The Children's Place - Chapter 11 DIP Terms

DIP Terms

DIP Commitments

• The debtors' prepetition secured lenders are providing two senior secured superpriority facilities: an asset-based revolver of up to $166 million agented by Wells Fargo Bank, N.A., and a term loan of up to $116 million agented by Crystal Financial LLC d/b/a SLR Credit Solutions (SLR).
  • DIP ABL facility: $166 million of revolving commitments. Under the proposed interim order, no more than $131 million may be outstanding at any one time before the final order is entered. The debtors estimate initial net availability at about $11 million based on current borrowing base estimates.
    • The letter of credit sublimit is $20 million, including a $1 million Canadian sublimit. The U.S. and Canadian swing line sublimits are both zero, and Canadian revolving borrowings are capped at $16 million.
    • Amounts repaid may be reborrowed, and all revolving loans are base rate loans.
  • DIP term facility: $116 million, consisting of:
    • a $16 million new-money term loan funded on the closing date, $15 million of which may be used only to pay down prepetition revolving loans
    • a cashless interim roll-up of $16 million of prepetition term loans
    • a cashless roll-up of the remaining prepetition term principal when the final order is entered, at which point the prepetition term loan is deemed paid in full
  • The term facility does not revolve: principal that is repaid or prepaid cannot be redrawn. The proposed interim order caps term borrowings at $116 million outstanding, less any prepetition term loans still outstanding.
• The motion, the DIP ABL credit agreement and the term facility's closing condition all put ABL commitments at $166 million. The proposed interim order's recitals, however, describe the revolver as $146 million in aggregate principal amount of revolving loans.

Background and Prepetition Capital Structure

• The Children's Place was founded in 1969 and is based in Secaucus, N.J. It is a specialty retailer of children's apparel, accessories and footwear under The Children's Place and Gymboree brands. It sells through two digital storefronts, retail stores in North America and wholesale marketplaces including Amazon, and franchise and wholesale partners distribute its products in 13 countries.
• Citing liquidity pressures, declining sales, operating losses and working-capital needs, the debtors filed Chapter 11 on Nov. 8, 2026, in the District of New Jersey and are running two tracks at once. A liquidator is running going-out-of-business sales at every store open on the petition date to capture holiday-season inventory recoveries. Meanwhile, the debtors continue to market the business, intellectual property and real estate for a potential going-concern sale.
• The prepetition capital structure consists of:
  • $350 million ABL facility with Wells Fargo, dated May 9, 2019: secured by first-priority liens on substantially all assets other than term priority collateral and second-priority liens on term priority collateral. The motion puts petition-date ABL borrowings at not less than $130.4 million, including $19.4 million of standby letters of credit. The proposed interim order's stipulation instead states not less than $130.5 million, including not less than $110.6 million of revolving loans and $19.3 million of letters of credit.
  • $100 million term loan with SLR, dated Dec. 16, 2025: fully outstanding at filing, with proceeds used to partially repay ABL borrowings. It is secured by first-priority liens on specified intellectual property, real estate, FF&E and equity interests (term priority collateral) and second-priority liens on ABL priority collateral.
  • An intercreditor agreement dated Dec. 16, 2025, governs the relative lien priorities. The parties stipulate that it is a section 510(a) subordination agreement.
  • About $151 million of unsecured promissory notes issued to Mithaq Capital SPC between February 2024 and September 2026, contractually subordinated in payment to both secured facilities. Mithaq is also the controlling stockholder, beneficially owning about 61.1% of the common stock.
• The motion says the debtors market-tested the financing. No party contacted would lend on a junior basis or provide enough to refinance the prepetition secured debt in full, and the prepetition secured lenders would not consent to being primed by a third-party DIP. The debtors also cite an extremely limited pool of unencumbered assets.

