Searles Valley Minerals - Chapter 11 DIP Terms

DIP Terms

Borrower(s) / Guarantor(s)

• Searles Valley Minerals Inc. ("SVM"), as DIP Borrower
• SVM's affiliated Debtors — Trona Railway Company LLC and Searles Domestic Water Company LLC — as DIP Guarantors
• The Debtors are jointly and severally liable for all DIP Obligations in accordance with the terms of the Final Order and the DIP Loan Documents

Agent / Lender(s)

• Karnavati Holdings, Inc., as DIP Lender, an affiliate of the Debtors
• HSBC Bank USA, National Association, as Prepetition Secured Lender

DIP Commitments

• Secured term loan facility in an aggregate principal amount of up to $20 million, which, subject to certain conditions, may be increased pursuant to the LC Upsize (as defined in the DIP Credit Agreement), comprised of:
  • Up to $7.5 million authorized on an interim basis (the "Initial DIP Loan"), of which $7 million was funded to the DIP Borrower pursuant to the Interim Order
  • An additional $12.5 million authorized on a final basis, for a total of $20 million (including the Initial DIP Loan), with $13 million to be funded when and as provided in the Budget upon entry of the Final Order
• The DIP Lender has no obligation to make any loan or advance unless all conditions precedent under the DIP Loan Documents and the Final Order have been satisfied in full or waived, and has no obligation or responsibility to monitor the DIP Parties' use of the DIP Loans

Supplier Liquidity Advance

• The "Supplier" under the Soda Ash Supply and Liquidity Agreement, dated as of June 14, 2026, has committed to provide a liquidity advance of up to $20,000,000, which will be guaranteed (subject to satisfaction of certain conditions) by Nirma Limited ("Nirma"), an affiliate of the Debtors
• The Debtors are bound by certain secured reimbursement obligations, secured by liens and claims, under the Reimbursement and Indemnity Agreement, dated as of June 18, 2026, by and among Nirma and the Debtors
• The Debtors have been unable to obtain adequate financing or other financial accommodations (in addition to the Supplier Liquidity Advance) from sources other than the DIP Lender on terms more favorable than those provided under the DIP Loan Documents

Prepetition Obligations

• Prepetition Demand Line: Under the Demand Line of Credit Agreement, dated as of March 29, 2024, the Prepetition Secured Lender provided a demand line in an aggregate principal amount of up to $59,500,000 for working capital purposes, with a sublimit for performance and/or financial standby letters of credit
  • As of the Petition Date, $47.4 million in aggregate principal amount of loans and $12.1 million face amount of letters of credit for the account of SVM remain outstanding (the "Prepetition Demand Line Obligations")
• Receivables Facility: Under the Recourse Receivables Purchase Agreement, dated as of March 29, 2024, the Prepetition Secured Lender provides a factoring facility with respect to the Debtors' receivables for certain soda ash contracts
  • As of the Petition Date, approximately $26 million in aggregate principal amount is outstanding under the Receivables Facility (the "Prepetition Receivables Facility Obligations")

Receivables Facility (Postpetition)

• SVM is authorized to continue performing under and to incur postpetition obligations under the Receivables Facility; the Postpetition Receivables Facility Obligations constitute superpriority administrative obligations of the estates (the "Receivables Facility Superpriority Claims")
• The Prepetition Lender consents to the continued availability and functioning of the Receivables Facility during the pendency of the Chapter 11 Cases with maximum availability of up to $30,000,000
• All amounts received after the Petition Date are applied first to reduce the prepetition obligations under the Receivables Facility until paid in full, and then to postpetition obligations
• The maximum prepetition and postpetition obligations under the Receivables Facility may not exceed $30 million in the aggregate at any point in time

Cash Collateral

• The Debtors are authorized to use Cash Collateral (as defined in section 363(a) of the Bankruptcy Code) and all other Prepetition Collateral, solely in accordance with the terms of the Final Order
• The Prepetition Secured Lender consents to the Debtors' use of Cash Collateral and the entry into the DIP Facility and the DIP Loan Documents
• The Debtors shall continue to use a cash management system that is the same as or substantially similar to their prepetition cash management system; any material changes must be acceptable to the DIP Lender and the Prepetition Secured Lender, each in its reasonable discretion

