Sangamo Therapeutics - Chapter 11 DIP Terms

$30MM Northridge DIP Terms

Borrower / Guarantors

• Sangamo Therapeutics, Inc., as Borrower
• Sangamo Therapeutics UK Ltd., Sangamo Therapeutics France SAS, and Ceregene, Inc., as Guarantors
  • All obligations under the DIP Facility are guaranteed, as a guaranty of collection only, by each of the Borrower's direct and indirect subsidiaries and affiliates (collectively, the "Guarantors" and, together with the Borrower, the "Loan Parties")

DIP Lender

• Northridge ATM, LLC, together with its subsidiaries, affiliates, designees, and assignees, as DIP Lender

DIP Commitments

• DIP Loan proceeds are funded into a segregated DIP Bank Account, with the Loan Parties to obtain a control agreement in favor of the DIP Lender within 30 days after entry of the Final Order (subject to a 30-day cure period if commercially reasonable efforts are being used)
• $30 million non-amortizing senior secured superpriority debtor-in-possession term loan facility, plus applicable fees and premiums, comprised of:
  • Up to $10.5 million (the "Interim DIP Loans") available upon entry of the Interim Order
  • Up to the full amount of the DIP Commitments less amounts drawn under the Interim DIP Loans (the "Subsequent DIP Loans") available upon entry of the Final Order
• The borrowing of DIP Loans permanently decreases the DIP Commitments on a dollar-for-dollar basis, and DIP Loans repaid may not be reborrowed
• Draw mechanics:
  • The Initial Draw shall be made within two business days after entry of the Interim Order
  • Each subsequent draw shall be made in an aggregate minimum amount of $5 million, and in multiples thereof thereafter, upon three business days' written notice (or such shorter period as agreed by the DIP Lender), up to the amount of the available undrawn DIP Commitments, at any time prior to the date that is three business days before the DIP Termination Date

Cash Collateral

• Any and all of the Debtor's cash, whether existing as of entry of the Interim Order or thereafter and wherever located, including all cash, cash equivalents, and other amounts on deposit or maintained by the Debtor in any account, as well as proceeds of the DIP Collateral or DIP Loans, constituting "cash collateral" within the meaning of section 363(a) of the Bankruptcy Code
• The Debtor is authorized to use the proceeds of DIP Loans and Cash Collateral solely as expressly permitted under the Budget (subject to the Permitted Variance) and the terms of the DIP Term Sheet and the Interim Order

Interest Rate

• 12.0% per annum, payable in cash on the first business day of each month in arrears
• Default Rate Increase: an additional 2.0% per annum, payable in cash, upon the occurrence and during the continuance of an Event of Default

Fees

• Commitment Fee: 2.0% of the total amount of the DIP Commitments, approved on a final basis, fully earned and non-refundable upon entry of the Interim Order, payable in cash out of the proceeds of the Initial Draw or cash on hand within two business days after entry of the Interim Order
• Exit Fee: 5.0%, consistent with the Court's ruling at the Interim Hearing, payable as follows:
  • Initial Exit Fee: 5.0% of the Interim DIP Loans, approved on a final basis, fully earned and non-refundable upon entry of the Interim Order
  • Additional Exit Fee: 5.0% of the remaining amount of the DIP Commitments (i.e., the full amount of the DIP Commitments less amounts drawn under the Interim DIP Loans), subject to and following entry of the Final Order
  • The earned portion of the Exit Fee is due and payable in cash upon the earliest of (i) the DIP Termination Date, (ii) Payment in Full of the DIP Obligations, and (iii) on a pro rata basis for any mandatory or voluntary prepayment of the DIP Obligations
  • Per the DIP Term Sheet, if the DIP Termination Date occurs solely as a result of the occurrence and continuation of an Event of Default, the Exit Fee is not payable until the DIP Obligations have been accelerated by the DIP Lender (the Interim Order’s paragraph 2(d) restatement does not repeat this proviso, and the Interim Order controls in the event of any conflict)
• Work Fee: $75,000, fully earned, non-refundable, and allowed upon execution of the Term Sheet; paid in cash to the DIP Lender's counsel before the Petition Date, with receipt acknowledged as of June 15, 2026; any unused amount is carried forward to offset the DIP Lender's legal expenses during the case
• The Commitment Fee, the Exit Fee, and the Work Fee are approved on a final basis; if such fees are not approved on a final basis and paid as set forth, the Term Sheet and any applicable DIP Documents automatically terminate. The Commitment Fee and the Exit Fee, to the extent earned and payable, are payable even if the DIP Facility is never drawn

Maturity

• All DIP Obligations shall be due and payable in full in cash on the earliest of the following (the "DIP Termination Date"):
  • December 30, 2026
  • The effective date of any chapter 11 plan with respect to the Borrower
  • The consummation of the sale or other disposition of all or substantially all of the assets of the Loan Parties pursuant to section 363 of the Bankruptcy Code; provided that consummation of either the transaction contemplated by the Merope APA or the transactions contemplated by the Lumos APA, in each case individually, shall not constitute such a sale or disposition
  • The date of acceleration of the DIP Loans and termination of the DIP Commitments following an Event of Default
  • Dismissal of the Chapter 11 Case, conversion of the Chapter 11 Case to a case under chapter 7, or the appointment of a trustee or examiner
  • 35 days after the Petition Date, unless the Final Order has been entered by such date (unless otherwise extended in writing by the DIP Lender in its sole discretion)

