S.M.F. Group - Chapter 11 DIP Terms

DIP Terms

Borrower(s) / Guarantor(s)

• The Fireman Group Café Concepts, Inc., as DIP Borrower
• SMJ Group, Inc., S.M.F. Group Inc., Italian Café Concepts, LLC, Fiorello's Roman Café, Inc., Ebbets Field Venture, LLC, Cieli Partners, L.P., Ebbets Field Venture II, LLC, SFAP Group, LLC, Café Concepts (Washington DC), LLC, Shelny, LLC, Red Eye/Brooklyn Associates, L.P., 57th Street Hospitality Partners, LLC, SMJ Group, LLC, The Finer Diner, LLC, Red Eye Grill, Inc., Red Eye Grill, L.P., Brooklyn Diner USA, L.P. and Brooklyn Diner USA, Inc., as the other Credit Parties and DIP Loan Parties
  • The DIP Agreement preamble and signature pages also name Broadway Hospitality Venture, LLC and Brasserie 57, LLC as Borrowers, although both are omitted from Schedule 1 to the DIP Agreement and from the Rule 4001(c) summary chart in the motion
  • There are 22 debtors in the jointly administered cases; Fireman Hospitality Card LLC is a debtor but is neither a Prepetition Note Borrower nor a DIP Loan Party
• The DIP Borrower is authorized to borrow and incur the DIP loans, and each other DIP Loan Party is authorized to guarantee such borrowings; the DIP Loan Parties are jointly and severally liable for all DIP obligations

Agent / Lender(s)

• FHGRF LLC, a Delaware limited liability company, as sole DIP Lender (also the Prepetition Secured Party as holder of the Prepetition Note)
• The Debtors' CEO holds a 35.8% non-controlling membership interest in the DIP Lender, subject to dilution without his consent and to senior distribution rights of other members; the Debtors state that the CEO recused himself from all DIP negotiations and discussions and that the Debtors and the DIP Lender were represented by separate, sophisticated counsel and decision makers
• The Debtors submit that the business judgment standard governs notwithstanding the CEO's minority interest and that, if the DIP Lender is deemed an insider, the facility satisfies the entire fairness standard as to both process and price
• The Debtors seek a finding that the DIP Lender extended credit in good faith and is entitled to the protections of section 364(e)
• Pullman & Comley LLC serves as counsel to the DIP Lender and the Prepetition Secured Party; Raines Feldman Littrell LLP is proposed counsel to the Debtors

DIP Commitments

• Up to $6.5 million senior secured superpriority debtor-in-possession facility (but in any event not to exceed the maximum aggregate amount of the Holdback Amounts), comprised of:
  • Interim New Money DIP Revolving Facility of up to $1.5 million, plus an additional $800,000 in the DIP Lender's sole and absolute discretion, for a total of $2.3 million, available upon entry of the interim order
    • The Interim New Money DIP Commitment expires upon the earlier of the funding of the maximum commitment amount or entry of the final order
  • Interim Roll-Up DIP Loans of the Prepetition Secured Obligations in an amount equal to two times each advance under the Interim New Money DIP Revolving Facility, automatically rolled up, refinanced and converted into postpetition obligations on a cashless basis
  • Additional New Money DIP Revolving Facility, available following entry of the final order and remittance of required Holdback Amounts, in an amount up to the Additional New Money DIP Revolving Commitment — the lesser of (a) $4.2 million and (b) the maximum aggregate Holdback Amounts less the Interim New Money DIP Facility and less any portion of the Holdback Amounts required to be held by any lender as collateral for indebtedness other than the loans
    • Advances available from time to time in amounts consistent with the projected cash flow shortfalls set forth in the budget, unless otherwise consented to by the DIP Lender in its sole and absolute discretion
  • Additional Roll-Up DIP Loans of the Prepetition Secured Obligations in an amount equal to two times each advance under the Additional New Money DIP Revolving Facility, on the same cashless basis, following entry of the final order
• The roll-up ratio is 2:1. The deemed borrowing of the roll-up loans entitles the Borrowers to receive for cancellation an equivalent aggregate principal amount of Prepetition Obligations, with no cash or other consideration exchanged; such amounts cease to be outstanding under the Prepetition Note Documents
• The stated $6.5 million aggregate cap and the facility's components do not reconcile: the two new-money tranches alone total $6.5 million ($2.3 million interim plus up to $4.2 million additional), and the motion elsewhere describes the facility as providing "meaningful new money to the Debtors up to $6.5 million ... with a modest roll-up ratio of 2:1." If both new-money tranches are fully drawn and rolled at 2:1, DIP obligations would approach $12.7 million (new money plus roll-up limited by the outstanding Prepetition Obligations), before PIK interest, the exit fee and capitalized lender expenses
• Borrowings require a written Borrowing Request delivered by 12:00 p.m. at least one business day before the requested borrowing date (unless the DIP Lender agrees otherwise), certifying compliance with the Holdback remittance and budget covenants, satisfaction of all due milestones, and the absence of any default
• The revolving facilities may be borrowed, repaid and reborrowed from time to time from entry of the applicable DIP order through the maturity date
• The Prepetition Note is a Secured Demand Promissory Note originally dated March 17, 2016, amended and restated on several occasions, most recently as the Second Amended and Restated Secured Demand Promissory Note dated July 31, 2026 — nine days before the petition date. The Prepetition Note Borrowers are all Debtors other than Fireman Hospitality Card LLC
• As of the petition date, the Debtors stipulate that they were jointly and severally indebted under the Prepetition Loan Documents in an aggregate principal amount of not less than $6,235,147.78 (the motion says approximately $6,235,147.78), inclusive of at least $2,378,334.60 of Prepetition Emergency Funding advanced as emergency bridge funding in anticipation of the potential chapter 11 filing, plus accrued interest, fees, costs and all other obligations

