U.S. TelePacific Corp. - Chapter 11 DIP Terms

DIP Terms

Borrower(s) / Guarantor(s)

• U.S. TelePacific Corp., as DIP Borrower
• U.S. TelePacific Holdings Corp., as Parent
• Each of the Debtors other than the DIP Borrower, as DIP Guarantors, comprising U.S. TelePacific Holdings Corp., Mpower Holding Corporation, Mpower Communications Corp., TPx International Holdings Corp., NextWeb, Inc., DSCI, LLC, OCiX, Inc., Arrival Communications, Inc., TPx Communications Co., Big City Networks, Inc., and ICG ChoiceCom L.P.
• The DIP Loan Parties are jointly and severally liable for the DIP obligations

Agent / Lender(s)

• Wilmington Savings Fund Society, FSB, as administrative agent and collateral agent (also serves as Prepetition Superpriority Agent, Prepetition First Lien Agent, Prepetition Second Lien Agent, Prepetition Third Lien Agent and, under the Receivables Intercreditor Agreement, Prepetition Receivables Agent)
• The lenders from time to time party thereto, as DIP Lenders

DIP Commitments

• $73,549,998 superpriority, senior secured and priming term loan facility comprised of:
  • $20 million of new money superpriority senior secured term loan commitments:
    • $10 million of initial term loan commitments
    • $10 million of second draw term loan commitments
  • $53,549,998 of roll-up term loans, effected on a cashless, dollar-for-dollar basis:
    • $48,549,998 rolled up upon entry of the interim order, consisting of $34,731,795 of Prepetition Superpriority Obligations and $13,818,203 of Prepetition First Lien Interest Obligations
    • $5 million of Prepetition First Lien Principal Obligations rolled up upon entry of the final order
• The roll-up was authorized as compensation for, in consideration for, as a necessary inducement for, and on account of the DIP Lenders' agreement to fund the new money term loans. The court found that the prepetition superpriority and first lien secured parties would not otherwise have consented to the use of their cash collateral or the subordination of their liens, and that the DIP secured parties would not have extended credit absent the roll-up.
• Prepetition capital structure, as stipulated by the debtors:
  • Prepetition Superpriority Obligations: not less than $21,564,988 in principal, plus a MOIC Prepayment Amount not to exceed $15 million, calculated as the excess amount necessary to permit each Prepetition Superpriority Lender to achieve a multiple on invested capital of 1.75:1.00 on its initial term loan advances
  • Prepetition First Lien Obligations: not less than $394,026,303 in principal, plus accrued and unpaid interest and a Make-Whole Premium of not less than $32.9 million
  • Prepetition Second Lien Obligations: not less than $639,375,356 in principal, plus accrued and unpaid interest
  • Prepetition Third Lien Obligations: not less than $33,151,826 in principal, plus accrued and unpaid interest
  • Prepetition Revolver Obligations: not less than $4,836,000 in principal, plus accrued and unpaid interest
  • Prepetition Receivables Obligations: $9,810,636 in the aggregate, consisting of not less than $3,655,355 of Receivables Proceeds held by the debtors as of the petition date and $6,155,281 of expected Receivables Proceeds from sold but uncollected receivables. The court found that sales under the Prepetition Receivables Purchase Documents, whether occurring before, on or after the petition date, constitute true sales under applicable non-bankruptcy law for fair consideration and are not voidable or avoidable, and that the Sold Receivables and Receivables Proceeds do not constitute property of the debtors or their estates.
• Amendments, waivers, consents and other modifications to the DIP documents require no further court approval so long as they do not shorten the maturity of the extensions of credit, increase the aggregate commitments, or increase the rate of interest or the fees calculated on commitments; updates, modifications and supplements to the approved budget likewise require no further court approval

