UPG Enterprises - Chapter 11 DIP Terms

DIP Terms

DIP Commitments

• $6.083 million of new-money junior secured superpriority term loan commitments, with $2 million available on entry of the interim order and an additional $4.083 million after entry of the final order, each subject to the draw conditions; on entry of the final order the prepetition bridge loans also roll up into a postpetition term loan equal to their outstanding principal and accrued and unpaid interest at that time.
• The motion, proposed interim order and credit agreement each cap the aggregate facility at $6.083 million while listing both the $6.083 million new-money commitment and the roll-up as its components, so the stated aggregate leaves out the rolled-up bridge debt, which carried an original principal of $4,984,214.59.
• Section 2.01(a) of the credit agreement sets the post-final-order availability at $4.2 million, while the motion, the proposed interim order and the credit agreement's own $6.083 million total new money commitment support $4.083 million.
• The roll-up works as an automatic exchange and conversion of the prepetition promissory note into a postpetition term loan, is deemed to refinance the bridge loans dollar-for-dollar, does not constitute a novation, and leaves the rolled-up loan junior and subordinate to the prepetition secured obligations and liens; the note survives as to the non-debtor Monroe and Elk Grove entities.
• The motion, the credit agreement and paragraph 4 of the proposed interim order place the roll-up at entry of the final order, while paragraph 14(b) of that same order ties the note's exchange and satisfaction to the initial DIP draw date.
• Amounts repaid under either the new money loans or the rolled-up loan may not be reborrowed.
• New money proceeds must be held in a segregated "DIP Loan Account," may not be commingled with other cash, and any surplus proceeds or net cash proceeds must remain in that account.
• The facility primes no existing liens, cross-collateralizes no prepetition debt, and imposes no plan or disclosure statement deadline.
• The interim order remains proposed; the motion was set for presentment on Sept. 24, 2026 at 1:00 p.m. CT, and the first milestone requires entry of the interim order by that date.

Borrower(s) / Guarantor(s)

• UPG Enterprises LLC, as borrower and borrower agent, together with the other debtors as borrowers, jointly and severally liable for all DIP obligations
• There are no subsidiary guarantors as of the effective date, and the credit agreement bars the debtors from forming or acquiring new subsidiaries.
• Six affiliates that are obligors under the bridge loan documents are neither DIP borrowers nor subject to the interim order: Mapes & Sprowl Steel LLC, Cortran LLC and Mapes Holdings LLC (the Elk Grove entities), which are not debtors and intend to pursue Article 9 sales of their assets, and UPG Electrical LLC, Carter Motor Company LLC and UPG Electrical Holdings LLC (the Monroe entities).

Agent / Lender(s)

• Firehorse Capital LLC, as sole DIP lender and administrative agent, and also the prepetition bridge lender
• Firehorse is an entity formed by the owners of UPG Enterprises and lends behind, rather than ahead of, the existing secured lenders; the credit agreement names Paul Douglass, who signs as Firehorse's manager, and Chris Hutter as its related parties, and deems Firehorse not to be an affiliate of any loan party.
• The prepetition secured agents, White Oak Commercial Finance LLC and Schaumburg Bank & Trust Company, N.A., are not DIP lenders but consent to the use of cash collateral and hold consent rights over the budget.