Cash Collateral

• All of the Debtors' cash wherever located and held, including cash in deposit accounts, that constitutes cash collateral of the Prepetition Secured Party (including the proceeds of prepetition collateral) or the DIP Lender within the meaning of section 363(a)
• Use is authorized solely to the extent and for the purposes permitted in the approved DIP budget, subject to permitted variances; upon a DIP termination declaration, cash collateral use is limited to the items permitted during the remedies notice period

Interest Rate

• 12.0% per annum, payable in kind by increasing the then principal amount of the loans, accruing from the date of borrowing until repaid
• Default Rate Increase: 4.0% per annum above the interest rate otherwise accruing, applicable upon the occurrence and during the continuance of an event of default and payable on demand
• The sole Interest Payment Date is the maturity date; interest is computed on a 360-day year and actual days elapsed, accrues on the day a loan is made and not on the day it is repaid, and is due before and after judgment and before and after the commencement of any proceeding under any debtor relief law

Fees

• Exit Fee: 2.0% of the aggregate principal amount of all loans advanced, deemed advanced, capitalized or otherwise added to the DIP obligations — including the rolled-up prepetition obligations, which are deemed advanced — fully earned upon entry of the interim order, due and payable upon the earlier of the maturity date or full repayment of the loan and all other indebtedness, and non-refundable under any circumstances
• Lender Expenses: all reasonable and documented out-of-pocket expenses incurred in connection with the documentation and negotiation of the DIP loan documents and in connection with the chapter 11 cases through and after the effective date, including the fees and expenses of Pullman & Comley LLC, as counsel, and any third-party consultants and financial, accounting or other advisors, payable within five business days after presentation of a payment request and, to the extent permitted by the DIP order, without further notice, hearing or court order
  • Unpaid Lender Expenses are conclusively deemed a requested advance under the loans and become part of the DIP obligations, though the DIP Lender has no obligation to make such an advance
  • Costs and expenses payable under the DIP agreement are added and capitalized to the outstanding principal balance of the loans
• Fee Review Procedure: DIP professional fees and expenses and adequate protection professional fees and expenses are payable without filing fee applications, without compliance with U.S. Trustee guidelines and without further court approval, provided that each professional delivers summary invoices (redactable for privilege) to the Debtors' counsel, the U.S. Trustee and committee counsel, who have seven calendar days to object in writing; undisputed amounts are paid promptly and disputed amounts abide agreement or court order
• Indemnification: the DIP Loan Parties indemnify the DIP Lender and its related parties against all losses, claims, damages, liabilities and related expenses arising out of the DIP loan documents, the loans and the use of proceeds, environmental matters, and related litigation, regardless of whether caused in whole or in part by the indemnitee's comparative, contributory or sole negligence, except to the extent finally determined to result from the indemnitee's actual fraud, gross negligence, bad faith or willful misconduct; the Borrowers waive all claims for special, indirect, consequential or punitive damages

Maturity

• The earliest to occur of:
  • December 31, 2026
  • The date on which the interim order expires if the final order has not been entered within 35 days after the petition date
  • Conversion of any of the chapter 11 cases to chapter 7
  • The effective date of a confirmed chapter 11 plan
  • The date of acceleration of the DIP loans
• The DIP agreement separately defines a "Final Maturity Date" as the earlier of (a) one business day after the effective date of a confirmed chapter 11 plan and (b) December 31, 2026
• On the maturity date the Borrowers must repay the aggregate principal of all loans outstanding, together with all accrued and unpaid interest and any outstanding fees, without notice or demand

Prepayments

• The Borrowers may voluntarily prepay the loans in whole or in part without premium or penalty, other than any exit fee, accrued interest, fees, expenses and other DIP obligations then due and payable; any prepayment must be accompanied by accrued interest and does not reduce the revolving commitments unless the DIP Lender agrees in writing
• Mandatory prepayments of 100% of net cash proceeds are required within three business days of receipt in respect of:
  • Any disposition or involuntary disposition consummated on or after the petition date
  • Any debt issuance not permitted under the DIP agreement or any sale or issuance of equity interests (other than to another Borrower)
  • Any settlement, judgment, award or other recovery in respect of any commercial tort claim or other litigation claim constituting DIP collateral
• The Borrowers must give written notice of any mandatory prepayment by 12:00 p.m. at least one business day beforehand, specifying the date and providing a reasonably detailed calculation of the amount
• Mandatory prepayments are applied first to fees, indemnities and expenses, second to accrued and unpaid interest, and third to unpaid principal, and are accompanied by interest on the principal prepaid through the prepayment date
• The Borrowers may not otherwise prepay, redeem, retire or acquire any indebtedness other than the DIP obligations and regularly scheduled or required payments on permitted indebtedness provided for in the budget

Holdback Amounts

• Holdback Amounts means the aggregate amount as of the petition date, together with all amounts thereafter accumulated, of all money and other obligations owed to the Borrowers and held by third-party payment processors, including American Express, Toast, Stripe and The Hilton Club
• Prior to entry of the final order, and except to the extent necessary to cover cash shortfalls to pay disbursements authorized under the budget, Holdback Amounts received must be deposited within one business day into a segregated account subject to the DIP Lender's control
• Following entry of the final order, all such amounts must be remitted to the DIP Lender within one business day of receipt and applied first to outstanding Prepetition Obligations, next to the outstanding balance of the DIP loans, with any excess retained by the Borrowers only if no default or event of default has occurred and is continuing
• The Debtors are pursuing more than $5.9 million in Holdback Amounts held by their payment processors in connection with the MCA Funders' redirect notices, and have commenced an adversary proceeding (i) seeking turnover of the Holdback Amounts, (ii) requiring timely, ordinary-course settlement and remittance of the proceeds of postpetition card transactions, and (iii) restraining the payment processors from transferring such funds to any party other than the applicable Debtors
• To the extent Holdback Amounts are released to the Debtors during the interim period, the Debtors are authorized to use them to fund operations and pay budgeted disbursements, which may mitigate the need to borrow the additional $800,000; upon entry of the final order, any released Holdback Amounts must be applied to pay down the DIP loans until repaid in full
• Collection and remittance of Holdback Amounts is both a milestone (not less than $4.8 million by September 10, 2026 and all remaining amounts by October 4, 2026) and a condition precedent to any advance under the Additional New Money DIP Revolving Facility