Fees

• Commitment Fee (as defined in the DIP Credit Agreement), together with any audit fees, appraisal fees, servicing fees, liquidator fees, or similar amounts, and any amounts due in respect of indemnification obligations, each of which is deemed approved upon entry of the Final Order
• Reasonable and documented invoiced out-of-pocket fees, costs, and expenses of:
  • The DIP Lender, including professional, transaction, legal, financial advisor, appraisal, and valuation-related fees and expenses incurred in connection with the DIP Facility, whether incurred prior to or after the Petition Date
  • The Prepetition Secured Lender, including the reasonable and documented fees and expenses of Alston & Bird LLP
• Professionals for the Prepetition Secured Lender and the DIP Lender (the "Lender Professionals") are not required to submit invoices to the Court; fees and expenses are payable by the DIP Borrower within ten calendar days after delivery of invoices, without the necessity of filing motions or fee applications
• The Debtors are authorized and directed to indemnify and hold harmless the Prepetition Secured Lender, the DIP Lender, and their respective affiliates and representatives, except to the extent resulting primarily from such Indemnified Party's gross negligence, bad faith, or willful misconduct, or from such party's material breach of its obligations under the DIP or Prepetition Loan Documents

Maturity / DIP Termination Events

• Unless waived in writing by the DIP Lender (or, with respect to the use of Cash Collateral, the Prepetition Secured Lender), the following constitute DIP Termination Events:
  • Failure of the Debtors to perform, in any material respect, any terms, provisions, conditions, covenants, or obligations under the Final Order
  • Entry of any order modifying, reversing, revoking, staying, rescinding, vacating, or amending the Final Order
  • Failure of the Debtors to comply with the Sale Milestones and/or DIP Milestones (each as defined in the DIP Credit Agreement)
  • Occurrence of the "Termination Date" under the DIP Credit Agreement
  • Occurrence of an "Event of Default" under the DIP Credit Agreement
• On the DIP Termination Date: the maturity of the DIP Facility is accelerated; the DIP Lender's commitment to make DIP Loans terminates; the Prepetition Secured Lender's commitment to provide continued availability of the Receivables Facility terminates; and, after the Notice Period, the DIP Borrower's right to use Cash Collateral and proceeds of the DIP Facility automatically terminates
• Following a DIP Termination Event, the DIP Lender or the Prepetition Secured Lender may exercise rights and remedies after providing not less than five business days' advance written notice (the "Notice Period"), subject to the Carve Out; the automatic stay is automatically vacated at the end of the Notice Period unless (a) the DIP Lender and the Prepetition Secured Lender elect otherwise in a written notice to the Debtors, or (b) the Court determines a DIP Termination Event has not occurred or orders otherwise

Carve Out

• Statutory fees payable to the Clerk of the Court and the U.S. Trustee under 28 U.S.C. § 1930(a), plus interest at the statutory rate, together with all unpaid fees and expenses included in the Budget for periods up to and including the date of a Carve Out Trigger Notice
• Up to $35,000 after the date of a Carve Out Trigger Notice for services provided by any claims and noticing agent
• Up to $50,000 in fees and expenses incurred by a chapter 7 trustee under section 726(b) of the Bankruptcy Code
• Unpaid Allowed Professional Fees of the Debtors and the Committee incurred prior to delivery of a Carve Out Trigger Notice
• Post-Carve Out Trigger Notice Cap:
  • Debtors' Professional Persons: $1,050,000
  • Committee's Professional Persons: $100,000

Use of Proceeds

• Cash Collateral and the proceeds of the DIP Facility and Supplier Liquidity Advance are to be used solely to pay the expenditures set forth in the Budget (subject to Permitted Variances) for:
  • Working capital purposes
  • Costs and fees under the DIP Facility and the Final Order
  • Other general corporate purposes
  • The satisfaction of costs and expenses of administering the Chapter 11 Cases
• None of the Cash Collateral, proceeds of the DIP Loans, the Supplier Liquidity Advance, or the Carve Out may be used to challenge or contest the DIP Lender's or Prepetition Lender's claims, liens, and security interests, or to investigate (except up to $300,000 in the aggregate for the Debtors and $300,000 for the Committee), commence, prosecute, or defend any claim or cause of action against the Prepetition Lender or the DIP Lender or their respective affiliates