Background and Prepetition Capital Structure

• The debtors operate under the UPG family of brands as a group of industrial companies engaged in steel processing and production, manufacturing, distribution and logistics, organized into a flat roll group that processes steel into sheets and coils and a fabrication group that manufactures finished steel components.
• Funding and cash-flow problems left the debtors delinquent to trade creditors; as of the petition date they owed roughly $530,000 in priority claims, mostly taxes, and approximately $11 million of trade debt, faced pending litigation claiming in excess of $30 million in the aggregate, and were responding to a Department of Justice civil investigative demand issued in early 2026 concerning 18 Paycheck Protection Program loans, nine in each round, taken by debtors, non-debtor affiliates and former affiliates and since forgiven in a total amount of approximately $26 million.
• Needing liquidity to market their assets, the owners funded subordinated bridge loans through Firehorse under a fourth amended and restated promissory note dated Sept. 17, 2026, in an original principal amount of $4,984,214.59 advanced in tranches on June 26, Aug. 6, Aug. 20 and Sept. 17, 2026; the entire amount was used to pay professional fees of the debtors' and the DIP lender's professionals in connection with the sale process and restructuring. The debtors stipulate to that amount plus accrued interest, premiums, fees, costs and expenses, secured by liens on all of their assets that are junior to the prepetition secured liens but senior to all other liens on the bridge collateral.
• Following the appointment of an independent manager, the debtors negotiated the DIP facility with Firehorse on the same junior and subordinated basis and filed Chapter 11 on Sept. 22 and 23 to complete going-concern sales and pursue an orderly wind-down, with John Sordillo as chief restructuring officer and SC&H Capital and Angle Advisors as investment bankers.
• Prepetition secured debt consists of:
  • The White Oak facility, a $90 million aggregate revolver commitment under a Dec. 31, 2024 loan and security agreement with Maksteel USA LLC, Chicago Steel Holdings LLC and Lexington Steel LLC as U.S. borrowers, Maksteel Holdings ULC as Canadian borrower and Maksteel Holding Corp. and UPG Flat Roll Group LLC as guarantors, secured by first-priority liens on substantially all of their assets; approximately $50.4 million of principal and interest was outstanding at the petition date, plus prepayment premium and make-whole amounts
  • The Wintrust facility, a revolving credit loan capped at $35 million and a $4.27 million term loan under an Aug. 22, 2022 loan and security agreement, as amended by a forbearance agreement and fourth amendment dated Jan. 30, 2026, with Metalex LLC, National Metalwares L.P., UPG Fabrication LLC, National Metalwares Holdings LLC and Sidecar NM LLC as borrowers, secured by first-priority liens on substantially all of their assets; approximately $7.5 million of principal and interest was outstanding at the petition date
• The debtors acknowledge and stipulate that they are in default under the prepetition loan documents.

Interest Rate

• 10.0% per annum, added to the outstanding principal amount of the loans on the last day of each month
• Default Rate: 12.0% per annum, reflecting a 2.0% increment over the standard rate, payable on demand in cash while an event of default continues
• Interest is computed on a 360-day year for actual days elapsed, and accrued interest on any principal repaid or prepaid is payable in cash on the date of that repayment.
• The proposed interim order requires the debtors to make all payments due to the prepetition secured parties, including interest, before making any payment of interest under the DIP loan agreement.

Fees

• Exit Fee: 4.0% of the initial aggregate principal amount of the new money commitments, fully earned on the effective date, due at maturity, and added to the aggregate principal balance of the new money loans payable on repayment or prepayment
• Unused Line Fee: 1.5%, payable in kind per the DIP budget; the credit agreement's fee subsection for this item is marked reserved, though the agreement elsewhere confirms the fee is paid in kind and does not reduce the new money commitments
• Lender Counsel: fees and expenses of DLA Piper LLP (US), as counsel to Firehorse, payable within 15 days of invoice, with any invoice delivered on or before the effective date fully earned and payable on that date and payable from new money proceeds, which may be net funded to account for it
• Fees are non-refundable, non-creditable, payable without setoff or withholding and grossed up for taxes, and are paid in kind by addition to the outstanding principal amount of the loans.
• The debtors must pay all outstanding adequate protection fees and expenses before paying any DIP fees and expenses; neither category is subject to court allowance or review, and lender professionals need not comply with U.S. Trustee fee guidelines or file fee applications. Summary invoices go to the debtors, the U.S. Trustee and any committee, which have 10 calendar days to object in writing; absent an objection by 12:00 p.m. prevailing Central Time on the last day of that period, the debtors pay within five calendar days, and disputed portions are reserved to the court.

Maturity

• The earliest to occur of:
  • The scheduled maturity date of Dec. 18, 2026
  • Consummation of a sale of all or substantially all of the borrowers' assets or equity, and where sold in a series of partial sales, consummation of the final sale in that series
  • Acceleration of the obligations or termination of the new money commitments by the agent or lender
  • The effective date of a confirmed plan of reorganization or liquidation
  • 14 days after the petition date if the final order has not been entered, unless extended with Firehorse's written consent, not to be unreasonably withheld
  • The date the interim or final order ceases to be in full force and effect after entry
  • Conversion or dismissal of any of the cases
  • Incurrence of any other Section 364 financing that does not provide for immediate payment in full in cash of the prepetition senior secured obligations and all DIP obligations
• Firehorse may extend the maturity date for any reason, including to allow the debtors to pursue confirmation of an acceptable plan.
• The debtors have no optional prepayment right if prohibited by the intercreditor agreements and otherwise without Firehorse's consent, but may prepay in full without premium or penalty in connection with a refinancing, and may terminate or reduce the commitments without premium if they obtain financing on terms they reasonably determine to be more favorable and that repays the outstanding new money loans.
• Mandatory prepayments of 100% of net cash proceeds are due within two business days of receipt for any disposition outside the ordinary course and for any event of loss, and for the incurrence of any non-permitted indebtedness.