Prepayments

• Voluntary Prepayments: permitted at any time, subject to (i) allocation to the ratable portion of the Exit Fee due thereon, (ii) accrued interest on the amount prepaid, and (iii) minimum amounts of at least $1 million of principal
• Mandatory Prepayments:
  • Dispositions: within one business day of receipt of the Net Cash Proceeds of any disposition of DIP Collateral (excluding dispositions of DIP Collateral in the ordinary course of business), the applicable Loan Party shall prepay the DIP Obligations in an amount equal to 100% of such Net Cash Proceeds, applied to principal, accrued interest, and the allocable portion of the Exit Fee
  • Indebtedness: within one business day of receipt of proceeds of any indebtedness (other than permitted indebtedness), the applicable Loan Party shall prepay the DIP Obligations in an amount equal to 100% of such Net Cash Proceeds, plus accrued interest and the Exit Fee as applied to the principal amount prepaid
  • No reinvestment of such net proceeds is permitted without the prior written consent of the DIP Lender

Carve Out

• All fees required to be paid to the Clerk of the Court and to the U.S. Trustee under section 1930(a) of title 28, plus interest at the statutory rate
• All reasonable fees and expenses up to $50,000 incurred by a trustee under section 726(b) of the Bankruptcy Code
• Allowed Professional Fees of the Debtor Professionals (retained under sections 327, 328, or 363) and Committee Professionals (retained under sections 328 or 1103) incurred at any time before or on the first business day following delivery of a Carve Out Trigger Notice
• The amounts described in the three bullets above — Clerk/U.S. Trustee fees, section 726(b) trustee fees (up to $50,000), and pre-trigger Allowed Professional Fees — are collectively the ‟Pre-Carve Out Trigger Notice Amounts”
• Post-Carve Out Trigger Notice Cap: Allowed Professional Fees in an aggregate amount not to exceed $2,500,000 incurred after the first day following delivery of the Carve Out Trigger Notice

Use of Proceeds

• Working capital and other general corporate purposes of the Loan Parties
• Professional fees and expenses of the Debtor's estate in administering the Chapter 11 Case
• Fees and expenses payable under the DIP Facility, including the Commitment Fee, the Exit Fee, the Work Fee, and the professional fees and expenses of the DIP Lender
• Interest and other amounts payable under the DIP Facility and the DIP Documents
• Any other purpose not prohibited by the DIP Orders

Conditions Precedent

• Initial Draw conditions include:
  • Entry of the Interim Order on or before five business days after the Petition Date, with no order entered reversing, amending, staying, vacating, terminating, or otherwise modifying it
  • Delivery of a 13-week cash flow budget, in form and substance acceptable to the DIP Lender, reflecting the consolidated operating cash flow of the Debtor
  • Payment of all out-of-pocket costs, fees, and expenses required to be paid to the DIP Lender (including the Commitment Fee), with the Commitment Fee and the DIP Lender's legal fees and expenses incurred as of the Initial Draw paid out of the proceeds of the Initial Draw
  • Representations and warranties true and correct in all material respects
  • No Material Adverse Effect having occurred and be continuing
  • Compliance in all material respects with the DIP Documents and no Event of Default having occurred and be continuing
  • Delivery of a customary borrowing notice
• Each Other Draw is subject to customary conditions, including the absence of any appointment of a trustee, examiner, or receiver; the continued effectiveness of any Acceptable Stalking Horse Purchase Agreement; the absence of a Material Adverse Effect; and the granting and approval of the DIP Claims and DIP Liens

Credit Bid

• Subject to section 363(k) of the Bankruptcy Code, the DIP Lender or its designee (which may be an acquisition vehicle formed by the DIP Lender) has the unqualified right to credit bid up to the full amount of the applicable priority DIP Obligations in any sale of all or any portion of the DIP Collateral — whether under section 363, a chapter 11 plan subject to section 1129(b)(2)(A), or a chapter 7 sale under section 725 — without the need for further order of the Court
• The DIP Lender has the absolute right to assign, transfer, sell, or otherwise dispose of its credit bid rights to any acquisition vehicle formed in connection with such bid or other designee

Avoidance Actions

• Effective upon entry of the Interim Order, the DIP Collateral includes all causes of action under section 549 of the Bankruptcy Code to recover postpetition transfers of DIP Collateral and the proceeds thereof
• Effective upon entry of the Final Order, the DIP Collateral includes all other Avoidance Actions and the proceeds thereof (i.e., avoidance, recovery, subordination, or other claims under sections 544, 545, 547, 548, and 550 of the Bankruptcy Code or similar state or federal statutes and common law, including fraudulent transfer laws)

