Yardbird Group - Chapter 11 DIP Terms

DIP Terms

Borrower / Guarantors

• Yardbird Group LLC, a Delaware limited liability company, as borrower
• The Bird Singapore LLC, Yardbird Beverly Hills, LLC, Yardbird Chicago, LLC, Yardbird DC, LLC, Yardbird Denver LLC, Yardbird DFW Concession, LLC, Yardbird DFW Management LLC, Yardbird DFW, LLC, and YB Las Vegas, LLC, as guarantors on a joint and several, first-priority secured basis

Agent / Lenders

• Brightwood Loan Services LLC, as administrative and collateral agent, which serves in the same capacities under the prepetition credit agreement
• Brightwood Capital SBIC III, LP and/or its affiliates and designees, as DIP lenders; every holder of initial term loans or delayed-draw term loans under the prepetition credit agreement will be offered the chance to participate in the DIP loans pro rata, and only prepetition lenders that fund their pro rata share of the new money have their prepetition loans rolled up

DIP Commitments

• $5.4 million superpriority senior secured priming term loan facility comprised of:
  • $1.8 million in new money term loans
  • Up to $3.6 million of deemed, cashless roll-up of outstanding initial term loans and delayed-draw term loans held by prepetition lenders that fund their pro rata share of the new money, rolled at $1 of prepetition debt per $1 of new money funded under the interim order and at $2 per $1 upon entry of the final order, with the interim roll-up loans converting to the 2-for-1 final roll-up loans at that time
• The lenders conditioned the new money on inclusion of the roll-up, and the interim order finds they would not have extended credit without it.
• Amounts paid or prepaid may not be reborrowed.
• The order's decretal paragraphs and the term sheet cap the facility at $5.4 million in the aggregate, of which $1.8 million is new money, though the order's recital of the final relief requested describes borrowing up to $5.4 million of new money loans in addition to the roll-up loans.

Availability

• Interim: $1 million of new money plus up to $1 million of roll-up loans, borrowed simultaneously in a single draw on the closing date, which occurs within two business days of entry of the interim order.
• Final: upon entry of the final order and satisfaction of the funding conditions, the interim roll-up converts to a 2-for-1 roll-up and the balance of the new money, up to $800,000, becomes available in multiple draws, subject to the budget.
• Borrowing requests are due by 12:00 p.m., New York City time, three business days before funding, reduced to one business day for the initial borrowing.

Interest Rate

• New money DIP loans: Term SOFR (1.00% floor) plus 12.00%, paid in kind monthly
• Roll-up loans: Term SOFR (1.00% floor) plus 12.00%, paid in kind
• Default rate increase: 2.00%
• Interest accrues on a 360-day year based on days elapsed; accrued interest is paid in kind on the last business day of each calendar month, while other DIP obligations are payable monthly in arrears and on maturity.

Fees

• Closing premium: 2.00% of the new money DIP loans, paid in kind on the closing date, non-refundable and, upon entry of the interim order, irrevocable
• Exit premium: 2.00% of the DIP loans, payable in cash at maturity subject to entry of the final order, and not owing if the DIP lenders acquire substantially all, or a portion, of the debtors' assets through the credit bid
• Agent fee: payable under a separate fee letter between the borrower and the DIP agent
• Assignment processing and recordation fee: $3,500, waivable by the DIP agent
• The debtors pay the DIP agent's and lenders' out-of-pocket fees and expenses, limited to a single financial advisor, a single lead counsel, and a single local counsel per jurisdiction, subject to a ten-business-day review period for the debtors, the U.S. Trustee, and any committee, with only the disputed portion withheld pending resolution.