Milestones

• Failure to meet any milestone is an event of default; each may be extended only with Firehorse's written approval:
  • Sept. 24, 2026: entry of the interim order and filing of a motion, in form and substance satisfactory to Firehorse, seeking approval of bidding procedures and a Section 363 sale
  • Oct. 21, 2026: entry of the final order and of a bidding procedures order in form and substance satisfactory to Firehorse
  • Oct. 21, 2026: deposit of $1 million of net cash proceeds into the DIP account, plus either an additional $1 million deposited or execution of one or more fully committed, contingency-free asset purchase agreements with qualified and financially capable buyers that, in Firehorse's sole discretion, will yield more than $1 million of additional net cash proceeds
  • Oct. 30, 2026: execution of one or more fully committed, contingency-free asset purchase agreements with qualified and financially capable buyers that, in Firehorse's sole discretion, will yield net cash proceeds in excess of $2 million
  • Nov. 30, 2026: deposit of an additional $2 million of net cash proceeds into the DIP account

Use of Proceeds

• Pay fees, interest and expenses under the DIP loan documents
• Fund the cost of administering the cases, including professional fees and expenses, and fund the carve-out
• Finance other prepetition and pre-filing expenses approved by the court
• Fund working capital and general corporate purposes
• Make adequate protection payments, including payment of the prepetition secured lenders' fees and expenses
• All uses must be consistent with the approved budget, subject to permitted variances, the DIP order and the intercreditor agreements; proceeds of the rolled-up loan are deemed used to refinance the bridge loans dollar-for-dollar.
• No DIP loans, DIP collateral, cash collateral, prepetition or bridge collateral or any portion of the carve-out may be used to investigate, initiate or prosecute claims against the DIP lender, the bridge loan secured parties or the prepetition secured lenders, to challenge their obligations, liens or claims, to interfere with their enforcement, to seek liens or superpriority claims senior to or pari passu with theirs, to pay Section 503(b)(9) claims absent the DIP agent's specific written approval, or to pay prepetition claims other than as authorized by the court, agreed by the DIP lender or permitted under the interim order and the approved budget.

Cash Collateral

• Cash collateral is defined as all of the debtors' cash wherever located and held, including cash in deposit accounts, that constitutes cash collateral of the bridge loan secured parties, the DIP lender or the prepetition secured parties; DIP loan proceeds themselves constitute cash collateral of the DIP lender.
• Use is consensual, conditioned on the adequate protection package and limited to the approved budget, and terminates on the earlier of the maturity date, termination of the DIP facility in accordance with its terms, or as otherwise set forth in the interim order.
• Conditions specific to the White Oak facility:
  • Delivery to the White Oak agent, no later than Monday of each week beginning Sept. 28, 2026, of a U.S. borrowing base report as of the prior Friday's close, consistent with prepetition practice
  • Delivery on the same weekly schedule of an officer-certified variance report reconciling actual to budgeted performance for the prior week and cumulatively from the petition date, with an explanation of material line-item variances
  • Maintenance at all times of U.S. revolver availability of not less than 85% of the "Availability" line item in the Flat Roll Group Forecast portion of the approved budget, with the U.S. specified overadvance capped at $4 million and availability increased by the amount by which White Oak cash collateral held in the blocked account or by the agent (excluding specified collateral) and in the White Oak debtors' main operating account together exceeds $250,000
  • A shortfall below that 85% threshold terminates the debtors' authority and the agent's consent to use cash collateral until cured by a cash payment to the agent within two business days after delivery of the variance report for the week in question, subject to written waiver by the prepetition secured lenders
  • Deposit of all White Oak cash collateral into blocked accounts at BMO Bank N.A., with daily remittance back to the debtors only up to the amount that keeps availability at or above the minimum threshold; retained amounts are not applied to the White Oak obligations until the earlier of the termination date or a sale of all or substantially all of the White Oak debtors' assets
  • Prompt remittance of specified White Oak collateral, consisting of all proceeds of a Sept. 26, 2024 seller lender promissory note in the original principal amount of $2 million executed by Grand Steel Products Inc. in favor of Maksteel-Chattanooga LLC, and the $500,000 payment, subject to reductions, under an Aug. 21, 2026 settlement and termination agreement between Nucor Warehouse Systems Inc. and MAK Steel USA LLC, which the agent applies against the White Oak obligations without credit in the availability line item
• Payments and proceeds of collateral subject to the prepetition secured liens are applied first to the prepetition secured obligations, second to the carve-out, third to amounts due on the new money loans, fourth to the rolled-up loan or the promissory note, and last to the debtors.