Securities and Priorities

• The DIP Obligations constitute allowed superpriority administrative expense claims pursuant to section 364(c)(1) of the Bankruptcy Code against the Debtor, with priority over any and all other administrative expense and other claims, subject only to the Carve Out; provided that the DIP Superpriority Claims shall not have priority over any stalking horse bid protections approved by the Court with respect to an Acceptable Stalking Horse Purchase Agreement
• The DIP Lender is granted valid, binding, enforceable, nonavoidable, and automatically perfected DIP Liens in all DIP Collateral, subject and subordinate to the Carve Out, with the following priorities:
  • Pursuant to section 364(c)(2), a first-priority lien on all DIP Collateral not subject to a valid, perfected, non-avoidable lien or security interest
  • Pursuant to section 364(d)(1), an automatically perfected first-priority lien on all DIP Collateral subject to a valid, perfected, non-avoidable lien or security interest
• The DIP Liens are automatically effected and perfected upon entry of the Interim Order, without the necessity of executing or filing any security documents, financing statements, or control agreements
• The Loan Parties represent that none of their assets are subject to any valid, perfected liens as of the Petition Date, other than the Existing Liens, and no liens will be created on or after the Petition Date except the Carve Out and as expressly permitted under the DIP Documents
• The DIP Documents include a negative pledge on all assets of the Loan Parties, subject to the Carve Out
• Upon consummation of a sale pursuant to an Acceptable Stalking Horse Purchase Agreement, the DIP Liens are automatically released from the applicable acquired assets pursuant to section 363(f)(2) of the Bankruptcy Code

Limitations on Use of Proceeds, Cash Collateral, and Carve Out (Restricted Use)

• No DIP Loans, DIP Collateral, Cash Collateral, any portion of the Carve Out, or proceeds of any of the foregoing may be used by the Debtor, any statutory or non-statutory committee, or any other party in interest to:
  • Investigate (except as expressly permitted), initiate, or prosecute any claim, cause of action, or proceeding against the DIP Lender or its Representatives, including any challenge to the amount, validity, enforceability, perfection, or priority of the DIP Obligations (including the Commitment Fee, Work Fee, and Exit Fee), the DIP Liens, or the DIP Collateral, any Avoidance Actions, or any ‟lender liability” claims
  • Object to, appeal, or otherwise challenge the Interim Order, the DIP Facility, the DIP Obligations, the DIP Liens, or the DIP Term Sheet (provided that parties retain the right to object to entry of the Final Order)
  • Prevent, hinder, or delay the DIP Lender’s enforcement or realization on the DIP Collateral (other than to contest whether a DIP Termination Event has occurred and is continuing)
  • Seek postpetition financing, or to grant liens, claims, or security interests, senior to or pari passu with the DIP Liens or DIP Claims, unless the DIP Obligations are paid in full
  • Use Cash Collateral or sell/dispose of DIP Collateral without the DIP Lender’s consent other than as provided in the DIP Orders and the DIP Term Sheet
  • Pay any prepetition claim unless agreed in writing by the DIP Lender or included in the Budget
• The Carve Out is not available for, and does not apply to, any such Restricted Use. (The source provides no separate investigation/challenge budget for a Committee.)

Events of Default

• The DIP Documents will contain Events of Default customary for debtor-in-possession facilities of this type, including, without limitation:
  • Non-payment; non-compliance with covenants; entry of judgments in excess of $1,000,000; impairment of the DIP Lender’s security interest in the DIP Collateral; and other customary defaults (subject to applicable grace/cure periods for non-payment defaults only)
  • Failure to enter the Interim Order within five business days after the Petition Date, or the Interim Order being stayed, amended, modified, reversed, vacated, or otherwise altered without the DIP Lender’s consent
  • Failure to enter the Final Order within 35 days after the Petition Date, or the Final Order being stayed, amended, modified, reversed, vacated, or otherwise altered without the DIP Lender’s consent
  • An Acceptable Stalking Horse Purchase Agreement being cancelled, terminated, amended, modified, or supplemented without the DIP Lender’s consent (not to be unreasonably conditioned or delayed)
  • Dismissal of the Chapter 11 Case or conversion to a case under chapter 7
  • Non-compliance by any Loan Party with the terms of the DIP Orders (subject to applicable grace/cure periods)
  • Appointment of a receiver, trustee, responsible officer, or examiner with expanded powers (other than a fee examiner)
  • Entry of an order granting relief from the automatic stay permitting a third party to foreclose on or enforce against assets of the Loan Parties with an aggregate fair market value exceeding $1,000,000
  • Entry of an order (a) surcharging the DIP Collateral, (b) applying the section 552(b) equities-of-the-case exception, (c) allowing an administrative-expense claim with priority over or pari passu with the DIP Claims, or (d) otherwise adversely impacting the DIP Lender’s liens, claims, or priority
  • Any direct or indirect action by a Debtor to challenge the DIP Lender’s rights and remedies, or to avoid or require disgorgement of amounts received under the DIP Facility
  • Entry of an order, without the DIP Lender’s consent, approving additional financing under section 364 from another party (except financing that pays the DIP Obligations in full upon closing or initial funding)
  • Material payments on prepetition obligations after entry of the Interim Order other than as permitted by the DIP Orders, acceptable first/second-day orders, the DIP Documents/Budget, or as otherwise agreed by the DIP Lender
  • Entry of an order terminating or modifying the Debtor’s exclusive right to file or solicit a plan under section 1121 without the DIP Lender’s consent
  • Any Loan Party seeking to disallow the DIP Obligations, challenge the validity/enforceability of the DIP Liens or DIP Claims, or contest any DIP Document provision having an adverse effect on the DIP Lender
  • A Debtor filing a Plan not in form and substance acceptable to the DIP Lender (a Plan is acceptable if it provides for Payment in Full of the DIP Obligations on or before its effective date)
  • The occurrence and continuance of a Material Adverse Effect
  • A Loan Party filing a motion to settle a controversy or claim reasonably expected to have a material adverse effect on the DIP Collateral without the DIP Lender’s consent
  • Failure to execute and deliver requested perfection documents within the applicable time periods
  • A Debtor filing a motion to approve a sale of DIP Collateral that is not acceptable to the DIP Lender (other than pursuant to an Acceptable Stalking Horse Purchase Agreement or a qualifying alternative that would generate proceeds sufficient for Payment in Full of the DIP Obligations)

