Contract analysis

Section 1.1 — Defined Terms. As used in this Stipulation, the following terms shall have the meanings ascribed to them below. All capitalized terms used but not otherwise defined herein shall have the meanings ascribed to such terms in the DIP Credit Agreement, dated as of October 13, 2023, by and among Cascabel Financial Holdings, Inc., as borrower, Cascabel Asset Management LLC, as guarantor, and Driftwood Absolute

Section 1.2 — Incorporation by Reference. All capitalized terms used but not otherwise defined in this Stipulation shall have the respective meanings ascribed to them in the DIP Credit Agreement, the terms and conditions of which are incorporated herein by reference as though fully set forth herein. To the extent of any conflict between the definitions set forth herein and those set forth in the DIP Credit Agreement,

Section 1.3 — Rules of Construction. Unless the context otherwise requires: (a) words importing the singular include the plural and vice versa; (b) words importing a gender include each gender; (c) the words "include," "includes," and "including" shall be deemed to be followed by the words "without limitation"; (d) references to "Sections," "Articles," "Exhibits," and "Schedules" are to sections, articles, exhibits,

ARTICLE II — ADEQUATE PROTECTION PACKAGE

Section 2.1 — Replacement Liens (Adequate Protection Liens) (a) Pursuant to §§ 361 and 363(e) of the Bankruptcy Code, and in consideration for the priming of the Pre-Petition First Lien Facility by the DIP Facility, the Pre-Petition Secured Lenders (holding an aggregate of Eighty-Eight Million Dollars ($88,000,000) of the Pre-Petition First Lien Facility) are hereby granted, effective immediately upon entry of the Fi

Section 2.2 — Superpriority Administrative Expense Claims (a) Pursuant to § 507(b) of the Bankruptcy Code, the Pre-Petition Secured Lenders are hereby granted, effective immediately upon entry of the Final DIP Order incorporating this Stipulation, allowed superpriority administrative expense claims (the "§ 507(b) Claims") against each of the Debtors, jointly and severally, to the extent of any diminution in the value

Section 2.3 — Adequate Protection Payments (a) Commencing on the first business day of the first full calendar month following entry of the Final DIP Order and on the first business day of each calendar month thereafter during the pendency of the DIP Facility, the Debtors shall make monthly adequate protection payments (the "Adequate Protection Payments") to the Pre-Petition Secured Lenders, through the Pre-Petition

Section 2.4 — Adequate Protection Reserve (a) An adequate protection reserve in the amount of Three Million Five Hundred Thousand Dollars ($3,500,000) (the "Adequate Protection Reserve") was funded from the proceeds of Draw 1 upon entry of the Interim DIP Order and has been deposited into a segregated, interest-bearing account held and maintained by the Pre-Petition Agent, Velthorn National Bank, N.A. (the "Reserve A

Section 2.5 — Reimbursement of Ad Hoc Group Counsel Fees (a) As an additional component of the adequate protection package set forth herein, the Debtors shall reimburse the reasonable and documented fees and expenses of Hartwell & Crane LLP, counsel to the Ad Hoc Group, incurred in connection with the Chapter 11 Cases, the DIP Facility, this Stipulation, and the ongoing monitoring of the Debtors' compliance with the

Section 3.1 — Professional Fee Carve-Out (a) Notwithstanding anything to the contrary in the DIP Credit Agreement, the DIP Orders, or this Stipulation, the DIP Liens, the DIP Superpriority Claims, the Adequate Protection Liens, and the § 507(b) Claims shall each be subject to, and subordinate to, a carve-out (the "Carve-Out") in an aggregate amount of Two Million Seven Hundred Fifty Thousand Dollars ($2,750,000), con

Section 3.2 — Carve-Out Reservation Notwithstanding any other provision of the DIP Credit Agreement, the DIP Orders, or this Stipulation, the Debtors shall at all times maintain a segregated cash reserve or other arrangement, in form and substance reasonably acceptable to the DIP Lender and the Pre-Petition Agent, sufficient to fund the Carve-Out in full upon the occurrence of a Termination Event and delivery of a Ca

Section 4.1 — Committee Challenge Period The Committee shall have a period of seventy-five (75) calendar days following entry of the Final DIP Order (i.e., from October 13, 2023, through and including December 27, 2023) (the "Committee Challenge Period") within which to investigate and, if warranted, commence any Challenge by filing an adversary proceeding or contested matter in this Court, relating to (i) the validi

