Phoenix Press - Chapter 11 DIP Terms

DIP Terms

Borrower / Debtor

• Phoenix Press, LLC, as Debtor and Borrower
• On July 14, 2026 (the "Petition Date"), Phoenix Press, LLC filed a voluntary petition under chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the Eastern District of Michigan

Agent / Lender(s)

• InterNex Capital Funding LLC, as Senior DIP Lender ("InterNex")
• InterNex Capital Funding LLC, together with the servicer InterNex Capital, LLC, as Prepetition Secured Creditor under a Loan and Security Agreement dated as of May 15, 2026

DIP Commitments

• Up to $4,000,000.00 senior first position secured super-priority revolving credit facility (the "DIP Facility" or "Sr. DIP Facility"), under the Superpriority First Position Secured Debtor in Possession Loan and Security Agreement (the "Senior DIP Agreement")
• As of the Petition Date, the Debtor's Prepetition Secured Obligations owed to InterNex were not less than $2,011,228 (representing aggregate principal plus accrued but unpaid interest and fees), plus additional accrued and unpaid interest, fees, costs and expenses; the refinancing of the prepetition obligations and the making of the Sr. DIP Loans constitute integrated transactions
• On an interim basis (the "Interim DIP Financing"), between entry of the Interim Order and entry of the Final Order, the Debtor is authorized to draw such monies as are necessary to:
  • Immediately pay down the entire prepetition indebtedness owed to the Senior DIP Lender, in the approximate amount of $2,100,000
  • Conduct ongoing business operations and make disbursements under the Budget, not to exceed $3,482,130 (comprised of actual funds disbursed)
• The Senior DIP Lender has no obligation to make any loan or advance unless all conditions precedent under the Sr. DIP Loan Documents and the Order have been satisfied in full or waived by the Senior DIP Lender

Cash Collateral

• As of the Petition Date and continuing until receipt of the Payoff Amount, all of the Debtor's cash, wherever located, whether as original collateral or proceeds of other Prepetition Collateral, constitutes Cash Collateral and is Prepetition Collateral of the Prepetition Secured Creditor
• The Debtor is authorized to use Cash Collateral in accordance with the Budget and the terms of the DIP Loan Documents and the Order
• The Prepetition Lender has not otherwise consented to the use of Cash Collateral, and the Senior DIP Lender is unwilling to provide the DIP Facility unless the Prepetition Secured Obligations (other than contingent indemnification obligations) are paid in full upon entry of the Order and closing of the Sr. DIP Facility

Fees

• The Debtor is authorized to pay the principal, interest, fees, expenses and other amounts payable under the Sr. DIP Loan Documents as they become due, without further Court approval, including, without limitation:
  • Commitment or unused line fees, origination fees, arrangement fees, closing fees, draw fees, minimum utilization fees, maintenance fees, IUF Reserve funding, collection fees, wire or bank fees, returned payment fees, exit fees, and out-of-pocket fees and expenses
  • The reasonable fees and disbursements of the Senior DIP Lender's attorneys, advisers, accountants, and other consultants
• The "Origination Fee" as defined in the DIP Loan Documents applies only to $1.9 million; however, the Court noted (in a footnote) that this appears to conflict with the Debtor's disclosure on the record at ECF No. 35, which states that this \"Origination Fee\" is waived
• The Debtor is authorized and directed to pay all reasonable and documented out-of-pocket expenses of the Senior DIP Lender in connection with the DIP Facility, including attorney fees incurred prior to the Petition Date, and reasonable legal, accounting, collateral examination, monitoring and appraisal fees, financial advisory fees, and fees and expenses of other consultants, upon receipt of summary invoices
• Payment of such fees and expenses is not subject to allowance by the Court, and the Senior DIP Lender's professionals are not required to comply with the U.S. Trustee fee guidelines; objections to invoice summaries may be raised within ten (10) days of receipt, with the undisputed portion paid promptly

Maturity / Termination

• The DIP Obligations shall be due and payable, and the use of Cash Collateral shall automatically cease, on the Maturity Date (as defined in the Senior DIP Agreement)
• On the Termination Date, at the option of the Senior DIP Lender:
  • All applicable DIP Obligations and Prepetition Obligations shall be immediately due and payable, and all commitments to extend credit shall terminate, other than as required with respect to the Carve Out
  • All authority to use Cash Collateral shall cease, provided that during the Remedies Notice Period the Debtor may use Cash Collateral to pay payroll obligations (other than severance), remit trust fund taxes collected during that period, and pay other expenses critical to the preservation of the estate, as agreed by the Senior DIP Lender in its sole discretion

