UNITED STATES BANKRUPTCY COURT 

SOUTHERN DISTRICT OF FLORIDA 

MIAMI DIVISION 

www.flsb.uscourts.gov

 

In re: Case No. 20-20259-RAM 

 (Jointly Administered)

It’Sugar FL I LLC, et al, 

 Chapter 11 

 Debtors. 

 / 

EMERGENCY MOTION OF THE DEBTORS FOR INTERIM 

AND FINAL ORDERS (I) AUTHORIZING DEBTOR (A) TO 

OBTAIN POSTPETITION FINANCING FROM SHL HOLDINGS, INC.; AND 

 (B) TO UTILIZE CASH COLLATERAL, (II) GRANTING ADEQUATE 

PROTECTION, (III) MODIFYING THE AUTOMATIC STAY, 

(IV) SCHEDULING FINAL HEARING; AND (V) GRANTING RELATED RELIEF 

The Debtors seek to continue to operate in the ordinary course, to preserve the 

value of the estate, to preserve jobs and to maintain operations. Without the 

immediate authorization to obtain financing, the Debtors will not be able to meet 

payroll, rent, tax, insurance and other obligations necessary for its day-to-day 

operations. The Debtors respectfully request that the Court waive the provisions 

of Local Rule 9075-1(B) which requires an affirmative statement that a bona fide 

effort was made in order to resolve the issues raised in the Motion, as the relief 

requested is urgent in nature and does not lend itself to advance resolution. 

It’Sugar FL I LLC, It’Sugar LLC, It’Sugar Atlantic City LLC, and It’Sugar FLGC LLC 

(collectively, “It’Sugar” or the “Debtors”) as debtor in possession, moves this Court pursuant to 

sections 105, 361, 362, 363, 364 and 507(b) of title 11 of the United States Code (“Bankruptcy 

Code”), Rules 4001(b) and (c) of the Federal Rules of Bankruptcy Procedure (“Bankruptcy 

Rules”), Rules 4001-2 and 4001-3 of the Local Rules of United States Bankruptcy Court for the 

Southern District of Florida (“Local Rules”), and this Court’s Guidelines for Motions Seeking 

Authority to Use Cash Collateral and Motions Seeking Approval of Postpetition Financing

(“Guidelines”), on an emergency basis, for entry of interim and final orders: (a) authorizing the 

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Debtors to obtain senior secured postpetition financing; (b) authorizing the Debtors to use Cash 

Collateral (as defined below); (c) granting liens and providing superpriority claims with respect 

to such postpetition financing; (d) approving the form of adequate protection to be provided by 

the Debtors; (e) modifying the automatic stay to the extent necessary to effectuate the terms of 

the DIP Orders (as defined below); (f) scheduling a final hearing to consider entry of the Final 

Order (as defined below); and (g) granting related relief in connection with the DIP Financing 

(as defined below) (“Motion”). In support, the Debtors respectfully state as follows. 

DISCLOSURES UNDER BANKRUPTCY RULES, LOCAL RULES AND GUIDELINES 

Pursuant to Bankruptcy Rule 4001(b), (c) and (d), Local Rules 4001-2, 4001-3, 9013-1(F) 

and (G), and the Guidelines, the Debtors submit the following list and summary of the material 

terms of its proposed secured financing and use of cash collateral pursuant to the proposed 

Interim Order attached as Exhibit A (“Interim Order”), setting forth the location of such material 

terms in the Interim Order.1

Material Provision Location in Interim 

Order and/or Loan and 

Security Agreement 

Summary Description 

Prepetition Lender Interim Order ¶ D SHL Holdings, Inc. 

DIP Lender Loan and Security 

Agreement, p. 1, ¶ 3 

SHL Holdings, Inc. 

Principal balance due 

Prepetition Lender 

Interim Order ¶¶ D.3 and 

5.a.; Loan and Security 

Agreement p. 2 

$6,216,362.00 

DIP Loan Amount Loan and Security 

Agreement ¶ 3 

$4,000,000.00 

1

 The Loan and Security Agreement is attached as Exhibit B to this Motion. References to the Budget are to the 13-

week cash Budget contemplated by this Motion and attached to the proposed Interim Order. References to the 

Interim Order is to the proposed Interim Order attached as Exhibit A. All capitalized terms not defined in this chart 

shall have the meanings ascribed to them in this Motion, the Loan and Security Agreement, and the Interim Order, 

as applicable. 

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Material Provision Location in Interim 

Order and/or Loan and 

Security Agreement 

Summary Description 

Interest Rate Id. LIBOR + 1.5% 

Security Interest Loan and Security 

Agreement ¶ 5 

Lien on and security interest in the 

Collateral (as defined in the Loan and 

Security Agreement) 

Liens, Superpriority 

claim, and priming 

liens 

Interim Order ¶¶ 3, 4, 6, 

7; Loan and Security 

Agreement ¶¶ 4 and 5 

Senior lien and super priority 

administrative expense claim 

Cash Collateral Interim Order ¶¶ 2 and 5 Subject to Interim Order and Loan and 

Security Agreement, Debtors are 

authorized to use Cash Collateral (as 

defined in Motion) 

Proposed Use of DIP 

Loan Proceeds 

Budget attached as 

Exhibit to Interim Order 

Working capital and general corporate 

purposes; payment of certain 

administrative costs as set forth in the 

Budget, including professional fees 

contemplated by the Interim Order 

Termination Date The Interim Period up to a final hearing 

on this Motion, and subject to 

termination provisions in the Interim 

Order 

Termination Provisions Interim Order ¶ 2; Loan 

and Security Agreement 

p. 4 and ¶ 9 

Upon Event of Default, Debtors’ right to 

use Cash Collateral terminates, and SHL 

may declare all obligations immediately 

due and payable and charge interest, 

apply Collateral held or assigned to SHL 

toward monies due, or alternatively, file 

suit(s) to foreclose Loan and Security 

Agreement. SHL’s remedies are 

cumulative and exercise of one remedy 

does not preclude exercise of another 

remedy. 

Remedies Notice 

Period 

Interim Order p. 5, ¶ 2; 

Loan and Security 

Agreement p. 9, ¶ 9; p. 

10 ¶ 10 

Upon occurrence of Cash Collateral 

Termination Event, SHL must give 5-

days written notice to Debtors prior to 

commencing a proceeding to determine 

Debtors’ right to further use of Cash 

Collateral; SHL must give Debtors at 

least 10 days’ notice before effectuating 

public sale or of time after which any

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Material Provision Location in Interim 

Order and/or Loan and 

Security Agreement 

Summary Description 

private sale or other disposition of 

Collateral is to be made 

Adequate Protection Interim Order p. 6-8, ¶ 5; 

Loan and Security 

Agreement p. 5; p. 11, ¶ 

11(d) 

SHL is entitled to adequate protection in 

an amount equal to the aggregate 

diminution in the value of its interest in 

the Collateral including Cash Collateral 

as provided for under Bankruptcy Code. 

SHL is entitled to further adequate 

protection, including a stipulation of 

Prepetition Liens and Debt, the 

allowance of SHL’s secured claim, the 

granting of Replacement Liens 

(subordinate to the DIP Liens) on the 

Collateral, the reaffirmation of the 

Prepetition Guaranty and other 

Prepetition Loan Documents, and the 

payment of Fees and Expenses pursuant 

to section 506(b) of the Bankruptcy 

Code. 

Debtor’s 

Acknowledgments and 

Agreement 

Interim Order p. 2-3, 

¶D(1)-(6); p. 5, ¶3; p.6, 

¶4; p. 6, ¶5(a); Loan and 

Security Agreement p. 1-

2, ¶¶ A-G; p. 2, ¶ 1; p. 

10-11, ¶ 11(d) 

Among other things, Debtors 

acknowledge the Prepetition Debt and 

the enforceability of the Prepetition 

Liens. No Avoidance Action shall lie 

regarding obligation, transfer or grant of 

security interests under the DIP 

Documents. 

Stipulations of the Debtors are binding 

on any successor and third parties 

including chapter 7 or 11 trustee. 

Waiver/modification of 

stay 

Interim Order p.8, ¶6 Entry of an order granting relief from 

stay to allow DIP Lender to exercise 

rights under the DIP Documents, 

including rights set forth in the Loan and 

Security Agreement, with the only issue 

to be raised by parties-in-interest, if any, 

being whether, in fact, an Event of 

Default has occurred and is continuing. 

Limitation on use of 

proceeds 

Interim Order p. 5-6, ¶2; 

p. 11, ¶ 11 

Debtors’ estates’ right to use Cash 

Collateral subject to terms and 

conditions of Interim Order and Loan 

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Material Provision Location in Interim 

Order and/or Loan and 

Security Agreement 

Summary Description 

and Security Agreement as provided for 

in the Budget; such right shall be subject 

to a Cash Collateral Termination Event. 

More specifically, proceeds of DIP Loan 

may not be used to, among other things, 

object to and or challenge the amount, 

validity, perfection, priority or 

enforceability of or asserting any 

defense, counterclaim or offset to any 

amount due under the DIP Documents or 

Prepetition Loan Documents for lender 

liability or actions pursuant to Sections 

105, 502(d), 510, 544, 547, 548, 549, 

550 or 552 of the Bankruptcy Code. 

Waiver of right to file a 

plan 

 None 

Deadlines for filing a 

plan 

 None 

Waiver/modification of 

non-bankruptcy law re 

perfection 

Interim Order p. 6, ¶5.a.; 

p. 8-9, ¶¶7, 8; 

Debtors acknowledge that SHL’s 

Prepetition Liens were duly perfected; 

and perfection of the Replacement Liens 

and DIP Liens provided under the 

Interim Order and Loan and Security 

Agreement 

Indemnification None 

Release/Waiver of 

claims 

 See comments to Debtors’ 

acknowledgements and agreement, 

above. 