Credit Bid

• The DIP Lender has the right, pursuant to section 363(k), to credit bid up to and including the full amount of the DIP Obligations, including any outstanding principal and accrued interest, fees, and expenses, without the need for further Court order, whether such sale is effectuated through section 363 or 1129 of the Bankruptcy Code, by a chapter 7 trustee under section 725, or otherwise
• Any such credit bid may provide for the assignment of the right to purchase the acquired assets to a sub-agent or a newly formed acquisition vehicle

Avoidance Actions

• The Avoidance Actions themselves are excluded from the DIP Collateral; however, certain proceeds are included as DIP Collateral:
  • 75% of all proceeds from commercial tort claims and Avoidance Actions against any Debtor-Affiliated Entity (a present or former insider or affiliate of the Debtors) or the Prepetition Lender, with the remaining 25% being the "Estate Portion of Affiliated Entity Proceeds"
  • 50% of all proceeds from commercial tort claims and Avoidance Actions against any entity that is not a Debtor-Affiliated Entity or the Prepetition Lender, with the remaining 50% being the "Estate Portion of Non-Affiliated Entity Proceeds"
• The Estate Portion of Proceeds shall not be used to fund the Carve Out or to pay any claims of the Prepetition Secured Lender, the DIP Lender, Nirma, or any other non-Debtor affiliates, and no Prepetition Liens of the Prepetition Secured Lender shall attach to the Estate Portion of Proceeds

Challenge Period and Budget

• The deadline to commence a Challenge is no later than August 31, 2026, or such later date as may be agreed by the Prepetition Secured Lender in writing (the "Challenge Deadline")
• No more than $300,000 in the aggregate of the proceeds of the DIP Collateral, Prepetition Collateral, Supplier Liquidity Advance, and Carve Out (credited against the amount allocated to Committee Professionals under the Budget) may be used by the Committee solely to investigate (but not to prosecute or Challenge) the Debtors' admissions and releases
• The aggregate amount reflected in the Budget for the fees and expenses of Professionals for the Committee is increased from $1.6 million to $2.5 million

Security and Priorities

• As security for the DIP Obligations, the DIP Lender is granted valid, binding, enforceable, non-avoidable, and automatically perfected DIP Liens on all DIP Collateral, subject only to the Carve Out, with the following priorities:
  • A junior lien pursuant to section 364(c)(3) on all DIP Collateral subject to valid, perfected, and non-avoidable liens in existence as of the Petition Date, including the Prepetition Liens (the "Permitted Prior Liens")
  • A first-priority lien pursuant to section 364(c)(2) on all DIP Collateral that was unencumbered as of the Petition Date and any DIP Collateral subject to an avoidable lien that is subsequently avoided
  • Notwithstanding the foregoing, the Receivables Facility Liens are first-priority liens, not subject to the Carve Out, with respect to all postpetition Receivables funded by Advances and all Related Rights
• The DIP Lender is granted an allowed superpriority administrative expense claim pursuant to section 364(c)(1) on account of the DIP Obligations (the "DIP Superpriority Claims"), subject only to the Carve Out and the Prepetition Superpriority Claims, with priority over all administrative expenses of the kinds specified in sections 105, 326, 330, 331, 503(b), 506(c), 507(a), 507(b), and 726 of the Bankruptcy Code
• As additional security for the Postpetition Receivables Facility Obligations, the Prepetition Secured Lender is granted the Receivables Facility Liens on all Receivables and Related Rights funded by Advances (first-priority, not subject to the Carve Out) and on all other DIP Collateral that was unencumbered as of the Petition Date or was subject to an avoidable lien as of the Petition Date that is subsequently avoided
• The DIP Liens and Replacement Liens attach and become valid, perfected, and effective by operation of law as of the Petition Date, without any further action, filing, or recordation

Nirma Guarantee / Subrogation

• To the extent Nirma is called upon to, and does, pay the Debtors' obligations under any guarantee issued in favor of the Prepetition Secured Lender with respect to (i) the Prepetition Obligations under the Prepetition Loan Documents or (ii) the Postpetition Receivables Facility Obligations, Nirma shall be subrogated to all liens, rights, and claims of the Prepetition Secured Lender against the Debtors and their assets, including the Prepetition Liens, the Replacement Liens, the Receivables Facility Liens, the Prepetition Superpriority Claims, and the Receivables Facility Superpriority Claims
• In the case of only a partial payment by Nirma, such subrogated liens, rights, and claims shall be subordinate to the remaining liens, rights, and claims that continue to be held by the Prepetition Secured Lender, to the extent permitted under any applicable guaranty or indemnity agreement or applicable law