Indemnification and Expense Reimbursement

• The Debtor is authorized and directed to pay all fees, premiums, indemnification obligations, and costs, expenses, and disbursements of the DIP Lender, including the reasonable and documented fees and expenses of Norton Rose Fulbright US LLP and Ice Miller LLP, as co-counsel to the DIP Lender, and any other professionals retained by the DIP Lender with the Debtor's consent, without the need to file fee or retention applications or comply with the U.S. Trustee's fee guidelines
• The DIP Documents contain customary indemnification provisions for the benefit of the DIP Lender and its related parties; such indemnity does not extend to losses (a) arising from the material breach of an Indemnitee's obligations, (b) not involving an act or omission of the Debtor and brought by one Indemnitee against another, or (c) determined by final, non-appealable judgment to have arisen from the gross negligence, bad faith, or willful misconduct of such Indemnitee
• Invoices for professional fees may be in summary form, are not required to contain individual time entries, and may be redacted to protect privileged or confidential information; absent a formal objection within the five-business-day Fee Objection Period, such fees are promptly paid

Stipulations and Releases

• The Debtor stipulates that the DIP Lender does not control the Debtor or its operations and is not a control person or insider of the Debtor or its affiliates
• The Debtor stipulates that, as of the date of the Interim Order, there exist no claims, defenses, or causes of action against the DIP Lender or its Representatives arising from or related to the Interim Order, the DIP Facility, the DIP Liens, the DIP Superpriority Claims, the DIP Collateral, the DIP Obligations, or the DIP Term Sheet
• Effective upon entry of the Final Order, the Debtor, on behalf of itself and its estate, and each Guarantor, releases and discharges the DIP Lender and its Representatives from any and all causes of action arising prior to the date of the Interim Order in connection with the foregoing matters, including avoidance actions and "lender liability" or equitable subordination claims; provided that nothing relieves the DIP Lender from fulfilling its commitments under the DIP Term Sheet

Modification of Automatic Stay and Remedies

• The automatic stay under section 362(a) is vacated and modified to permit the Debtor to grant the DIP Liens and DIP Superpriority Claims, incur the DIP Obligations, and perform under the Interim Order and the DIP Term Sheet
• Upon the occurrence and during the continuation of a DIP Termination Event, the DIP Lender may, among other things, terminate the DIP Commitments, declare the DIP Obligations due and payable, terminate the Debtor's ability to use Cash Collateral, charge interest at the default rate, exercise rights of set-off, and exercise remedies against the DIP Collateral
• In the case of enforcement of rights against the DIP Collateral (other than due to the occurrence of the Maturity Date), the DIP Lender shall provide five business days' prior written notice (the "Remedies Notice Period" or "Waiting Period"), during which the Debtor, any Committee, or other party in interest may seek an emergency hearing, and during which the Debtor may use Cash Collateral solely to fund expenses critically necessary to preserve the value of its business and to fund the Carve Out Reserves

Waivers

• Subject to entry of the Final Order:
  • Section 506(c): the Debtor waives the right to surcharge the DIP Collateral as to the DIP Lender
  • Section 552(b): the "equities of the case" exception shall not apply
  • The equitable doctrine of "marshaling" and other similar doctrines shall not apply with respect to the DIP Collateral and the DIP Obligations
• The DIP Orders shall include a customary release of the DIP Lender and its representatives with respect to any and all claims and causes of action arising from or related to the Chapter 11 Case, the DIP Facility, and the DIP Documents