Maturity

• 75 days after the petition date, or, if earlier, the first to occur of:
  • 30 days after the petition date if the final order has not been entered (an interim order trigger the term sheet's definition omits)
  • Acceleration of the DIP loans and termination of commitments following an event of default
  • Appointment of a Chapter 11 trustee or other court-mandated fiduciary with decision-making authority, including an examiner with expanded powers
  • Consummation of a sale of all or substantially all of the debtors' assets
  • Conversion of the cases to Chapter 7 or dismissal
  • The effective date of a confirmed Chapter 11 plan
• Voluntary prepayment is permitted in whole or in part on three business days' notice without premium or penalty other than the exit premium. Mandatory prepayments sweep 100% of net cash proceeds of collateral dispositions other than ordinary-course inventory sales and of casualty insurance and condemnation proceeds, in each case above the carve out, and 100% of net cash proceeds of indebtedness not permitted under the facility; at the debtors' request, the required DIP lenders may waive the asset-sale sweep in their sole discretion. All prepayments require three business days' notice, are accompanied by accrued interest, and apply first to the new money loans and then to the roll-up loans.
• Absent lender consent, a confirmation order may not discharge or affect the debtors' joint and several DIP obligations other than by payment in full in cash on or before the plan effective date.

Case Milestones

• Subject to entry of the final order, failure to meet any milestone, unless waived or extended by the required DIP lenders, is an event of default. Measured from the Sept. 21, 2026 petition date:
  • Petition date: file the bidding procedures motion, which must also seek approval of a stalking-horse bid by the DIP lenders or their designee under an asset purchase agreement acceptable to the required DIP lenders
  • 3 business days: entry of the interim order
  • 22 days: entry of the bidding procedures order
  • 30 days: entry of the final order
  • 37 days: bid deadline
  • 45 days: commencement of the auction, if any
  • 50 days: sale hearing, subject to court availability
  • 53 days: closing of the approved sale
• The term sheet carries one additional milestone requiring the cases to be commenced no later than Sept. 21, 2026, which the filing satisfied. The term sheet also makes any missed milestone an event of default without the interim order's final-order condition; the interim order governs over any inconsistent provision of the DIP documents.

Use of Proceeds

• New money proceeds fund, in accordance with the budget and subject to permitted variances, working capital and general corporate purposes, including costs of the asset sale and payments authorized under first-day orders; professional fees and other restructuring charges, including U.S. Trustee fees and allowed committee professional fees; the DIP agent's and lenders' professional, transaction and valuation-related fees; and administration costs and amounts approved by the court.
• Roll-up proceeds are used solely to refinance and repay an equivalent amount of prepetition obligations through cashless conversion.
• Proceeds may not fund a distribution under a plan that does not pay the DIP obligations in full in cash absent consent of the required DIP lenders and the DIP agent.

Cash Collateral

• The debtors are authorized to use cash collateral through the final hearing solely in accordance with the interim order, the DIP documents, and the budget, including to make adequate protection payments; outside those terms, use is prohibited.
• Cash collateral is stipulated to include all of the debtors' cash, amounts on deposit in any account, and amounts generated by collection of receivables or other disposition of the prepetition collateral, together with proceeds of the foregoing.
• Lender consent to a budget is not consent to use cash collateral or new money after an event of default, even if budgeted funds remain unspent.

Securities and Priorities

• The DIP obligations receive allowed superpriority administrative expense claims under section 364(c)(1) against each debtor's estate, senior to all other administrative expenses, including 503(b) and 507(b) claims, payable from all prepetition and postpetition property and, upon entry of the final order, avoidance action proceeds, subject only to the carve out and junior to any administrative expense claims of City National Bank of Florida (CNB), lender to debtor Southern Operations, LLC, with respect to the CNB priority collateral, meaning all property and assets of Southern Operations. It is a termination event for any other superpriority claim to be granted or allowed.
• The DIP agent receives automatically perfected liens on substantially all assets, subject to the carve out and permitted liens, with the following priorities:
  • First-priority liens under section 364(c)(2) on all unencumbered property, including, upon entry of the final order, avoidance action proceeds
  • First-priority priming liens under section 364(d)(1) on all property securing the prepetition obligations, including cash collateral
  • Junior liens under section 364(c)(3) on property subject to valid, perfected, unavoidable senior liens
• The DIP liens and prepetition liens are at all times junior and subordinate to any validly perfected prepetition liens of City National Bank of Florida on all property and assets of Southern Operations, LLC, and the priming liens do not prime CNB on that collateral.
• Personal property, machinery and equipment owned by CSC Leasing Co. and leased to Yardbird Group LLC under a master lease dated Oct. 12, 2023, and proceeds of that equipment including related casualty insurance proceeds, are excluded from the DIP collateral; all other rights and remedies among the debtors, CSC, and the DIP secured parties are reserved.
• The debtors must maintain casualty and loss insurance on substantially the same basis as prepetition, and the DIP agent is deemed named as additional insured and lender's loss payee on each policy relating to the DIP collateral.
• Each DIP order must prohibit the debtors from incurring indebtedness ranking pari passu with or senior to the DIP obligations or benefiting from a first-priority lien under section 364.