Carve Out

• All unpaid fees payable to the Clerk of the Court and the U.S. Trustee under 28 U.S.C. § 1930(a), plus statutory interest under 31 U.S.C. § 3717 (payable without regard to any Carve Out Trigger Notice)
• Chapter 7 Trustee Fee: unpaid reasonable fees and expenses of a trustee payable under section 726(b), not to exceed $25,000 (also without regard to any Carve Out Trigger Notice)
• Allowed professional fees of debtor and committee professionals incurred on and before the first business day following delivery of a Carve Out Trigger Notice, to the extent allowed and consistent with the approved DIP budget
• Post-Carve Out Notice Amount: $250,000 for allowed professional fees incurred after the first business day following delivery of the Carve Out Trigger Notice
• Carve Out Trigger Notice: a written notice (which may be by email) delivered by the DIP Lender to the Debtors' lead counsel, the U.S. Trustee and lead counsel to any committee, deliverable following a DIP termination event, stating that the carve out has been triggered and the Post-Carve Out Notice Amount invoked; it may be included in a Remedies Notice (the DIP agreement permits delivery only following the occurrence and during the continuation of an event of default)
• Carve Out Reserves: on the trigger date, the notice constitutes a demand to fund two segregated reserves — a Pre-Carve Out Trigger Notice Reserve equal to then-unpaid estimated allowed professional fees incurred on and before the trigger date, capped at the amounts set forth in the approved DIP budget for such professionals through the delivery date, and a Post-Carve Out Trigger Notice Reserve equal to the $250,000 Post-Carve Out Notice Amount
• Upon an event of default, the Debtors may use proceeds of the DIP facility or cash collateral, subject to the budget, to fund the carve out and the carve out reserves
• The carve out does not apply to the committee or its professionals for any actions taken to avoid, challenge, object to, recharacterize, subordinate or otherwise adversely affect the Prepetition Obligations or the security and collateral therefor existing as of the petition date, the DIP loans, the DIP collateral, or the DIP orders
• Following delivery of a Carve Out Trigger Notice, the DIP Lender may not sweep or foreclose on the Debtors' cash until the carve out reserves have been fully funded; the carve out reserves are not subject to the DIP liens or the adequate protection liens
• Neither the DIP Lender nor the Prepetition Secured Party is responsible for the payment or reimbursement of any professional's fees or disbursements
• All DIP liens, DIP superpriority claims, Prepetition Liens, adequate protection liens and adequate protection claims are subject and subordinate to payment of the carve out in all respects

Use of Proceeds

• Provide working capital for, and fund other general corporate purposes of, the Debtors
• Fund the carve out and pay any adequate protection obligations
• Pay other permitted uses not prohibited by the DIP loan documents, in each case solely in accordance with the approved DIP budget, subject to permitted variances
• No proceeds of the loans, the carve out, the carve out reserve, the DIP collateral, the prepetition collateral (including cash collateral) or any portion thereof may be used, directly or indirectly, to investigate (except as expressly permitted by the challenge budget), initiate, prosecute, join or finance any claim or action against the DIP Lender or the Prepetition Secured Party or seeking relief that would impair their rights or remedies; to object to or challenge the legality, validity, priority, perfection or enforceability of their claims, liens or interests; to assert any avoidance action related to the DIP liens, DIP superpriority claims, DIP obligations, Prepetition Liens or Prepetition Secured Obligations; to prosecute any objection to or contest of the DIP liens, DIP superpriority claims, Prepetition Secured Obligations, Prepetition Liens, adequate protection claims or adequate protection liens; to seek authority to obtain financing or use cash collateral without the DIP Lender's prior written consent; or to assert any claim or cause of action against any released party

Credit Bid

• As part of the Debtors' stipulations, and subject to the challenge rights preserved in the interim order, the Debtors acknowledge that in connection with any sale process or sale authorized by the Court, the DIP Lender and the Prepetition Secured Party, or any assignee or designee of the foregoing, have the right to credit bid any or all obligations outstanding under the DIP Facility and the Prepetition Loan Documents in connection with any disposition of estate property, subject to section 363(k), and the Debtors shall not oppose such right

Avoidance Actions

• DIP collateral excludes avoidance actions themselves; upon entry of the final order, avoidance action proceeds — any proceeds of or property recovered from avoidance actions, whether by adjudication, judgment, settlement or otherwise — are included in the DIP collateral
• Any liens on avoidance action proceeds are subject to and effective only upon entry of the final order

Challenge Period and Budget

• Debtors' Stipulations: the Debtors acknowledge and agree that, as of the petition date, the Prepetition Liens were valid, binding, enforceable, non-avoidable and properly perfected and were granted for fair consideration and reasonably equivalent value; that they were senior to all other liens on the prepetition collateral subject only to potential Permitted Prior Senior Liens; that the Prepetition Secured Obligations are legal, valid, binding and non-avoidable; that no offsets, defenses, claims or counterclaims exist and no portion is subject to avoidance, disallowance, disgorgement, recharacterization or subordination; that the Debtors and their estates hold no claims or causes of action, including chapter 5 claims, against the Prepetition Secured Party or its related parties; and that the Debtors waive, discharge and release any right to challenge the Prepetition Secured Obligations or the validity, extent and priority of the Prepetition Liens. The stipulations bind the Debtors immediately upon entry of the interim order and bind all other parties in interest unless a challenge is timely pursued
• The challenge deadline is the earlier of:
  • For all parties in interest, including the official committee and any chapter 7 or chapter 11 trustee, the earlier of (i) 60 days after formation of the official committee or, if no committee is appointed, 75 days after entry of the interim order, and (ii) confirmation of a chapter 11 plan, without prejudice to any provisions of the final order
  • Any later date agreed to by the Debtors and the Prepetition Secured Party and ordered by the Court for cause
• Challenge Budget: no more than $50,000 in the aggregate of the DIP collateral, prepetition collateral or DIP Facility may be used by the official committee, if appointed, solely to investigate — but not to prosecute — the Prepetition Liens or Prepetition Secured Obligations within the challenge deadline
• To preserve a challenge, a party in interest must (i) file a motion seeking standing before the challenge deadline (if standing is required), describing the specific nature and basis of the challenge, (ii) timely and properly commence and serve an adversary proceeding or contested matter by the challenge deadline, and (iii) obtain a final, non-appealable order sustaining the challenge
• If no challenge proceeding is timely and properly filed, the Debtors' stipulations become binding on all parties in interest, the Prepetition Secured Obligations constitute allowed claims, the Prepetition Liens are deemed legal, valid, binding, continuing, non-avoidable, perfected and enforceable, and all challenges are deemed forever waived, released and barred