Roll-Up

• Both prepetition facilities roll up in part on entry of the interim order and in full on entry of the final order, subject to the challenge rights preserved in the proposed interim order.
  • ABL (creeping roll-up): from interim entry, all proceeds of ABL priority collateral go first to prepetition ABL obligations until paid in full, freeing DIP availability as the prepetition revolver is paid down. Existing letters of credit, cash management services and bank products become DIP ABL obligations. Any remaining prepetition ABL obligations are refinanced into DIP revolving loans when the final order is entered, and the motion says this occurs no later than one business day after entry.
  • Term: $16 million of prepetition term principal converts into DIP term loans on interim entry. The rest converts on final entry, and $15 million of the $16 million of new money pays down prepetition revolving loans.
  • Accrued prepetition interest, fees, expenses and other amounts due on the prepetition revolving and term loans are paid in cash on the closing date.
• The proposed interim order approves each roll-up as consideration for the DIP lenders' funding, not as adequate protection. Each roll-up remains exposed to any challenge to the refinanced prepetition loans, and the court may fashion any appropriate remedy after a successful challenge. The debtors, relying on the Beers declaration, say the lenders would not fund, and the prepetition secured parties would not consent, without the roll-up.

Interest Rate

• DIP ABL: base rate + 3.50%. The base rate is the highest of:
  • the federal funds rate + 0.50%
  • one-month Term SOFR + 1.00%
  • Wells Fargo's prime rate
  • a 0% floor
  Canadian-dollar loans bear the Canadian base rate plus the same margin.
• DIP term: three-month Term SOFR (2.00% floor) + 8.25%, set for monthly interest periods.
• Default rate increase: 2.0% under both facilities. It applies automatically to overdue amounts and, after notice, to all obligations while another event of default continues.
• Interest is payable monthly in arrears on the first day of each month; term interest is also payable on prepaid principal and at the termination date. Interest is computed on a 360-day year, except prime-based and Canadian loans under the ABL.

Fees

• DIP ABL:
  • Unused line fee: 0.375% per annum when the average daily unused commitment in the prior quarter is no more than 50% of commitments, and 0.250% when it exceeds 50%; payable monthly in arrears
  • Letter of credit fees: 1.75% per annum on commercial letters of credit and 3.50% per annum on standby letters of credit; both accrue at the default rate after notice during an event of default
  • Fronting fee: 0.125% per annum on average L/C obligations, plus the issuer's customary charges
  • Additional fees in the amounts set in fee letters with the agents
• DIP term: fees in the amounts and at the times set in a fee letter dated as of the closing date; fully earned when paid and nonrefundable.
• Professional fees of the DIP agents, DIP lenders and prepetition secured parties are paid without fee applications or compliance with U.S. Trustee guidelines.
  • Summary invoices go to the U.S. Trustee and any committee, which have 10 days to object; the undisputed portion is paid promptly.
  • Fees incurred through the closing date are paid at closing without prior invoice delivery.
  • Fees paid prepetition are approved and protected from avoidance or disgorgement, subject to challenge rights only as to the prepetition secured obligations.

Maturity and Prepayments

• DIP ABL matures on the earliest of:
  • Jan. 29, 2027
  • the effective date of a Chapter 11 plan in any case
  • the closing of a sale of all or substantially all loan party assets
  • 30 days after the petition date, if the final order has not been entered
  • dismissal of any case or conversion to Chapter 7
• DIP term has the same triggers, with an outside date of March 1, 2027.
• Acceleration can terminate either facility earlier.
  • On termination, obligations become immediately due and commitments end, except for funding the Carve Out.
  • Letters of credit must be cash collateralized at 105% of face (at least 110% for non-dollar letters of credit), and that collateral is not subject to the Carve Out.
• Voluntary prepayments under either facility carry no premium or penalty but are allowed only after the prepetition obligations are repaid. Term loan prepayments must be at least $1 million and in $500,000 multiples above that.
• Mandatory prepayments:
  • The term loan must be prepaid with 100% of net proceeds within three business days. This covers dispositions and casualty events involving term priority collateral, equity issuances, non-permitted debt and term priority extraordinary receipts.
  • The ABL must be prepaid with net proceeds of ABL priority collateral events, applied first to prepetition obligations.
  • If combined outstandings exceed the aggregate borrowing base, the excess is prepaid first on the ABL and then on the term loan.