Avoidance Actions

• Avoidance actions themselves are excluded from the collateral grant, but upon entry of the final order their proceeds become DIP collateral and are available to satisfy the DIP superpriority claims and the adequate protection liens and claims.

Carve Out

• Post-carve-out trigger notice cap: $200,000 of allowed professional fees of debtor and committee professionals incurred after the first business day following delivery of a carve-out trigger notice
• Chapter 7 trustee fees: $50,000
• Clerk and U.S. Trustee fees under 28 U.S.C. sections 156(c) and 1930(a), plus statutory interest, are included and are not subject to any budget.
• Pre-trigger allowed professional fees are capped for debtor professionals at 115% of the professional fees shown in the last carve-out report delivered before the trigger notice, with any earned restructuring, sale, success, or other transaction fee capped at 100%, plus actual fees incurred between that report and the trigger cap date as reported within three business days; committee professionals are limited to the cumulative budgeted amount through the trigger date without giving effect to any permitted variance, with each committee professional to provide a good-faith estimate within three business days of the notice.
• The carve-out trigger notice is a written notice the DIP agent delivers by email, at the direction of the required DIP lenders, to the debtors, their lead restructuring counsel, the U.S. Trustee, and any committee's counsel, stating that a termination event has occurred and that the post-carve-out trigger notice cap has been invoked.
• The debtors fund a segregated reserve account weekly, beginning on the closing date, in the budgeted professional-fee amount for the prior week until a trigger notice is delivered, after which they may fund it up to the sum of the pre- and post-trigger caps. That account is the sole source for carve-out obligations, and the DIP agent may not sweep or foreclose on cash until it is fully funded, retaining DIP liens and superpriority claims on any residual. Surplus funds go first to the DIP agent until the facility is repaid, then to the prepetition agent.
• While a carve-out trigger notice is outstanding, and provided a professional's share of the reserve account plus its retainer covers its fees in full, each professional must apply unused retainers before receiving payment, including from the reserve account; every professional must also apply unused retainers before payment on its final fee application, and retainers may still be applied to prepetition fees.
• The carve out is senior to the DIP superpriority claims, the DIP liens, and all adequate protection liens and claims, and neither the budget, the caps, nor the reserve account limits the amount of allowed professional fees the debtors owe. The debtors must deliver a carve-out report of accrued unpaid professional fees together with each variance report.

Adequate Protection

Prepetition Senior Secured Parties

• Replacement and additional automatically perfected postpetition liens on all DIP collateral, including avoidance action proceeds upon entry of the final order, to the extent of any diminution in value, subordinate to the carve out, the DIP liens, and permitted liens, and at all times junior to CNB's validly perfected liens on the CNB priority collateral
• An allowed administrative expense claim under sections 503(b) and 507(b) to the extent of diminution in value, senior to all other administrative claims except the carve out and the DIP superpriority claims, with no payment or retention on account of that claim until the DIP obligations are paid in full in cash or otherwise satisfied as agreed
• Payment without further court order of reasonable and documented fees and expenses, including those of Winston Taylor LLP and Cole Schotz P.C. as counsel to the prepetition lenders, subject to a ten-business-day review period for the debtors, the U.S. Trustee, and any committee; invoices must identify matters, timekeepers, rates, hours and, for law firms, each attorney's law school graduation year, and the U.S. Trustee reserves the right to seek unredacted detail
• Diminution in value is measured against the priming DIP liens, the carve out, the debtors' sale, lease or use of prepetition collateral, and the automatic stay, and nothing in the order impairs section 507(b) if the protection proves insufficient.