Limitation of rights of 

parties under section 

506(c) 

Interim Order, ¶8 Debtors waive the right to surcharge 

SHL’s Collateral under Section 506(c) 

Carve Out Loan and Security 

Agreement p. 7, ¶ 4 

SHL’s Postpetition Liens and SuperPriority Claim shall be subordinate to: 

(i) the claims of retained professionals 

of the estates in this Case up to the 

amounts set forth in the Budget. 

(ii) unpaid fees and expenses of the 

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Material Provision Location in Interim 

Order and/or Loan and 

Security Agreement 

Summary Description 

United States Trustee and the Clerk of 

the Court. 

Granting of lien on 

claims/causes of action 

 None 

Binding Effect See comments to Debtors’ 

acknowledgements and agreement, 

above. 

Interim Order Substantially in the form of the Interim 

Order attached to the Motion as Exhibit 

A. 

Relief Requested 

1. Pursuant to this Motion, the Debtors seek the scheduling of interim and final 

hearings, and the entry of the Orders providing the following relief: 

a. DIP Financing: authorizing the Debtors to obtain postpetition financing 

(“DIP Financing”) pursuant to the terms and conditions of the DIP Documents 

(as defined herein), the Interim Order (as defined herein) and the Final Order (as 

defined herein), pursuant to section 364(c)(1), 364(d), and 364(e) of the 

Bankruptcy Code and Rule 4001(c) of the Bankruptcy Rules; 

b. DIP Documents: authorizing the Debtors to execute and enter into the 

Loan and Security Agreement attached as “Exhibit B” (“Loan and Security 

Agreement"), the promissory note, and all related or ancillary documents and 

agreements, including all security and pledge agreements contemplated thereby 

(collectively, as may be amended, supplemented or otherwise modified pursuant 

to their respective terms, the "DIP Documents"), and to perform all such other 

and further acts as may be required in connection with the DIP Documents; 

c. DIP Loan: authorizing the Debtors to borrow, on an interim basis, postpetition financing of up to $4,000,000.00 (“Interim DIP Loan”) and seek other 

financial accommodations from SHL as part of the DIP Financing;

d. Cash Collateral: authorizing the Debtors to continue to use cash in which 

SHL has an interest (“Cash Collateral”), including, but not limited to, the 

proceeds of all Collateral (as defined in the DIP Documents and Prepetition Loan 

Documents) in accordance with the Budget (as defined herein); 

e. Adequate Protection: granting SHL Replacement Liens and reaffirming 

the Debtors’ obligations under the Prepetition Loan Documents. 

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f. Debtor Stipulations: approving of certain stipulations in paragraph D of 

the Interim Order by the Debtors with respect to the Prepetition Loan Documents 

and DIP Documents and the liens and security interests arising therefrom, and 

releasing certain claims; 

g. Superpriority Administrative Claims: allowing SHL a superpriority 

administrative expense claim under section 364(c)(1) of the Bankruptcy Code for 

all of the Debtors’ obligations under the DIP Documents, the Interim Order and 

the Final Order; 

h. Automatic Stay: vacating or modifying the automatic stay imposed by 

Section 362 of the Bankruptcy Code to the extent necessary to implement and 

effectuate the terms of the DIP Documents, the Interim Order and the Final Order; 

i. Interim Hearing: pursuant to Bankruptcy Rule 4001, that an interim 

hearing (“Interim Hearing”) on the Motion be held before this Court to consider 

entry of an order granting the Motion on an interim basis (“Interim Order”), 

thereby authorizing the Debtor, on an interim basis to borrow from SHL under or 

as permitted by the DIP Documents, and authorizing the Debtor’s use of Cash 

Collateral; 

j. Final Hearing: scheduling a final hearing (“Final Hearing”) to be held 

within 45 days of the entry of this Interim Order to consider entry of a final order 

authorizing the DIP Financing (“Final Order”); and 

k. Other Related Relief: granting the other relief set forth in the proposed 

Interim and Final Orders. 

Jurisdiction and Venue 

2. This Court has jurisdiction over this matter pursuant to 28 U.S.C. §§ 157 and 

1334. This is a core proceeding pursuant to 28 U.S.C. § 157(b).

3. Venue is proper before this Court pursuant to 28 U.S.C. §§ 1408 and 1409. 

Background 

4. On September 22, 2020 (“Petition Date”), each of the Debtors filed a voluntary 

petition for relief under chapter 11 of title 11 of the United States Code. 

5. The Debtors are operating their business and managing their affairs as a debtorsin- possession pursuant to section 1107(a) and 1108 of the Bankruptcy Code. 

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6. For a detailed description of the Debtors and operations, the Debtors respectfully 

refer the Court and parties in interest to the Consolidated Chapter 11 Case Management 

Summary (“Case Management Summary”) [ECF No. 8]. 

7. As disclosed in the Case Management Summary, SHL Holdings Inc. and It’Sugar 

share a common, ultimate parent entity. 

Basis for Relief Requested 

A. The DIP Financing is a Sound Exercise of the Debtor’s Business Judgment 

8. As described above, after appropriate investigation and analysis, the Debtors’ 

management has concluded that the DIP Financing is the best option available under the 

circumstances of this case. 

9. Bankruptcy courts routinely defer to a debtor's business judgment on most 

business decisions, including the decision to borrow money, unless such decision is arbitrary and 

capricious. See In re Farmland Indus., Inc., 294 B.R. 855, 879 (Bankr. W.D. Mo. 2003) 

(articulating that approval of postpetition financing requires, inter alia, an exercise of "sound and 

reasonable business judgment"); see also In re YL West 87th Holdings I LLC, 423 B.R. 421, 441 

(Bankr. S.D.N.Y. 2010) (stating that "[c]ourts have generally deferred to a debtor's business 

judgment in granting section 364 financing"); Trans World Airlines, Inc. v. Travellers Int'l AG 

(In re Trans World Airlines, Inc.), 163 B.R. 964, 974 (Bankr. D. Del. 1994) (noting that the 

interim loan, receivables facility and asset-based facility were approved because they "reflect[ed] 

sound and prudent business judgment on the part of TWA . . . [were] reasonable under the 

circumstances and in the best interest of TWA and its creditors"); cf. In re Filene's Basement, 

LLC, No. 11- 13511(KJC), 2014 WL 1713416, at *12 (Bankr. D. Del. Apr. 29, 2014) (stating 

"[t]ransactions under § 363 must be based upon the sound business judgment of the debtor or 

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trustee."). In fact, "[m]ore exacting scrutiny would slow the administration of the debtor's estate 

and increase its cost, interfere with the Bankruptcy Code's provision for private control of 

administration of the estate, and threaten the court's ability to control a case impartially." 

Richmond Leasing Co. v. Capital Bank, N.A., 762 F.2d 1303, 1311 (5th Cir. 1985). 

10. Courts have noted that the business judgment test is not an onerous standard. See 

Crystalin, LLC v. Selma Props. Inc. (In re Crystalin, LLC), 293 B.R. 455, 463–64 (B.A.P. 8th 

Cir. 2003). Moreover, 

[u]nder the 'business judgment' rule, the management of a corporation's affairs is placed 

in the hands of its board of directors and officers, and the Court should interfere with 

their decisions only if it is made clear that those decisions are, inter alia, clearly 

erroneous, made arbitrarily, are in breach of the officers' and directors' fiduciary duty to 

the corporation, are made on the basis of inadequate information or study, are made in 

bad faith, or are in violation of the Bankruptcy Code. 

In re Farmland Indus., Inc., 294 B.R. at 881 (internal citations omitted). Accordingly, courts 

have reasoned that, "[b]usiness judgments should be left to the board room and not to [the] 

Court." In re Farmland Indus., Inc., 294 B.R. at 881 (citations omitted). 

11. Courts recognize that a debtor is entitled (if not required) to consider 

noneconomic benefits offered by a proposed postpetition facility when exercising its business 

judgment: 

Although all parties, including the Debtors and the Committee, are naturally motivated to 

obtain financing on the best possible terms, a business decision to obtain credit from a 

particular lender is almost never based purely on economic terms. Relevant features of 

the financing must be evaluated, including noneconomic elements such as the timing and 

certainty of closing, the impact on creditor constituencies and the likelihood of a 

successful reorganization. 

In re ION Media Networks, Inc., No. 09-13125, 2009 WL 2902568, at *4 (Bankr. S.D.N.Y. Jul. 

6, 2009). 

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12. The Debtors’ determination to enter into the DIP Financing represents an 

appropriate exercise of its sound business judgment and should be approved. The Debtors’ 

ability to operate successfully and confirm a plan is contingent upon having the liquidity to meet 

its post-petition financial obligations. Absent a credit facility to provide cash for operations and 

to fund this case, the Debtors will be unable to achieve their restructuring goals to the detriment 

of its estate and creditors. 

13. The DIP Financing also demonstrates the support of SHL (the Debtors’ 

prepetition and post-petition financier) for the broader restructuring process and will provide 

confidence to landlords, suppliers, vendors, customers, employees, other business partners that 

the Debtors can continue to meet their commitments during this chapter 11 case. 

14. In light of the Debtors’ overall circumstances, the Debtors believe that they could 

not obtain postpetition financing from another lending source on terms equal or superior to the 

DIP Financing. As such, and as further described in the Case Management Summary [ECF No. 

8], the Debtor’s decision to enter into the DIP Financing is a sound exercise of the Debtor’s 

business judgment. Accordingly, the Court should grant the Debtors authority to enter into the 

DIP Financing and obtain the funds from SHL on the secured, administrative superpriority basis 

described herein. 