Cash Collateral

• All of the debtors' cash, wherever located and held, including cash in deposit accounts, that constitutes or will constitute cash collateral of any of the prepetition secured parties and DIP secured parties within the meaning of section 363(a) of the Bankruptcy Code
• The debtors are authorized to use cash collateral in accordance with the DIP documents and the approved budget, subject to permitted variances, and are enjoined from using cash collateral other than on the terms of the final order absent further court order
• The DIP loan parties may use cash collateral to pay the Adequate Protection Fees and Expenses
• Receivables Proceeds held as of the petition date and received thereafter must be deposited into a segregated account designated in writing by the Prepetition Receivables Purchasers, though the debtors may use such proceeds in accordance with the orders and the approved budget. Any amendment to the approved budget changing the use of Receivables Proceeds must be reasonably acceptable to the Prepetition Receivables Purchasers.
• So long as DIP obligations or commitments remain outstanding, the prepetition secured parties may not foreclose on or otherwise enforce against the DIP collateral absent the consent of the required DIP lenders, are deemed to consent to dispositions and lien releases permitted under the DIP documents, may not take further perfection steps other than as expressly permitted, and must segregate, hold in trust and turn over to the DIP agent any prepetition collateral or proceeds they receive. Any prepetition secured party in possession or control of collateral, or noted as secured party on a certificate of title, is deemed to hold such possession, control or notation as gratuitous bailee and agent for perfection for the DIP secured parties. More broadly, any person or entity receiving DIP collateral or its proceeds before the DIP obligations are indefeasibly paid in full holds them in trust for the DIP secured parties and must immediately turn them over to the DIP agent.

Interest Rate

• Interest accrues and is payable as set forth in the DIP credit agreement
• Upon the occurrence and continuance of an event of default and delivery of written notice by the DIP agent, acting at the direction of the Required AHG Lenders or Required Lenders, to the DIP borrower and its counsel, lead counsel to the DIP lenders, the U.S. Trustee and lead counsel to the creditors' committee, interest, including where applicable at the default rate, shall accrue and be paid as set forth in the DIP credit agreement

Fees

• Commitment Premium, as defined in Section 2.08(c) of the DIP credit agreement, fully earned as of the closing date and due and payable in accordance with the DIP documents
• Administrative agency fees, fronting fees and any other fees, premiums, unused facility fees, amendment fees, prepayment premiums, early termination fees, servicing fees, audit fees, liquidator fees, structuring fees, collateral agent's or security trustee's fees, upfront fees, closing fees, commitment fees, closing date fees, original issue discount fees, prepayment fees and agency fees, together with indemnities and professional fees, in each case as provided in the DIP documents or separate letter agreements. Payment of such fees is irrevocable and was deemed approved upon entry of the interim and final orders, whether arising before, on or after the petition date and whether or not the transactions are consummated.
• DIP Fees and Expenses include the fees and expenses of:
  • Professionals retained by or on behalf of the DIP agent, including Goodwin Procter LLP and one local counsel
  • Counsel and advisors to the Ad Hoc Group, including Davis Polk & Wardwell LLP, Guggenheim Securities LLC, Lerman Senter PLLC, and Haynes and Boone, LLP, together with any other local or special counsel or advisors to the DIP lenders
• No retention motions or fee applications are required, and payment is not subject to allowance or review by the court, subject to the following invoice review procedures:
  • Summary invoices, which need not contain time detail and may be redacted for privileged or confidential information, are provided to the debtors, the Ad Hoc Group Advisors, counsel to any statutory committee and the U.S. Trustee
  • Objections must be in writing, state the grounds with particularity, and be submitted within 10 calendar days of receipt of the invoices
  • Absent a written objection received by 12:00 p.m. prevailing Central Time on the last day of the review period, invoices are paid promptly and within five business days; if an objection is received, the undisputed amount is paid within five business days without the need for formal fee applications and the court retains jurisdiction to determine the disputed portion
  • The Ad Hoc Group Advisors and professionals for the DIP agent, Prepetition Superpriority Agent and Prepetition First Lien Agent are not required to comply with U.S. Trustee fee guidelines
• DIP Fees and Expenses and Adequate Protection Fees and Expenses incurred on or prior to the closing date were payable on the closing date without any professional first delivering an invoice or supporting documentation to the review parties other than the debtors, and unpaid DIP Fees and Expenses incurred prior to the closing date are payable indefeasibly upon its occurrence
• All fees, costs and expenses paid prepetition to or for the benefit of the DIP agent, the Prepetition Superpriority Agent, the Prepetition First Lien Agent, or the Prepetition Superpriority or First Lien Secured Parties in connection with the DIP facility or the chapter 11 cases are approved in full and not subject to recharacterization, avoidance, subordination or disgorgement