Debtors' Releases

• Effective upon entry of the Interim Order, and subject to any party in interest's right to commence a Challenge under paragraph 25, the Debtors fully, finally, and forever release and discharge the Prepetition Secured Lender and its related parties (the "Released Prepetition Lender Parties") from all claims arising prior to the Petition Date relating to the Prepetition Loan Documents and/or the DIP Orders, except claims a court of competent jurisdiction determines by final, non-appealable order to result primarily from the Released Party's gross negligence, bad faith, or willful misconduct (and excluding claims of any entity subrogated to the Prepetition Secured Lender's rights)
• Effective upon entry of the Interim Order, the Debtors similarly release and discharge the DIP Lender and its related parties (the "Released DIP Lender Parties") from all claims arising prior to the Petition Date relating to the DIP Loan Documents and the DIP Orders, subject to the same gross negligence / bad faith / willful misconduct exception; unlike the Prepetition Lender release, the DIP Lender release is not expressly made subject to the Challenge right
• The Debtors acknowledge they have no defense, counterclaim, offset, or recoupment of any kind to reduce or eliminate their liability to repay the Prepetition Secured Lender or the DIP Obligations

Sale / Collateral Proceeds

• Subject in all respects to the Carve Out and the funding of the Professional Fee Escrow Account, all net cash proceeds from the sale of the Debtors' assets constituting Prepetition Collateral shall be indefeasibly paid to the Prepetition Secured Lender at closing for application against the Prepetition Obligations
• All net cash proceeds from the sale of the Debtors' assets constituting DIP Collateral, to the extent remaining after payments to the Prepetition Lender, shall be indefeasibly paid to the DIP Lender at closing for application against the DIP Obligations

Adequate Protection

Prepetition Secured Lender

• An allowed superpriority claim to the extent of any Diminution in Value (the "Prepetition Superpriority Claims"), subject to the Carve Out, provided that the Estate Portion of Proceeds shall not be used to pay any Prepetition Superpriority Claims
• Valid, binding, enforceable, and perfected replacement liens on the Prepetition Collateral and other DIP Collateral (the "Replacement Liens"), subject to the Carve Out and Permitted Prior Liens, equal to the aggregate Diminution in Value
• Payment of current interest at the non-default rate
• Reimbursement from the Debtors and their estates for the fees and costs of its professionals
• Inspection rights (also granted to the DIP Lender), including one conference call per week with management, reasonable access to the Debtors' books, records, properties, facilities, and bank accounts, and the ability to discuss the Debtors' affairs, finances, and condition with the Debtors' officers, Professionals, and financial advisors

Waivers

• Section 506(c): All rights to surcharge the interests of the Prepetition Secured Lender or the DIP Lender in any Prepetition Collateral or DIP Collateral are finally and irrevocably waived
• Section 552(b): The "equities of the case" exception shall not apply to the Prepetition Secured Lender or the DIP Lender
• Marshaling: The DIP Lender and the Prepetition Secured Lender shall not be subject to the equitable doctrine of "marshaling" or any similar doctrine with respect to the DIP Collateral or the Prepetition Collateral
• Payments and proceeds remitted to the Prepetition Secured Lender or the DIP Lender are received free and clear of any claim, charge, assessment, or other liability, and may not be re-borrowed
• Discharge Waiver: The DIP Obligations shall not be discharged by entry of an order confirming any plan, notwithstanding section 1141(d), unless such plan provides for the indefeasible payment in full in cash of all DIP Obligations on the effective date, or such other treatment acceptable to the DIP Lender in its sole and absolute discretion

Permitted Variance

• As of the last day of each weekly period covered in a Reconciliation Report, tested for any rolling two-week period, the following may vary from the applicable Budget by not more than 20%:
  • Cash receipts
  • Cash disbursements, in the aggregate or for any line item (excluding professional fees and expenses for purposes of variance testing)
  • Operating Cash Flow (Total Net Cash Flow excluding Court-approved critical vendor payments and utility deposits under section 366)
• Permitted Variances are not cumulative beyond a given Testing Period, and the DIP Borrower's failure to comply with the Budget subject to the Permitted Variances constitutes an Event of Default
• It is an Event of Default if any Weekly Projection reflects, for any week prior to the week ending August 21, 2026, a negative cash balance at the end of such week, exclusive of funds in the Professional Fee Escrow Account