B. The Debtors Should be Authorized to Obtain DIP Financing Under Section 364 of 

the Bankruptcy Code 

15. It is essential to the success of the Debtors’ chapter 11 case that the Debtors 

obtain access to sufficient postpetition financing and use of Cash Collateral. The preservation of 

estate assets, the Debtors’ continuing viability and its ability to reorganize successfully and 

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maximize value for stakeholders depends heavily upon the approval of the relief requested 

herein. 

16. Section 364(c) of the Bankruptcy Code authorizes a debtor to incur credit with 

priority over all administrative claims. To incur credit on this basis, a debtor need only 

demonstrate that, despite a good faith effort, credit was not available without the protections of 

sections 364(c) of the Bankruptcy Code. Bray v. Shenandoah Fed. Sav. & Loan Ass'n (In re 

Snowshoe Co.), 789 F.2d 1085, 1088 (4th Cir. 1986). Thus, "[t]he statute imposes no duty to 

seek credit from every possible lender before concluding that such credit is unavailable." Id.; see 

also In re Ames Dep't Stores, 115 B.R. 34, 40 (Bankr. S.D.N.Y. 1990) (holding that debtor made 

a reasonable effort to secure financing where it approached four lending institutions, was rejected 

by two, and selected the least onerous financing option from the remaining two lenders). 

Moreover, where few lenders are likely to be able and willing to extend the necessary credit to 

the debtor, "it would be unrealistic and unnecessary to require [the debtor] to conduct . . . an 

exhaustive search for financing." In re Sky Valley, Inc., 100 B.R. 107, 113 (Bankr. N.D. Ga. 

1988), aff'd sub nom. Anchor Sav. Bank FSB v. Sky Valley, Inc., 99 B.R. 117, 120 n.4 (N.D. Ga. 

1989). 

17. The Debtors have satisfied the conditions under section 364(c) of the Bankruptcy 

Code to obtain financing in exchange for a superpriority administrative claim. The Debtors have 

determined that they are not able to secure sufficient funding on an unsecured or junior lien 

basis. SHL has existing liens on substantially all the Debtor’s assets. Unencumbered assets, if 

any, are insufficient to support the Debtors’ needs. Likewise, the Debtors have determined that 

sufficient capital could not be raised on an unsecured basis or on a junior lien basis, even in 

combination with the Debtors’ unencumbered non-cash assets, if any. 

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18. Section 364(d)(1) authorizes the Debtors to obtain postpetition credit secured by a 

senior lien on assets of the estate, if the Debtors are unable to obtain sufficient credit without 

granting such a lien and the interests of any nonconsenting lien holders are adequately protected. 

11 U.S.C. § 364(d)(1). 

19. Courts have identified a number of factors that support a debtor's determination to 

obtain credit secured by a "priming" lien, including: (a) whether the party subject to a priming 

lien has consented to such treatment; (b) whether alternative financing is available on any other 

basis (i.e., whether any better offers, bids or timely proposals are before the court); (c) whether 

the proposed financing is necessary to preserve estate assets and is necessary, essential, and 

appropriate for continued operation of the debtor's business; (d) whether the terms of the 

proposed financing are reasonable and adequate given the circumstances of both the debtor and 

proposed lender(s); and (e) whether the proposed financing agreement was negotiated in good 

faith and at arm's length and entry therein is an exercise of sound and reasonable business 

judgment and in the best interest of the debtor's estate and its creditors. See, e.g., In re Ames 

Dep't Stores, Inc., 115 B.R. at 37-39; Bland v. Farmworker Creditors, 308 B.R. 109, 113-14 

(S.D. Ga. 2003); In re Barbara K. Enter. Inc., No. 08-11474, 2008 WL 2439649 at *13 (Bankr. 

S.D.N.Y. Jun. 16, 2008); see also 3 COLLIER ON BANKRUPTCY ¶ 364.05 (Alan N. Resnick 

& Henry J. Sommer eds., 16th ed. 2013). 

20. The Debtors respectfully submit that the DIP Financing, including the granting of 

Priming Liens is appropriate under this analysis and the facts of this chapter 11 case. First, the 

priming requested is consensual. The proposed financing in this case provides for a senior lien on 

the assets of the estate, except to the extent of “Permitted Liens.” The Debtors are unaware of 

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any secured claims other than the claims of SHL. Consequently, the Debtors assert that adequate 

protection to existing lien-holders is not an issue in this case. 

21. Second, the Debtors and their advisors have determined that the DIP Financing is 

the only alternative readily available that can satisfy the Debtors’ financing needs in this case 

and permit it to pursue a restructuring within chapter 11. The Debtors are only able to obtain 

these negotiated terms by agreement to provide first priority priming liens. The Debtors do not 

believe that the financing necessary to fund this chapter 11 case and pursue the Debtors’ 

restructuring goals is available from other lenders on comparable terms. 

22. Third, the Debtors require immediate access to the DIP Financing, along with the 

use of Cash Collateral, to provide adequate liquidity for the operation and maintenance of the 

Debtors’ estates and assets. The Debtors’ access to the DIP Financing will benefit all 

stakeholders by facilitating the Debtors’ efforts to preserve and enhance the value of the Debtor’s 

assets. 

23. Fourth, the Debtors’ entry into the DIP Financing is a sound exercise of business 

judgment and is in the best interests of its estate, creditors and other parties in interest.

C. The Debtor’s Proposed Adequate Protection Should be Approved 

24. Parties with an interest in cash collateral or collateral that may be used to secure 

postpetition financing are entitled to adequate protection. 11 U.S.C. § 363(e). Although section 

361 of the Bankruptcy Code provides examples of forms of adequate protection, such as granting 

replacement liens and administrative claims, courts decide what constitutes sufficient adequate 

protection on a case-by-case basis. See, e.g., Martin v. United States (In re Martin), 761 F.2d 

472, 474-76 (8th Cir. 1985); In re Satcon Tech. Corp., No. 12-12869, 2012 WL 6091160, at *6 

(Bankr. D. Del. Dec. 7, 2012). 

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25. At the same time, it is well-recognized that "adequate protection" is not 

equivalent to "absolute protection." In re Beker Indus., Inc., 58 B.R. 725, 741 (Bankr. S.D.N.Y. 

1986) ("Adequate protection, not absolute protection, is the statutory standard."). Further, "[i]n 

order to encourage reorganization, the courts must be flexible in applying the adequate protection 

standard" as long as such flexibility does "not operate to the detriment of the secured creditor's 

interest." In re Martin, 761 F.2d at 476.

26. The Interim Order provides for adequate protection for SHL. As discussed in 

greater detail in the summary chart of the DIP Financing terms above, these adequate protection 

provisions include the reaffirmation and stipulation to the Prepetition Debt and Prepetition Lien, 

the granting of replacement liens, and the payment of amounts allowable under Section 506 of 

the Bankruptcy Code.

D. The Parties have Proceeded in Good Faith 

27. The terms and conditions of the DIP Financing and the use of Cash Collateral are 

fair and reasonable and were negotiated by the parties in good faith and at arms' length. 

Therefore, SHL should be accorded the benefits of section 364(e) of the Bankruptcy Code to the 

extent any or all of the provisions of the DIP Documents, or any Interim Order or Final Order of 

this Court pertaining thereto, are hereafter modified, vacated, stayed or terminated by subsequent 

order of this or any other court.

E. Request for Preliminary Hearing 

28. Pursuant to Bankruptcy Rule 4001(c)(2), a final hearing on a motion to obtain 

post-petition financing may not be commenced earlier than 14 days after service of such motion. 

Upon request, however, the Court is empowered to conduct a preliminary expedited hearing on 

the motion and authorize post-petition financing to the extent “necessary to avoid immediate and 

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irreparable harm to the estate pending a final hearing.” Bankruptcy Rule 4001(c)(2). It is 

essential to the continued operation of the Debtors’ business that it be authorized by this Court to 

obtain post-petition financing and use of Cash Collateral as set forth in the Interim Order 

pending the final hearing on the Motion. Unless this Motion is approved on an interim basis, the 

Debtors will be unable to pay its employees and other immediate obligations as set forth in the 

Budget, which would have a devastating effect on the Debtors’ operations, customer base and 

revenues. Thus, funds are urgently needed to meet all of the Debtors’ immediate working capital 

and other liquidity needs. Absent immediate relief, the Debtors’ ability to operate its business in 

the ordinary course will be immediately and irreparably jeopardized. 

29. The Debtors have been informed that SHL is willing to provide the DIP Loan, 

subject to the conditions set forth in the Interim Order, including, without limitation, the 

provisions of the Interim Order assuring that the security interests and liens pursuant to section 

364(c) of the Bankruptcy Code and the various claims, superpriority claims, and other 

protections granted pursuant to the Interim Order will not be affected by any subsequent reversal 

or modification of the Interim Order, or by any other order that is applicable to the DIP Loan, as 

provided in section 364(e) of the Bankruptcy Code. 

30. The Debtors submit that SHL has acted in good faith in consenting to and in 

agreeing to provide the financing, and the reliance of SHL on the assurances referred to above is 

in good faith. SHL and the Debtors have negotiated at arms’ length and in good faith regarding 

the DIP Financing to fund the continued operations of the Debtors. SHL will not agree to provide 

the DIP Loan, absent the approval of the terms and conditions set forth in the Interim Order. 