Milestones

• Missing a milestone is an event of default. Each milestone is set out in Exhibit C to the proposed interim order, and every order must be reasonably acceptable to the DIP and prepetition agents. The agents may extend any milestone in writing, including by email from counsel.
  • Petition date (Nov. 8, 2026): file the DIP, cash management and CRO-retention motions
  • Nov. 9: file the bid procedures motion, including designation of a stalking horse bidder, and the motion to approve the liquidation consulting agreement and store-closing sales
  • Nov. 10: entry of the interim DIP order, the interim cash management order, the bid procedures order and an interim order approving the liquidation agreement
  • Nov. 20: file a motion to extend the lease assumption/rejection period to 210 days from the petition date. Also file motions to retain a real estate broker for the sale of the property at 1377 Airport Road, Fort Payne, Alabama, and a sales consultant for the IP sale. The IP-consultant milestone is enforceable only if the debtors and DIP agents agree on funding and budget treatment.
  • Nov. 30: final cash management order
  • Dec. 8: final DIP order, CRO-retention order and final approval of the liquidation agreement (and, if applicable, the stalking horse designation)
  • Dec. 10: bid deadline; copies of all bids to the agents
  • Dec. 14: auction completed and winning and back-up bidders declared, with the DIP and prepetition agents' consent; both bids must be acceptable to the DIP agents
  • Dec. 17: sale order(s) entered, store-closing sales approved if not already, and the purchase agreement executed
  • Dec. 18: order extending the lease assumption/rejection period
  • Dec. 31, 2026: sale closing
  • Back-up sale: closing within two business days after an order declining to approve a sale or the termination of a purchase agreement
• The bid procedures must require sale proceeds of a minimum amount satisfactory to the agents in their sole discretion, applied through the DIP waterfall, and must provide for selecting a back-up bid at the end of the auction.
• Canadian recognition milestones:
  • The debtors must apply for the initial recognition, supplemental and interim DIP recognition orders within two business days after the interim order is entered, and obtain them within five business days.
  • They must file for the final DIP recognition order within two business days after the final order and obtain it within seven business days, subject to the Canadian court's availability.
  • The motion's summary gives seven business days to obtain the interim recognition orders, while the milestone schedule gives five.
• The debtors ask for a final hearing about 25 days after the petition date. The proposed interim order would set it within 30 days of interim entry but leaves the date blank.

Sale and Liquidation Controls

• Store-closing sales run under a consulting agreement dated Nov. 3, 2026, with Tiger Capital Group, LLC, SB360 Capital Partners, LLC and GA Retail Solutions, LLC as approved liquidator. They cover inventory and equipment at all stores open on the petition date and must be conducted solely through in-store sales.
• The debtors may not amend or waive the purchase agreement or the liquidation agreement without the applicable agent's prior written consent or order-based permission. Without the agent's reasonable consent or order-based permission, they also may not:
  • change any store's sale from a going-out-of-business sale
  • remove stores from the closing process
  • sell covered assets through Amazon
  • dispose of FF&E
• A permitted sale of all or substantially all assets must either have the agent's written consent or pay enough at closing to exceed all DIP and prepetition obligations.
  • A going-concern sale must pay that amount in cash with no financing contingency.
  • A liquidation transaction must take the form of an equity bid with a closing payment above that amount.
  • Net proceeds up to the outstanding obligations go to the agent.
• Dispositions of DIP or prepetition collateral outside the ordinary course need the DIP and prepetition agents' written consent. Rejecting a real property lease outside the store-closing process needs agent consent, and the debtors must consult the agents on assumption/rejection plans.

Use of Proceeds

• Under the proposed interim order, DIP proceeds may be used only for the following, in line with the budget:
  • the roll-up and the paydown of prepetition revolving loans with the interim term financing
  • working capital and letters of credit
  • costs of administering the cases and the Canadian recognition proceedings
  • prepetition obligations that are in the budget or approved by the DIP and prepetition agents and the court
  • interest, fees and expenses under the DIP documents, and adequate protection payments
  • funding the Carve Out and other budgeted general corporate purposes
• The debtors say the liquidity will fund the store-closing sales through the holiday season, payroll, critical vendors and service providers, occupancy and distribution costs, and continued marketing of the business, IP and real estate for a going-concern sale under the proposed bidding procedures.
• Nondebtor subsidiaries will be funded from cash collateral in the ordinary course, subject to the budget.

