TPD Design House - Chapter 11 DIP Terms

DIP Terms

Borrower

• TPD Design House, LLC, as Borrower

Lender

• Oslo Blue, LLC, a single-member limited liability company whose sole member is Scott Tarte, as Lender
• The Lender has no connection with the Debtor other than the Pre-Motion Advance (defined below), though the Debtor disclosed the following regarding Mr. Tarte:
  • He has never been an owner, officer, manager, director, or employee of the Debtor
  • He is a current client of the Debtor, which is providing wedding-related services to Mr. Tarte, the costs of which have been paid in full
  • His daughter is an employee of the Debtor
• Neither the Lender nor Mr. Tarte is a creditor of the Debtor, though Mr. Tarte could become one if the Debtor is unable to complete the project for which it has been engaged and paid in full.

DIP Commitments

• Postpetition line of credit in a maximum principal amount not to exceed $1,000,000, with all advances at the Lender's unfettered discretion upon the Debtor's demonstration that the funds are necessary and in furtherance of its business.
  • The Lender has already funded a pre-motion advance in the aggregate amount of $144,893 (the "Pre-Motion Advance"), consisting of (i) $108,893 funded on April 9, 2026, for regular gross payroll, benefits, and retention pay (which the Debtor lacked sufficient cash to fund on April 8, 2026), and (ii) $36,000 paid around the same time to a critical vendor to ensure timely completion of a project. The Debtor seeks retroactive approval and inclusion of the Pre-Motion Advance as part of the postpetition loan.
  • Prior to making the Pre-Motion Advance, the Lender understood the advances were "at-risk" insofar as they were made without court approval; nevertheless, the Lender knowingly assumed that risk to ensure the Debtor's employees were paid timely.
• The Debtor projects an approximate $730,000 cash shortfall through June 6, 2026, as reflected in its updated 9-week budget covering the period from April 5, 2026, through June 6, 2026.
• Because of the simplicity of the loan terms, the Debtor and the Lender will not enter into a note or any other loan documents; instead, the parties will rely upon the entry of interim and final orders to govern the terms of payment.

Cash Collateral

• One of the Debtor's first-day motions was a motion to use cash collateral, which was granted by the court through the entry of an interim order. The Debtor's postpetition collections have been slower than expected, creating an immediate and urgent cash shortfall that is preventing the Debtor from paying necessary expenses to operate its business and fund its chapter 11 case.

Interest Rate

• The loan will accrue interest at the minimum amount, if any, required under applicable law.
• Default Interest Rate: Not applicable.

Maturity

• The Debtor has no obligation to make principal or interest payments during the pendency of its chapter 11 case. The loan is payable upon the earliest to occur of:
  • A sale or transfer of the Debtor's assets
  • Conversion of the case to a case under chapter 7
  • Dismissal of the case
• Events of Default: Not applicable.

Use of Proceeds

• Fund working capital needs pursuant to the Debtor's updated 9-week budget, to the extent the Debtor lacks funds from collections sufficient to address such needs, including:
  • Gross payroll and benefits
  • Rent
  • Vendor payments
  • General administrative costs
  • Postpetition professional fees
  • Other working capital needs as they arise

Credit Bid

• The Lender reserves the right to include the unpaid portion of its claim as partial consideration towards an anticipated offer to purchase substantially all of the Debtor's assets, either by the Lender or by an affiliated entity.
• If the Lender or an affiliate does not purchase substantially all of the Debtor's assets, the Lender reserves all rights to enforce its Section 364(c)(1) claim.

Securities and Priorities

• The loan and all advances thereunder shall be granted superpriority administrative expense claim status pursuant to Bankruptcy Code Section 364(c)(1), with priority over any and all administrative expenses of the kind specified in Sections 503(b) or 507(b).
• The Debtor does not believe it would be able to obtain unsecured credit allowable under Section 503(b)(1) as an administrative expense on terms as or more favorable than the terms of the loan.
• The automatic stay under Section 362 of the Bankruptcy Code is modified to the extent necessary to permit the Debtor and the Lender to implement the terms of the loan.
• The Lender is entitled to the protections of Sections 364(c)(1) and 364(e) of the Bankruptcy Code, having extended credit to the Debtor in good faith.