31. Given the impact that the Coronavirus pandemic and the restrictions imposed by 

states and municipalities on the Debtors’ business operations, as well as the uncertainty of the 

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Debtors’ future resulting therefrom and the extreme time constraints facing the Debtors, the 

Debtors’ range of realistic financing alternatives is extremely limited if not non-existent. The 

Debtors submit that the terms and conditions of the DIP Loan, taken as a whole, are fair and 

reasonable under the circumstances, reflect the Debtors’ exercise of prudent business judgment 

consistent with its fiduciary duty; and are supported by reasonably equivalent value and fair 

consideration. 

32. Accordingly, the Debtors request entry of an Interim Order in substantially the 

form attached as Exhibit A, together with such amendments and modifications as may be made 

by Debtors and SHL prior to, at or as a result of the Interim Hearing. 

33. Such interim relief is essential to enable the Debtors to fulfill their existing 

obligations, as specifically detailed in the Budget. These sums will be required to pay employees 

and other immediate operating expenses such as rent that are the very minimum necessary for the 

Debtors to continue as a going concern for the benefit of all of their creditors, employees and 

stakeholders. Accordingly, the Debtors respectfully request approval of the Motion, pending a 

final hearing on the Motion, on an emergency interim basis, on the terms and subject to the 

conditions set forth in the Interim Order and Budget, or on such other terms that the Court may 

deem appropriate. 

F. Request for Final Hearing 

34. Pursuant to Bankruptcy Rules 4001(b)(2) and 4001(c)(2), the Debtors request that 

the Court set a date that is no longer than 45 days from the Petition Date as date for the Final 

Hearing. 

35. The Debtors request that they be authorized to serve a copy of the Interim Order, 

which fixes the time and date for filing objections, by first class mail on the notice parties listed 

Case 20-20259-RAM Doc 34 Filed 09/23/20 Page 16 of 51
   

17

below. The Debtors further request that the Court consider such notice of the Final Hearing to be 

sufficient notice under Bankruptcy Rule 4001(c)(2).

G. Request for Immediate Relief and Waiver of Stay 

36. Pursuant to Bankruptcy Rules 6003(b) and 6004(h), the Debtors seek entry of 

orders granting the relief requested by this Motion on an interim and final basis and, to the extent 

it applies, a waiver of any stay of the effectiveness of such orders. 

37. Bankruptcy Rule 6003(b) provides, in relevant part, that "[e]xcept to the extent 

that relief is necessary to avoid immediate and irreparable harm, the court shall not, within 21 

days after the filing of the petition, issue an order granting ... a motion to use, sell, lease or 

otherwise incur an obligation regarding property of the estate including a motion to pay all or 

part of a claim that arose before the filing of the petition." Fed. R. Bankr. P. 6003(b). Therefore, 

where the failure to grant any such requested relief would result in immediate and irreparable 

harm to the Debtors’ estate, the Court may authorize the relief prior to the twenty-second day 

following the Petition Date. Bankruptcy Rule 6004(h) provides that "[a]n order authorizing the 

use, sale, or lease of property other than cash collateral is stayed until the expiration of 14 days 

after entry of the order, unless the court orders otherwise." Fed. R. Bankr. P. 6004(h).

NOTICE 

38. Notice of this Motion has been given to: (a) Counsel for SHL; (b) the Office of 

the United States Trustee for the Southern District of Florida; and (c) the Debtors’ 20 largest 

general unsecured creditors. In light of the nature of the relief requested, the Debtor submits that 

no further notice is necessary. 

Case 20-20259-RAM Doc 34 Filed 09/23/20 Page 17 of 51
   

18

NO PRIOR REQUEST 

39. No prior request for the relief sought in this Motion has been made to this or any 

other Court in connection with this chapter 11 case.

 Dated: September 23, 2020. 

s/ Michael S. Budwick 

Michael S. Budwick, Esquire 

Florida Bar No. 938777 

mbudwick@melandbudwick.com

Joshua W. Dobin, Esquire 

Florida Bar No. 93696 

jdobin@melandbudwick.com 

James C. Moon, Esquire 

Florida Bar No. 938211 

jmoon@melandbudwick.com 

MELAND BUDWICK, P.A. 

3200 Southeast Financial Center 

200 South Biscayne Boulevard 

Miami, Florida 33131 

Telephone: (305) 358-6363 

Telecopy: (305) 358-1221 

Proposed Attorneys for Debtors 

Case 20-20259-RAM Doc 34 Filed 09/23/20 Page 18 of 51
UNITED STATES BANKRUPTCY COURT 

SOUTHERN DISTRICT OF FLORIDA 

MIAMI DIVISION 

www.flsb.uscourts.gov

In re: 

 Chapter 11 

IT’SUGAR FL I LLC, Case No. 20-20259-RAM 

IT’SUGAR LLC, Case No. 20-20261-RAM 

IT’SUGAR ATLANTIC CITY LLC, Case No. 20-20263-RAM 

IT’SUGAR FLGC LLC, Case No. 20-20264-RAM 

 Jointly Administered 

Debtors. 

_______________________________/

INTERIM ORDER (I) AUTHORIZING DEBTORS (A) TO OBTAIN POSTPETITION 

FINANCING FROM SHL HOLDINGS, INC.; AND (B) TO UTILIZE CASH 

COLLATERAL, (II) GRANTING ADEQUATE PROTECTION, (III) MODIFYING 

THE AUTOMATIC STAY, (IV) SCHEDULING FINAL HEARING; AND (V) 

GRANTING RELATED RELIEF NUNC PRO TUNC TO SEPTEMBER 22, 2020 

This matter came before this Court on September 25, 2020 at 1:30 p.m. (“Interim 

Hearing”) upon the motion ("Motion") [ECF No. __] of It’Sugar FL 1, LLC, IT’Sugar, LLC, 

IT’Sugar Atlantic City, LLC and IT’Sugar FLGC, LLC (collectively, “IT’Sugar” or the 

"Debtors") pursuant to sections 105, 361, 362, 363, 364, and 507 of title 11 of the United States 

Code (“Bankruptcy Code”) and Rules 4001(b) and (c) of the Federal Rules of Bankruptcy 

Procedure (“Bankruptcy Rules”), seeking entry of interim and final orders: (a) authorizing Debtors 

EXHIBIT A

Case 20-20259-RAM Doc 34 Filed 09/23/20 Page 19 of 51
to obtain senior secured postpetition financing, (b) authorizing the Debtors to use Cash Collateral, 

(c) granting liens and providing superpriority claims with respect to such postpetition financing, 

(d) approving the form of adequate protection to be provided by the Debtor, (e) modifying the 

automatic stay to the extent necessary to effectuate the terms of the Orders, (f) scheduling a final 

hearing to consider entry of the Final Order, and (g) granting related relief in connection with the 

DIP Financing.1

This Order shall constitute findings of fact and conclusions of law pursuant to Fed. R. 

Bankr. P. 7052 and shall take effect and be fully enforceable as of September 22, 2020 (“Petition 

Date”). 

Upon the record made by the Debtors in the Motion and at the Interim Hearing, and 

objections, if any, having been withdrawn, resolved or overruled by the Court, THE MOTION 

IS GRANTED, ON AN INTERIM BASIS PENDING FINAL HEARING, AND THE 

COURT FINDS THAT:

A. On the Petition Date, each of the Debtors filed voluntary petitions for relief under 

chapter 11 of the Bankruptcy Code. Debtors have retained possession of their property and 

continue to operate their businesses as debtors in possession pursuant to Bankruptcy Code sections 

1107 and 1108. 

B. The Court has jurisdiction over the Cases and this proceeding pursuant to 28 U.S.C. 

§ 1334. Determination of the Motion constitutes a core proceeding as defined in 28 U.S.C. 

§ 157(b)(2). Venue over this Motion is proper under 28 U.S.C. § 1409(a). 

C. No Committee has been appointed in these Cases. 

D. Debtors admit, stipulate and agree that: 

1. the Prepetition Loan Documents evidence and govern the Prepetition Debt, 

the Prepetition Liens and the prepetition financing relationship among IT’Sugar, LLC, 

IT’Sugar Atlantic City, LLC and IT’Sugar FLGC, LLC (“Prepetition Obligors”) and SHL; 

2. the Prepetition Debt constitutes the legal, valid, and binding obligation of 

the Prepetition Obligors, enforceable in accordance with the terms of the Prepetition Loan 

Documents; 

1

 All capitalized terms not defined herein shall have the meanings ascribed to them in the Motion. 

Case 20-20259-RAM Doc 34 Filed 09/23/20 Page 20 of 51
3 

3. as of the Filing Date, the Prepetition Obligors are liable for payment of the 

Prepetition Debt, and the Prepetition Debt shall be an allowed joint and several secured 

claim in their respective estates in an amount not less than $6,216,362.00, exclusive of 

accrued and accruing amounts allowable under section 506(b) of the Bankruptcy Code; 

4. no offsets, defenses or counterclaims to the Prepetition Debt exist, and no 

portion of the Prepetition Debt is subject to contest, objection, recoupment, defense, 

counterclaim, offset, avoidance, recharacterization, subordination, or other claim, cause of 

action, or challenge of any nature under the Bankruptcy Code, under applicable nonbankruptcy law or otherwise; 

5. upon the entry of this Order, SHL’s interests in the Collateral will be 

adequately protected; and 

6. Debtors do not have, and hereby release, and are forever barred from 

bringing any claims, counterclaims, causes of action, defenses, or setoff rights relating to 

the Prepetition Loan Documents, the Prepetition Liens, the Prepetition Debt or otherwise, 

against SHL and its respective affiliates, subsidiaries, agents, officers, directors, 

employees, advisors, consultants, predecessors in interest, successors, and assigns. 

