedures for Busey Bank's collateral that do not preserve its section 363(k) credit bid right is an event of default.

Avoidance Actions

• The DIP liens exclude the borrowers' causes of action but extend to their proceeds, with Busey Bank looking last to those proceeds after all other DIP collateral. The adequate protection liens do not attach to Chapter 5 causes of action or their proceeds.

Challenge Period

• The borrowers stipulate to the amount and validity of the prepetition secured obligations and to Busey Bank's valid, enforceable, first-priority, perfected liens on the prepetition collateral. The stipulations bind the borrowers immediately upon entry of the final order.
• The stipulations bind the committee and all other parties, including any Chapter 11 or Chapter 7 trustee, unless a party with proper standing timely commences a challenge proceeding and prevails. The challenge deadline is 60 calendar days after entry of the final order, rolling to the next business day, which places it at Dec. 28, 2026, or any later date the court orders for cause.
• A standing motion filed before the deadline tolls it during the motion's pendency, solely for the moving party. The final order confers no standing on any party, and all rights to object to standing are reserved.
• Subject to any timely challenge, the borrowers and their estates release Busey Bank and its affiliates and representatives from all claims arising on or before the date of the final order relating to the borrowers, their Chapter 11 cases and the DIP loan documents. The release covers avoidance claims under sections 502(d), 544, 545, 547, 548, 550 and 553, recharacterization and equitable subordination. It does not release Busey Bank's obligations under the final order or the DIP loan documents.

Securities and Priorities

• Under sections 364(c)(2) and 364(d), effective as of entry of the interim DIP order and automatically perfected, Busey Bank holds DIP liens on all prepetition and postpetition real and personal property of the borrowers, other than causes of action but including their proceeds. Subject to the carve-out, the DIP liens are senior to all other liens on and claims against the DIP collateral. The loan agreement also grants a first-priority lien under section 364(c)(2) on the borrowers' operating accounts at Busey Bank.
• The DIP obligations constitute superpriority administrative expense claims under section 364(c)(1) against the Gladiolus debtor and the Glendale debtors, respectively. These claims have priority over all other obligations, including administrative claims arising under the final cash management order [D.I. 1322].
• While DIP obligations remain outstanding, no claim or lien senior to or pari passu with the DIP protections is permitted, other than as set forth in the final order. The DIP liens may not be made junior to or pari passu with liens preserved under section 551, liens under sections 363 or 364, postpetition liens including governmental liens, or intercompany or affiliate liens.
• The court found the DIP facility negotiated in good faith and at arm's length, entitled to section 364(e) protection.

Adequate Protection

Busey Bank, as Prepetition Lender

• Payment of principal and interest on the prepetition secured obligations to the extent provided in the approved budget. The budget carries interest expense of $47,300 and principal repayment of $90,200 for Gladiolus and interest expense of $70,900 and principal repayment of $49,700 for Glendale through Jan. 1, 2027.
• Replacement liens under section 361(2), solely to the extent of diminution in value, on all property of each borrower that would constitute Busey Bank's prepetition collateral. The liens are subject to the carve-out and to valid senior liens perfected before the petition date, and exclude Chapter 5 causes of action and their proceeds.
• Section 507(b) superpriority administrative expense claims, solely to the extent of diminution in value, subordinate only to the carve-out and the DIP superpriority claims and senior to all other claims, including administrative claims under the final cash management order
• Weekly budget compliance reports to Busey Bank and the committee
• The court found that the adequate protection currently protects Busey Bank, without any finding that it is entitled to postpetition interest under section 506(b).

Waivers

• Each waiver under the final order applies to amounts actually funded pursuant to the approved budget:
  • Section 506(c): no administration costs may be charged against the DIP collateral or the prepetition collateral without the prior written consent of Busey Bank
  • Section 552(b): no party may invoke the "equities of the case" exception as to the proceeds, products, offspring or profits of the prepetition collateral
  • Marshaling and similar doctrines do not apply, except that Busey Bank looks last to proceeds of causes of action

Permitted Variance

• Actual cumulative disbursements may not vary by more than 15% from projected cumulative disbursements for any measurement period, absent Busey Bank's written consent, which may be given by email. Payments of DIP professional fees and expenses are excluded from the test.
• Budget compliance reports are due to Busey Bank and the committee by 5:00 p.m. Eastern time each Friday, showing actual results for each budget line item weekly from the petition date as of two Sundays prior. Under the loan agreement, each report must certify compliance with the budget covenant.
• The modified initial DIP budget runs weekly from the week ending Sept. 18, 2026 through Jan. 1, 2027. Over that period it projects:
  • For Gladiolus, rent income of $108,300 in four installments of $27,100, operating disbursements of $68,200 consisting entirely of shared services, DIP draws of $95,700, and an ending DIP balance of $97,900 inclusive of $1,000 in DIP fees and $1,400 in accrued interest, with total debt rising from $2,792,000 to $2,889,900
  • For Glendale, rent income of $134,000, operating disbursements of $91,300, including shared services of $32,000, management fees of $16,400, real estate taxes of $12,300 and repairs and maintenance of $10,500, and capital expenditures of $70,000
  • For Glendale, DIP draws of $149,200 and an ending DIP balance of $152,900 inclusive of $1,500 in DIP fees and $2,400 in accrued interest, with total debt rising from $1,742,300 to $1,895,200