Waivers

• Subject to entry of the final order but retroactive to the petition date:
  • Section 506(c): no administration expenses may be charged against the prepetition or DIP collateral or the secured parties, except to the extent of the carve out, absent prior written consent
  • Section 552(b): the "equities of the case" exception does not apply, and the secured parties retain all benefits of the section
  • The equitable doctrine of marshaling does not apply to the DIP or prepetition collateral, without impairing the senior position of CNB's liens on the CNB priority collateral
• Subject to the carve out and entry of the final order, and unless and until the DIP, adequate protection, and prepetition obligations are paid in full in cash and the commitments terminated, the debtors irrevocably waive the right to seek or consent to, among other things, modification or vacatur of the interim order or any equal or senior claim absent consent of the DIP agent and required DIP lenders, any equal or senior lien, use of cash collateral outside the DIP documents, return of goods on account of prepetition debt, conversion or dismissal, or appointment of a Chapter 11 trustee or an examiner with enlarged powers.
• Upon entry of the final order, anti-assignment provisions in leases, licenses, and contracts requiring landlord or third-party consent, or payment to a governmental entity, are deemed inconsistent with the Bankruptcy Code as to the granting of DIP and adequate protection liens on leasehold interests and their proceeds.
• The debtors and their estates release the DIP lenders, DIP agent, prepetition senior secured parties, and their related persons from all claims relating to the DIP obligations, the DIP superpriority claims, the DIP liens, the prepetition liens, and the prepetition obligations, including lender-liability and equitable subordination theories and challenges to the validity, priority, or avoidability of those liens and claims, subject to the challenge and third-party stipulation provisions.
• Nothing in the order imposes on the DIP agent or lenders any liability for claims arising from the debtors' prepetition or postpetition activities, and they are not deemed to control the debtors' operations, act as a responsible person or owner or operator, or owe any fiduciary duty.