Securities and Priorities

• The Debtors propose to obtain postpetition financing by providing the DIP Lender with superpriority administrative expense claim status and liens — senior only on unencumbered collateral — under section 364, together with senior and junior liens on certain collateral as set forth in the DIP agreement and the interim order. The Debtors submit that they cannot obtain unsecured or more favorable financing, that discussions with BankUnited regarding alternative financing produced no proposal, and that their negotiations with the DIP Lender were conducted in good faith and resulted in a fair deal among the parties
• The recitals to the motion and the proposed interim order describe the DIP liens as granted "pursuant to sections 364(c) and 364(d)," and the DIP agreement's representations and funding conditions describe a "first-priority priming" lien, but the operative granting language provides only section 364(c)(2) liens on unencumbered property and section 364(c)(3) junior liens on property subject to Permitted Prior Senior Liens; no priming lien under section 364(d) is expressly granted, and property encumbered solely by the Prepetition Liens is not expressly covered by either grant
• The DIP Lender is granted valid, binding, enforceable, non-avoidable and automatically perfected liens and security interests in all DIP collateral, subject and subordinate to the carve out in all respects, with the following priorities:
  • First-priority senior liens under section 364(c)(2) on all DIP collateral not subject to valid, perfected and non-avoidable liens as of the petition date (including the Prepetition Liens and Permitted Prior Senior Liens) or to valid, non-avoidable third-party liens in existence immediately prior to the petition date perfected as permitted by section 546(b), or that becomes unencumbered upon satisfaction of prior secured obligations or release or invalidation of prior security interests
  • Junior liens under section 364(c)(3) on DIP collateral subject to Permitted Prior Senior Liens
• Other than as set forth above, the DIP liens are senior to all other security interests, liens or claims against the DIP collateral, including any lien preserved for the estates under section 551; are enforceable against any trustee and upon conversion or dismissal of the cases; shall not be made subject to or pari passu with any lien granted in the chapter 11 cases or any successor cases; and shall not be subject to sections 510, 549 or 550
• DIP collateral includes the Debtors' commercial tort claims against merchant cash advance lenders, future receivables and revenue-based financing funders and related affiliates and parties, and claims against Hilton Grand Vacations Management, LLC and related Hilton Club entities and their affiliates, principals, members, officers and agents, together with all proceeds, products, substitutions, recoveries, judgments, settlements and distributions in respect thereof
• All DIP obligations constitute allowed superpriority administrative expense claims against each of the Debtors' estates under section 364(c)(1), on a joint and several basis, without the need to file any proof of claim, having priority over all other obligations, liabilities and indebtedness of the Debtors, subject and subordinate only to the carve out
• The DIP liens and adequate protection liens are subject and subordinate to Permitted Prior Senior Liens, which include purchase money security interests and property subject to true equipment leases; liens held by BankUnited; liens held by the Small Business Administration; liens held by Inkind Card and Rewards Network securing certain contractual obligations; and, solely during the interim period, liens held by any entity that provided financing in the form of a purchase of future receivables, revenue-based financing or a merchant cash advance — in each case solely to the extent such liens were senior to the Prepetition Lender and duly perfected, valid, enforceable and non-avoidable as of the petition date. Nothing in the interim order constitutes a finding that any such alleged lien is valid, senior, enforceable, prior, perfected or non-avoidable, and the rights of all parties in interest to challenge such liens are preserved
• Insurance: upon entry of the interim order, the DIP Lender is deemed, without further action or notice, to be named as an additional insured and lender's loss payee on each insurance policy maintained by the Debtors that in any way relates to the DIP collateral
• DIP collateral also includes the Debtors' turnover claims under section 542 against payment processors, merchant acquirers, acquiring banks, payment facilitators, gateways, card networks and reserve account holders, together with substantially all other assets, including deposit accounts, investment property, intellectual property, real property interests and tax refunds (including any Employee Retention Tax Credits). The commercial tort claims are itemized on Schedule 2 to the DIP agreement, which names the merchant cash advance funders, identifies pending state-court actions, and includes claims under 18 U.S.C. § 1961 et seq.
• The Permitted Prior Senior Liens definition also includes liens existing on the petition date and later perfected under section 546(b) (to the extent valid, perfected, enforceable, unavoidable and expressly identified in the DIP agreement or permitted by the interim order), ordinary depository setoff rights, minor real-property encumbrances, certain tax liens, and statutory and common law liens of landlords, carriers, warehousemen, mechanics, suppliers, materialmen, repairmen and similar persons permitted under the DIP agreement. A seller's reclamation right under section 546(c) is expressly not a Permitted Prior Senior Lien and is subject to the DIP liens
• Perfection: the interim order is sufficient and conclusive evidence of the attachment, validity, perfection and priority of the DIP liens and adequate protection liens without any filing or recordation; the DIP Lender and the Prepetition Secured Party are authorized but not required to make filings, and a certified copy of the DIP order may be filed or recorded in lieu of financing statements, with perfection dating from entry of the order
• Payments Held in Trust: any person receiving a payment on account of a security interest in DIP collateral, or receiving DIP collateral or its proceeds, before payment in full in cash of all DIP obligations must hold such payment in trust for the DIP Lender and immediately turn it over
• Amendments: copies of all amendments, waivers, consents and other modifications (other than the approved DIP budget) must be provided to the U.S. Trustee and committee counsel at least two business days before effectiveness; any amendment shortening the maturity or increasing the aggregate commitments or the interest rate must be filed with the Court and is deemed approved if no objection is made within two business days
• In the event of any conflict between the interim order and the motion, the DIP loan documents, the prepetition loan documents or any other order, the interim order governs and controls