Conditions Precedent

• To closing and the initial advance:
  • Delivery of the executed loan agreement and notes, and evidence of required insurance with premiums paid
  • Payment of the lender's fees and expenses, including legal and administrative fees, as provided in the approved budget and subject to the final order's procedures
  • The borrowers' opening of their primary operating, disbursement and other accounts at Busey Bank
  • Entry of the final DIP order, in full force and effect and not reversed, modified, stayed or vacated
• To each additional advance: representations and warranties true and correct, no continuing event of default, and the final DIP order in full force and effect

Covenants and Sale Milestones

• Seeking court approval of a sale of substantially all of the borrowers' real property, including the mortgaged property, by Nov. 30, 2026, and closing by Dec. 30, 2026
• Obtaining Busey Bank's prior written consent, not to be unreasonably withheld, before filing a stalking horse notice, auction notice or private sale notice under the bid procedures order [D.I. 1048], or otherwise seeking to sell its collateral, where the purchase price would not pay its obligations in full in cash
• Obtaining a final DIP order by Oct. 26, 2026; the final order was entered Oct. 28, 2026
• Affirmative covenants include budget compliance, weekly reporting, access to books, records and properties, maintenance of properties and insurance naming Busey Bank as additional insured or lender loss payee, maintaining primary banking at Busey Bank, performance under real property leases, and further assurances within ten business days of request.
• Negative covenants bar liens other than permitted liens, indebtedness other than the obligations and amounts in the approved budget, loans or investments, and distributions to members, in each case absent Busey Bank's written approval.

Events of Default and Remedies

• Events of default under the loan agreement include:
  • Breach of the loan documents after any applicable cure period, or a materially incorrect representation or warranty
  • An execution or foreclosure against the mortgaged property or other property that remains unstayed for 30 days
  • Failure to comply with the approved budget, subject to the permitted variance
  • Failure to make payments on the DIP loan or on the prepetition loan as due under the approved budget, to make monthly interest payments, or to repay the loan at maturity
  • Failure to obtain a final DIP order by Oct. 26, 2026
  • Dismissal or conversion of any case
  • Failure to maintain adequate insurance on the mortgaged property
  • Failure to meet the sale approval and closing milestones, filing bidding procedures without a credit bid right, or seeking an insufficient sale without consent
  • Stay relief granted to any other creditor as to Busey Bank's collateral
  • Filing a plan that does not repay the DIP loan, the roll-up and the prepetition loan in full in cash on the effective date, absent consent
  • Seeking financing secured by Busey Bank's collateral, or use of its cash collateral, without consent
  • Entry of, or an application by a borrower without consent for, any order modifying the interim or final DIP order
  • Any superpriority claim or lien pari passu with or senior to Busey Bank, other than the carve-out, or any other material noncompliance with the loan agreement
• Under the final order, upon an event of default the stay is modified to permit Busey Bank to deliver a remedies notice, which may be by email, to debtors' counsel, the U.S. Trustee and committee counsel. The notice becomes effective no sooner than ten business days after delivery. Busey Bank may then terminate or reduce the commitments, accelerate, terminate the DIP facility, revoke consent to use of cash collateral and exercise remedies against the DIP and prepetition collateral.
• During the remedies notice period, the borrowers and the committee may seek emergency relief, in which case the notice period extends until the court rules.
• The loan agreement's remedies include taking possession of and managing the mortgaged property as attorney-in-fact, selling it, foreclosing the Gladiolus and Glendale mortgages, consenting to a receiver, obtaining judgment on the notes and exercising remedies under the prepetition loan documents. Busey Bank may also set off deposits during an event of default, and the borrowers consent to stay relief for that purpose.

Indemnification

• The borrowers jointly and severally indemnify Busey Bank against losses that would not have been incurred had their representations and warranties been true and their covenants performed, excluding losses caused by its willful misconduct or gross negligence.
• Busey Bank may assign the loan documents or sell participations without the borrowers' consent and is released on assignment, except for liabilities caused by its willful misconduct or gross negligence.

Key Dates

• Petition date: June 4, 2026; joint administration order entered June 12, 2026 [D.I. 35]; committee appointed Aug. 21, 2026 [D.I. 846, as cited in the final order]
• Interim DIP order entered Aug. 27, 2026 [D.I. 937] on consent, without a hearing; final hearing scheduled Sept. 9, 2026 and adjourned by agreement to Oct. 1, 2026, when the court approved the term sheet on a final basis subject to a form of order and loan documents
• Loan agreement closing date defined as Oct. 22, 2026; loan agreement dated Oct. 26, 2026, the loan agreement's deadline for a final DIP order
• Final order entered Oct. 28, 2026 [Doc 1504], effective immediately, with any Bankruptcy Rule 6004(h) stay waived
• Sale approval motion by Nov. 30, 2026; challenge deadline Dec. 28, 2026; advance period end date and sale closing by Dec. 30, 2026; maturity Dec. 31, 2026; budget runs through Jan. 1, 2027

Governing Law and Jurisdiction

• Under the final order, the court retains jurisdiction over all matters arising from the DIP facility, the term sheet and the final order. If the court does not have or exercise jurisdiction, the parties submit to the federal and state courts of New Jersey and waive trial by jury. To the extent state law governs, the law of the jurisdictions where the Gladiolus and Glendale collateral is located applies.
• The loan agreement is governed by federal law and Florida law, with suits brought in the bankruptcy court or, upon termination of or relief from the stay, in Florida courts. Actions to enforce against the Glendale borrowers' collateral are governed by Indiana law and brought in Indiana courts.