Maturity

• On the maturity date, as defined in the DIP credit agreement (the order does not itself fix a maturity date), the DIP borrower shall pay in cash the then unpaid and outstanding amount of the DIP obligations, except as expressly set forth in the DIP documents with respect to any exit term loan facility, preferred equity election or similar exit financing mechanism
• Upon a disposition of Sale Assets, 100% of net cash proceeds must be deposited into the Proceeds Account, held in trust for the DIP secured parties and prepetition secured parties, and promptly applied to prepayment of the DIP obligations under Section 2.11(e) of the DIP credit agreement, provided that sufficient proceeds are retained pursuant to an approved budget or with the consent of the Required AHG Lenders to implement a wind-down of the estates and confirmation of a chapter 11 plan
• On the maturity date, 100% of amounts held in the Proceeds Account are drawn and paid to the DIP agent to repay the DIP obligations; if maturity occurs on the date of consummation of a plan of reorganization, remaining proceeds are applied in accordance with the plan and/or the DIP credit agreement

Events of Default and Remedies

• Following an unwaived event of default and delivery of a termination notice, on not less than five business days' notice to lead restructuring counsel to the debtors, the Ad Hoc Group Advisors, the creditors' committee and the U.S. Trustee, the DIP agent may:
  • Terminate or revoke the debtors' right to use cash collateral, subject to the carve out
  • Terminate the DIP facility as to any future liability or obligation of the DIP secured parties, without affecting the DIP obligations or the DIP liens securing them
  • Declare all DIP obligations immediately due and payable
  • Invoke the right to charge interest at the default rate
• Upon delivery of the termination notice, the DIP secured parties' and prepetition secured parties' consent to the use of cash collateral and the debtors' ability to incur additional DIP obligations terminate automatically upon expiration of the remedies notice period unless the court orders otherwise, and the DIP secured parties have no obligation to provide further loans or financial accommodations; the prepetition secured parties' consent to the use of cash collateral terminates automatically upon acceleration of the DIP obligations
• Prior to exercising any further remedies — including freezing or sweeping account balances, setoff, and foreclosure on or disposition of the DIP collateral — the DIP secured parties must file a stay relief motion on not less than five business days' notice to the remedies notice parties, which may run concurrently with the remedies notice period; the debtors' rights to contest such relief are reserved
• Until the stay relief motion is adjudicated, the DIP loan parties may continue to use cash collateral solely to pay necessary expenses and fund working capital needs as set forth in the approved budget and to fund the carve out
• During the remedies notice period, the debtors, the creditors' committee, the DIP secured parties, the Ad Hoc Group and any party in interest may seek an emergency hearing to contest whether an event of default has occurred and is continuing or to obtain non-consensual use of cash collateral; if such a request is made, the notice period is extended until the court rules
• If the court permits enforcement following the hearing on the stay relief motion, the debtors must cooperate with the DIP secured parties' enforcement efforts and may not take or direct any action designed to hinder or restrict enforcement; the debtors must promptly serve any stay relief motion on each party that has filed a request for notice