Permitted Variance

• A Permitted Variance is limited to not greater than 15% for budget variances with respect to the Net Operating Variance, tested on a cumulative four-week rolling basis as set forth in each Variance Report
• Any Net Operating Variance with respect to net operating cash flow that exceeds 15% is material and constitutes an Event of Default under the DIP Documents
• United States Trustee fees, professional fees of the DIP Lender (to the extent reimbursed) and the Loan Parties, and certain other administrative expenses to be agreed are excluded from the Net Operating Variance calculation

$35MM Replacement DIP Terms

Borrower(s) / Guarantor(s)

• Sangamo Therapeutics, Inc., as Borrower
• Each of the Borrower’s direct and indirect material domestic subsidiaries, as Guarantors of collection only

Lender

• Future Solution Investments LLC or its designated affiliate, as Replacement DIP Lender

DIP Commitments

• $35 million non-amortizing senior secured superpriority replacement term loan facility comprised of:
  • Up to $18 million available upon entry of the interim order and satisfaction or waiver of the applicable conditions precedent
  • The remaining commitments available upon entry of the final order and satisfaction of the applicable conditions
• The initial draw will be made as soon as reasonably practicable following entry of the interim order
• Subsequent draws:
  • Minimum aggregate amount of $2.5 million
  • Three business days’ written notice, subject to a shorter period agreed to by the DIP Lender
  • Available until three business days before the DIP termination date
• Each borrowing permanently reduces the DIP commitments on a dollar-for-dollar basis, and repaid DIP loans may not be reborrowed
• All draws are subject to the budget, the permitted variance and the amount of undrawn commitments
• DIP proceeds will be deposited into a segregated DIP bank account. The Loan Parties must obtain a control agreement in favor of the DIP Lender within 30 days after entry of the final order, subject to a 30-day cure period if they are using commercially reasonable efforts to obtain the agreement
• Definitive DIP documents are to close as soon as reasonably practicable after entry of the final order and no later than five business days thereafter, unless otherwise agreed by the DIP Lender

Cash Collateral

• All of the Debtor’s cash, wherever located and whether existing upon entry of the interim order or arising thereafter, including cash, cash equivalents, deposit-account balances and proceeds generated from DIP collateral or the DIP loans, constitutes Cash Collateral of the Replacement DIP Lender
• DIP borrowings and Cash Collateral may be used only as expressly permitted by the budget, subject to the permitted variance, the Replacement DIP term sheet and the interim order
• Upon funding the full amount of the Post-Sale Escrow and payment in full of any DIP obligations exceeding the Successful Bid Amount:
  • Cash Collateral will be limited to the cash and cash equivalents held in the Post-Sale Escrow
  • Cash exceeding the Post-Sale Escrow will no longer be subject to the DIP liens or constitute Cash Collateral
• Until the DIP obligations are paid in full, the Debtor must maintain its petition-date cash management system, as modified by the interim order and any acceptable cash management order
• The Debtor may not open a new deposit or securities account that is not subject to the Replacement DIP Lender’s liens, other than a Professional Fees Account

Interest Rate

• 9.0% per annum, payable in cash on the first business day of each month in arrears
• Interest is calculated using a 365- or 366-day year, as applicable, and the actual number of days elapsed
• Default Rate Increase: 2.0% per annum, payable in cash following an event of default, during its continuance and after written notice from the DIP Lender
• After funding the Post-Sale Escrow, subsequently accrued interest may be deposited into the escrow and will increase the DIP Lender’s credit bid dollar-for-dollar above its initial credit bid amount

Fees and Expenses

• DIP Fees: None
• The Debtor is authorized to pay the Replacement DIP Lender’s indemnification obligations and reasonable and documented fees, costs, expenses and disbursements, including fees and expenses of KTBS Law LLP and Young Conaway Stargatt & Taylor, LLP and other professionals retained with the Debtor’s consent
• Expense Payment Cap: $250,000 in aggregate out-of-pocket accrued and unpaid fees, costs, disbursements and expenses, including legal fees and expenses incurred before the closing date
  • While no event of default has occurred and is continuing, amounts above the cap are not payable in cash
  • Excess amounts accrue to the DIP obligations, are deposited into the Post-Sale Escrow as applicable, and increase the Replacement DIP Lender’s credit bid dollar-for-dollar above its initial credit bid amount
• Professional invoices may be submitted in summary form without individual time entries and are not subject to the U.S. Trustee’s fee guidelines or a requirement to file fee applications
• The Debtor, Committee and U.S. Trustee have five business days to object to an invoice. Undisputed amounts must be paid no later than three business days after expiration of the objection period, while disputed amounts are payable upon resolution of the objection or further court order

