Vanderbilt Minerals - Chapter 11 DIP Terms

DIP Terms

Borrower(s) / Guarantor(s)

• Vanderbilt Minerals, LLC, a Delaware limited liability company and Debtor and Debtor-in-Possession, as Borrower

Agent / Lender(s)

• VM Buyer LLC, as Administrative and Collateral Agent
• VM Buyer LLC and the lenders party thereto from time to time, as DIP Lenders

DIP Commitments

• $20 million senior secured priming, super-priority debtor-in-possession term loan facility (inclusive of amounts approved by the Interim Order) comprised of:
  • $15 million in Initial Term Loans available on the Closing Date
  • $5 million in Delayed Draw Term Loans, the initial borrowing of which shall be made on the Final Order Entry Date
• The DIP Facility refinances obligations outstanding under the Existing DIP Loan Agreement, dated February 15, 2026, by and among the Borrower, the lenders party thereto and Commodore Material Funding, LLC, as agent
• Once repaid, no portion of the Initial Term Loans or Delayed Draw Term Loans may be reborrowed

Interest Rate

• Applicable Rate: 7.5% per annum, paid in kind by addition to the outstanding principal amount of the Loans
• Interest accrued on the Loans is due and payable in arrears on the first day of each month beginning with June 1, 2026, on any date of mandatory prepayment with respect to the principal being prepaid, and on the Maturity Date
• Default Rate Increase: 2.0% per annum

Fees

• Exit Fee: $1,250,000, non-refundable, fully earned on the Closing Date and due and payable upon any refinancing, prepayment or other satisfaction of the Loans and other Obligations; provided that if the closing and the purchase and sale of assets contemplated by the Asset Purchase Agreement occur, the Exit Fee shall be deemed waived and shall no longer be due and payable
• Reasonable and documented professional fees, consultant fees and legal fees and expenses of the DIP Lender, including the professional fees of Milbank LLP, payable regardless of whether such amounts are in the Approved Budget

Maturity

• The earliest of:
  • Termination Date (June 23, 2026, as may be extended by the Borrower for an additional 15 days as set forth in Section 4.4(a) of the Asset Purchase Agreement)
  • The filing of a motion by the Borrower seeking dismissal of the Case, the entry of an order dismissing the Case, or the filing of a motion by the Borrower seeking to convert the Case to a case under Chapter 7
  • The acceleration of the Obligations and the termination of all Commitments upon the occurrence of an Event of Default
  • The consummation of an Alternative Transaction
  • The termination of the Asset Purchase Agreement for any reason other than as a result of a default by the Purchaser
• The Borrower may not voluntarily prepay the Loans in whole or in part prior to the Maturity Date

Milestones

• On or before May 8, 2026, entry of the Sale Order
• On or before May 8, 2026, entry of the Interim DIP Order
• On or before May 29, 2026, entry of the Final DIP Order
• On or before the Termination Date, the Sale Order shall be a Final Order
• On or before June 23, 2026, consummation of the 363 Sale Transaction