Carve Out

• Post-Carve Out Trigger Notice Cap: allowed professional fees incurred on or after the first business day following delivery of a carve out trigger notice, capped at $1 million for debtor professionals and $150,000 for committee professionals, in each case funded into separate carve out accounts
• Reasonable and documented fees and expenses of up to $75,000 incurred by a trustee under section 726(b) of the Bankruptcy Code
• Clerk of the court and U.S. Trustee fees under 28 U.S.C. § 1930(a), plus statutory interest
• Pre-Carve Out Trigger Notice Cap: all unpaid allowed professional fees of debtor and committee professionals retained under sections 327, 328, 363 or 1103, incurred at any time before or on the day of delivery of a carve out trigger notice and whether allowed before or after such delivery, subject to application of any retainers held, without regard to whether such fees are provided for in an approved budget and other than any restructuring, sale, success or other transaction fee of any investment banker or financial advisor
• A carve out trigger notice is a written notice delivered by email by the DIP agent, acting at the direction of the Required AHG Lenders (or, after the DIP obligations are indefeasibly paid in full and the DIP commitments terminated, by any prepetition agent), to the debtors, their restructuring counsel, the U.S. Trustee and counsel to the creditors' committee, deliverable only following and during the continuation of an event of default and stating that the Post-Carve Out Trigger Notice Cap has been invoked
• Upon delivery of a carve out trigger notice and prior to payment of any DIP obligations, the debtors must fund the carve out accounts — which are not subject to the control of the DIP agent or the prepetition agents — in an amount equal to the carve out cap less amounts already held. Neither the DIP agent nor the prepetition agents may sweep or foreclose on the debtors' cash until the carve out account has been fully funded.
• Amounts in the carve out account are reduced dollar-for-dollar as allowed professional fees are paid after delivery of the trigger notice and are not replenished; the failure of the carve out account to satisfy the carve out in full does not affect the carve out's priority
• Funds in the carve out account are applied first to obligations benefiting from the Pre-Carve Out Trigger Notice Cap and then to those benefiting from the Post-Carve Out Trigger Notice Cap, with any remaining funds distributed to the DIP agent on account of the DIP obligations
• The carve out is senior to all liens, security interests and superpriority claims granted under the orders, the DIP documents and the prepetition credit documents
• To the extent the carve out is funded from borrowings under the DIP facility, such amounts constitute DIP obligations; the incurrence or payment of the carve out is not restricted by the approved budget
• Neither the carve out, the carve out accounts nor the approved budget caps the allowed professional fees or other administrative expense claims that estate professionals may assert or that the court may allow, and the DIP lenders retain the right to contest allowance, including on the ground that amounts sought exceed the approved budget; none of the DIP agent, the DIP lenders or the prepetition secured parties is responsible for paying or reimbursing estate professionals or for ensuring the debtors have funds to do so
• Committee Professionals Fee Cap: the approved budget may not be amended to reduce the budget for committee professionals below $1,950,000 without the consent of the creditors' committee, not to be unreasonably withheld, conditioned or delayed, provided that such consent is not required to the extent the committee acts in a manner inconsistent with the Settlement Term Sheet as determined by the court. Committee professionals may not seek, and the debtors are not obligated to pay, allowed professional fees in excess of the cap.

Use of Proceeds

• Continue the orderly operation of the debtors' businesses and maintain relationships with vendors, suppliers and customers
• Fund payroll, capital expenditures and other working capital and operational needs
• Cover the administrative costs of the chapter 11 cases, including the postpetition sale and marketing process
• Pursue the value-maximizing restructuring transactions contemplated under the RSA
• Proceeds may be used solely in accordance with the orders, the DIP documents and the Updated DIP Budget, subject to permitted variances
• No proceeds of the DIP loans, DIP collateral, prepetition collateral or the carve out may be used, directly or indirectly (including through reimbursement of any non-debtor party's professional fees), to investigate, threaten to initiate or prosecute claims against the DIP secured parties or prepetition secured parties, to challenge the DIP or prepetition obligations or liens, to hinder enforcement or realization on the collateral, to modify the rights and remedies granted to the secured parties, to seek liens or claims senior to or pari passu with the DIP liens and claims, or to pay prepetition claims other than as approved by the court, agreed to in writing by the requisite lenders, or expressly permitted under the final order — in each case unless all DIP obligations, prepetition obligations, adequate protection obligations and claims granted under the final order have been refinanced or paid in full in cash, including the cash collateralization of any letters of credit
  • The creditors' committee may use up to $75,000 in the aggregate to investigate, but not to prosecute or initiate the prosecution of — including preparing any complaint or motion on account of — the claims and liens of the prepetition secured parties (including claims and liens as to sold receivables and Receivables Proceeds) and potential claims, counterclaims, causes of action or defenses against the prepetition secured parties

Credit Bid

• The DIP agent, acting directly or through one or more acquisition vehicles and at the direction of the Required AHG Lenders, on behalf of itself and the other DIP secured parties, may credit bid all or any portion of the DIP obligations in any sale of the DIP collateral
• The Prepetition First Lien Agent, acting at the direction of the requisite lenders under the Prepetition First Lien Credit Agreement, may credit bid up to the full amount of the Prepetition First Lien Obligations, including any Prepetition First Lien Adequate Protection Obligations, in any sale of the prepetition collateral, provided that the DIP obligations are indefeasibly repaid in full in cash and the DIP commitments are terminated
• No further court order is required, whether the sale is effectuated under section 363(k), 1123 or 1129(b) of the Bankruptcy Code, by a chapter 7 trustee under section 725, or otherwise