E. Good cause has been shown for the entry of this Interim Order. The Debtors have 

an immediate need to obtain the DIP Financing, and for authorization to continue to use Cash 

Collateral to permit, among other things, the orderly continuation of the operation of its business; 

the maintenance of business relationships with subcontractors, suppliers, vendors, and customers; 

the payment of payroll and related employee related expenses; and the payment of rent, other 

working capital and operational needs. The access of the Debtors to sufficient working capital and 

liquidity made available through the DIP Financing and use of Cash Collateral is vital to the 

preservation and maintenance of the going concern value of the Debtors and to the successful 

reorganization of the Debtors. The proposed DIP Financing is in the best interests of the Debtors, 

their estates and creditors. 

F. The Debtors are unable to obtain financing on equal or more favorable terms from 

sources other than SHL. The terms of the DIP Financing have no material impact on the rights of 

Case 20-20259-RAM Doc 34 Filed 09/23/20 Page 21 of 51
4 

existing lien holders because SHL is the only existing lienholder and consents to the relief granted 

herein. 

G. SHL has acted in good faith regarding the DIP Financing and the Debtor’s 

continued use of the Collateral, including Cash Collateral, in accordance with the terms hereof. 

SHL is entitled to the adequate protection provided in this Interim Order as and to the extent set 

forth herein pursuant to sections 361, 362, 363 and 364 of the Bankruptcy Code. In light of the 

good faith of SHL, in accordance with section 364(e) of the Bankruptcy Code, the rights and 

priorities granted to SHL under this Interim Order and the DIP Documents will not be affected or 

avoided by any subsequent reversal or modification of this Interim Order or the Final Order. The 

terms of this Order have been negotiated at arm's length and in good faith. 

H. Under the circumstances of these Cases, this Interim Order is a fair and reasonable 

response to Debtors' request for SHL’s consent to the use of Cash Collateral, and the entry of this 

Interim Order is in the best interest of Debtors' estates and their creditors. 

I. The notice provided by Debtors of the Motion, the hearing on the Motion, and the 

entry of this Order satisfy the requirements of Bankruptcy Rules 2002, 4001(b),(c) and (d), and 

9014 and Bankruptcy Code sections 102(1) 362, 363, and 364 and were otherwise sufficient and 

appropriate under the circumstances, for purposes of this Interim Order. 

WHEREFORE, IT IS ORDERED THAT THE MOTION IS GRANTED, 

AND THAT: 

1. Authorization for the DIP Financing and DIP Documents. Debtors are authorized 

to enter into and perform all obligations under the DIP Documents. Upon execution and delivery 

of the DIP Documents, the DIP Documents shall constitute valid, binding and unavoidable 

obligations of the Debtors, enforceable against the Debtors in accordance with the terms of the 

DIP Documents and this Interim Order. No obligation, payment, transfer or grant of security under 

the DIP Documents or this Interim Order shall be stayed, restrained, voidable, or recoverable under 

the Bankruptcy Code or under any applicable law (including without limitation, any claims and 

causes of action pursuant to sections 502(d), 544, 545, 547, 548 and 550 of the Bankruptcy Code 

or under any applicable Uniform Fraudulent Transfer Act, Uniform Fraudulent Conveyance Act 

or other similar state statute or common law (each, an “Avoidance Action”)), or subject to any 

defense, reduction, setoff, recoupment, recharacterization, subordination, disallowance, 

impairment, cross-claim or counterclaim. 

Case 20-20259-RAM Doc 34 Filed 09/23/20 Page 22 of 51
5 

2. Authorization to Use Cash Collateral. Debtors are authorized to use Cash Collateral 

through the Termination Date solely (a) in accordance with the terms and provisions of this Interim 

Order; and (b) to the extent required to pay, when due, those expenses enumerated in the Budget, 

subject to permitted variances. Each of the following events shall be deemed a “Cash Collateral 

Termination Event”: 

(a) the Debtors use Cash Collateral in excess of the amounts set forth in the 

Budget; 

(b) confirmation of a plan of reorganization other than a plan of reorganization 

that is reasonably acceptable to SHL (any such plan, an “Acceptable Plan”) or if the 

Debtors file, propose, support, or fail to contest in good faith the filing or confirmation of 

a plan of reorganization that is not an Acceptable Plan; 

(c) a sale of all or substantially all of the assets of the Debtors; 

(d) the Debtors commence any action including the filing of any pleading, 

against SHL with respect to the Prepetition Loan Documents; 

(e) the occurrence of an Event of Default under the DIP Documents; and 

(f) the date of the Final Hearing, if this Order is modified at the Final Hearing 

in a manner unacceptable to SHL. 

Upon the occurrence of a Cash Collateral Termination Event, SHL may upon five 

business days’ written notice to the Debtors, commence a proceeding in the Court to 

determine the Debtors’ right to any further use of the Cash Collateral, and the Debtors’ 

authorization to use the Cash Collateral shall be deemed automatically terminated on the 

fifth business day following commencement of such proceeding unless the Court orders 

otherwise by such time, and no further consent to the use of Cash Collateral shall be implied 

by any other action, inaction, or acquiescence by SHL (“Termination Date”). 

3. DIP Superpriority Claims. Pursuant to section 364(c)(1) of the Bankruptcy Code, 

all of the obligations under the DIP Documents shall constitute allowed claims against the Debtors 

(without the need to file any proof of claim) with priority over any and all administrative expenses, 

Case 20-20259-RAM Doc 34 Filed 09/23/20 Page 23 of 51
6 

diminution in value claims and all other claims against the Debtors now existing or hereafter 

arising, of any kind whatsoever, including, without limitation, all administrative expenses of the 

kind specified in sections 503(b) and 507(b) of the Bankruptcy Code, and over any and all 

administrative expenses or other claims arising under sections 105, 326, 328, 330, 331, 365, 

503(b), 506(c), 507(a), 507(b), 726, 1113 or 1114 of the Bankruptcy Code (collectively the “DIP 

Superpriority Claims”), regardless of whether such expenses or claims may become secured by a 

judgment lien or other non-consensual lien, levy or attachment, which allowed claims shall for 

purposes of section 1129(a)(9)(A) of the Bankruptcy Code be considered administrative expenses 

allowed under section 503(b) of the Bankruptcy Code and shall be payable from and have recourse 

to the Collateral and any proceeds of the Collateral; provided, however, that the DIP Superpriority 

Claims shall be subordinate to Administrative Expense Carveout, including fees payable to the 

U.S. Trustee under Section 1930(a) of title 28 of the United States Code. The DIP Superpriority 

Claims shall be entitled to the full protection of section 364(e) of the Bankruptcy Code in the event 

that this Interim Order or any provision hereof is vacated, reversed or modified, on appeal or 

otherwise. 

4. DIP Liens. As security for the Debtors’ obligations under the DIP Documents, 

effective and perfected upon the date of entry of this Interim Order and without the necessity of 

the execution, recordation of filings by the Debtors of mortgages, security agreements, control 

agreements, pledge agreements, financing statements or other similar documents, or the possession 

or control by SHL of, or over, any collateral, SHL is granted, pursuant to section 364(d)(1) of the 

Bankruptcy Code, a valid, binding, continuing, enforceable, fully-perfected first priority senior 

priming security interest in and lien upon the Collateral (“Priming Liens”), subject to the Permitted 

Liens. The DIP Liens shall not be subject or subordinate to or made pari passu with any lien or 

security interest that is avoided and preserved for the benefit of the Debtors and their estates under 

section 551 of the Bankruptcy Code. The Priming Liens shall not be subject to or subordinate to 

or made pari passu with any liens arising after the Petition Date including, without limitation, any 

liens or security interests granted in favor of any federal, state, municipal or other governmental 

unit (including any regulatory body), commission, board, or court for any liability of the Debtors. 

The liens granted herein are collectively referred to as the “DIP Liens.” Notwithstanding anything 

in this Interim Order, to the contrary, the DIP Liens shall not attach to (a) Avoidance Actions that 

are not prohibited by the DIP Loan Agreement or their proceeds, or (b) subject to the entry of the 

Case 20-20259-RAM Doc 34 Filed 09/23/20 Page 24 of 51
7 

Final Order, any property of the Debtors that is not of the same nature and type as the collateral 

securing the Prepetition Debt. 

5. Adequate Protection of Interests of SHL. SHL is entitled, pursuant to sections 361, 

362, 363(e) and 364(d)(1) and 507 of the Bankruptcy Code, to adequate protection of its interests 

in the Collateral, including the Cash Collateral, for and equal in amount to the aggregate 

diminution in the value of its interests in the Collateral (including Cash Collateral) as provided in 

the Bankruptcy Code. 

(a) Priority of Prepetition Liens/Allowance of SHL’s Claim. Subject to the 

terms of this Interim Order: (1) the Prepetition Liens shall constitute priority liens, 

subordinate only to the Dip Liens; (2) the Prepetition Debt constitutes the legal, valid and 

binding obligation of the Prepetition Obligors, enforceable in accordance with the terms of 

the Prepetition Loan Documents; (3) no offsets, defenses or counterclaims to the 

Prepetition Debt exist, and no portion of the Prepetition Debt is subject to avoidance, 

recharacterization or subordination pursuant to the Bankruptcy Code or applicable 

nonbankruptcy law; (4) the Prepetition Loan Documents are valid and enforceable in all 

respects; and (5) SHL’s claim with respect to the Prepetition Debt shall for all purposes 

constitute an allowed secured claim within the meaning of Bankruptcy Code section 506

in an amount not less than $6,216,362.00. 