Securities and Priorities

• All DIP obligations constitute allowed superpriority administrative expense claims under Section 364(c)(1) against the debtors on a joint and several basis, ahead of all other administrative expenses, but junior and subordinate to and subject to the prior payment in full in cash of the prepetition secured obligations, the prepetition liens, the prepetition secured adequate protection liens, the 507(b) claims and other adequate protection claims, and the carve-out.
• The DIP agent, for itself and the DIP lender, receives automatically perfected postpetition liens under Sections 364(c)(2) and 364(c)(3) on all collateral without further filing or recordation, with the following priorities:
  • First-priority senior liens on all DIP loan proceeds and any accounts holding them, subject only to the carve-out and the adequate protection liens
  • First-priority senior liens on all unencumbered property, including avoidance actions and their proceeds upon entry of the final order, junior to the adequate protection liens granted on the assets of the respective prepetition secured obligors
  • Junior liens on all other collateral, senior to other liens but junior to valid, perfected, unavoidable third-party liens in existence immediately before the petition date, including the prepetition secured liens, or perfected afterward as permitted by Section 546(b), and subject to the carve-out and the adequate protection liens
• DIP collateral covers all present and after-acquired assets of any nature, including cash, receivables and intercompany accounts, contracts, inventory, deposit and securities accounts, equity interests, commercial tort claims, direct and derivative causes of action, other non-avoidance estate claims (including breach of fiduciary duty, alter ego and veil-piercing, and successor liability claims) and their proceeds, real property interests, intellectual property and all proceeds, and adds avoidance actions and their proceeds on entry of the final order; the liens do not attach where law prohibits attachment, in which case the proceeds are DIP collateral.
• The DIP liens and adequate protection liens may not be primed, subordinated or made pari passu with liens preserved under Section 551, later-arising liens including governmental liens, intercompany or affiliate liens, or any lien granted under Sections 363 or 364 after entry, other than the carve-out and the prepetition permitted prior liens.
• Where the bridge loan secured parties are named loss payee on the debtors' insurance, the DIP agent is deemed loss payee and distributes proceeds first to the prepetition secured obligations, second to the DIP obligations, and third to the bridge loans.
• The credit agreement subordinates the DIP obligations and liens in right of payment and collateral allocation to the prepetition senior secured obligations, including under a Sept. 22, 2026 subordination and intercreditor agreement among Firehorse, White Oak and the White Oak borrowers and guarantors, and makes DIP payments, prepayments and remedies subject to the intercreditor agreements.
• The debtors may not sell or encumber DIP collateral except as the DIP documents or a court order permit, and may not dispose of prepetition secured collateral without the applicable prepetition agent's written consent or a court order.

Carve Out

• Post-Carve-Out Trigger Notice Cap: $100,000 for debtor professionals and $50,000 for committee professionals
• The carve-out also covers Clerk and U.S. Trustee fees under 28 U.S.C. § 1930(a) with statutory interest, which no budget may limit, and accrued but unpaid allowed fees of estate professionals retained under Sections 327, 328 or 363 and of any committee, incurred through the first business day after delivery of a carve-out trigger notice, in each case limited to the amount approved in the budget for that professional.
• The debtors fund the pre-trigger amount into a non-interest-bearing professional fee account each Wednesday for the following week's budgeted fees and may borrow weekly under the facility to do so until an event of default or the termination date; payments from that account may continue regardless of a default.
• A carve-out trigger notice may be delivered only following the occurrence and during the continuation of an event of default under the facility, and on delivery the debtors must fund a reserve equal to the carve-out from available cash in the DIP loan account.
• Success and transaction fees earned by SC&H Capital and Angle Advisors count as allowed professional fees for carve-out purposes whether or not budgeted, and must be funded into the professional fee account at the closing of the applicable transaction unless approved by the court and paid at closing.
• Fees incurred in excess of a professional's allocated budget are not payable from the carve-out; the carve-out is reduced dollar-for-dollar by fee payments, and post-trigger payments permanently reduce the cap dollar-for-dollar.
• The carve-out is funded solely from DIP proceeds and not from prepetition secured collateral, including cash collateral, absent the relevant agent's written consent or payment in full in cash of that agent's obligations; residual amounts in the professional fee account after final fee applications are returned to the DIP lender.
• The carve-out terms are the same for debtor and committee professionals, with per-professional allocations set in the approved budget.
• The DIP, prepetition, bridge and adequate protection liens and claims are all subordinate to the carve-out, but once a weekly carve-out amount is funded, the DIP and prepetition lenders' subordination for pre-trigger professional fees is limited to the funds deposited in the professional fee account.