Estate Stipulations and Challenge Period

• The debtors stipulate that as of the petition date the credit parties owed the prepetition secured parties approximately $13,324,252, consisting of roughly $11,215,290 of initial term loans and roughly $2,108,962 of delayed-draw term loans, including Amendment No. 2 delayed-draw term loans, plus fees, expenses and indemnities; that the obligations are legal, valid, binding and non-avoidable and not subject to offset, subordination, or challenge; that prepetition payments and transfers to the secured parties are not avoidable; and that the prepetition liens are valid, binding, perfected, enforceable first-priority liens subject only to permitted liens. The obligations arise under a credit and guaranty agreement dated July 28, 2022, as amended by Amendment No. 1 dated April 19, 2024 and Amendment No. 2 and Waiver dated Nov. 14, 2025.
• No such stipulation is made as to CNB: Southern Operations, LLC borrowed under an Aug. 11, 2020 loan and security agreement in the stated principal amount of $9.9 million through the Main Street Loan Facility program, amended and ratified by an agreement dated April 8, 2025, effective as of Aug. 11, 2024, to which certain debtor affiliates are party as guarantors. Those obligations purport to be secured by liens on the collateral defined in the CNB loan documents, and the order expressly declines to stipulate that the obligations are valid debt or that CNB's liens are valid, perfected, enforceable, non-avoidable, or immune from challenge.
• The stipulations, waivers, and releases bind the debtors upon entry of the interim order and, subject to entry of the final order, bind the estates and all other parties in interest, including any committee and any Chapter 7 or Chapter 11 trustee, unless a party with requisite standing timely files an adversary proceeding challenging the roll-up loans, prepetition liens, or prepetition obligations and obtains a final, non-appealable order sustaining the challenge.
• Challenge deadline: 75 calendar days after entry of the interim order, extendable for a Chapter 7 or Chapter 11 trustee to the later of that date and 10 calendar days after the trustee's appointment; any committee may agree to terminate the period early.
• Challenge budget: no more than $50,000 of DIP proceeds, DIP collateral, or prepetition collateral, including cash collateral, may be used by a committee, and then solely to investigate the roll-up loans, prepetition liens, and prepetition obligations within the challenge period. Subject to entry of the final order, committee professional fees for that investigation above the $50,000 cap are not payable from the carve out.
• Because each debtor is a limited liability company, the order preserves a committee's or other party's ability to file a motion seeking a mechanism to prosecute a challenge for which it may not obtain standing as a matter of law, and tolls the challenge period as to that specific challenge pending further court order; absent such a mechanism, the debtors retain authority to prosecute the challenge in the exercise of their business judgment.
• If no timely challenge is filed, the roll-up loans and prepetition obligations become allowed claims not subject to challenge and the prepetition liens are deemed valid and perfected as of the petition date. If a challenge is filed, the stipulations remain binding except as specifically and expressly challenged, and challenges not brought in that proceeding are forever barred.
• The interim order confers no standing on any party to pursue estate causes of action, and the court may fashion any appropriate remedy following a successful challenge.

Credit Bid

• The DIP agent, or any assignee or designee including an acquisition vehicle, acting at the direction of the required DIP lenders, may credit bid up to the full amount of the DIP obligations under section 363(k) in any sale of DIP collateral, whether under section 363, a Chapter 11 plan, or a Chapter 7 disposition under section 725. That amount includes outstanding principal on the new money and roll-up loans, accrued and unpaid interest including PIK interest, all fees, premiums and expenses including the exit premium where applicable, and any other DIP obligations. The agent may assign, sell, or otherwise dispose of the credit-bid right to any acquisition entity or joint venture formed for the bid.
• Subject to the challenge provisions, entry of the final order, and satisfaction of the DIP obligations, or as the DIP agent otherwise consents at the direction of the required DIP lenders, the prepetition agent, acting at the direction of the required prepetition lenders directly or through acquisition vehicles, may credit bid up to the full amount of the prepetition obligations then outstanding, reflecting all dollar-for-dollar reductions from the roll-up, in any sale of prepetition collateral.
• It is an event of default for any debtor to seek, or for the court to enter, an order impairing the unqualified credit-bid rights of the prepetition agent, the DIP agent, or any DIP lender.

Budget

• The initial budget attached to the interim order is a 13-week cash flow forecast prepared by the borrower in consultation with Albert Altro of Traverse LLC, the proposed chief restructuring officer, and approved by the required DIP lenders. Across its Sept. 14 through Dec. 14, 2026 columns it projects total receipts of $9.13 million, principally company-owned unit sales of $4.27 million and prefunded Venetian labor and tips of $1.65 million and $1.32 million, against operating disbursements of $9.06 million and Chapter 11 costs of $1.97 million, with $1.8 million of DIP draws. Cash moves from $235,600 at the start of the Sept. 14 week, and $177,400 entering the Sept. 21 filing week, to $140,500 at the end of the Dec. 14 week, a net decline of $95,100; the low point is $111,500 at the end of the Sept. 28 week. DIP draws are budgeted at $800,000 in the filing week, $300,000 in the Oct. 5 week, $300,000 in the Nov. 16 week, and $400,000 in the Dec. 14 week. Line items include $351,300 of Brightwood interest, $560,000 for debtor counsel, a $515,000 Soravine fee, $250,000 for DIP lender's counsel, and $220,000 for the chief restructuring officer.
• Updated budgets are due on the Friday of every fourth week beginning Oct. 16, 2026, each covering the subsequent 13 weeks and satisfactory to the required DIP lenders in their sole discretion; absent agreement, the then-current budget remains in effect.