(b) Replacement Liens. SHL is granted (subordinate to the DIP Liens) first 

priority, properly perfected, valid and enforceable security interests in postpetition 

collateral, which are not subject to any claims, counterclaims, defenses, setoff, recoupment, 

or deduction, and which are otherwise unavoidable and not subject to recharacterization or 

subordination pursuant to any provision of the Bankruptcy Code, any agreement, or 

applicable nonbankruptcy law, for the benefit of SHL, in the Collateral (“Replacement 

Liens”) as security for payment of the Prepetition Debt. The Replacement Liens: (1) are 

and shall be in addition to the Prepetition Liens, subordinate only to the DIP Liens; (2) are 

and shall be properly perfected, valid and enforceable liens without any further action by 

Debtors or SHL and without the execution, filing or recordation of any financing 

statements, security agreements, mortgages or other documents or instruments; and (3) 

Case 20-20259-RAM Doc 34 Filed 09/23/20 Page 25 of 51
8 

shall remain in full force and effect notwithstanding any subsequent conversion or 

dismissal of the cases. Notwithstanding the foregoing, Debtors are authorized to and shall 

execute and deliver to SHL such financing statements, mortgages, instruments, and other 

documents as SHL may request from time to time in respect of the Replacement Liens of 

SHL. 

(c) Reaffirmation of Guaranty. The guaranty set forth in the Prepetition 

Guaranty and all other Prepetition Loan Documents shall remain in full force and effect 

notwithstanding the entry of this Order and any subsequent orders amending this Order or 

otherwise providing for the use of Cash Collateral consented to by SHL pursuant to 

Bankruptcy Code section 363. Guarantors are and shall remain liable for the guaranteed 

obligations under the Prepetition Security Agreement. 

(d) Payment of Fees and Expenses. As additional adequate protection of the 

interests of SHL in the Collateral, Debtors will timely pay in cash all accrued and unpaid 

fees and expenses of SHL, within ten (10) days, after receipt by the Debtors of an invoice 

(which invoices may be redacted to protect privileged, confidential or proprietary 

information) without the necessity of any formal fee application. To the extent such fees 

and expenses are otherwise not allowable under 506(b), such payments will be deemed to 

reduce the Prepetition Debt on a dollar-for-dollar basis. Upon receipt of such invoices, the 

U.S. Trustee and any committee of unsecured creditors that may be appointed in these 

Cases shall have ten (10) days to notify the party submitting an invoice for payment of any 

objection to the reasonableness of such fees and costs. In the absence of such a timely 

objection, such parties shall be deemed to have irrevocably waived their right to object to 

such fees and costs. 

6. Perfection of DIP Liens. SHL is authorized, but not required, to file or record (and 

to execute in the name of the Debtors, as their true and lawful attorneys, with full power of 

substitution, to the maximum extent permitted by law) financing statements, trademark filings, 

copyright filings, mortgages, notices of lien or similar instruments in any jurisdiction, or take 

possession of or control over assets, or take any other action, in each case, in order to validate and 

perfect the liens and security interests granted to them hereunder. Without any further consent of 

Case 20-20259-RAM Doc 34 Filed 09/23/20 Page 26 of 51
9 

any party, SHL is authorized and directed to take, execute, deliver and file such instruments (in 

each case, without representation or warranty of any kind) to enable SHL to further validate, 

perfect, preserve and enforce the DIP Liens. All such documents will be deemed to have been 

recorded and filed, as applicable, as of the Petition Date. A certified copy of this Interim Order 

may, in the discretion of SHL, be filed with or recorded in filing or recording offices in addition 

to or in lieu of such financing statements, mortgages, notices of lien or similar instruments, and all 

filing offices are authorized and directed to accept such certified copy of this Interim Order for 

filing and recording, as applicable. For the avoidance of doubt, the automatic stay of section 362(a) 

of the Bankruptcy Code shall be modified to the extent necessary to permit SHL to take all actions, 

as applicable, referenced in this Interim Order. 

7. Survival of DIP Liens and Priorities. In the event that any order is entered 

dismissing the Case under section 1112 of the Bankruptcy Code or otherwise, such order shall 

provide (in accordance with sections 105 and 349 of the Bankruptcy Code) that (i) the DIP 

Superpriority Claims and DIP Liens, security interests, replacement security interests and 

administrative claims granted to SHL pursuant to this Interim Order shall continue in full force 

and effect and shall maintain their priorities as provided in this Interim Order until all obligations 

of the Debtors shall have been paid and satisfied in full (and that such DIP Superpriority Claims, 

DIP Liens, security interests, replacement security interests and administrative claims, shall, 

notwithstanding such dismissal, remain binding on all parties in interest) and (ii) this Court shall 

retain jurisdiction, notwithstanding such dismissal, for the purposes of enforcing the claims, liens 

and security interests referred to in clause (i) above. Except as expressly provided in this Interim 

Order, the DIP Liens, the DIP Superpriority Claims and all other rights and remedies of the DIP 

Lender granted by the provisions of this Interim Order shall survive, and shall not be modified, 

impaired or discharged by (i) the entry of an order converting the Cases to a case under chapter 7, 

dismissing the Cases, or by any other act or omission, (ii) the entry of an order approving the sale 

of any Collateral pursuant to section 363(b) of the Bankruptcy Code or (iii) the entry of an order 

confirming a chapter 11 plan in these Cases and, pursuant to section 1141(d)(4) of the Bankruptcy 

Code, the Debtors have waived any discharge as to any remaining DIP Obligations. The terms and 

provisions of this Interim Order and the DIP Documents shall continue in these Cases, or in any 

superseding chapter 7 cases under the Bankruptcy Code, and the DIP Liens, the DIP Superpriority 

Claims and all other rights and remedies of SHL granted by the provisions of this Interim Order 

Case 20-20259-RAM Doc 34 Filed 09/23/20 Page 27 of 51
10 

shall continue in full force and effect until the obligations of the Debtors to SHL are indefeasibly 

paid in full in cash. 

8. No Surcharge. In the exercise of their business judgment, subject to entry of the 

Final Order, Debtors (or any Trustee) agree that there shall be no surcharge of the Collateral for 

any purpose, unless agreed to by SHL. Further, Debtors represent that the Budget contains all 

expenses that are reasonable and necessary for the operation of their businesses and the 

preservation of the Collateral through the period for which the Budget runs, and therefore includes 

all items potentially chargeable to SHL under Bankruptcy Code section 506(c). Therefore, 

effective upon entry of the Final Order, the Debtors (or any Trustee) shall be deemed to have 

waived any rights, benefits, or causes of action under Bankruptcy Code section 506(c), or any 

other legal or equitable doctrine (including, without limitation, unjust enrichment) as they may 

relate to or be asserted against SHL or the Collateral. 

9. Stipulations Binding on Successors of Debtors and Third Parties; Challenge Period. 

Subject to the entry of the Final Order, the Debtors’ stipulations, admissions, agreements, and 

releases contained in this Interim Order shall be binding upon the Debtors and any successors 

thereto (including, without limitation, any chapter 7 or chapter 11 trustee or examiner appointed 

or elected for the Debtors) in all circumstances and for all purposes. The Debtors’ stipulations, 

admissions, agreements and releases contained in this Interim Order shall be binding upon all other 

parties in interest, including, without limitation, any committee appointed in this Case and any 

other person or entity acting on behalf of the Debtors’ estates in all circumstances for all purposes; 

provided, however, that the United States Trustee and any committee appointed in this case shall 

have sixty (60) days after the entry of this Interim Order (“Challenge Period”) to file an adversary 

proceeding or contested matter challenging the amount, validity, perfection, enforceability, 

priority or extent of SHL’s interest in the Collateral or otherwise asserting or prosecuting any 

action for preferences, fraudulent transfers or conveyances, other avoidance power claims or any 

other claims, counterclaims or causes of action, objections, contests or defenses (collectively, 

“Challenge Proceedings”) against SHL, its respective predecessors, successors and assigns, 

affiliates, subsidiaries, funds, portfolio companies, management companies, and, with respect to 

each of the foregoing entities, each of their respective current and former directors, officers, 

members, employees, partners, managers, independent contractors, agents, representatives, 

Case 20-20259-RAM Doc 34 Filed 09/23/20 Page 28 of 51
11 

principals, Professionals, consultants, financial advisors, attorneys, accountants, investment 

bankers, and other professional advisors (each of the foregoing entities a “Representative” and, 

collectively, the “Representatives”) in connection with matters related to the Prepetition Loan 

Documents and the Collateral; provided that any pleadings filed in any Challenge Proceedings 

shall set forth with specificity the basis for such challenge or claim and any challenges or claims 

not so specified prior to the expiration of the Challenge Period shall be deemed forever waived, 

released and barred. 

10. Challenge Proceeding. If no such Challenge Proceeding matter is timely and 

properly filed during the Challenge Period or the Court does not rule in favor of the plaintiff in 

any such proceeding then: (a) the Debtors’ stipulations, admissions, agreements and releases 

contained in this Interim Order shall be binding on all parties in interest, including, without 

limitation, any committee of unsecured creditors appointed in these Cases; (b) notwithstanding 

any reservations of rights contained in this Interim Order, the obligations of the Prepetition 

Obligors under the Prepetition Loan Documents shall constitute allowed claims not subject to 

defense, claim, counterclaim, recharacterization, subordination, offset or avoidance, for all 

purposes in this Case, and any subsequent chapter 7 case; (c) the Prepetition Liens shall be deemed 

to have been, as of the Petition Date, legal, valid, binding, perfected, security interests and liens, 

not subject to recharacterization, subordination, avoidance or other defense; and (d) the Debtors’ 

obligations to SHL shall not be subject to any other or further claim or challenge by the Creditors’ 

Committee, any non-statutory committees appointed or formed in this Case or any other party in 

interest acting or seeking to act on behalf of the Debtors’ estates and any defenses, claims, causes 

of action, counterclaims and offsets by the Creditors’ Committee, any non-statutory committees 

appointed or formed in this Case, or any other party acting or seeking to act on behalf of the 

Debtors’ estate, whether arising under the Bankruptcy Code or otherwise, against SHL or its 

Representatives arising out of or relating to the Prepetition Loan Documents shall be deemed 

forever waived, released and barred. If any such Challenge Proceeding is timely filed during the 

Challenge Period, the stipulations, admissions, agreements and releases contained in this Interim 

Order shall nonetheless remain binding and preclusive (as provided in the second sentence of this 

paragraph) on all other persons and entities, except to the extent that such stipulations, admissions, 

agreements and releases were expressly and successfully challenged in such Challenge Proceeding 

as set forth in a final, non-appealable order of a court of competent jurisdiction. 