Adequate Protection

Prepetition Secured Lenders

• Replacement and additional perfected postpetition liens on all prepetition secured collateral and all collateral constituting assets of the prepetition secured obligors, including avoidance actions and their proceeds upon entry of the final order, senior to all other liens and not subject to or pari passu with any other lien until the prepetition secured obligations are paid in full
• Allowed Section 507(b) superpriority claims against the applicable obligor debtors, subject and subordinate only to the carve-out and senior in payment to the DIP superpriority claims
• Continued accrual of interest on the White Oak loans and the Wintrust loans at the applicable default rate under each set of loan documents, paid in cash when due in accordance with those documents and the approved budget, subject to the challenge provisions
• Cash payment of all reasonable and documented prepetition and postpetition fees and expenses of counsel, in each applicable jurisdiction, and financial and other advisors, subject to the invoice review procedures and, before the closing of a sale of substantially all of the relevant debtors' assets, capped at the budgeted amounts for each agent; the debtors may use DIP proceeds to pay these amounts
• Continuation of all prepetition reporting plus copies of financial reporting delivered to the DIP agent, including borrowing base reports, monthly financial statements, a rolling 13-week cash flow forecast with weekly budget-to-actual variance reports, and periodic conferences with management on operations, collateral and sale process updates
• Maintenance and insurance of the prepetition secured collateral to the extent required under the prepetition loan documents

Bridge Loan Secured Parties

• No separate adequate protection is granted because Firehorse is itself the DIP lender and agent; the bridge loan secured parties retain their rights, liens and collateral under the bridge loan documents, subject to the exchange and satisfaction of the note through the roll-up, and receive the same reporting they were entitled to before the petition date.
• Nothing in the order primes the bridge loan liens or impairs Firehorse's rights as bridge lender except as expressly provided by the roll-up, and the order does not affect the bridge parties' rights against the non-debtor Elk Grove entities.

Credit Bid

• The DIP agent, at the DIP lender's direction, may credit bid directly or through acquisition vehicles up to the full amount of the DIP obligations, including the rolled-up loan and the superpriority claims, and each prepetition secured agent may credit bid up to the full amount of its prepetition secured loans, including adequate protection obligations, in any sale of the relevant collateral, whether under Section 363, a plan confirmed under Section 1129(b)(2)(A)(ii)-(iii), a Chapter 7 trustee sale under Section 725 or otherwise, without further court order.
• The DIP lender and each prepetition secured agent are automatically deemed qualified bidders, and no debtor may object to their credit bids.
• Any DIP credit bid for prepetition secured collateral must provide for indefeasible payment in full in cash of the prepetition secured obligations at closing unless the applicable agent agrees in advance in writing to different treatment; the credit agreement carries the same cash-component requirement.
• If avoidance actions or other estate claims are sold or otherwise disposed of, whether by the debtors or a trustee, the DIP agent may credit bid up to the full amount of the DIP obligations for them without further court order.

Avoidance Actions

• Upon entry of the final order, DIP collateral will include avoidance actions and avoidance action proceeds, defined as claims and causes of action under Sections 502(d), 506(d), 542, 543, 544, 545, 547, 548, 549, 550, 553 and 724(a) and any similar state law avoidance action, and the same assets become subject to the prepetition secured adequate protection liens and are payable on account of the DIP superpriority and 507(b) claims.
• Until the final order is entered, avoidance actions and their proceeds are excluded from the assets available to satisfy the DIP superpriority claims.