Permitted Variance

• Permitted variance: 15%, tested on aggregate actual disbursements across all line items, including professional fees, against budgeted operating disbursements for each testing period; food and liquor disbursements may be adjusted on a pro forma basis by up to 20% based on their correlation to revenue and cash receipts.
• Testing periods run on a rolling two-week basis: the first begins with the second full week after the petition date and ends on the second Sunday thereafter, and each week thereafter the following two-week period ending on a Sunday is tested, until the recast budget is approved.
• Variance reports are due on the Wednesday of each calendar week starting with the second full week after the petition date, in form acceptable to the DIP lenders in their sole discretion, reporting line-by-line expenditures including professional fees and the dollar variance from budget, excluding U.S. Trustee fees under 28 U.S.C. section 1930(a) and interest under 31 U.S.C. section 3717.
• Exceeding the permitted variance in any testing period after the closing date is an event of default; upon a termination event, the permitted variance is reduced to 0.00% of budgeted disbursements.
• The interim order's variance-report provision describes the comparison period as the immediately preceding calendar week ending on Sunday while defining the testing period as a rolling two weeks; the term sheet version of the same provision reads consistently on the two-week testing period.

Reporting and Access

• The debtors must deliver all reporting required under the DIP documents and, on reasonable notice during business hours, permit the agent's and lenders' representatives to inspect assets, examine books and records, and discuss the debtors' affairs, finances, and condition with officers and financial advisors, subject to attorney-client privilege and confidentiality obligations.

Covenants

• The affirmative and negative covenants in Sections 5 and 6 of the prepetition credit agreement, as amended through Amendment No. 2, are incorporated by reference for the benefit of the DIP agent and lenders, with specified debt, lien, and investment baskets excluded, including the Main Street Loan Obligations basket, the permitted-acquisition and refinancing baskets, and the general lien covenant, which is replaced by the DIP term sheet's own permitted-liens construct.
• Case-specific additional covenants require the debtors to retain Albert Altro of Traverse LLC as chief restructuring officer and seek approval of the retention application at the second-day hearing; use commercially reasonable efforts to deliver copies of all pleadings promptly; comply with each court order; provide access to information and to management regarding strategic planning, cash and liquidity management, and operational and restructuring activities, subject to privilege; furnish management information to the chief restructuring officer and make all members of management available to the chief restructuring officer, as requested by the chief restructuring officer or the DIP agent, for a reasonable number of meetings and calls; refrain from materially changing the nature of the business or adversely amending organizational documents absent consultation with the lenders; not assert subrogation or contribution rights against other debtors until the facility is repaid and the commitments terminated; and make no payment on prepetition debt except as adequate protection, as agreed in writing by the required DIP lenders and authorized by the court, or under first-day or second-day relief.

Conditions Precedent

• Closing conditions include entry of an unstayed interim order; first-day motions and orders, including those on the DIP facility, cash management, and critical vendors, reasonably satisfactory to the agent and lenders; officer's certificates; the absence of a material adverse change since the petition date, disregarding effects of the Chapter 11 filing itself; the absence of unstayed litigation that could reasonably be expected to result in a material adverse change; receipt of required governmental and third-party consents; know-your-customer information; a valid and perfected lien on the collateral with the required priority, which entry of the DIP orders is agreed to satisfy; agreement to the UCC financing statements; and delivery of the initial budget.
• Each new money draw additionally requires representations and warranties accurate in all material respects, no default or event of default, a timely borrowing request, payment of fees and expenses, and compliance in all material respects with the DIP orders; draws after the interim facility further require entry of a final order that remains in full force and has not been reversed, modified, stayed, or vacated, and compliance with all milestones due on or before entry of the final order and those draws.