Adequate Protection

Prepetition Secured Party

• The Prepetition Secured Party is entitled, pursuant to sections 105, 361, 362, 363(e), 364(d)(1) and 507, to adequate protection against the net postpetition diminution in value of its liens and security interests in the prepetition collateral, including cash collateral. The proposed interim order would find that the adequate protection arrangements and the terms of the use of the prepetition collateral are fair and reasonable and constitute reasonably equivalent value and fair consideration
• Adequate Protection Claims: superpriority administrative expense claims under section 507(b) against each of the Debtors in the amount of any diminution in value from and after the petition date, subject and subordinate only to the carve out and the DIP superpriority claims, and senior to all other administrative expense claims and all other claims against the Debtors and their estates
• Adequate Protection Liens: valid, binding, enforceable and automatically perfected replacement liens and security interests in the DIP collateral, effective and perfected as of entry of the interim order, in the amount of any diminution in value from and after the petition date
  • Senior to all other liens on, or claims against, the DIP collateral, but subject and subordinate only to the carve out in all respects and the DIP liens
  • In no circumstances and at no time in the chapter 11 cases or any successor case may the adequate protection liens be senior to or pari passu with any DIP liens, regardless of whether such liens attach prior in time
• Adequate Protection Professional Fees and Expenses: payment of all reasonable and documented out-of-pocket fees, costs and expenses of the Prepetition Secured Party, including the fees and expenses of Pullman & Comley, LLC, as its legal counsel, incurred since the petition date and relating in any way to legal services related to the Prepetition Secured Obligations, the Debtors or the chapter 11 cases, subject to the review procedures set forth in the interim order
• Section 507(b) Reservation: nothing in the interim order impairs or modifies the application of section 507(b) in the event the adequate protection provided proves insufficient to compensate for any diminution in value of the Prepetition Secured Party's interests in the prepetition collateral
• The Debtors represent in the DIP agreement that the use of cash collateral to fund the fees and costs of retained professionals as set forth in the budget constitutes a diminution of the DIP Lender's collateral warranting adequate protection
• Note: the interim order's captions for the Permitted Prior Senior Liens Holders' adequate protection are transposed — the paragraph captioned "Adequate Protection Claims for Permitted Prior Senior Liens" grants replacement liens, and the paragraph captioned "Adequate Protective Liens for Permitted Prior Senior Liens" grants the section 507(b) claims. The descriptions below follow the substance of the provisions

Permitted Prior Senior Liens Holders

• The Debtors have agreed to provide limited and customary adequate protection to the holders of Permitted Prior Senior Liens under sections 361, 362, 363 and 364(d), in the form of replacement liens and superpriority administrative expense claim status, to protect against any postpetition diminution in value of their prepetition collateral (including cash collateral) resulting from the Debtors' use, sale, lease, depreciation or disposition of such collateral, including the use of cash collateral on a dollar-for-dollar basis, and the imposition of the automatic stay
• Replacement Liens: liens under sections 361 and 363 on all postpetition property to the same extent, validity and priority as their prepetition liens held as of the petition date, solely to the extent of any diminution in value resulting from the Debtors' use of their collateral, subject to the DIP liens and the carve out
  • Deemed valid, binding, perfected and enforceable upon entry of the interim order without the necessity of executing or filing security agreements, financing statements, mortgages, notices or any other documents, but subject to a determination as to the validity, priority and extent of such Permitted Prior Senior Liens
• Superpriority administrative expense claims under section 507(b), subordinate only to the DIP claims, including the DIP superpriority claims, and the carve out, solely to the extent that (i) the holder is determined to hold valid, perfected and enforceable prepetition liens and claims, (ii) the Debtors' use of cash collateral results in a diminution in the value of such creditor's interest in the prepetition collateral, and (iii) the other forms of adequate protection provided are determined to be insufficient to protect against such diminution in value