Cash Collateral

• The debtors stipulate that all of their cash, wherever held, is cash collateral of the prepetition secured parties, subject to the intercreditor agreement and the lien priority annex. The prepetition lenders consent to its use under the budget until the termination date.
• During the three-business-day remedies notice period, cash collateral may be used only for:
  • payroll, excluding severance
  • expenses the DIP ABL agent approves as critical
  • other uses the DIP agents agree to
  • funding the Carve Out account

Carve Out

• Post-trigger cap: $1.5 million for fees of case professionals incurred after a Carve Out trigger notice. Post-trigger payments permanently reduce the cap dollar for dollar.
• Pre-trigger fees: allowed, unpaid fees of the debtors' professionals (including in the Canadian recognition proceedings), any committee's professionals, and the Information Officer and its counsel, subject to any retainers. Canadian professionals' fees are governed by the Canadian supplemental order rather than Bankruptcy Court allowance.
• U.S. Trustee and clerk fees are covered separately and are not limited by the budget.
• Before a trigger, the debtors fund a segregated professional fee escrow account weekly from DIP ABL borrowings or cash collateral. The deposit is the greater of budgeted unpaid fees and the fees reported in weekly statements; a professional that misses a statement is funded only at its budgeted amount. Professionals are paid solely from the escrow.
• A trigger notice counts as a DIP ABL draw request for the Carve Out, net of amounts already in escrow. Amounts funded become DIP ABL obligations.
• The agents hold a reserve against the borrowing base made up of:
  • the $1.5 million post-trigger cap
  • any escrow shortfall
  • statutory fees
  • two weeks of budgeted professional fees
• Success, transaction and similar fees of the investment banker or financial advisor cannot be paid from the Carve Out. The Carve Out ranks senior to the DIP liens, the DIP superpriority claims and the adequate protection liens and claims.
• Committee investigation budget: $50,000, subject to the final order. It may be used to investigate, but not to prosecute or challenge, the prepetition liens and obligations.

Securities and Priorities

• Each facility receives a section 364(c)(1) superpriority administrative claim, subject to the Carve Out, the CCAA Priority Charges and the lien priority annex.
  • ABL claims rank first as to ABL priority collateral.
  • Term claims rank first as to term priority collateral.
  • The two are pari passu on all other assets.
• Under sections 364(c)(2), 364(c)(3) and 364(d), each agent receives automatically perfected liens on substantially all assets. These include prepetition collateral, cash and deposit accounts, credit card and other receivables, inventory, subsidiary equity, intellectual property, owned real property, commercial tort claims, intercompany debt, lease proceeds and section 549 recoveries. Avoidance action proceeds are added on entry of the final order.
  • Excluded: the real property leases themselves, and contracts or licenses where a lien would cause a non-excusable breach (proceeds of both remain collateral), plus assets excluded under the DIP documents
• Each prepetition agent consents, under the intercreditor agreement, to the interim order and to its own DIP facility, which the prepetition lenders themselves provide.
• Lien priority annex (each waterfall headed by the Carve Out):
  • ABL priority collateral: prepetition ABL permitted prior liens; DIP ABL liens; ABL adequate protection liens; prepetition ABL liens; DIP term liens; term adequate protection liens; prepetition term liens
  • Term priority collateral: prepetition term permitted prior liens; DIP term liens; term adequate protection liens; prepetition term liens; DIP ABL liens; ABL adequate protection liens; prepetition ABL liens
  • Administrative claims: Carve Out; DIP superpriority claims; adequate protection superpriority claims
• On Canadian collateral, all DIP and prepetition liens and claims are subordinate to the CCAA Priority Charges. Absent agent consent, these are an administration charge of up to US$650,000, a directors' charge of up to C$1.975 million, and any other consented charge.
• The DIP liens are not subject to sections 510, 549 or 550. No lien avoided and preserved under section 551 ranks pari passu with or senior to them. Reclamation claims keep the same priority against the DIP liens that they had against the prepetition liens.

Avoidance Actions

• On an interim basis, the collateral includes proceeds, recoveries and settlements of section 549 actions to recover postpetition transfers of DIP collateral.
• Subject to the final order, it also includes proceeds, but not the actions themselves, of Chapter 5 and section 724(a) avoidance actions. In Canada this extends to proceeds of avoidance proceedings under section 36.1 of the CCAA and sections 95, 96 and 101 of the Bankruptcy and Insolvency Act.

Adequate Protection

Prepetition ABL and Term Secured Parties

• Replacement liens on the DIP collateral and section 507(b) superpriority claims, to the extent of diminution in value. Both are subject to the Carve Out, the CCAA Priority Charges, the intercreditor agreement and the lien priority annex, and the liens are not subject to sections 510, 549 or 550.
• Current cash payment of interest at the default rate, and principal when due, on any prepetition secured obligations still outstanding after interim entry, subject to challenge rights
• Payment of the prepetition agents' reasonable, documented fees and expenses, both before and after the interim order, without fee applications and subject to the intercreditor agreement
• Current payment of prepetition indemnification obligations, including the costs of answering discovery and defending any challenge. These are subject to objection rights, and the court keeps jurisdiction over disputed claims.
• Budget, reporting, inspection, field audit and appraisal rights. The prepetition secured parties keep the right to seek additional protection.