Events of Default

• The occurrence of an "Event of Default" under the Sr. DIP Loan Documents (unless waived by the Senior DIP Lender in its sole discretion), as well as the following:
  • Entry of any order dismissing or converting the Case to Chapter 7 of the Bankruptcy Code
  • Entry of an order authorizing the appointment of a Chapter 11 trustee, or an examiner with expanded powers
  • Entry of an order terminating the Interim Order (except if a Final Order is entered)
  • The Effective Date of a Plan of Reorganization
  • Reversal or vacatur of the Interim Order
  • Except as authorized by the Court, the Debtor granting, creating, incurring or suffering to exist any post-petition liens, security interests or super-priority claims senior to or pari passu with those granted to the Senior DIP Lender
• Upon a Termination Declaration, and subject to a Remedies Notice Period of five (5) business days after the Termination Declaration Date, the Senior DIP Lender may exercise all rights and remedies against the DIP Collateral and the Prepetition Collateral
• During the Remedies Notice Period, the Debtor may seek an emergency hearing solely to contest whether an Event of Default has occurred and/or is continuing

Carve Out

• The Carve Out, payable only to the extent included in the approved Budget, consists of:
  • All fees required to be paid to the Clerk of the Bankruptcy Court and to the Office of the United States Trustee under 28 U.S.C. § 1930(a) and Section 3717 of Title 31 of the United States Code
  • Subject to entry of the Final Order, the Case Professionals Carve Out Amount, to pay allowed and unpaid professional fees and expenses of the Debtor and any Statutory Committee's professionals
• The sum of $5,000 for any trustee appointed under Chapter 7 of the Bankruptcy Code
• The Senior DIP Lender shall not be responsible for the funding, direct payment or reimbursement of any Case Professionals' fees or Statutory Committee expenses, except as necessary to fund the Carve Out

Use of Proceeds

• Subject to the rights of parties in interest, repay in full in cash the balance of the Prepetition Secured Obligations owed to InterNex upon entry of the Order, as provided in the Payoff Letter
• Thereafter, proceeds of the DIP Facility are to be used solely for:
  • Post-petition operating expenses and other working capital
  • Certain transaction fees and expenses
  • Permitted payment of the costs of administration of the Cases
  • As otherwise permitted under the DIP Loan Documents, including payment of the Senior DIP Lender's professional fees and costs

Credit Bid

• In connection with any sale process commenced by the Debtor or otherwise authorized by the Court, the Senior DIP Lender may credit bid some or all of the claims of the Senior DIP Lender and the Prepetition Secured Creditor for the Collateral and the DIP Collateral under section 363(k) and/or section 1129 of the Bankruptcy Code
• The Senior DIP Lender shall be considered a "Qualified Bidder" with respect to its rights to acquire any or all of the assets by Credit Bid

Avoidance Actions

• The DIP Collateral includes all claims and causes of action, and the proceeds thereof, to avoid a transfer of property (or an interest in property) under Section 549 of the Bankruptcy Code; otherwise, the DIP Collateral does not include any Chapter 5 causes of action or their proceeds
• The Adequate Protection Liens granted to Bender shall not attach to any avoidance actions (or their proceeds) arising under Chapter 5 of the Bankruptcy Code

Challenge Period

• The Challenge Period runs until the later of:
  • Sixty (60) days from the selection of counsel for any Statutory Committee
  • Seventy-five (75) days after entry of a Final Order authorizing DIP Financing if no Statutory Committee is appointed
• If the Case is converted to Chapter 7 or a Trustee is appointed prior to expiration, such estate representative or Trustee shall receive the full benefit of the later of (a) expiration of the Challenge Period and (b) thirty (30) days from its appointment
• Nothing in the Order vests or confers on any person, including any Statutory Committee, standing or authority to pursue any claim or cause of action belonging to the Debtor or its estate; if no timely Challenge is filed, the Debtor's Stipulations, admissions and releases become binding on all parties in interest