Events of Default and Remedies

• Beyond payment and covenant defaults, the case-specific events of default include:
  • Failure to meet any milestone, as extended only with Firehorse's consent
  • Entry of an order approving a Section 363 sale without Firehorse's prior written consent
  • Appointment of a Chapter 11 trustee, an examiner other than a fee examiner or a receiver with enlarged powers, or conversion or dismissal of any case
  • Termination or reduction of exclusivity without Firehorse's consent
  • Any order vacating, staying, modifying or amending the cash management order or the DIP orders without Firehorse's consent, granting administrative priority or liens equal or senior to the DIP claims and liens, permitting a Section 506(c) charge against the DIP or prepetition senior secured parties, or authorizing other cash collateral use or Section 364 financing that does not repay the obligations in full in cash
  • Confirmation of, or an order approving a disclosure statement for, any plan other than an acceptable plan or one paying the DIP obligations and prepetition senior secured obligations in full in cash, or the debtors' filing of or support for such a plan
  • Seeking confirmation of a plan that does not provide for indefeasible payment in full in cash of all prepetition secured obligations and adequate protection obligations by the effective date, absent the applicable agent's prior written agreement
  • Entry of an order granting stay relief permitting foreclosure on collateral or on pledged equity, or termination of the right to use cash collateral
  • Money judgments in excess of $250,000 in the aggregate, net of accepted insurance coverage, or non-monetary judgments with a material adverse effect, in either case undischarged and unstayed for 30 consecutive days or subject to enforcement by the judgment creditor
  • Acceleration of material indebtedness, which the agreement fixes at a $50,000 threshold, a change of control, or the occurrence of a material adverse effect
  • A loan party, or any of its directors, officers or employees, being convicted of a crime, being under civil or criminal indictment or investigation, or being subject to a government enforcement action, other than matters listed on a schedule of enforcement actions, lawsuits and investigations that is on file with the agent rather than attached to the filing
  • Dissolution or liquidation of any loan party or subsidiary, or a loan party seeking or supporting authority to dissolve or liquidate
• On an event of default the DIP agent may deliver a termination declaration by email or overnight mail to the debtors, the prepetition secured agents, any committee and the U.S. Trustee, accelerating the loans, terminating the commitments and triggering the carve-out reserve; the agent and the prepetition secured lenders may then restrict the use of their respective cash collateral.
• The automatic stay is modified so that remedies may be exercised three business days after the termination date. During that remedies notice period the debtors may use cash collateral solely to fund the carve-out and to pay payroll and other expenses critical to administering the estates strictly in accordance with the approved budget, and any party in interest may seek an emergency hearing on whether a default occurred; if the court schedules that hearing later on its own initiative, the notice period is automatically extended until it rules.
• Remedies run in sequence: the prepetition secured lenders first, though they may not freeze, sweep or restrict funds in the DIP loan account without the DIP lender's written consent; then the DIP agent, including credit bidding, sweeping the DIP loan account, setoff and foreclosure on DIP collateral other than prepetition secured collateral, in each case subject to funding the carve-out reserve and paying accrued but unpaid employee wages and benefits; and then the bridge loan secured parties.

Challenge Period and Budget

• The deadline to bring a challenge to the debtors' stipulations is the earlier of:
  • 75 calendar days after entry of the interim order, for parties in interest
  • 60 days from formation, for a creditors' committee
  • Any later date agreed to in writing by the applicable prepetition secured parties
• If a Chapter 7 or Chapter 11 trustee is appointed before the period ends, that trustee's deadline extends to the longer of the remaining period or 14 calendar days after appointment, and any trustee is treated as a party other than the debtors and is not bound by the stipulations for purposes of a challenge proceeding.
• A timely standing motion attaching a proposed challenge extends the period for that party and those claims until two business days after the court grants standing, and the period expires immediately if standing is denied.
• If the debtors settle the potential claims underlying the stipulations before entry of the final order, that settlement binds the estates and all parties in interest and forecloses any later challenge to the settled matters.
• The debtors and any committee may use DIP proceeds and non-prepetition-secured DIP collateral to investigate, but not to prosecute or prepare pleadings against, the bridge loan secured parties' claims and liens; the debtors' right ends on entry of the final order, after which the committee is capped at $25,000 for that investigation, and no amount may be used to challenge the DIP obligations, liens or superpriority claims. Section 6.13 of the credit agreement directs the same $25,000 allowance at the prepetition senior secured parties instead.
• The initial DIP budget covers the 13 weeks ending Dec. 18, 2026 and reflects an opening cash balance of $250,000 and total cash outflows of approximately $6.333 million, with line-item totals of approximately $4.354 million in professional fees (including $1.425 million for debtor bankruptcy counsel, $950,000 for the financial advisor and CRO, $820,000 for other DIP counsel and $220,000 each for committee counsel and committee financial advisor), $754,000 in corporate expenses, $625,000 in adequate protection payments including $130,000 of interest on the fabrication group side, and $600,000 in critical vendor payments, with cumulative DIP draws reaching the full $6.083 million commitment in the final week.
• The budget is a rolling 13-week receipts and disbursements forecast in weekly line-item detail; the debtors deliver an updated budget every fourth Thursday, and any amendment requires Firehorse's prior written approval and the prepetition secured agents' prior written consent. If the parties cannot agree, the prior approved budget remains in effect, though a non-approved forecast will not satisfy the draw condition for the additional availability. Material modifications require docket notice to the U.S. Trustee, any committee, the prepetition secured agents and Rule 2002 parties, who have three business days to object.