Events of Default

• The term sheet's events of default include:
  • Failure to pay principal when due, or interest, fees or other amounts within three business days of the due date
  • Any representation or warranty proving inaccurate in any material respect when made
  • Failure to observe any other covenant, condition or agreement, unremedied for three business days after written notice from the agent; failure to meet any milestone or additional covenant is an immediate default for as long as it continues unremedied or unwaived
  • Expenditure of loan proceeds outside the budget, or a variance exceeding the permitted variance
  • The DIP orders ceasing to create valid perfected liens of the required priority, or ceasing to be in full force and effect, or any failure to perform obligations under or violation of the DIP orders
  • A motion or order approving payment of prepetition claims above $100,000 in the aggregate outside first-day and second-day orders included in the budget, stay relief permitting foreclosure on assets with book value above $50,000, or a settlement above $50,000 with a secured creditor not approved by the required DIP lenders and not budgeted; separately, payment of any administrative expense claim of $100,000 or more not set forth in the budget, and payment of, or a motion or order approving payment of, any prepetition claim above $50,000 outside budgeted first- and second-day relief. The two prepetition-claim triggers overlap at different thresholds, $100,000 in the aggregate in one clause and $50,000 for any claim in the other.
  • Appointment of, or an application by a debtor or affiliate for, a Chapter 11 trustee or an examiner with enlarged powers; dismissal of a case without provision for termination of commitments and payment in full; or conversion to Chapter 7 or the filing of a motion seeking conversion
  • Motions or orders, absent consent of the required DIP lenders, obtaining additional financing under section 364(c) or (d) that does not repay the DIP obligations at consummation, modifying the DIP orders inconsistently with the term sheet, granting an equal or superior administrative priority, or granting a lien on the collateral senior to the DIP liens; and entry of an order modifying the DIP documents or the prepetition credit agreement adversely to the lenders
  • A third-party application for the prepetition-claim, trustee or examiner, dismissal, or conversion relief described above that the debtors do not contest in good faith, or any person obtaining a final order charging the collateral under section 506(c) or otherwise adverse to the agent or lenders
  • Any debtor challenging the validity, extent, perfection or priority of the prepetition liens or obligations, or attempting to invalidate or impair the DIP liens or subject collateral to section 506(c) assessment, or any such lien ceasing to be valid
  • Termination or modification of exclusivity without lender consent, or an uncontested motion seeking it; the filing of a plan or disclosure statement that does not pay the prepetition and DIP obligations in full before maturity, or entry of an order approving or confirming such a plan; adverse modification, withdrawal or termination of an approved plan or confirmation order without lender consent
  • Sale of assets other than under the stalking-horse APA unless the DIP and prepetition obligations are paid in full before maturity; modification of the bidding procedures order, or a motion seeking it, without lender consent; impairment of credit-bid rights; and any debtor seeking or supporting disallowance of the DIP lenders' claims or contesting any provision of the term sheet

Termination and Remedies

• Authority to use cash collateral and DIP proceeds terminates automatically, and the DIP obligations become due and payable, on the earliest of an event of default under the term sheet, the debtors' failure to comply with the interim order or any covenant in it or the term sheet, or the maturity date. The debtors must immediately notify the agents, and the lenders, of any termination event.
• Remedies follow five days' advance written notice, which may be by email, to debtors' counsel, the U.S. Trustee, and any committee's counsel; at the end of that notice period the automatic stay terminates without further order unless the secured parties elect otherwise, and the DIP secured parties may exercise all rights against the DIP collateral, including terminating commitments, while the prepetition secured parties may pursue the prepetition obligations subject to the DIP obligations, DIP superpriority claims, permitted liens, and the carve out.
• During the notice period the debtors may use DIP proceeds drawn before the termination event and cash collateral only to fund operations in accordance with the budget, with the permitted variance reduced to 0.00% immediately upon the termination event, and to fund the reserve account; the parties consent to an expedited hearing, and if a hearing requested within the period is scheduled later, the notice period extends to the hearing date. Fees and expenses incurred by the debtors or a committee during the notice period permanently reduce the post-carve-out trigger notice cap unless the court determines no termination event occurred.
• Any party in interest may seek an emergency hearing to contest whether assets are estate property, with all rights and positions preserved.
• On a mandatory prepayment or after remedies are exercised, recoveries apply first to agent fees, indemnities and expenses, second to lender fees and indemnities, third to new money principal and interest, fourth to roll-up principal and interest, fifth to remaining DIP obligations, and last to the borrower.