Avoidance Actions

• The DIP collateral and the DIP superpriority claims exclude avoidance actions — claims and causes of action under sections 502(d), 544, 545, 547, 548, 549, 550 and 553 and any other avoidance actions under the Bankruptcy Code — but include any proceeds or property recovered, unencumbered or otherwise, from avoidance actions, whether by judgment, settlement or otherwise
• The adequate protection liens and 507(b) claims likewise exclude avoidance actions but extend to avoidance proceeds
• Where the prepetition secured parties are entitled to exercise remedies following expiration of the DIP agent remedies notice period, they must use commercially reasonable efforts to look first to collateral other than avoidance proceeds to satisfy the adequate protection claims

Challenge Period and Budget

• The deadline to bring a challenge is the later of the following and any date agreed to by the requisite lenders and the prepetition agents or ordered by the court for cause:
  • As to the creditors' committee, the earlier of 60 calendar days after its appointment (appointed July 9, 2026) and the deadline for filing objections to a sale of the debtors' assets or to confirmation of a chapter 11 plan
  • As to all other parties in interest, the earlier of 60 calendar days after entry of the interim order and the deadline for filing objections to a sale of the debtors' assets or to confirmation of a chapter 11 plan
  • If the cases are converted to chapter 7 and a chapter 7 or chapter 11 trustee is appointed or elected before the challenge period expires, the later of 60 calendar days after entry of the interim order and 30 calendar days after such appointment, solely as to such trustee
• A challenge may be brought only by a party with requisite standing obtained by court order entered before expiration of the challenge period, and any pleading must set forth the basis for the challenge with specificity; challenges not so specified, including claims later added by amendment, are forever waived, released and barred. Neither order vests or confers standing on any statutory or non-statutory committee or other entity to pursue claims belonging to the debtors or their estates, and any ruling on standing does not stay or delay the cases or plan confirmation.
• If no challenge is timely and properly filed, or the court does not rule in the challenger's favor, the debtors' stipulations become binding on all parties in interest, the prepetition obligations constitute allowed claims not subject to avoidance, reduction, setoff, recharacterization, subordination (other than under the Intercreditor Agreements), disallowance or other challenge, and the prepetition liens are deemed to have been legal, valid, binding and perfected as of the petition date. If a challenge is timely filed, the stipulations nonetheless remain binding on all other parties except to the extent successfully challenged by the filing party in a final, non-appealable order.
• No provision of the orders that became final upon entry is subject to challenge, including the Initial Rolled-Up Term Loans (and the roll-up of the MOIC Prepayment Amount), which became final and irrevocable upon entry of the interim order, and the Final Rolled-Up Term Loans, which became final and irrevocable upon entry of the final order
• The Updated DIP Budget supersedes the Initial DIP Budget in its entirety and reflects anticipated operating receipts, operating disbursements, non-operating disbursements, net operating cash flow and liquidity for each calendar week covered thereby, in form and substance acceptable to the Required Lenders. Budget updates require approval of the Required AHG Lenders, and the creditors' committee must receive notice of any updates, modifications or supplements as soon as practicable and in any event before implementation.