Case 20-20259-RAM Doc 34 Filed 09/23/20 Page 29 of 51
12 

11. No Challenge. Subject to the entry of the Final Order, no borrowings under the DIP 

Financing may be used, in the Case or any other proceeding of any kind, or in any jurisdiction, to 

(a) object and/or challenge the amount, validity, perfection, priority or enforceability of or 

asserting any defense, counterclaim or offset to, any amount due under the DIP Documents or the 

Prepetition Loan Documents, the validity, perfection, priority, extent or enforceability of any 

amount due under the DIP Documents or the Prepetition Liens or the liens or claims granted under 

this Interim Order, the DIP Documents or the Prepetition Loan Documents, including, in each case, 

without limitation, for lender liability or pursuant to section 105, 502(d), 510, 544, 547, 548, 549, 

550, or 552 of the Bankruptcy Code, applicable non-bankruptcy law or otherwise, (b) investigate, 

assert or prosecute any claims and defenses or causes of action against the SHL or its respective 

representatives, (c) prevent, hinder or otherwise delay the SHL’s assertion, enforcement or 

realization against or upon the Cash Collateral or the Collateral in accordance with the DIP 

Documents, the Prepetition Loan Documents, or this Interim Order, (d) seek to modify any of the 

rights granted to the SHL, hereunder or under the DIP Documents or the Prepetition Loan 

Documents without the SHL’s prior written consent, (e) attempt to directly or indirectly modify 

any of the rights granted to SHL, (f) pay any amount on account of any claims arising prior to the 

Petition Date unless such payments are (i) approved by an order of this Court and (ii) in accordance 

with the DIP Documents. 

12. No Marshaling. Neither SHL nor any of the Collateral shall be subject to the 

doctrine of marshaling. Without limiting the generality of the foregoing, subject to the entry of the 

Final Order, no party other than SHL shall be entitled, directly or indirectly, to direct the exercise 

of rights or remedies or to seek (whether by order of this Court or otherwise) to marshal or 

otherwise control the enforcement of the DIP Liens, Prepetition Liens or Replacement Liens. 

13. Equities-of-the-Case Waiver. SHL shall be entitled to all of the rights and benefits 

of section 552(b) of the Bankruptcy Code, and no person may assert an "equities of the case" claim 

under section 552(b) of the Bankruptcy Code against SHL with respect to any proceeds, product, 

offspring, or profits of any of the Collateral, or otherwise. 

14. No Waiver. SHL shall not be deemed to have suspended or waived any of their 

rights or remedies under this Order, the DIP Documents, the Prepetition Loan Documents, or 

Case 20-20259-RAM Doc 34 Filed 09/23/20 Page 30 of 51
13 

applicable nonbankruptcy law unless such suspension or waiver is in writing, signed by a duly 

authorized officer of SHL, as applicable, and directed to Debtors. No failure of SHL to require 

strict performance by Debtors (or by any Trustee) of any provision of this Order shall waive, affect 

or diminish any right of SHL thereafter to demand strict compliance and performance therewith, 

and no delay on the part of SHL in the exercise of any right or remedy under this Order, the DIP 

Documents, the Prepetition Loan Documents or applicable nonbankruptcy law shall preclude the 

exercise of any right or remedy. Further, this Order shall not constitute a waiver by SHL of any of 

their rights under the DIP Documents, the Prepetition Loan Documents, the Bankruptcy Code or 

applicable nonbankruptcy law, including, without limitation their right to later assert: (1) that, any 

of their interests in the Collateral lack adequate protection within the meaning of Bankruptcy Code 

sections 362(d) or 363(e) or any other provision thereof; or (2) a claim under Bankruptcy Code 

section 507(b). 

15. "Responsible Person." By taking any actions pursuant to this Order, SHL shall not: 

(a) be deemed to be in control of the operations or liquidation of Debtors; or (b) be deemed to be 

acting as a "responsible person" with respect to the operation, management or reorganization of 

Debtors. 

16. Release. Upon the earlier of the Termination Date and any release of the DIP Liens 

and Prepetition Liens, Debtors shall execute and deliver to SHL a general release of any and all 

claims and causes of action that could have been asserted or raised under or in connection with the 

DIP Documents and Prepetition Loan Documents or any acts or omissions after the Filing Date. 

17. Amendments. Debtors and SHL may enter into amendments or modifications of 

the DIP Documents and Prepetition Loan Documents or the Budget without further notice and 

hearing or order of this Court; provided, that (a) such modifications or amendments do not 

materially and adversely affect the rights of any creditor or other party-in-interest and (b) notice 

of any such amendment or modification is filed with this Court.

18. Proof of Claim. SHL shall not be required to file a proof of claim with respect to 

any of the Prepetition Debt and the stipulations and findings set forth in this Order shall constitute 

an informal proof of claim in respect thereof. 

Case 20-20259-RAM Doc 34 Filed 09/23/20 Page 31 of 51
14 

19. Binding Effect. Except as provided herein, this Order shall be binding on all parties 

in interest in the Cases and their respective successors and assigns, including any trustee, except 

that any trustee shall have the right to terminate this Order after notice and a hearing. If this Order 

does not become a final nonappealable order, if the Debtors or a trustee terminates this Order, or 

if any of the provisions of the Order are hereafter modified, amended, vacated or stayed by 

subsequent order of this Court or any other court, such termination or subsequent order shall not 

affect: (a) subject to of the other provisions of this Order, the stipulations, representations, and 

findings contained in this Order and the relief granted by and the releases contained in this Order; 

and (b) the priority, validity, enforceability or effectiveness of any lien, security interest or other 

benefit or claim authorized hereby with respect to Cash Collateral used prior to the effective date 

of such termination or subsequent order. All such liens, security interests, claims, and other 

benefits shall be governed in all respects by the original provisions of this Order, and SHL shall 

be entitled to all the rights, remedies, privileges, and benefits granted hereto, including the liens 

and priorities granted herein. Except as otherwise explicitly set forth in this Order, no third party 

is intended to be, or shall be deemed to be, a third party beneficiary of this Order. 

20. Notice of Final Hearing. The Final Hearing is scheduled for [______________], 

2020, and may be continued from time to time without further notice other than that given in open 

court. Debtors are directed to immediately serve a copy of this Order and the proposed Final Order 

by first class mail, postage prepaid, on counsel for SHL, Debtors' twenty (20) largest unsecured 

creditors, and the United States Trustee, which service shall constitute adequate and proper notice 

of the Final Hearing. Any objection to the Order must be filed with the Court and received by 

counsel for the Debtors, SHL, and the United States Trustee no later than seventy-two (72) hours 

prior to the commencement of the Final Hearing. Any timely and properly filed and served 

objection will be heard at the Final Hearing. To participate through CourtSolutions, you must make 

a reservation in advance no later than 3:00 p.m., one business day before the date of the hearing. 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 

 

Case 20-20259-RAM Doc 34 Filed 09/23/20 Page 32 of 51
15 

Reservations should be arranged online at https://www.court-solutions.com/. If a party is unable 

to register online, a reservation may also be made by telephone at (917) 746−7476. 

### 

Submitted By: 

Joshua W. Dobin, Esquire 

Florida Bar No. 93696 

jdobin@melandbudwick.com

MELAND BUDWICK, P.A. 

Counsel for Debtors 

3200 Southeast Financial Center 

200 South Biscayne Boulevard 

Miami, Florida 33131 

Telephone: (305) 358-6363 

Telefax: (305) 358-1221 

Copies Furnished To: 

Joshua W. Dobin, Esquire, is directed to serve copies of this Order on all parties in interest and 

to file a Certificate of Service. 