Maturity

• All DIP obligations are due and payable in full in cash, or other consideration mutually agreed by the Borrower and DIP Lender, upon the earliest to occur of:
  • January 31, 2027
  • The effective date of a chapter 11 plan
  • Consummation of a sale or other disposition of all or substantially all of the Borrower’s assets under section 363 of the Bankruptcy Code, other than a sale of assets subject to the Astellas APA or Merope APA
  • Acceleration of the DIP loans and termination of the DIP commitments following an event of default
  • Dismissal of the chapter 11 case, conversion to chapter 7, or appointment of a trustee or examiner
  • Thirty-five days after entry of the interim order if the final order has not been entered, unless extended in writing by the DIP Lender
• Upon the DIP termination date, the DIP commitments terminate, further borrowings cease and the Debtor’s authority to use DIP proceeds and Cash Collateral terminates, other than amounts available under the Carve Out

Voluntary and Mandatory Prepayments

• The Borrower may prepay the DIP loans in whole or in part at any time without premium, penalty, make-whole payment or other charge
• Partial prepayments are applied to outstanding principal and permanently reduce the DIP commitments
• Unless waived in writing by the DIP Lender, the Debtor must apply 100% of the net cash proceeds from indebtedness other than permitted indebtedness, plus accrued interest on the prepaid principal, within one business day after receipt
• Net cash proceeds may not be reinvested without the DIP Lender’s prior written consent, which may not be unreasonably conditioned or delayed, other than proceeds below a de minimis threshold to be agreed in the DIP credit agreement

Carve Out

• The Carve Out includes:
  • All fees payable to the Clerk of the Court and U.S. Trustee under 28 U.S.C. § 1930(a), plus interest at the statutory rate
  • Up to $50,000 of reasonable fees and expenses incurred by a trustee under section 726(b) of the Bankruptcy Code
  • Allowed unpaid fees and expenses of Debtor and Committee professionals incurred before or on the first business day following delivery of a Carve Out Trigger Notice, subject to the budget and applicable limits under the DIP orders
  • Post-Carve Out Trigger Notice Cap: $3 million of allowed professional fees incurred after the first business day following delivery of the Carve Out Trigger Notice
• A Carve Out Trigger Notice may be delivered following the occurrence and during the continuance of a DIP termination event and acceleration of the DIP obligations
• Each Monday, the Debtor must transfer cash into a segregated Professional Fees Account equal to the professional fees and expenses reflected in the budget for that week, with the initial transfer also covering prior budgeted weeks
• Upon delivery of a Carve Out Trigger Notice, the Debtor must use cash on hand, including Cash Collateral and funds in the Professional Fees Account, to fund the pre- and post-trigger reserves
• Subject to exhaustion of the DIP commitments and the professional-fee amounts in the then-effective budget, the Debtor may draw under the facility to fund any shortfall in the Carve Out notwithstanding an event of default or DIP termination event
• The Post-Sale Escrow is not subject to the Carve Out

Use of Proceeds

• Pay the costs of administering the chapter 11 case
• Fund general corporate, working capital and operational needs, including payroll and the maintenance of relationships with customers, vendors and suppliers
• Pay professional fees and expenses and fund obligations benefiting from the Carve Out
• Pay interest and other amounts due under the DIP facility
• Repay the Original DIP Facility
• All uses are subject to the budget, the permitted variance, the DIP orders and the Replacement DIP term sheet

Original DIP Facility Repayment

• The repayment of the Original DIP Facility is approved on a final basis
• Following entry of the interim order and concurrently with receipt of the initial funding under the Replacement DIP Facility, the Debtor is authorized and directed to repay all Original DIP obligations in full in cash in accordance with the payoff letter
• Upon irrevocable and indefeasible repayment in full and satisfaction of the payoff letter’s other conditions, the liens and security interests securing the Original DIP Facility will be automatically released and terminated without further action or court order
• The repayment is nonrefundable and irrevocable and is not subject to challenge, avoidance, reduction, setoff, recoupment, recharacterization, subordination, disgorgement, disallowance, impairment, marshaling, surcharge or recovery
• The Original DIP Facility was provided by Northridge ATM, LLC under a term sheet dated June 22, 2026, and is repaid pursuant to the payoff letter; the payoff amount comprises principal, interest, the exit fee on the interim loan drawn under the Original DIP Facility, and estimated legal fees of Norton Rose Fulbright US LLP and Ice Miller LLP
• Under the payoff letter, the Loan Parties release the Original DIP Lender and its related parties from claims arising before the payoff effective date, and the Original DIP obligations are reinstated to the extent any portion of the payoff is later rescinded, avoided or required to be returned

Post-Sale Escrow

• If the Replacement DIP Lender is selected as the Successful Bid with respect to a Plan Sponsor Alternative, the Debtor may elect to:
  • Deposit net cash proceeds equal to at least 110% of the Successful Bid Amount into a segregated Post-Sale Escrow with an acceptable third-party escrow agent; or
  • Immediately pay the Successful Bid Amount to the Replacement DIP Lender in satisfaction of the DIP obligations
• To the extent DIP obligations exceed the Successful Bid Amount, applicable net cash proceeds exceeding that amount must be immediately applied to the remaining DIP obligations
• If the Replacement DIP Lender is not selected as the Successful Bid, all net cash proceeds from the applicable sale must be paid to the Replacement DIP Lender until the DIP obligations are paid in full
• The Post-Sale Escrow may be distributed only under a confirmed plan of reorganization or upon termination or withdrawal of the Plan Sponsor Alternative in accordance with its terms (which, at the DIP Lender’s election, includes upon an event of default)
• The Replacement DIP Lender has a first-priority senior security interest in the Post-Sale Escrow, free and clear of all other liens, claims and encumbrances, including the Carve Out and any section 506(c) or section 552(b) claim