Challenge Period, Stipulations and Releases

• Challenge deadline: 60 days from formation of a committee, if one is appointed, or 75 days after entry of the interim order if none is appointed. It may be extended in writing by the prepetition agents, or by the court for good cause on an application filed before it expires.
• In their stipulations, the debtors make the following admissions:
  • The prepetition ABL and term obligations are allowed secured claims entitled to postpetition interest, fees and indemnities under section 506(b).
  • The prepetition liens are valid, perfected and senior.
  • The debtors are in default, and interest has accrued at the default rate since the petition date.
  • The estates have no claims against the prepetition secured parties.
  • No DIP or prepetition lender controls the debtors or is an insider.
• The debtors waive any challenge of their own. The stipulations bind all other parties unless a party with standing timely brings a challenge and wins a final, non-appealable judgment; only the specific stipulations successfully challenged are released.
• Effective on interim entry, the debtors release all claims relating to the DIP and prepetition obligations, including lender liability, equitable subordination, recharacterization and Chapter 5 claims, subject only to third-party challenge rights. The released parties are:
  • Wells Fargo and SLR, as DIP and prepetition agents
  • the DIP ABL and DIP term lenders and other credit parties
  • the other prepetition ABL and term secured parties
  • each of their affiliates, controlling persons, officers, directors, shareholders, advisors and professionals
• Except for the investigation budget, DIP proceeds, collateral, cash collateral and the Carve Out cannot fund challenges to the DIP or prepetition obligations or liens, claims against the lenders, or interference with enforcement.
• The prepetition secured parties' costs of defending a timely challenge are paid as adequate protection, subject to the Carve Out.

Credit Bid

• The DIP agents, DIP credit parties and prepetition agents may credit bid up to the full amount of their obligations, including accrued interest and expenses.
  • The right applies in any sale under section 363 or 1129, or by a Chapter 7 trustee under section 725.
  • It is subject to challenge rights and to paying any senior liens in cash.
  • Each of these parties is deemed a qualified bidder.
• The ABL lenders may not credit bid for term priority collateral unless the term obligations are paid in full in cash at closing. The same rule applies to the term lenders bidding for ABL priority collateral.

Waivers

• Subject to entry of the final order:
  • Section 506(c): no surcharge of the DIP or prepetition collateral without consent
  • Section 552(b): the equities-of-the-case exception does not apply to the prepetition secured parties
  • Marshaling: the DIP and prepetition secured parties are not subject to it
• Until the DIP and prepetition obligations are paid in full, the debtors irrevocably waive the right to seek, without the agents' consent:
  • any modification of the interim order
  • priority claims or liens equal or senior to the DIP or adequate protection claims and liens
  • any other cash collateral order

Budget and Permitted Variance

• The debtors must operate under a 13-week budget approved by the DIP and prepetition agents in their sole discretion.
  • It shows weekly, by line item, receipts, disbursements, net cash flow, inventory, each borrowing base and excess availability, with stores being closed broken out.
  • The initial budget's total debt balance line falls from 230,509 to 36,194 across the forecast.
• An updated budget is due in the fifth week of each budget, first on Dec. 9, 2026, and may add only new periods.
  • It is deemed approved unless the agent objects within five business days.
  • If the parties cannot agree, covenants are tested against the initial budget, and an event of default occurs once the initial budget period ends without an agreed successor.
• Variance reports are due every Wednesday beginning Dec. 2, 2026. Failure to comply with the budget is an event of default under the proposed interim order.
• Variance tests under both facilities are run each Saturday, first over a four-week period and then over rolling three-week periods:
  • Operating receipts must be at least 85% of budget.
  • Operating disbursements must be no more than 110% of budget, excluding lender and case professional fees.
  • Case professional fees must be no more than 115% of budget, measured cumulatively from the petition date.
  • Term facility only: cumulative total net cash flow may fall no more than $10 million below budget, excluding lender professional fees.
• The motion says testing begins Dec. 5, 2026, while both credit agreements set the first test date as Saturday, Nov. 28, 2026.