Liens and Priorities

• The DIP obligations constitute allowed superpriority administrative expense claims under section 364(c)(1) against the DIP loan parties on a joint and several basis, with priority over all other claims, subject to the carve out and, solely with respect to the Prepetition Receivables Collateral, the Prepetition Receivables 507(b) Claims
• The DIP agent, for itself and the other DIP secured parties, is granted automatically perfected liens on all DIP collateral, including cash collateral and avoidance proceeds, with the following priorities:
  • First-priority senior liens on all unencumbered property under section 364(c)(2), subject only to the carve out
  • First-priority senior priming liens on all prepetition collateral under section 364(d)(1), senior in all respects to the prepetition liens and the adequate protection liens, and subordinate only to the carve out, permitted prior liens, and — solely as to the portion of the DIP collateral constituting sold receivables — the Prepetition Receivables Liens and Prepetition Receivables Adequate Protection Liens
  • Junior liens on all other property under section 364(c)(3), junior to the carve out and permitted prior liens but senior in all respects to the adequate protection liens (other than the Prepetition Receivables Adequate Protection Liens on the Prepetition Receivables Collateral)
• The DIP liens are not subject or subordinate to, or pari passu with, any lien avoided and preserved under section 551, any liens arising after the petition date (including in favor of any governmental unit), any intercompany or affiliate liens, or any other lien under section 361, 363 or 364
• The DIP liens and adequate protection liens are deemed valid and perfected upon entry of the interim order without further filing or recordation, and all such documents are deemed recorded and filed as of the petition date. The adequate protection liens are not subject to sections 506(c), 510, 549 or 550.
• The Intercreditor Agreements remain in full force and effect and continue to govern the relative priorities, rights and remedies of the prepetition secured parties, including with respect to replacement liens, administrative expense claims and adequate protection, notwithstanding the rolling up of the Prepetition Superpriority Obligations and Prepetition First Lien Obligations into the DIP obligations
• The DIP financing, the roll-up, the adequate protection and the DIP liens were negotiated in good faith and at arm's length, and the DIP secured parties — and, as to the roll-up and the continued use of prepetition collateral, the Prepetition Superpriority and First Lien Secured Parties — are entitled to the full protection of sections 364(e) and 363(m) if the orders are vacated, reversed or modified on appeal or otherwise
• The DIP liens, DIP superpriority claims, 507(b) claims, adequate protection liens and other adequate protection obligations survive and are not modified, impaired or discharged by conversion or dismissal of the cases, termination of joint administration, entry of an order approving a sale of DIP collateral, or confirmation of a chapter 11 plan, and the DIP loan parties have waived any discharge of remaining DIP obligations or adequate protection obligations under section 1141(d)(4); no claim or lien senior to or pari passu with those granted under the orders may be permitted while such obligations remain outstanding
• Nothing in the orders constitutes a finding that any alleged prior lien is valid, senior, enforceable, perfected or non-avoidable, and all parties' rights to challenge any such lien are preserved; a seller's reclamation rights under section 546(c) do not constitute a prior lien and are expressly subject to the DIP liens and the prepetition liens

Adequate Protection

• The prepetition secured parties are entitled to adequate protection under sections 361, 362, 363(e), 364(d)(1) and 507 for the aggregate diminution in value of their interests in the prepetition collateral (including cash collateral) from and after the petition date, including diminution resulting from the debtors' sale, lease or use of the collateral, the priming of the prepetition liens by the DIP liens, payments made on account of the carve out or under the orders, and the imposition of the automatic stay. Each replacement lien and 507(b) claim described below is granted only to the extent and in the amount of such diminution.
• The court found the adequate protection reasonable and sufficient, but any prepetition secured party may request further or different adequate protection, subject to applicable contractual limitations including those in the Intercreditor Agreements, and the DIP loan parties and any other party in interest may contest such a request

Prepetition Superpriority Secured Parties

• Replacement liens on all DIP collateral, excluding avoidance actions but including avoidance proceeds, senior to all other liens on the DIP collateral, subject to pari passu Prepetition Revolver Adequate Protection Liens on Shared Collateral and subordinate to the carve out, permitted prior liens, the DIP liens, and the Prepetition Receivables Liens and Prepetition Receivables Adequate Protection Liens on the Prepetition Receivables Collateral
• Allowed superpriority administrative expense claims under section 507(b) against each debtor on a joint and several basis, subordinate to the carve out, the DIP superpriority claims, and the Prepetition Receivables 507(b) Claims solely with respect to Receivables Proceeds

Prepetition First Lien Secured Parties

• Replacement liens on all DIP collateral, excluding avoidance actions but including avoidance proceeds, subject to pari passu Prepetition Revolver Adequate Protection Liens on Shared Collateral and subordinate to the carve out, permitted prior liens, the DIP liens, the Prepetition Receivables Liens and Prepetition Receivables Adequate Protection Liens on the Prepetition Receivables Collateral, and the Prepetition Superpriority Adequate Protection Liens and Prepetition Superpriority Liens
• Allowed superpriority administrative expense claims under section 507(b), subordinate to the Prepetition Receivables 507(b) Claims (solely as to Receivables Proceeds), the DIP superpriority claims, the carve out, and the Prepetition Superpriority 507(b) Claims
• Consistent with the Multi-Lien Intercreditor Agreement, the Prepetition First Lien Secured Parties may not retain any distributions, proceeds or recoveries on account of such liens or claims until the Prepetition Superpriority Obligations are indefeasibly paid in full