Section 4.2 — Other Party in Interest Challenge Period Any other party in interest (other than the Committee) shall have a period of sixty (60) calendar days following entry of the Final DIP Order (i.e., from October 13, 2023, through and including December 12, 2023) (the "General Challenge Period" and, together with the Committee Challenge Period, the "Challenge Periods") within which to investigate and, if warrante

Section 4.3 — Effect of Expiration Without Challenge If no Challenge is timely commenced within the applicable Challenge Period: (a) the Pre-Petition Secured Lenders' liens and claims under the Pre-Petition First Lien Credit Agreement shall be deemed and shall conclusively be established as valid, enforceable, properly perfected, and of the priority set forth in the Pre-Petition First Lien Credit Agreement; (b) Drift

ARTICLE V — CONSENT TO PRIMING AND ROLL-UP

Section 5.1 — Consent of the Ad Hoc Group Subject to and conditioned upon the full and timely performance by the Debtors and the DIP Lender of the adequate protection provisions set forth in Article II hereof and Article III hereof, and subject to the terms and conditions of this Stipulation, the Ad Hoc Group (consisting of Velthorn National Bank, N.A. and Pinnacle Credit Partners Fund II, LP) hereby irrevocably cons

Section 5.2 — Withdrawal of Objections (a) Upon entry of the Final DIP Order incorporating this Stipulation, the Ad Hoc Group shall be deemed to have withdrawn the Ad Hoc Group Objection filed on September 19, 2023 (Dkt. No. 47), in its entirety and with prejudice. The Ad Hoc Group shall take no further action to prosecute or pursue the Ad Hoc Group Objection. (b) Upon entry of the Final DIP Order incorporating this

Section 5.3 — Reservation of Rights of Non-Party Lenders Brindoval Institutional Lending, LLC, as a holder of Twenty-Two Million Dollars ($22,000,000) of the Pre-Petition First Lien Facility (representing 25.00% of the Pre-Petition Secured Lenders' aggregate holdings), is not a signatory to this Stipulation and is not a member of the Ad Hoc Group. Notwithstanding the foregoing, Brindoval Institutional Lending, LLC sh

Section 6.1 — Recitation of DIP Milestones. The DIP Credit Agreement requires the Debtors to comply with the following milestones (collectively, the "Milestones"), the satisfaction of which is a condition to the DIP Lender's continued obligations under the DIP Credit Agreement: (a) Interim DIP Order: Entry of the Interim DIP Order within five (5) business days of the Petition Date. Status: Satisfied. The Interim DIP

Section 6.2 — Reservation of Rights. The Ad Hoc Group expressly reserves the right to object to any request by the Debtors or the DIP Lender to extend, modify, or waive any Milestone under the DIP Credit Agreement, and nothing in this Stipulation shall be construed as the Ad Hoc Group's consent to any such extension, modification, or waiver. The Ad Hoc Group further reserves the right to be heard on any motion, appli

ARTICLE VII — BUDGET COMPLIANCE AND MONITORING

Section 7.1 — Budget Compliance (a) The adequate protection package set forth in Article II hereof is conditioned upon, and shall remain in full force and effect only so long as, the Debtors remain in compliance with the DIP Budget, as required under the DIP Credit Agreement. (b) The DIP Budget shall be a 13-week rolling cash flow budget, updated by the Debtors every four (4) weeks and delivered to the DIP Lender and

Section 7.2 — Reporting (a) The Debtors shall provide the Pre-Petition Agent with all financial reporting and information required to be delivered under the DIP Credit Agreement, including, without limitation: (i) monthly unaudited financial statements (balance sheet, income statement, and cash flow statement) of each Debtor and on a consolidated basis; (ii) each updated 13-week DIP Budget; (iii) bi-weekly variance r

ARTICLE VIII — EVENTS OF DEFAULT AND REMEDIES

Section 8.1 — Adequate Protection Default An "Adequate Protection Default" shall occur upon the occurrence of any of the following events: (a) The Debtors' failure to make any Adequate Protection Payment within three (3) business days of the applicable due date as set forth in Section 2.3 hereof; (b) The Debtors' failure to maintain the Adequate Protection Reserve at the required level of Three Million Five Hundred T

Section 8.2 — Remedies Upon Adequate Protection Default (a) Upon the occurrence and during the continuance of an Adequate Protection Default, the Pre-Petition Secured Lenders (through the Pre-Petition Agent or counsel to the Ad Hoc Group) may provide written notice of such default to the Debtors, the DIP Lender, the Committee, and the United States Trustee. (b) Following delivery of such notice and the expiration of