Borrowing Base and Liquidity Covenants

• ABL availability is the lesser of commitments and the aggregate revolving borrowing base. That base is reduced by a term loan pushdown reserve equal to any amount by which term outstandings exceed the term borrowing base. The base consists of the sum of:
  • 90% of eligible credit card receivables
  • 90% of eligible trade receivables, net of reserves
  • eligible inventory at cost, net of reserves, times an advance rate of net orderly liquidation value. The advance rate is 90% times the inverse of the projected discount for the following week, as set by the ABL agent.
  • in-transit inventory, capped at 25% of the applicable cap
  • warehoused inventory, capped at the lesser of 10% of the applicable cap and $40 million in the U.S. or $4 million in Canada
  • less availability reserves, including the Carve Out, Canadian charge and tariff refund reserves and reserves for augment merchandise in the store-closing sales
• The term borrowing base sits above the ABL base and consists of the sum of:
  • 102.5% of eligible credit card and trade receivables, and eligible inventory at an advance rate of 102.5% times the inverse of the projected discount
  • in-transit inventory, capped at 10%
  • warehoused inventory, capped at the lesser of 10% and $40 million in the U.S. or $4 million in Canada
  • 35% of the appraised value of eligible intellectual property, capped at the lesser of $25 million and 30%. Starting Dec. 16, 2026, and at each fiscal quarter-end after that, the advance rate falls by 4.375% and the cap by $3.125 million, until each reaches zero.
  • 75% of the liquidation value of eligible real estate, which includes the Fort Payne, Alabama property
  • less the ABL borrowing base and availability reserves
• Minimum excess availability:
  • DIP ABL: at least the greater of 10% of the global line cap and $35 million at all times
  • DIP term: $35 million, reduced cumulatively by 50% of cash net proceeds from term agent-approved sales of IP or real estate, to a floor of zero. This step-down does not reduce the ABL minimum.
• Tariff refund assets are excluded from every borrowing base unless the agent agrees after diligence. Tariff refund proceeds count toward availability only once received in cash and economically retained.

Released Reserves

• Specified prepetition reserves are released at closing and may not be reinstated except as the intercreditor acknowledgment allows:
  • Freight and duty reserve (25% of eligible in-transit inventory): $3.89 million
  • Two-month landlord lien state rent reserve (Washington, Pennsylvania, Virginia): $1.32 million
  • One month's rent reserve: $1.52 million
  • Texas sales tax reserve: $1.16 million
  • Texas personal property reserve: $231,000
  • Amex contra and other contra accounts (102.5% gross-up): $72,309 and $47,701
  • Restructuring reserve: $22.5 million. The ABL portion goes to zero while the term loan portion rises to $37.5 million, a net $7.5 million reduction.
• Further releases are forecast:
  • The restructuring reserve falls to $30 million after the week ending Nov. 28 and is removed after the week ending Dec. 5, 2026.
  • The e-commerce and store returns reserve is removed after the week ending Dec. 12, 2026, if returns have stopped by then.
  • The IP reserve is removed after the week ending Dec. 19, 2026, if the auction has taken place.
  • The off-site storage reserve is removed after the week ending Jan. 2, 2027.

Cash Management

• Credit card receipts and all deposit account balances are swept daily into concentration accounts under the collateral agent's sole control. The loan parties have no right to withdraw from them. Excluded are payroll accounts and small accounts holding up to $50,000 each and $250,000 in total.
• Proceeds of ABL priority collateral go to cash collection accounts under the DIP ABL agent's sole control and are applied first to prepetition ABL obligations, then to DIP ABL obligations.
• Net proceeds of term priority collateral go to a term loan priority account. Franchise receivable proceeds instead go to the operating account for budgeted use until a termination date under the term facility.
• The Canadian borrower's operating account at Toronto-Dominion Bank may be used only for budgeted operating disbursements, never for transfers to affiliates. Excess balances are swept daily to a concentration account and reconciled daily, and any breach is an immediate event of default under both facilities.
• Tariff refund proceeds must be paid directly into blocked accounts and reported monthly.