Credit Bid

• Subject to section 363(k) of the Bankruptcy Code, the Replacement DIP Lender or its designee may credit bid up to the full amount of the applicable priority DIP obligations in any sale of all or any portion of the DIP collateral
• The credit-bid right applies to a section 363 sale, a sale under a chapter 11 plan, a disposition by a chapter 7 trustee or otherwise, without a further court order
• The Replacement DIP Lender may assign, transfer, sell or otherwise dispose of its credit-bid rights to an acquisition vehicle formed in connection with the bid or another designee

Excluded Collateral

• The DIP collateral excludes at all times:
  • Avoidance actions and their proceeds
  • Commercial tort claims
  • Claims against directors and officers
  • Claims or causes of action against the DIP Lender or its affiliates that are not released under the final order
  • Excluded Property

Securities and Priorities

• The DIP obligations are secured by automatically perfected liens and security interests in substantially all of the Loan Parties’ prepetition and postpetition assets and properties constituting DIP collateral
• The DIP liens are effective upon entry of the interim order without the execution or filing of mortgages, security agreements, pledge agreements, control agreements, financing statements or other perfection documents
• Subject to the Carve Out and permitted liens, the DIP obligations are entitled to:
  • First-priority liens
  • Senior first-priority liens on unencumbered assets and property
  • Allowed superpriority administrative expense claims under section 364(c)(1) of the Bankruptcy Code, with recourse to all DIP collateral
• The DIP superpriority claims are subordinate to the Carve Out and do not have priority over stalking-horse bid protections approved by the court
• Upon funding the Post-Sale Escrow and payment in full of DIP obligations exceeding the Successful Bid Amount, DIP collateral will be limited to the cash and cash equivalents held in the Post-Sale Escrow

Waivers

• Subject to entry of the final order:
  • Section 506(c): No costs or expenses of administering the chapter 11 case or a successor case may be charged against or recovered from DIP collateral without the Replacement DIP Lender’s prior written consent, other than the Carve Out
  • The equitable doctrine of marshaling and similar doctrines will not apply to the DIP collateral or DIP obligations
• The Replacement DIP term sheet also requires the DIP orders to include a waiver of the “equities of the case” exception under section 552(b) of the Bankruptcy Code

Budget and Permitted Variance

• The initial budget covers an 11-week period commencing on or around the week of entry of the interim order and includes projected operating receipts, operating and nonoperating disbursements, net operating cash flow and liquidity
• The budget must be updated on the fifth Thursday following approval of the prior budget and every fifth Thursday thereafter
• The DIP Lender has three business days after delivery to reject an updated budget in its reasonable discretion. If no rejection notice is delivered within that period, the updated budget becomes effective
• After delivery of the first updated budget, the Borrower must provide biweekly variance reports comparing actual and projected net operating cash flow for the four-week period ending the prior Thursday on a cumulative four-week rolling basis
• Permitted Variance: Not greater than 15% for the Net Operating Variance
• A Net Operating Variance exceeding 15% is material and constitutes an event of default
• U.S. Trustee fees, reimbursed professional fees of the DIP Lender and Loan Parties, and certain other agreed administrative expenses are excluded from the Net Operating Variance calculation
• The professional-fee allocation for Committee professionals may not be reduced without the Committee’s prior express written consent

Conditions Precedent

• Conditions to the initial draw include:
  • Delivery of an acceptable 11-week cash flow budget
  • Payment of required out-of-pocket costs, fees and expenses, subject to the Expense Payment Cap
  • Accuracy of the Loan Parties’ representations and warranties
  • No continuing Material Adverse Effect or event of default
  • Material compliance with the applicable DIP documents
  • Entry of the interim order without an adverse reversal, amendment, stay, vacatur, termination or other modification
  • Delivery of a customary borrowing notice acceptable to the DIP Lender
• Conditions to subsequent draws include:
  • Delivery of an acceptable budget or updated budget
  • No appointment of a trustee, examiner or receiver for a Loan Party or its assets
  • Continued accuracy of representations and warranties and material compliance with the DIP orders
  • No continuing default or event of default
  • Payment of required reasonable and documented out-of-pocket costs and expenses, subject to the Expense Payment Cap
  • Court approval of the DIP claims and DIP liens securing the DIP obligations