Carve-Out

• The DIP Liens, DIP Superpriority Claims, and any other liens or claims granted by the Final Order are subject and subordinate to the right of payment and priority of Carve-Out Expenses, which shall be senior to all claims and liens over all assets of the Debtor, including the Collateral
• Carve-Out Expenses consist of:
  • UST Carve-Out: statutory fees payable to the U.S. Trustee under 28 U.S.C. § 1930(a)(6), including any interest payable thereon under 31 U.S.C. § 3717, and any fees payable to the Clerk of the Court
  • Professional Fee Carve-Out: all unpaid Allowed Professional Fees of Debtor Professionals (including any unpaid amounts payable to Greenhill & Co. LLC as an M&A Fee, in an amount no greater than $2,750,000) and Committee Professionals incurred or earned through the date of delivery of a Carve-Out Trigger Notice, solely to the extent such fees are not in excess of the Approved Budget amounts and subject to any Permitted Variance
  • Post-Trigger Carve-Out: Allowed Professional Fees of Professional Persons in the aggregate amount not to exceed $1,000,000, incurred after the first Business Day following delivery of the Carve-Out Trigger Notice
• Pursuant to the Interim Order, $2,250,000 of the DIP Loans was funded into one or more segregated accounts (the Carve-Out Reserve Account) exclusively for the benefit of Allowed Professional Fees and not subject to the control of the DIP Lender; the Carve-Out Reserve Account has been funded with approximately $8,690,831 in the aggregate from the proceeds of the Existing DIP and the Debtor's cash on hand
• Upon delivery of the Carve-Out Trigger Notice and termination of the DIP Credit Agreement, an additional amount shall be paid into the Carve-Out Reserve Account so that the balance equals the Carve-Out Reserve Amount, defined as the actually incurred but unpaid fees of Debtor Professionals and Committee Professionals not in excess of the Approved Budget, plus the UST Carve-Out, plus $1,000,000
• Upon the consummation of a sale of all or substantially all of the Debtor's assets consented to by the DIP Lender, the Debtor is authorized and directed to transfer from the proceeds of such sale(s) funds equal to the Carve-Out Reserve Amount to the Carve-Out Reserve Account
• Excluded uses: neither the Carve-Out nor proceeds of the DIP or Collateral may be used to pay any Professional Fees incurred in connection with (i) challenging the validity, priority or enforceability of the DIP Obligations, DIP Liens, or the DIP Lender's credit bid rights, (ii) seeking alternative debtor-in-possession financing without the DIP Lender's prior written consent (unless used to pay the DIP in full), or (iii) commencing or prosecuting any claims or causes of action against the DIP Lender or its related parties

Use of Proceeds

• Repay in full all obligations outstanding under the Existing DIP
• Pay certain costs, fees and expenses related to the DIP Credit Agreement and the chapter 11 case, including depositing estimated Professional Fees into the Professional Fee Escrow Account
• Fund working capital and general corporate purposes of the Debtor, in each case in accordance with the Approved Budget or in a manner constituting a Permitted Variance
• Fund the Carve-Out Reserve Accounts

Credit Bid

• The DIP Lender shall have the right to credit bid (either directly or through one or more acquisition vehicles) in accordance with section 363(k) of the Bankruptcy Code, up to the full amount of the DIP Lender's claims, including all DIP Obligations, in any sale of all or any portion of the Collateral, including sales occurring pursuant to section 363 of the Bankruptcy Code, included as part of any chapter 11 plan, or a sale or disposition by a chapter 7 trustee for the Debtor

Avoidance Actions

• The DIP Liens shall not attach to any Avoidance Action (as defined in the Asset Purchase Agreement), any commercial tort claim, or the proceeds of or attributable to any Avoidance Actions or commercial tort claims
• The DIP Liens shall not attach to any insurance policy that relates to talc liabilities or any proceeds of or attributable to any such policy that does not constitute a Purchased Asset

Budget

• The Approved Budget initially covers the period commencing May 1, 2026 through June 23, 2026, setting forth, among other things, the projected cash receipts and expenditures for the periods covered
• By the close of business on the third Friday of each month, a Revised Budget will be submitted to the DIP Lender for approval; upon the DIP Lender's approval, each Revised Budget shall become the Approved Budget and shall be utilized for any subsequent Variance Report
• The Approved Budget is subject to such variances as permitted in the DIP Credit Agreement

Securities and Priorities

• Valid, binding, enforceable, continuing, non-avoidable, and perfected first (priming) liens, effective as of the Petition Date, on all of the Collateral, pursuant to sections 364(c)(2), 364(c)(3), and 364(d) of the Bankruptcy Code, with the DIP Liens subject only to the Carve-Out and senior in priority to all other interests and liens of every kind
  • Excluded from the DIP Liens: Avoidance Actions and their proceeds, commercial tort claims and their proceeds, and any insurance policy (and proceeds thereof) relating to talc liabilities that does not constitute a Purchased Asset
• DIP Obligations are granted allowed superpriority administrative expense claims pursuant to section 364(c)(1) of the Bankruptcy Code, having priority over any and all other obligations, liabilities, and indebtedness of the Debtor and over any and all administrative expenses (other than Carve-Out Expenses), payable from and with recourse to all prepetition and post-petition property of the Debtor and all proceeds thereof, without the need to file any proof of claim or request for payment of administrative expenses
• The Final Order is sufficient and conclusive evidence of the priority, perfection, and validity of the DIP Liens and security interests, effective as of the date of entry of the Final Order, without any further act