Events of Default

• Both facilities include payment, covenant, misrepresentation and cross-default triggers, with a 10-day cure for general covenant breaches and a three-business-day grace on ABL interest and fee payments. Other events of default include:
  • default on post-petition or unstayed material debt, judgments or swap terminations above $2.5 million, and ERISA liabilities above $2.5 million
  • a change of control; an uninsured loss of material collateral; or loss or material impairment of material intellectual property
  • dismissal or conversion of any case; appointment of a trustee or expanded-power examiner that is not reversed within 30 days (or that the debtors accept); or any loan party motion seeking such an appointment
  • an order denying or terminating use of cash collateral; competing superpriority claims or senior or pari passu liens; or non-consensual financing or cash collateral motions
  • stay relief allowing foreclosure on assets worth more than $500,000 in total, or other action with a material adverse effect
  • reversal, stay or adverse change of the DIP or Canadian recognition orders; failure to enter the final order before the interim order expires; missed Canadian order dates; or any missed milestone
  • filing, supporting or failing to contest a plan that does not repay the DIP and prepetition obligations in full in cash, or confirmation of such a plan; or a sale motion filed without consent unless the sale repays the obligations in full
  • challenges to, or suits contesting, the DIP or prepetition documents, liens or claims
  • breach, non-consummation or unconsented termination of the purchase agreement or liquidation agreement
  • an injunction against the business (with a five-business-day cure period); unauthorized payment of prepetition senior debt; or adequate protection granted to the other lender group without consent
  • Term facility only: failure of the ABL agent to maintain the term loan pushdown reserve when it is above zero
• Under the proposed interim order, it is also an event of default to breach the order, the budget or the milestones, or for the court to enter an order authorizing priming credit, unauthorized cash collateral use, returns of goods under section 546(h), or modification of the lenders' rights. Each prepetition agent may declare a default under its own DIP facility, but neither lender group may terminate the other's facility.

Remedies

• After an event of default:
  • The ABL agent or the prepetition ABL agent may deliver a termination declaration that accelerates the DIP and prepetition ABL obligations and ends the ABL commitments.
  • The term agent or the prepetition term agent may do the same for the term facility.
  • Any agent may deliver a Carve Out trigger notice and restrict use of cash collateral.
• A three-business-day remedies notice period follows each declaration. The debtors or a committee may seek an emergency hearing during that period, but the debtors agree not to argue that the order or the DIP documents should be modified or are unenforceable.
• Unless the court orders otherwise, the stay lifts automatically at the end of the period. The DIP agents may then exercise remedies; the prepetition secured parties may do so only after the DIP obligations are paid in full, subject to the intercreditor agreement.
• The DIP agents and any liquidator get royalty-free use of the debtors' trade names, trademarks and other intellectual property, and access to warehouses, distribution centers and stores, to dispose of collateral.
• Remedies against Canadian collateral remain subject to the Canadian recognition orders. Recoveries after acceleration are applied first to the prepetition obligations.

Change of Control

• Under both facilities, a change of control occurs if:
  • a person or group other than the permitted holders acquires 25% or more of The Children's Place, Inc.'s voting equity on a fully diluted basis
  • The Children's Place, Inc. stops owning 100% of any other loan party free of non-permitted liens, other than through a permitted transaction
  • the board no longer includes at least one independent director under Nasdaq rules
  • a change of control occurs under the other DIP facility

Conditions Precedent

• Both facilities require, before initial funding:
  • executed loan and security documents
  • a borrowing base certificate dated Nov. 6, 2026
  • payment of required DIP and prepetition fees and accrued prepetition amounts, which may be deducted from closing advances
  • acceptable first-day and cash management orders, and an entered interim order not subject to a pending appeal
  • an approved initial budget and variance-report form
  • effective documents for the other facility
  • no disqualifying material adverse effect or litigation beyond the case-related events
  • closing-date milestones met and an effective approved liquidation agreement
  • no trustee or expanded-power examiner appointed or sought
• ABL only: simultaneous receipt of a principal payment of at least $15 million from DIP term loan proceeds. Later ABL draws also require accurate representations, no default, compliance with borrowing base, interim caps and the budget, and U.S. and Canadian orders in effect. Draws triggered by a Carve Out trigger notice are exempt from these conditions.
• Term only: effective DIP ABL documents with ABL commitments of at least $166 million.
• Term post-closing requirements: a mortgage on the Fort Payne property by Nov. 18, 2026, and IP security agreements by the date the final order is entered, each extendable by the agent.