Events of Default

• Events of default include, among other things:
  • Nonpayment, material covenant noncompliance subject to a 30-day cure period or longer period agreed by the DIP Lender, final nonappealable judgments exceeding $1 million, and material impairment of the DIP collateral security interests
  • Dismissal of the chapter 11 case or conversion to chapter 7
  • Failure to enter the final order within 35 days after entry of the interim order
  • Appointment of a receiver, trustee, responsible officer or examiner with expanded powers
  • Entry of stay relief permitting enforcement against Loan Party assets with an aggregate fair market value exceeding $1 million, subject to specified sale-process exceptions
  • An order surcharging DIP collateral, applying the section 552(b) equities-of-the-case exception, or allowing a claim senior to or pari passu with the DIP claims, subject to specified exceptions
  • Obtaining additional financing without the DIP Lender’s consent unless the financing pays the DIP obligations in full upon closing or initial funding
  • Filing a chapter 11 plan that is not reasonably acceptable to the DIP Lender or does not provide for payment in full of the DIP obligations on or before its effective date from an acceptable funding source
  • Cancellation, termination or a materially adverse amendment of an Acceptable Stalking Horse Purchase Agreement without the DIP Lender’s consent
  • Filing an asset-sale motion that is not acceptable to the DIP Lender, subject to specified exceptions for purchase agreements providing sufficient proceeds to pay the DIP obligations in full

Remedies

• Upon a continuing DIP termination event, the Replacement DIP Lender may terminate, reduce or restrict the commitments; accelerate the DIP obligations; terminate or restrict Cash Collateral use; charge default interest; freeze deposit-account balances; exercise setoff rights; enforce against DIP collateral or the Post-Sale Escrow; or seek authority to sell substantially all of the Debtor’s assets
• Enforcement against DIP collateral or the Post-Sale Escrow is subject to five business days’ prior written notice to the Debtor, any Committee and the U.S. Trustee, as provided in the interim order
• During the notice period, the Debtor, Committee or another party in interest may request an emergency hearing
• During that period, the Debtor may use Cash Collateral only for expenses critically necessary to preserve the value of its business and to fund the Carve Out Reserves

Limitations on Use

• DIP loans, DIP collateral, Cash Collateral, the Carve Out and other funds may not be used to investigate, initiate, support or prosecute claims or challenges against the Replacement DIP Lender or its representatives, or to challenge the DIP obligations, liens, claims, collateral or related rights
• Such funds also may not be used to hinder enforcement of the DIP obligations, seek unauthorized dispositions of DIP collateral, modify the DIP Lender’s rights or obtain claims or liens senior to or pari passu with the DIP liens and claims
• The restrictions do not prohibit a good-faith challenge regarding whether a DIP termination event has occurred or is continuing or whether the Replacement DIP Lender has complied with the DIP orders and documents
• The Carve Out is unavailable for any restricted use

Good Faith and Section 364(e) Protection

• The Replacement DIP Facility and the Replacement DIP term sheet were negotiated in good faith and at arm’s length, and the DIP obligations, DIP liens and DIP superpriority claims are entitled to the protections of section 364(e) of the Bankruptcy Code
• If the interim order or any of its provisions are later reversed, stayed, modified or vacated, that reversal will not affect the validity, enforceability or priority of any advances, obligations, liens, claims or payments arising or made before the Replacement DIP Lender’s actual receipt of written notice of the reversal

Insurance and Maintenance of Collateral

• Until the DIP obligations are paid in full, the Debtor must maintain all property, operational and other insurance required under the Replacement DIP term sheet
• Upon entry of the interim order, the Replacement DIP Lender is automatically deemed an additional insured and lender loss payee under each insurance policy relating to the DIP collateral, and is entitled to the proceeds of such policies until the DIP obligations are paid in full

Releases

• Effective upon entry of the final order, the Debtor, its estate and each Guarantor, to the maximum extent permitted by applicable law, release the Replacement DIP Lender and its representatives from causes of action arising before the date of the interim order relating to the Replacement DIP Facility, DIP liens, DIP superpriority claims, DIP collateral, DIP obligations, Replacement DIP term sheet or related transactions
• The releases do not relieve the Replacement DIP Lender from fulfilling its commitments under the Replacement DIP term sheet

Reporting and Access

• The Debtor must provide the Replacement DIP Lender, its advisors and Committee counsel with required reports, management calls, books and records and other information
• The Replacement DIP Lender and Committee counsel are entitled to reasonable access, upon reasonable notice and during regular business hours, to the Debtor’s books, records, assets and properties

Amendments

• Amendments, waivers, consents and other modifications may be implemented without further court approval unless they:
  • Shorten maturity
  • Increase aggregate commitments
  • Increase the interest rate or any fee
  • Otherwise constitute a material amendment, waiver, consent or modification
• Material DIP amendments require court approval
• If the interim order conflicts with the Replacement DIP term sheet, the interim order controls, subject to specified exceptions for incorporated definitions and terms

Governing Law and Jurisdiction

• New York law, except to the extent governed by the Bankruptcy Code
• The Debtor and DIP Lender submit to the exclusive jurisdiction of the Bankruptcy Court and waive any right to a jury trial

Final Hearing

• Final Hearing: August 20, 2026 at 10:00 a.m. prevailing Eastern Time
• Objection Deadline: August 10, 2026 at 4:00 p.m. prevailing Eastern Time