Triple Sticks Foods - Chapter 11 DIP Terms

DIP Terms

Borrower(s) / Guarantor(s)

• Triple Sticks Foods, LLC, as Borrower
• None, as Guarantors

Agent / Lender(s)

• CLTSTL3 Sticks, LLC, as DIP Lender

DIP Commitments

• Up to $300,000 senior secured superpriority post-petition financing facility, with the full $300,000 available on an interim basis (the "Interim Funding Amount")
• Evidenced by a DIP Promissory Note and Security Agreement between the Debtor and the DIP Lender

Cash Collateral

• CLTSTL3 Sticks, LLC is identified as the entity with interests in cash collateral

Interest Rate

• 15.0% per annum
• Default Rate: Interest Rate plus 2.0% per annum

Fees

• DIP Fees as set forth in the DIP Loan Documents, payable to the DIP Lender, including $5,000 payable to the DIP Lender's attorneys on the earlier of the events specified in the DIP Note
• Local Documentation Costs: $5,000 payable to the DIP Lender's attorneys (per Local Rule 4001-3 disclosure)

Maturity

• May 27, 2026, unless the DIP Lender accelerates the balance due upon the occurrence of one or more Events of Default
• Optional Prepayments: The Debtor may at any time, without premium or penalty, prepay amounts due under the DIP Note in whole or in part
• Mandatory Prepayments: None

Carve Out

• The Carve Out consists of the sum of:
  • All unpaid fees required to be paid to the Clerk of the Court and the U.S. Trustee under 28 U.S.C. § 1930(a) plus interest at the statutory rate pursuant to 31 U.S.C. § 3717
  • All unpaid reasonable fees and expenses up to $5,000 incurred by a trustee appointed under section 726(b) of the Bankruptcy Code
  • To the extent allowed by the Court, all accrued but unpaid fees and expenses (the "Allowed Professional Fees") incurred by persons or firms retained by the Debtor pursuant to section 327, 328, or 363 of the Bankruptcy Code (the "Debtor Professionals") and by the Official Committee pursuant to section 328 or 1103 of the Bankruptcy Code

Use of Proceeds

• Pay ordinary course operating expenses while the Debtor coordinates and conducts a sale of substantially all of its assets pursuant to section 363 of the Bankruptcy Code
• Satisfy ongoing cash requirements, including paying employees, paying utilities, and funding ordinary course day-to-day expenditures
• Conduct an orderly sale of the Debtor's assets to maximize value to stakeholders

Events of Default

• The occurrence of any of the following constitutes an Event of Default under the Agreement:
  • The Debtor fails to pay principal, interest, costs or fees when due
  • Failure to comply with any Milestone (as defined in section 8.2), unless the Debtor informs the Lender at least five Banking days in advance
  • The dismissal of the Debtor's Chapter 11 Case or its conversion to a Chapter 7 case
  • The appointment of a Chapter 11 trustee
  • The granting of any other claim or lien equal or superior in priority to that granted by the Agreement
  • The entry of an order by the Bankruptcy Court modifying, reversing, revoking, staying, rescinding, amending or vacating the Final Order without the express prior written consent of the Lender
  • The entry of an order by the Bankruptcy Court modifying, vacating or lifting the automatic stay to allow any party other than the Lender to proceed against the Collateral
  • The entry by the Bankruptcy Court of an order approving a plan of reorganization that does not provide for payment of all Obligations under the Agreement on the confirmation date of the plan
  • Failure of the Debtor to fully perform any of its obligations as provided in the Order

Securities and Priorities

• The DIP Lender is granted superpriority administrative expense claim status pursuant to section 364(c)(1) of the Bankruptcy Code in respect of all DIP Loan Obligations, subject to the Carve-Out, with priority over all other administrative expenses or priority claims of the kind specified in, or ordered pursuant to, sections 105, 326, 328, 330, 331, 502(b)(9), 503(b), 506(c) (subject to entry of the Final Order), 507(a), 507(b), 726, 1113, and other applicable provisions of the Bankruptcy Code
• The DIP Lender is granted continuing, valid, binding, enforceable, non-avoidable, and automatically and properly perfected postpetition security interests in and liens on the applicable Collateral (as defined in the DIP Note and Interim Order), pursuant to section 364(c) of the Bankruptcy Code, including liens on inventory, accounts, deposit accounts, documents, proceeds of claims or causes of action, and all rents, products, offspring, profits, supporting obligations, and proceeds thereof

Priming of Existing Liens

• Pursuant to section 364(d) of the Bankruptcy Code, the liens granted on the Priming DIP Collateral shall be senior in all respects to any other liens thereon

Cross-Collateralization of Pre-Petition Debt

• The Debtor has no pre-petition obligations to the DIP Lender

Adequate Protection

• The DIP Lender has no Prepetition Claims or Liens requiring adequate protection
• All creditors and other interested parties that hold or assert a security interest or other claim against any of the Debtor's assets are adequately protected, as further set forth in the Debtor's Emergency Motion for Entry of Interim and Final Orders (I) Authorizing the Debtor to Use Cash Collateral, (II) Granting Adequate Protection, and (III) Scheduling a Final Hearing

Waivers

• Subject to entry of the Final Order:
  • Section 506(c): The Debtor waives the right to assert claims to surcharge against the Priming DIP Collateral, and no costs or expenses of administration incurred in the Case shall be charged against the DIP Lender or the Priming DIP Collateral pursuant to section 506(c) of the Bankruptcy Code without the prior written consent of the DIP Lender
  • Section 552(b): The disclosure row in the Motion references a Section 552(b) waiver in its caption, but no substantive 552(b) waiver language is set out in the body of the Motion or Interim Order text disclosed

Automatic Stay Waiver / Modification

• The automatic stay imposed by section 362 of the Bankruptcy Code is modified to the extent necessary to permit the DIP Lender, upon the occurrence of an Event of Default and following notice and a hearing before the Court to consider any objections, to take such actions as it may deem appropriate in its sole discretion to proceed against and realize upon the Priming DIP Collateral

Stipulations as to Prepetition Claims and Liens / Challenge Period

• Not applicable; the DIP Lender has no Prepetition Claims or Liens

Milestones

• None

DIP Budget and Related Covenants

• The Debtor has prepared and delivered to the DIP Lender an initial 13-week budget (the "Budget"), upon which the DIP Lender is relying in agreeing to extend the postpetition financing
• Reporting: None
• Borrowing Conditions: None

Plan Restriction

• None

Estimated Value of Collateral

• $1,002,392, as set forth in the Liquidation Analysis attached to the DIP Declaration