Parties

• Borrowers: The Children's Place, Inc. (lead borrower), The Children's Place Services Company, LLC, The Children's Place (Canada), LP, TCP Brands, LLC and The Children's Place International, LLC
• Guarantors: thechildrensplace.com, inc., The Children's Place Canada Holdings, Inc., TCP IH II, LLC, TCP Real Estate Holdings, LLC, TCP International Product Holdings, LLC, TCP Investment Canada I Corp., TCP Investment Canada II Corp. and AMASKIT, LLC. All debtors are jointly and severally liable without substantive consolidation, and the U.S. and Canadian loan parties are expressly liable for each other's obligations.
• DIP ABL:
  • Wells Fargo Bank, N.A., also the prepetition ABL agent, serves as administrative agent, collateral agent, L/C issuer and swing line lender.
  • Wells Fargo Capital Finance Corporation Canada serves as Canadian L/C issuer, swing line lender and revolving lender.
• DIP term: Crystal Financial LLC d/b/a SLR Credit Solutions, also the prepetition term agent, serves as administrative and collateral agent. The lenders are SLR Investment Corp., Crystal Financial SPV LLC, CRPTF-SLR Credit SPV LLC, SLR 1818 SPV LLC, SLR Private Credit Fund II L.P., CRPTF-SLR Credit Partnership L.P., SLR Private Corporate Lending Fund II SPV (ABL) LLC, SLR 1818 L.P., SLR Private Corporate Lending Fund II L.P. and SLR Private Credit BDC II SPV LLC.
• Each DIP agent is deemed the successor to its prepetition counterpart under the intercreditor agreement, and DIP obligations count as ABL or term obligations under it.

Advisors and Reporting

• The debtors must keep the following advisors throughout the cases and may not terminate them or materially reduce their roles without agent consent, unless replaced by an acceptable successor:
  • Berkeley Research Group, LLC as financial advisor
  • Rudolph Morando and Christopher McAvinn as co-chief restructuring officers
  • Cascadia Capital, LLC as investment banker
  • A&G Real Estate Partners as real estate and lease disposition advisor
  • C Street Advisory Group, LLC as public relations advisor
  • the approved liquidator
• Weekly calls:
  • Both facilities require a Friday call with the agents and lenders, or more often on reasonable request. Confidential sale information is withheld where a lender or agent is a potential bidder.
  • The ABL also requires separate weekly calls with the financial advisor and the liquidator.
• Each agent may retain a lender group consultant at the debtors' expense, and the debtors have no access to its reports.
• Reporting includes weekly borrowing base certificates, monthly compliance certificates and tariff refund reports, and agent inspection, field audit and appraisal rights.

Plan Treatment and Other Financing

• Both credit agreements require, absent agent consent, a plan that pays the DIP and prepetition obligations in full in cash on the effective date.
• Under the proposed interim order, plan confirmation does not discharge the DIP and adequate protection obligations unless they are paid in full in cash by the effective date (other than unasserted contingent indemnification claims) or the agents agree otherwise.
• If any later financing secured by DIP collateral is obtained before the DIP is repaid, its cash proceeds must be turned over immediately to the applicable DIP agent.

Indemnification and Lender Protections

• The debtors indemnify the DIP agents, credit parties, lender group consultants and their related parties under the credit agreements.
  • The indemnity excludes losses finally determined to result from gross negligence or willful misconduct, and claims a borrower wins for bad-faith breach.
  • It survives repayment, termination and dismissal.
• Subject to the final order, the lenders bear no liability for the debtors' operations. Making the loans does not make the DIP lenders control persons or "responsible persons" or owners/operators under CERCLA.
• The DIP and prepetition agents are named as additional insured and loss payee on the debtors' policies, and the lenders need not file proofs of claim.

Canadian Recognition Proceedings

• The Children's Place, Inc., acting as foreign representative, will seek recognition of the cases as a foreign main proceeding in the Ontario Superior Court of Justice (Commercial List) under Part IV of the CCAA. An Information Officer will be appointed.
• The ABL and term DIP charges take effect in Canada only when the Canadian interim DIP recognition order is granted. The Canadian recognition orders govern the CCAA Priority Charges, the DIP charges and all Canadian collateral.

Amendments

• Amendments that are either non-material or not adverse to the debtors, and that comply with the DIP documents, may be made without a court order.
• For material adverse amendments, the debtors must give notice to any committee, the DIP agents, the prepetition agents and the U.S. Trustee, who have five days to object. A timely objection means the amendment needs court approval.