Waivers

• Subject to and effective upon entry of the DIP order, and except to the extent of the carve out:
  • Section 506(c): no costs or expenses of administration of the chapter 11 cases or any future proceeding resulting therefrom, including a chapter 7 case, shall be charged against or recovered from the DIP collateral under sections 105 or 506(c), the enhancement of collateral provisions of section 552, or any other legal or equitable doctrine (including unjust enrichment) or similar principle of law, without the DIP Lender's prior written consent; the DIP Lender shall not be subject to surcharge (the DIP agreement refers to surcharge under section 506(b), apparently in error). The interim order's superpriority claim provision references section 506(c) "upon entry of the Final Order," indicating that the surcharge waiver is intended to take effect on a final basis
  • Section 552(b): the "equities of the case" exception shall not apply
  • The equitable doctrine of "marshaling" or any other similar doctrine shall not apply with respect to the DIP Lender's collateral, including the DIP collateral; none of the DIP collateral or the application of its proceeds (in connection with any voluntary or mandatory prepayment, exercise of remedy or otherwise) shall be subject to marshaling or any similar doctrine
• Modification of Automatic Stay: the automatic stay is vacated and modified, without application to or further order of the Court, to permit (a) the DIP Loan Parties to grant the DIP liens and DIP superpriority claims and to perform such acts as the DIP Lender may request to assure the perfection and priority of the DIP liens; (b) the DIP Loan Parties to incur all DIP obligations; (c) the Debtors to grant the adequate protection liens and adequate protection claims and to perform such acts as the Prepetition Secured Party requests to ensure their perfection and priority; (d) subject to paragraph 11 of the interim order, the DIP Lender and the Prepetition Secured Party to exercise, upon the occurrence of any DIP termination event, all rights and remedies provided for in the interim order, the DIP loan documents, the prepetition loan documents or applicable law; and (e) the DIP Loan Parties to perform under the interim order and the DIP loan documents and to take any and all other reasonably necessary or required actions
  • The Debtors submit that stay modifications are standard features of postpetition financing facilities and that, in their business judgment, the stay modification is appropriate under the circumstances
• Release: the Borrowers, for themselves and their successors and assigns, fully release, acquit and forever discharge the DIP Lender, its successors and assigns, officers, directors, employees, representatives, trustees, attorneys, agents and affiliates from any and all actions, claims, demands, causes of action, judgments, executions, suits, debts, liabilities, costs, damages, expenses or other obligations of any kind, direct or indirect, at law or in equity, whether known or unknown, arising out of the DIP agreement, any other DIP loan document, the Prepetition Note, the Prepetition Obligations, any other Prepetition Note Document, the chapter 11 cases, the DIP order or related orders, documents or matters, or any of the transactions contemplated thereby, in each case occurring on or prior to the date thereof
  • Each Borrower agrees that it will not sue any released party on the basis of any released claim; the release survives termination of the DIP loan documents and payment in full of the DIP obligations
• Each party irrevocably waives, to the fullest extent permitted by applicable law, any right to a trial by jury in any legal proceeding directly or indirectly arising out of or relating to the DIP agreement or any other loan document or the transactions contemplated thereby, whether based on contract, tort or any other theory
• The Debtors waive and release any claim against the DIP Lender for breach or alleged breach of agency or fiduciary duty, and acknowledge that the DIP Lender acts solely as principal and not as advisor, agent or fiduciary
• The DIP agreement is governed by New York law and, to the extent applicable, the Bankruptcy Code; the parties submit to the non-exclusive jurisdiction of the Bankruptcy Court and, if it lacks or abstains from jurisdiction, to the federal and state courts sitting in New York, and waive venue and forum non conveniens objections
• The Debtors request a waiver of the notice requirements under Bankruptcy Rule 6004(a) and the 14-day stay imposed by Bankruptcy Rule 6004(h). Notwithstanding Bankruptcy Rules 4001(a)(3), 4001(c)(1), 6004(h), 6006(d), 7062 or 9024, any other Bankruptcy Rule, or Rule 62(a) of the Federal Rules of Civil Procedure, the interim order is immediately effective and enforceable upon entry with no stay of execution or effectiveness
• Reservation of Rights: except as otherwise expressly set forth in the interim order, entry of the interim order is without prejudice to, and does not constitute a waiver of or otherwise impair, (i) the rights of the Prepetition Secured Party to seek other or supplemental relief, including additional adequate protection; (ii) the rights of the DIP Lender or the Prepetition Secured Party under the Bankruptcy Code or non-bankruptcy law, including to request modification of the automatic stay, request dismissal or conversion of the cases or appointment of a chapter 11 trustee or examiner, or seek to propose a chapter 11 plan; or (iii) any other rights, claims or privileges of the DIP Lender or the Prepetition Secured Party

Permitted Variance

• The Debtors have prepared and delivered to the DIP Lender an initial 13-week cash flow forecast approved by the DIP Lender, which constitutes the approved DIP budget; a summary of the initial DIP budget is set forth on Exhibit 2 to the interim order
• The Borrowers must comply with the following budget variance covenants, tested on a weekly rolling basis commencing on the first Friday following entry of the interim order:
  • Disbursements: aggregate weekly disbursements may not exceed 110% of aggregate budgeted disbursements for such week
  • Receipts: aggregate operating receipts for any four-week period may not be less than 90% of aggregate budgeted operating receipts for such period (the DIP agreement's formulation — "as of the last day of each week ... during such four-week period" — does not define the measurement period; the interim order states it as any four-week period)
  • Line-Item Variance: no individual line-item disbursement category may exceed 115% of the budgeted amount for such line item in any single week, unless offset by corresponding underspend in the same line item in a prior week
  • Draw Limitation: no borrowing under the revolving facilities is permitted if, after giving effect thereto, the aggregate of such borrowing and all prior borrowings under the revolving facilities (net of repayments) would exceed 110% of the aggregate amount of revolving facilities projected to be outstanding under the then-current budget, measured on a cumulative basis from the petition date through the proposed borrowing date, unless otherwise consented to in writing by the DIP Lender
• Budget Refresh: commencing on the first Friday after entry of the interim order and weekly thereafter, the Debtors must deliver an updated 13-week cash flow forecast — including a salary run by employee with a budget line item for compensation and restaurant-level detail — in form and substance satisfactory to the DIP Lender in its sole discretion, together with such supporting documentation as reasonably requested (to be provided within three business days of request)
  • Each proposed budget is subject to the DIP Lender's written approval and, upon approval, replaces the then-current budget; until such approval, the Debtors remain governed by the initial DIP budget or the previously approved DIP budget then in effect
• Variance Report: a weekly report due on the first Wednesday of the week following entry of the interim order and no later than five business days after the end of each week thereafter (by 12:00 p.m.), in form satisfactory to the DIP Lender in its sole and absolute discretion, showing the amount and percentage variance of actual disbursements from budgeted disbursements on a line-item basis for the immediately preceding week, together with an explanation of the reason for any material variance
• Reporting: the Debtors must provide counsel to the official committee, if appointed, with all written reports delivered to the DIP Lender under the DIP loan documents and the interim order
• Use of the loans and other credit extensions must comply with the budget, the DIP loan documents and the DIP order. The DIP Lender may assume compliance, has no duty to monitor compliance, and is not obligated to pay any unpaid expenses incurred or authorized under the budget or omitted from it. Budget line items for interest, expenses and other amounts payable to the DIP Lender are estimates only, and the Borrowers remain obligated to pay all DIP obligations regardless of whether such amounts exceed the estimates. Nothing in the budget constitutes an amendment or modification of any DIP loan document or of the borrowing restrictions or lending limits set forth therein
• The budget was prepared in good faith on the basis of assumptions stated therein believed in good faith to be reasonable in light of conditions existing at the time of delivery, it being understood that projections and estimates are not to be viewed as facts, that no assurance can be given they will be realized, and that actual results may differ materially