Prepetition Revolver Secured Parties

• Replacement liens on all DIP collateral, excluding avoidance actions but including avoidance proceeds, pari passu with the Prepetition Superpriority and Prepetition First Lien Adequate Protection Liens and subordinate to permitted prior liens, the DIP liens, the Prepetition Receivables Liens and Prepetition Receivables Adequate Protection Liens on the Prepetition Receivables Collateral, and the carve out
• Allowed superpriority administrative expense claims under section 507(b), subordinate to the Prepetition Receivables 507(b) Claims (solely as to Receivables Proceeds), the DIP superpriority claims, and the carve out

Prepetition Second Lien and Third Lien Secured Parties

• Replacement liens on all DIP collateral, excluding avoidance actions but including avoidance proceeds:
  • The Prepetition Second Lien Adequate Protection Liens are subordinate to permitted prior liens, the Prepetition Receivables Liens and Prepetition Receivables Adequate Protection Liens on the Prepetition Receivables Collateral, the carve out, the DIP liens, the Prepetition Superpriority Adequate Protection Liens and Prepetition Superpriority Liens, and the Prepetition First Lien Adequate Protection Liens and Prepetition 1L Liens
  • The Prepetition Third Lien Adequate Protection Liens are further subordinate to the Prepetition Second Lien Adequate Protection Liens and the Prepetition 2L Liens
• Allowed superpriority administrative expense claims under section 507(b), in each case subordinate to the Prepetition Receivables 507(b) Claims (solely as to Receivables Proceeds), the DIP superpriority claims, the carve out, and the Prepetition Superpriority and Prepetition First Lien 507(b) Claims, with the Prepetition Third Lien 507(b) Claims further subordinate to the Prepetition Second Lien 507(b) Claims
• Consistent with the Intercreditor Agreements, the Prepetition Second Lien Secured Parties may not retain distributions until the Prepetition Superpriority Obligations and Prepetition First Lien Obligations are indefeasibly paid in full, and the Prepetition Third Lien Secured Parties may not retain distributions until the Prepetition Superpriority, First Lien and Second Lien Obligations are indefeasibly paid in full

Prepetition Receivables Purchasers

• Replacement liens on the amount of Receivables Proceeds held by the debtors as of the petition date, to the extent of diminution equal to the Receivables Proceeds used during the chapter 11 cases, senior to all other liens on the Prepetition Receivables Collateral (subject to the carve out) and, on all other DIP collateral, subordinate to the prepetition liens, the DIP liens, the other adequate protection liens, permitted prior liens and the carve out
• Allowed superpriority administrative expense claims under section 507(b), subject to the carve out and, on DIP collateral other than the Prepetition Receivables Collateral, subordinate to the DIP superpriority claims, the carve out and the other 507(b) claims

Additional Adequate Protection

• Payment in cash of all reasonable and documented prepetition and postpetition fees and expenses of the Ad Hoc Group, including the Ad Hoc Group Advisors, and of the Prepetition Superpriority Agent and Prepetition First Lien Agent, including the fees and expenses of Goodwin Procter LLP and special and local counsel to the prepetition agents, subject to the carve out and the invoice review procedures
• Delivery to the prepetition agents, for the benefit of the Prepetition Superpriority and First Lien Secured Parties, of all reporting required to be provided to the DIP agent under the DIP documents, at the same time as, and only to the extent that, such reporting is provided to the DIP agent
• Continued maintenance and insurance of the prepetition collateral and DIP collateral as required under the prepetition credit documents and DIP documents
• In the event the DIP obligations are discharged, the Milestones and the covenants set forth in Sections 5.03 and 5.04 of the DIP credit agreement remain in effect for the benefit of the Prepetition Superpriority and First Lien Secured Parties, except as waived, extended or modified by written agreement of the debtors and the requisite lenders