Amendments and Assignments

• No further court approval is needed to amend, waive, or modify the DIP documents or the budget, except that any modification shortening maturity, increasing the aggregate commitments or the interest rate, or effecting any other material amendment requires notice, a hearing, and court approval as necessary.
• Amendments require the written agreement of the required DIP lenders, meaning non-defaulting lenders holding more than 50% of outstanding DIP loans and commitments, and the borrower, acknowledged by the agent. Each affected lender must consent individually to extend or increase its commitment, postpone a payment date or reduce interest payable, or reduce principal, interest, fees or other amounts, or to change the amendment provision or the definition of required DIP lenders; the "Default Rate" definition may be amended by the required DIP lenders alone, and provisions affecting the agent's rights or duties require the agent's consent.
• Lenders may assign the DIP loans subject to the borrower's consent, not to be unreasonably withheld and not required during an event of default or for a permitted assignee, and to the agent's consent other than for assignments to a lender or its affiliates. No affiliate of the debtors may become a lender, and disqualified lenders, meaning operating-company competitors the borrower identifies in writing and their name-identifiable affiliates, are excluded from the permitted-assignee category.

Restrictions on Use of Proceeds and Collateral

• Subject to the $50,000 challenge budget, no DIP proceeds, DIP collateral, prepetition collateral, cash collateral, or carve-out funds may be used to investigate, commence or prosecute claims against the DIP agent, the DIP lenders, or the prepetition secured parties; to challenge the validity, priority, perfection or enforceability of their liens, claims or obligations, including through avoidance actions; to seek relief impairing their ability to recover on the collateral; or to assert claims of non-debtor affiliates arising from prepetition relationships with the debtors.

Key Dates

• Petition date: Sept. 21, 2026, in the District of Delaware
• Interim order entered: Sept. 22, 2026
• Final hearing: Oct. 20, 2026 at 10:00 a.m. prevailing Eastern time
• Final objection deadline: Oct. 13, 2026 at 4:00 p.m. prevailing Eastern time
• First updated budget due: Oct. 16, 2026

Other Provisions

• The interim order governs over any inconsistent provision of the DIP documents; takes effect nunc pro tunc to the petition date and is immediately enforceable without stay; and binds all parties in interest, including any committee and any subsequently appointed trustee, examiner, or other fiduciary, provided that the prepetition senior secured parties have no obligation to permit cash collateral use or extend financing to any trustee or similar responsible person.
• If the interim order is vacated, reversed, or modified on appeal, liens and claims granted to the prepetition senior secured parties before the effective date of that ruling remain governed by the original terms, and those parties are entitled to section 363(m) protection for all uses of prepetition collateral, including cash collateral, and all adequate protection obligations. The DIP liens, superpriority claims, and adequate protection survive conversion, dismissal, a section 363(b) sale order, and plan confirmation, including under section 1141(d)(4), and the court retains jurisdiction after any dismissal to enforce them.
• It is a termination event for the DIP liens or adequate protection liens to be made pari passu with or junior to any lien granted in the cases or preserved for the estates under section 551.
• The debtors jointly and severally indemnify the DIP lenders, the DIP agent, and their related persons, excluding losses resulting from an indemnified person's fraud, gross negligence, or willful misconduct as finally determined under the interim order; the term sheet's indemnity excludes only gross negligence and willful misconduct.
• New York law governs the term sheet and the facility, with the debtors submitting to the exclusive jurisdiction of the bankruptcy court or, failing that, New York courts, and waiving jury trial.