Waivers

• Section 506(c): No costs or expenses of administration incurred in the chapter 11 case or any successor case shall be charged against the DIP Lender or its claims pursuant to section 506(c) of the Bankruptcy Code without the prior written consent of the DIP Lender
• Section 552(b): The "equities of the case" exception under section 552(b) of the Bankruptcy Code shall not apply to the DIP Lender with respect to proceeds, products, offspring, or profits of any of the Collateral
• The equitable doctrine of "marshaling" or any similar doctrine shall not apply with respect to the Collateral
• The automatic stay under section 362(a) of the Bankruptcy Code is modified as necessary to effectuate all of the terms and provisions of the Final Order and the DIP Financing Documents
• The fourteen-day stay provisions of Bankruptcy Rule 4001(a)(3), the 21-day provision of Bankruptcy Rule 6003(b), the notice requirements of Bankruptcy Rule 6004(a), and the 14-day stay of Bankruptcy Rule 6004(h) are waived
• Release: in consideration of the DIP Lender's postpetition funding, role as Purchaser under the Asset Purchase Agreement, and other accommodations, the Debtor, on behalf of itself, its successors and assigns, and its estate, absolutely releases and forever discharges the DIP Lender and its successors, participants, assigns, shareholders, affiliates, directors, officers, attorneys, employees and other representatives from all claims, demands, causes of action, defenses, and liabilities of every kind, known or unknown, arising on or prior to the date of the Final Order, including any so-called "lender liability" claims

Permitted Variance

• As of any Variance Report Date, the actual aggregate amount of all cash disbursements during the applicable Testing Period shall not exceed 115% of the projected aggregate cash disbursements in the Approved Budget for such Testing Period (other than actual and projected disbursements with respect to Chapter 11 expenses (including professional fees and expenses) and debt service)
• As of any Variance Report Date, the actual aggregate amount of all Debtor and Committee professional fees and expenses actually paid since the Petition Date shall not exceed 115% of the projected aggregate amount of Professional Disbursements in the Approved Budget since the Petition Date

Remedies and Notice Period

• Upon the occurrence and during the continuance of an Event of Default, the DIP Lender may, without seeking relief from the automatic stay or any further order of the Court, exercise rights and remedies after providing not less than three (3) business days' advance written notice (the Enforcement Notice) to counsel to the Debtor, the U.S. Trustee, and counsel to any Committee
• During the Notice Period, the Debtor may only seek relief from the Court relating to whether an Event of Default has actually occurred or is continuing, and may not seek to limit the DIP Lender's exercise of rights or remedies
• Upon expiration of the Notice Period, the automatic stay shall automatically be lifted without further notice or order of the Court, subject to the Carve-Out

Sale Transaction

• The DIP Obligations shall be immediately paid in full in cash upon termination of the Asset Purchase Agreement other than as a result of a material breach of the Asset Purchase Agreement by the Purchaser as determined by a final order
• The DIP Lender shall have no obligation to close or fund the DIP Facility unless and until the Sale Order with respect to the Asset Purchase Agreement has been entered by the Court

Existing DIP and Bid Protections

• The DIP Liens and DIP Superpriority Claims under the Existing DIP have been terminated and released in connection with payment of the Existing DIP Obligations pursuant to a payoff letter
• The rights of the Existing DIP Lender under paragraph 4 of the Stalking Horse Order [Docket No. 139] are expressly preserved, and the Termination Payment described therein shall be treated pari passu with the DIP Superpriority Claims of the DIP Lender, subject in all instances to the Carve-Out
• The Debtor shall escrow from the proceeds of the DIP Loans exclusively for the payment of the Termination Payment: (i) $1,500,000 when the Debtor makes a subsequent draw on the DIP Facility and (ii) $1,500,000 on or before July 8, 2026
• The $3,000,000 escrowed for the Termination Payment shall only be payable to the Existing DIP Lender if the Court determines by Final Order that the Termination Payment is payable from a source other than the proceeds of the 363 Sale Transaction; if the Court determines the Termination Payment is not due or payable other than from such proceeds, the escrowed funds shall be released to the estate and constitute DIP Collateral

Intercompany Settlement

• In the event any party alleges a breach or seeks to terminate the Intercompany Settlement, the DIP Lender shall have standing to seek relief from the Court, including as to whether any alleged breach actually occurred or is continuing or any such termination was proper, and to enforce the Call Right and its rights as a third-party beneficiary thereunder