Waivers

• Section 506(c): Except to the extent of the carve out, no costs or expenses of administration of the chapter 11 cases or any successor cases may be charged against or recovered from the DIP collateral (including cash collateral) or the prepetition collateral without the prior written consent of the DIP agent and the Prepetition First Lien Agent, and no consent may be implied from any action, inaction or acquiescence
• Section 552(b): The "equities of the case" exception does not apply to any of the prepetition secured parties with respect to the proceeds, products, offspring or profits of any prepetition collateral
• The equitable doctrine of "marshaling" and similar doctrines do not apply to the DIP collateral, the DIP obligations, the prepetition obligations or the prepetition collateral, subject to the requirement that the prepetition secured parties look first to collateral other than avoidance proceeds
• Payments free and clear: payments and proceeds remitted to the DIP agent are irrevocable and received free and clear of any claim, charge, assessment or liability, including any arising under section 506(c) or 552(b)
• Releases: the debtors and their estates, subject to the challenge period, reaffirm the releases granted under the interim order and, effective as of the date of the final order, absolutely, unconditionally and irrevocably release and discharge each Prepetition Superpriority Secured Party, Prepetition First Lien Secured Party, Prepetition Second Lien Agent, Prepetition Third Lien Secured Party, each DIP secured party and their respective representatives, in each case solely in their capacities as such, from all claims and causes of action, known or unknown, arising out of or related to the prepetition credit documents or the DIP documents and arising at any time on or prior to the date of the final order; the release does not extend to any party that is not a DIP secured party, prepetition secured party or representative thereof in such capacity. The release does not relieve the prepetition secured parties, the Sponsor, the DIP secured parties or the debtors of their respective obligations under the Second Amended Restructuring Support Agreement, dated June 28, 2026, or the definitive documents thereunder, including the DIP documents.
• Indemnification: the DIP secured parties, the Prepetition Superpriority Secured Parties, the Prepetition First Lien Secured Parties, the Prepetition Second Lien Agent and the Prepetition Third Lien Secured Parties are indemnified as provided in the DIP documents and prepetition credit documents, including Section 9.04(b) of each of the DIP credit agreement and the Prepetition Superpriority, First Lien and Third Lien credit agreements, and the debtors agree that no exception or defense in contract, law or equity exists to such indemnification obligations and waive any such defense
• Exculpation and limitation of liability: no DIP secured party or prepetition secured party may be held liable for claims arising from the debtors' prepetition or postpetition activities or restructuring efforts, for the safekeeping of the collateral, for any loss, damage or diminution in its value, or for the acts of any carrier, servicer, bailee or custodian, with all risk of loss borne by the debtors. In extending credit, permitting the use of collateral or exercising remedies, none of these parties is deemed to control the debtors' operations, to owe fiduciary duties to the debtors, their creditors, shareholders or estates, or to act as a responsible person, owner, operator or managing agent under CERCLA or similar federal or state statutes; the debtors separately stipulated that no prepetition secured party controls, has authority to direct, or is a control person or insider of, the debtors.
• Any applicable stay, including under Bankruptcy Rule 6004, is waived and the final order is immediately effective

Permitted Variance

• The DIP loan parties must comply with the approved budget, subject only to the permitted variances described in Section 5.02(p) of the DIP credit agreement, on which the DIP secured parties relied in agreeing to provide the postpetition financing

Proofs of Claim

• Neither the prepetition secured parties nor the DIP secured parties are required to file proofs of claim to assert claims for the prepetition obligations, the adequate protection obligations or the DIP obligations, and no bar date order applies to them; the statements of claim in the orders, together with the evidence submitted with the DIP motion and at the interim and final hearings, are deemed to constitute proofs of claim as to amount, secured status and priority
• Each prepetition agent may, but is not required to, file a single master proof of claim in the lead case on behalf of the applicable prepetition secured parties, which is treated as though a separate proof of claim had been filed in each debtor's case; master proofs of claim need not identify claim transfers or attach underlying instruments, are for administrative convenience only, do not affect each holder's right to vote separately on a plan, and are in addition to rather than in lieu of any other proof of claim

Insurance

• To the extent any prepetition agent is listed as loss payee under the DIP borrower's or DIP guarantors' insurance policies, the DIP agent is also deemed loss payee, with the same relative priority of liens and claims, and shall apply any insurance proceeds first to indefeasible payment in full of the DIP obligations (other than contingent indemnification obligations as to which no claim has been asserted) and termination of the DIP commitments, and thereafter distribute remaining funds to the Prepetition First Lien Agent for application to the Prepetition First Lien Obligations; this obligation terminates upon payment in full of the DIP obligations and termination of the DIP commitments