Permitted Variance

• Beginning with the period from the effective date through the first Friday and each weekly period ended Friday thereafter, neither cash receipts nor aggregate cash disbursements, excluding lender fees, may vary by more than 10% from the approved budget.
• Variances are tested cumulatively within each four-week budget period, the first of which began Sept. 19, 2026 and ends Oct. 17, 2026 and the second of which ends Nov. 14, 2026: week one alone in week one, weeks one and two in week two, weeks one through three in week three, and weeks one through four in week four.
• The variance report is due by 5:00 p.m. New York City time each Thursday, certified by a responsible officer, with line-item and aggregate detail, an indication of whether each variance is temporary or permanent and an explanation of any material variance.
• The covenant in Section 5.11(b) excludes only lender fees from the disbursement test, while the form compliance certificate at Exhibit 5.01 excludes both debtor and lender professional fees, which are the largest category of budgeted disbursements.
• No borrowing may exceed 100% of the projected DIP budget for the period from the effective date to entry of the final order and, thereafter, for the one-week period following the week of the requested borrowing.

Waivers and Releases

• Subject to entry of the final order:
  • Section 506(c): no administration costs of these or any successor cases may be charged against or recovered from the DIP collateral, prepetition secured collateral or bridge loan collateral, including cash collateral, other than the carve-out, absent the relevant party's prior written consent
  • Section 552(b): the "equities of the case" exception will not apply to the bridge loan secured parties or the prepetition secured lenders with respect to proceeds, products, offspring or profits of their collateral
  • Marshaling: the equitable doctrine of marshaling and similar doctrines will not apply to the DIP collateral, prepetition secured collateral or bridge loan collateral for the benefit of any party other than the respective secured parties
  • Releases: the debtors and their estates release and discharge the prepetition secured parties (the White Oak and Wintrust agents and lenders, and Firehorse as bridge lender), the DIP agent, the DIP lender and each of their subsidiaries, affiliates, officers, directors, managers, principals, employees, agents, financial advisors, attorneys, accountants, investment bankers, consultants and other professionals from all claims, including derivative and estate claims, avoidance actions, preference claims and fraudulent transfer claims, arising out of the promissory note, the bridge loans, the prepetition loan documents or the DIP documents, in each case subject to the challenge provisions and without relieving the parties of their obligations under the DIP documents
• The debtors also waive any right to challenge the bridge loans and the prepetition secured loans, the priority of their obligations and the validity, extent and priority of the related liens, and waive any defense to the indemnification obligations running to the DIP lender and the prepetition secured parties, though they will not indemnify the prepetition secured parties for costs of an unsuccessful defense against a portion of an ultimately successful challenge.
• Neither the prepetition secured parties nor the DIP agent and lender need file proofs of claim, and the prepetition secured parties may instead file a single master proof of claim in the lead case; bar date orders will not apply to them with respect to the bridge loans or the adequate protection obligations.
• The milestones allow until Oct. 21, 2026 for entry of the final order, but the credit agreement's maturity definition triggers maturity 14 days after the petition date if the final order has not been entered by then, unless Firehorse consents in writing to an extension, which it may not unreasonably withhold; the proposed interim order leaves the final hearing date and objection deadline blank.