Milestones

• Chapter 11 cases commenced on the petition date (August 9, 2026)
• August 14, 2026: entry of the interim order approving the Interim New Money DIP Facility
• August 26, 2026: retention of a qualified investment banker or financial advisor on terms reasonably acceptable to the DIP Lender
• September 6, 2026: entry of the final order, acceptable to the DIP Lender in its sole discretion
• September 10, 2026: collection and remittance to the DIP Lender of not less than $4.8 million of Holdback Amounts; October 4, 2026: collection and remittance of all remaining Holdback Amounts
• September 30, 2026: filing of a chapter 11 plan and related disclosure statement in form and substance acceptable to the DIP Lender
• November 5, 2026: approval of the disclosure statement
• November 10, 2026: commencement of solicitation of votes on the plan
• December 20, 2026: confirmation hearing
• December 27, 2026: entry of an order confirming the plan, in form and substance acceptable to the DIP Lender in its sole discretion
• December 30, 2026: occurrence of the plan effective date
• Milestones are deemed extended, with corresponding extensions of subsequent milestones, only where the Court is unavailable, and in no event by more than three business days; any other extension requires the DIP Lender's written agreement and applies only to the specific milestone identified. Failure to meet a milestone is an event of default, and satisfaction of all milestones then due is a condition to each borrowing

Events of Default and Remedies

• Events of default include: non-payment of principal, interest, premium, fees or other amounts; failure to perform any affirmative or negative covenant or the Holdback remittance, prepayment or lender fee and expense provisions, with no notice or cure period (other loan document defaults carry a five-business-day cure after written notice); materially incorrect or misleading representations; cross-default on indebtedness or guarantees exceeding $50,000 in the aggregate; insolvency proceedings other than the chapter 11 cases; final money judgments exceeding $50,000 (or material non-monetary judgments) unstayed for thirty consecutive days; failure to meet a milestone; invalidity or contest of any DIP loan document; failure of the DIP order to create a valid, perfected lien of the required priority
• Chapter 11 case defaults include: conversion of any case to chapter 7; confirmation of a plan that does not provide for termination of the commitments and indefeasible payment in full in cash of all DIP obligations and the prepetition indebtedness on or before the effective date and for continuation of the DIP liens until that date; dismissal without payment in full; entry of any order without the DIP Lender's consent revoking, staying, modifying or amending the DIP orders, granting equal or superior administrative priority (other than the carve out), or permitting a non-permitted lien on DIP collateral; entry of an unstayed order granting stay relief to any creditor on a claim of $100,000 or more; and applications for an order impairing the DIP collateral, appointment of a trustee, conversion or dismissal, or for use of cash collateral or DIP collateral or priming financing without the DIP Lender's consent
• An event of default constitutes a DIP termination event unless waived in writing by the DIP Lender (which may be evidenced by email from its counsel)
• Upon a DIP termination event, the automatic stay is deemed vacated to permit the DIP Lender to deliver a Remedies Notice to Debtors' counsel, the U.S. Trustee and committee counsel declaring the DIP termination declaration date; effective no sooner than seven calendar days thereafter (the remedies notice period), and subject to the carve out in all respects, the DIP Lender may terminate, reduce or restrict the commitments, accelerate the DIP obligations, terminate the facility, terminate or restrict cash collateral use, charge the default rate, and enforce against the DIP collateral and prepetition collateral
• During the remedies notice period the Debtors and any committee may seek emergency relief from the Court, which automatically extends the period until adjudication; unless the Court orders otherwise, the automatic stay terminates upon expiration of the period
• During the remedies notice period the Debtors may use cash collateral solely to fund payroll and critical expenses necessary to keep the business operating or consented to by the DIP Lender, to fund the carve out, and to file an emergency motion
• The DIP agreement provides a five-business-day notice period before enforcement; the interim order's seven-calendar-day remedies notice period controls in the event of conflict
• Post-remedies application of funds: first to fees, indemnities and expenses of the DIP Lender; second to accrued and unpaid interest, fees, premiums and scheduled periodic payments; third to unpaid principal; and last, any balance to the Borrowers

Covenants

• Restaurant closures: the Borrowers may not close any restaurant location, cease operations at any location, or provide closure notice publicly or to employees without the DIP Lender's prior written consent
• Governance: Jordan Meyer, as chief restructuring officer, and Benjamin Grossman, as sole manager, are designated Responsible Officers and may not be replaced or removed without the DIP Lender's prior written consent
• Litigation claims management: the Borrowers must diligently prosecute the scheduled commercial tort claims consistent with the budget; may not settle, compromise, release or waive any such claim involving more than $25,000 individually or $75,000 in the aggregate, any non-monetary terms, or the release of any merchant cash advance funder, without the DIP Lender's prior written consent; must apply all net cash proceeds to prepay the loans; must report quarterly (or more frequently on request); and may not retain, replace or terminate litigation counsel without the DIP Lender's consent, not to be unreasonably withheld
• Information access: the Borrowers must maintain a current list of accounting, cash management and data management platforms, give seven business days' notice of changes, and provide the DIP Lender with a unique username and password affording continuous, real-time, read-only access to deposit accounts and cash and bank account information
• Chapter 11 claims: no critical vendor or other prepetition unsecured claim payments, section 503(b)(9) payments, or management incentive plan or section 503(c) payments except as approved by court order after notice and a hearing and, where funded from borrowings, approved by the DIP Lender and within the budget
• No additional indebtedness that is pari passu with or senior to the DIP obligations in right of payment or security; no superpriority claim or lien applications pari passu with or senior to the DIP obligations, the prepetition liens or the adequate protection liens; no amendment of the DIP order without the DIP Lender's consent in its sole and absolute discretion; no adversary proceeding or action against the DIP Lender arising from the prepetition note documents
• Other negative covenants restrict liens, investments, indebtedness, fundamental changes, dispositions, restricted payments, affiliate and insider transactions, burdensome agreements, amendments to indebtedness and material documents, fiscal year and legal name changes, subsidiary ownership and formation, sale-leasebacks, speculative transactions, prepayments of indebtedness, sanctions and anti-corruption matters, capital expenditures and compensation