Security and Priorities

• The Senior DIP Lender is granted an allowed first position superpriority administrative expense claim under section 364(c)(1) of the Bankruptcy Code (the "DIP Superpriority Claim") for all DIP Obligations, payable from and with recourse to all pre- and postpetition property of the Debtor and all proceeds thereof
• The Senior DIP Lender is granted automatically and properly perfected postpetition security interests in and liens on all presently owned and hereafter acquired assets and real and personal property of the Debtor (the "DIP Collateral") under sections 361, 364(c)(2), 364(c)(3), and 364(d), including, among other things, all Accounts; Goods (Equipment, Inventory and Fixtures); Documents, Instruments and Chattel Paper; Letters of Credit and Letter-of-Credit Rights; Securities Collateral; Investment Property; Intellectual Property Assets; Commercial Tort Claims; General Intangibles; Deposit Accounts; Supporting Obligations; money, cash or cash equivalents; membership interests; owned real property and proceeds of real property leases; and all Prepetition Collateral
• Effective upon payment of the Payoff Amount, the priorities are:
  • The Sr. DIP Liens and the Sr. DIP Superpriority Claim shall be junior only to the Carve Out, and otherwise senior and superior to any other security interest, lien or claim on the DIP Collateral except for the Permitted Liens (by way of example, a valid perfected purchase money security interest in equipment shall be ahead of the Sr. DIP Lender's lien)
  • The Sr. DIP Liens shall not be made subject to or pari passu with any other lien or security interest, and shall not be subject to challenge under sections 510, 547, 549, or 550 of the Bankruptcy Code
• The Prepetition Liens (the liens of InterNex) shall be deemed continuing liens for the benefit of the Senior DIP Lender to secure the Sr. DIP Obligations, and the prepetition liens of Bender Equity, LLC continue in full force and effect
• This Order is sufficient and conclusive evidence of the validity, perfection and priority of the DIP Liens without the necessity of filing or recording any financing statement or other instrument
• "Permitted Liens" include all purchase money security interests, liens or security interests securing lease obligations, and security interests securing obligations to Navitas Credit Corp.; Engs Commercial Finance Co.; Canon Financial Services, Inc.; Canon Solutions America, Inc.; OnPoint Capital, LLC; Raymond Leasing Corporation; Star Hill Financial LLC; and North Mill Equipment Finance, LLC (without any finding that such obligations or liens are valid or enforceable against the Debtor)
• The rights granted to the Senior DIP Lender and Bender are subject and subordinate to any post-petition payments made to Canon U.S.A., Inc. (successor to Canon Solutions America, Inc.) or Canon Financial Services, Inc.

Adequate Protection

Prepetition Secured Creditor (InterNex)

• Upon closing of the DIP Facility and entry of the Interim Order, the Debtor shall pay InterNex the amounts required under the Payoff Letter
• As adequate protection for the release of its collateral, and for any decrease in the value of its secured interest arising from the Debtor's use of Cash Collateral, the Prepetition Secured Creditor is granted:
  • A valid, perfected, and enforceable post-petition replacement lien on and security interest in all assets constituting InterNex's Pre-Petition Collateral and the proceeds thereof (the "InterNex Replacement Lien"), with the same priority it had as of the Petition Date, subject to validly perfected senior third-party liens but superior to any interests of Bender Equity
  • An allowed superpriority administrative expense claim under Bankruptcy Code sections 361 and 507(b) (the "INTERNEX Superpriority Claim"), junior only to any prepetition liens senior to the Sr. DIP Liens and the Carve Out, and with priority over all other administrative expenses and claims
• The INTERNEX Superpriority Claim shall be deemed satisfied upon the later of (i) payment of the Prepetition Secured Obligations in full, (ii) payment of all Obligations to the Senior Secured Lender, (iii) expiration of the Challenge Period where no Challenge has been timely filed, and (iv) effectiveness of the general release by the Debtor's estate

Prepetition Junior Lender (Bender Equity, LLC)

• Bender holds a pre-petition validly perfected second-priority secured claim (subordinated to the Senior Lender under the Prepetition Subordination Agreement) against the Debtor on all of the Debtor's personal property, in an amount owing as of July 14 of $9,861,419.20 (subject to verification by the Debtor); Bender's loans were guaranteed by Kirk Vercnocke, Geoffrey Vercnocke, and COMSPEC International, Inc.
• In addition to its other rights, Bender is entitled to:
  • Replacement liens in all of the Debtor's post-petition acquired assets to the same extent, validity and priority as its prepetition liens (the "Adequate Protection Liens"), which shall not attach to any avoidance actions or their proceeds under Chapter 5
  • A super-priority claim under 11 U.S.C. § 507(b) to the extent of any diminution in the value of its interests, subject to the administrative claims of the Senior Lender granted under the Order
  • All reporting required to be provided to the Senior DIP Lender, including all updated Budgets and variance reports, plus additional financial and operational reporting reasonably requested by Bender
  • Preservation of all of Bender's rights except as expressly set forth otherwise in the Order

Waivers

• Subject to entry of the Final Order:
  • Section 506(c): No costs or expenses of administration shall be charged against the Senior DIP Lender or the DIP Collateral, or the Prepetition Secured Creditor or the Prepetition Collateral, under sections 105 or 506(c) of the Bankruptcy Code
  • Section 552(b): The "equities of the case" exception shall not apply to the Prepetition Secured Creditor or the Senior DIP Lender
  • Neither the Prepetition Secured Creditor nor the Senior DIP Lender shall be subject to the equitable doctrine of "marshaling" or any similar doctrine with respect to the DIP Collateral or the Prepetition Collateral
• Discharge Waiver: None of the DIP Obligations, DIP Superpriority Claims or DIP Liens shall be discharged by confirmation of any plan of reorganization unless the DIP Obligations have been paid in full in cash on or before the plan's effective date, or the Senior DIP Lender has consented to alternate treatment

Permitted Variance

• The use of borrowings under the DIP Facility and the use of Cash Collateral shall be limited in accordance with the Budget, subject to variances of no more than fifteen (15) percent in the aggregate
• All modifications, amendments or supplements to the Budget shall be filed with the Court, and any party may object within five business days after the filing