Conditions Precedent

• Initial funding of the Interim New Money DIP Facility requires: executed DIP loan documents; resolutions, good standing and incumbency certificates satisfactory to the DIP Lender; certified financing statement searches dated no earlier than 30 days before the first borrowing request, with evidence that non-permitted liens are or will be terminated or released; insurance certificates and endorsements naming the DIP Lender as additional insured and loss payee; no material litigation or restraining order affecting the closing or the loans; entry of an interim order in form and substance satisfactory to the DIP Lender in its sole and absolute discretion, not stayed, vacated, reversed, rescinded or modified without its consent; an agreed budget approved by the Court in the interim order; and delivery of all material pleadings at least 24 hours in advance, and in no event later than delivery to the U.S. Trustee, in form, scope and substance satisfactory to the DIP Lender
• Each borrowing additionally requires: accuracy of representations and warranties in all material respects; no default or event of default; a compliant borrowing request; for post-interim advances, a final order satisfactory to the DIP Lender in its sole and absolute discretion; no material adverse effect since the petition date other than commencement of the cases; satisfaction of all due milestones; budget compliance; a valid, perfected priming first-priority lien on the DIP collateral subject to the carve out; payment of all lender fees and expenses then due; compliance with the books-and-records access covenants; no appointment of a trustee or examiner with enlarged powers and no dismissal or conversion; perfected DIP liens; first day and vendor-payment orders in form and substance reasonably satisfactory to the DIP Lender; a compliance certificate; and the DIP Lender deeming itself, on a reasonable good-faith basis, adequately secured
• Advances under the Additional New Money DIP Revolving Facility further require that the Borrowers have received Holdback Amounts in not less than the amounts specified in the milestones for the relevant period and have remitted all such amounts to the DIP Lender

Prepetition Capital Structure

• BankUnited Secured Loan (Loan and Security Agreement dated March 11, 2016, as amended and restated): $4,431,001.19 originally committed across various facilities; approximately $2,762,347.42 outstanding as of the petition date, secured by CCI's personal property and pledges of ownership interests in CCI, the guarantors and SMJ Group LLC. BankUnited holds a Permitted Prior Senior Lien
• Prepetition Note (FHGRF LLC): not less than $6,235,147.78, inclusive of at least $2,378,334.60 of Prepetition Emergency Funding
• Equipment obligations: approximately $35,087.00
• SBA EIDL loans: Cieli Partners, L.P. approximately $125,000 and Fiorello's Roman Café, Inc. approximately $125,000, each secured by substantially all assets; Brooklyn Diner USA, L.P. (Diner 57) $125,000, Broadway Hospitality Venture, LLC (Bond 45) $125,000, and Red Eye Grill, L.P. $416,667, which the Debtors believe are not subject to valid and perfected liens
• Merchant cash advances: as of March 2026, more than 30 MCAs across 11 lenders with aggregate obligations of not less than $5.5 million; the Debtors contend each is criminally usurious and unenforceable and subject to recharacterization or subordination, and assert avoidance and civil RICO claims against some or all such funders
• Friends and family borrowings: $4,500,000 original principal, unsecured obligations of CCI incurred in 2025, on which no payments have been made
• Trade and other unsecured debt: approximately $17,898,574.63

Noted Inconsistencies in the Filed Documents

• Case caption: the motion is captioned In re S.M.F. Group, Inc., Case No. 26-11893 (SAB); the proposed interim order and the DIP agreement recitals reference In re The Fireman Group Café Concepts, Inc., Case No. 26-11399
• Facility size: the $6.5 million cap is described as comprising both new money and roll-up tranches, yet the two new-money tranches alone total $6.5 million, and the motion separately describes the $6.5 million as new money
• Borrower list: Broadway Hospitality Venture, LLC and Brasserie 57, LLC appear in the DIP agreement preamble and signature pages but not in Schedule 1 or the Rule 4001(c) chart
• Lien grant: sections 364(c) and 364(d) and a "priming first-priority" lien are referenced in the recitals and representations, but only sections 364(c)(2) and 364(c)(3) liens are granted in the operative provisions
• Remedies notice: seven calendar days in the interim order versus five business days in the DIP agreement
• Adequate protection for Permitted Prior Senior Liens Holders: paragraph captions for replacement liens and section 507(b) claims are transposed
• Surcharge waiver refers to section 506(b) rather than 506(c)
• Conditions to the Additional New Money DIP Revolving Facility cross-reference the milestone in Section 6.18(d) where the Holdback collection milestone is Section 6.18(e)
• Challenge deadline is framed as "the earlier of" a fixed date "or any such later date" agreed and ordered for cause
• Debtors' stipulations and recitals refer to rights preserved in paragraph 12 (carve out) where the challenge provisions appear in paragraph 13
• Chief restructuring officer: the Responsible Officer definition names Jordan Meyer as CRO and Benjamin Grossman as sole manager, while the form borrowing request is signed by Benjamin Grossman as CRO
• Annex A cross-references for "Adequate Protection Liens," "Remedies Notice Period" and "Pre-Carve Out Notice Amount" do not match the paragraphs in which those terms are defined