Case 20-20259-RAM Doc 34 Filed 09/23/20 Page 33 of 51
EXHIBIT 1 

BUDGET 

[attached] 

 

Case 20-20259-RAM Doc 34 Filed 09/23/20 Page 34 of 51
IT'SUGAR, LLC 

13 Week Cash Budget

Week # 1 2 3 4 5 6 7 

Sep Oct Oct Oct Oct Nov Nov 

Week 5 Week 1 Week 2 Week 3 Week 4 Week 1 Week 2 

Week ended 9/26/20 10/3/20 10/10/20 10/17/20 10/24/20 10/31/20 11/7/20 

Projected Store Sales

Receipts:

377,457 $ 870,741 $ 870,741 $ 870,741 $ 870,741 $ 810,667 $ 810,667 $ 

Projected Wholesale Sales 19,000 17,936 17,936 17,936 17,936 27,363 27,363 

Projected e-commerce & Partnering 17,120 74,575 74,575 74,575 74,575 125,949 125,949 

Projected New Temp Store Sales - - - - - 66,832 66,832 

Sales Tax Collected 18,873 43,537 43,537 43,537 43,537 40,533 40,533 

DIP Financing 2,000,000 2,000,000 

 Total Receipts 432,450 $ 3,006,789 $ 1,006,789 $ 1,006,789 $ 1,006,789 $ 3,071,344 $ 1,071,344 $ 

Sales Taxes Paid

Disbursements:

(188,728) $ 

Inventory Purchases (342,529) $ (342,529) $ (342,529) $ (342,529) $ (393,618) $ (393,618) $ 

Store Payroll (476,391) $ (476,391) $ (495,656) $ 

Corporate Payroll (210,623) $ (210,623) $ (210,623) $ 

Severances (12,981) $ (12,981) $ (15,331) $ 

Shared Services Allocation (35,000) $ (35,000) $ 

Store Controllables (40,755) (40,755) (40,755) (40,755) (41,354) (41,354) 

Corporate Controllables (33,874) (33,874) (33,874) (33,874) (37,789) (37,789) 

Capex Funding - Temp Stores (95,000) (95,000) (95,000) (95,000) (158,525) (158,525) 

Occupancy

 (1)

(1,567,727) (1,626,058) 

 Subtotal Operating Costs - $ (1,212,154) $ (547,158) $ (2,779,881) $ (700,887) $ (2,978,954) $ (666,286) $ 

Legal - M&B 

Filing Fees & Expenses:

(80,000) 

US Trustee (4,750) 

Financial Advisor - Algon (120,000) 

Creditor's Committee Counsel 

(2)

 Subtotal Filing Fees - $ - $ - $ (4,750) $ - $ (200,000) $ - $ 

 Total Disbursements - $ (1,212,154) $ (547,158) $ (2,784,630) $ (700,887) $ (3,178,954) $ (666,286) $ 

Operating Cash Recap 9/26/20 10/3/20 10/10/20 10/17/20 10/24/20 10/31/20 11/7/20 

Beginning Cash Balance 500,000 $ 932,450 $ 2,727,085 $ 3,186,716 $ 1,408,874 $ 1,714,776 $ 1,607,166 $ 

Change in Cash 432,450 $ 1,794,635 $ 459,631 $ (1,777,842) $ 305,902 $ (107,611) $ 405,058 $ 

Cash Balance - End of Week 932,450 $ 2,727,085 $ 3,186,716 $ 1,408,874 $ 1,714,776 $ 1,607,166 $ 2,012,224 $ 

 (2) To be determined, if applicable.

 (1) Occupancy payments are subject to rejections and modifications of leases. 

Case 20-20259-RAM Doc 34 Filed 09/23/20 Page 35 of 51
Page 1 of 15

LOAN AND SECURITY AGREEMENT 

 LOAN AND SECURITY AGREEMENT (this “Amendment”), dated as of September 

__, 2020, by and among IT’SUGAR LLC, a Delaware limited liability company (“IT’Sugar”), 

IT’SUGAR ATLANTIC CITY LLC, a Delaware limited liability company (“Atlantic City”), 

IT’SUGAR FLGC LLC, a Florida limited liability company (“FLGC,” and collectively with 

IT’Sugar and Atlantic City, the “Prepetition Obligors”), IT’SUGAR FL I, LLC, a Delaware 

limited liability company (“FLI” and collectively with the Prepetition Obligors, the “Debtors”) 

and SHL HOLDINGS, INC., a Florida corporation (“SHL”). 

R E C I T A L S: 

A. It’Sugar was indebted to Bank of America N.A. (“Bank”) as evidenced by that 

certain Credit Agreement dated August 24, 2018, and First Amendment thereto dated February 

28, 2020, by and between It’Sugar and Bank (as so amended, the “Prepetition Credit 

Agreement”), evidencing a revolving line of credit in the principal amount of $4,000,000.00 (the 

“Prepetition Line of Credit”), which could be increased to $6,000,000.00 upon the request of 

It’Sugar. 

B. It’Sugar’s obligations under the Prepetition Line of Credit were guaranteed by 

Atlantic City and FLGC pursuant to the terms of that certain Continuing and Unconditional 

Guaranty dated August 24, 2018, made by Atlantic City and FLGC in favor of the Bank (the 

“Guaranty”). 

C. The Prepetition Obligors’ respective obligations under the Credit Agreement and 

Guaranty are secured by, among other things, that certain Security Agreement dated August 24, 

2018, by and among the Prepetition Obligors and the Bank (the “Prepetition Security 

Agreement”), granting the Bank a security interest in the personal property assets of the 

Prepetition Obligors described therein. The Bank’s security interest was perfected pursuant to 

UCC-1 Financing Statements filed (i) with respect to It’Sugar and Atlantic City, with the 

Delaware Department of State on August 24, 2018 under filing #20185865726, and (ii) with 

respect to FLGC, with the Florida Secured Transactions Registry on August 24, 2018 under 

filing #201806304765 (the “UCC-1s”). 

D. The Prepetition Credit Agreement, the Guaranty, the Prepetition Security 

Agreement, the UCC-1s and all other written documents executed in connection with the 

Prepetition Line of Credit, together with any and all written renewals, modifications and/or 

extensions thereof are collectively referred to as the “Prepetition Loan Documents”. 

E. The Bank’s rights under the Prepetition Loan Documents were assigned without 

recourse to the SHL pursuant to a Loan Sale and Assignment Agreement, dated April 7, 2020, 

and the other assignment documents and instruments executed in connection with the 

Assignment, and by reason thereof SHL is now the holder of such Prepetition Loan Documents 

and has all the rights and obligations of the Bank thereunder. 

F. The Prepetition Credit Agreement has been amended from time to time, including 

an increase of the principal balance advanced on the Prepetition Line of Credit to $6,000,000.00. 

EXHIBIT B

Case 20-20259-RAM Doc 34 Filed 09/23/20 Page 36 of 51
Page 2 of 15

G. As of the Petition Date, the Prepetition Obligors are liable for payment of the 

Prepetition Debt (defined below) in an amount not less than $6,216,362.00. 

H. On September 22, 2020, each of the Prepetition Obligors, along with the their 

affiliate IT’Sugar FL I, LLC (“FL I,” collectively with the Prepetition Obligors, the “Debtors”) 

filed petitions for relief under Chapter 11of the Bankruptcy Code in the United States 

Bankruptcy Court, Southern District of Florida (the “Bankruptcy Court”) styled as follows: (1) In 

re IT’Sugar FI I, LLC, Case No. 20-20259-RAM (2) IT’Sugar, LLC, Case No. 20-20261-RAM, 

(3) IT’Sugar Atlantic City, LLC, Case No. 20-20263-RAM and (4) IT’Sugar FLGC, LLC, Case 

No. 20-20264-RAM (collectively, the “Bankruptcy Cases”). 

I. The Debtors have requested that SHL extend financing to the Debtors in 

connection with the Bankruptcy Cases to facilitate its reorganization. 

J. SHL is willing to make loans and extend credit to the Debtors, subject to the 

terms and conditions set out herein and subject to the terms and conditions set forth in the 

Financing Order and any other orders of the Bankruptcy Court approving the proposed financing 

by SHL. 

K. The parties desire to enter into this Agreement and to memorialize their 

agreements with respect to the matters set forth. 

A G R E E M E N T: 

 FOR AND IN CONSIDERATION of the mutual covenants herein and good and valuable 

consideration, the receipt and sufficiency of which are hereby acknowledged, the Debtors and 

SHL agree as follows: 

1. Recitals. The foregoing recitals are confirmed by the parties as true and correct 

and are incorporated herein by reference. The recitals are a substantive part of this Agreement. 

Specifically, the Debtors acknowledge the Prepetition Debt. 

2. Definitions. Unless the context otherwise requires, the following terms when used 

in this Agreement will have the meanings set forth below: 

“Administrative Expense Advance” means the portion of the DIP Facility advance for the 

payment of (i) fees and expenses incurred by professionals retained by Debtors and the 

Committee (if any), all up to the amount set forth in the Budget; (ii) fees due to the United States 

Trustee pursuant to 28 U.S.C. Section 1930(a)(6); and (iii) fees due the Clerk of the Court. 

"Administrative Expense Carve Out" means the carve out from SHL’s super-priority 

administrative expense claim in order to allow the Administrative Expense Advance to be used 

as set forth in the Budget. 

"Bankruptcy Code" means Title 11 of the United States Code entitled "Bankruptcy," as now and 

hereafter in effect, or any successor statute. 

"Budget" means Debtors’ budget attached as “Exhibit A”. 

Case 20-20259-RAM Doc 34 Filed 09/23/20 Page 37 of 51
Page 3 of 15

"Business Day" means any day excluding Saturday, Sunday, and any day which is a legal 

holiday under the laws of the State of Florida or is a day on which banking institutions located in 

such state are authorized or required by law or other governmental action to close. 

“Collateral” means the following property now owned or hereafter acquired by the Debtors: 

(a) All accounts, and all chattel paper, instruments, deposit accounts, letter of 

credit rights, and general intangibles related thereto; and all returned or 

repossessed goods which, on sale or lease, resulted in an account. 

(b) All inventory. 

(c) All equipment and fixtures now owned or hereafter acquired by the Debtors. 

(d) All of the Debtors’ deposit accounts wherever located. The Collateral shall 

include any renewals or rollovers of the deposit accounts, any successor 

accounts, and any general intangibles and choses in action arising therefrom 

or related thereto. 

(e) All instruments, chattel paper, documents, certificates of deposit, securities 

and investment property of every type. 

(f) All general intangibles. The Collateral shall include all good will connected 

with or symbolized by any of such general intangibles. 

(g) All negotiable and nonnegotiable documents of title covering any Collateral. 

(h) All accessions, attachments and other additions to the Collateral, and all tools, 

parts and equipment used in connection with the Collateral. 

(i) All substitutes or replacements for any Collateral, all cash or non-cash 

proceeds (including insurance proceeds), products, rents and profits of the 

Collateral, and all income, benefits and property receivable on account of the 

Collateral, and all supporting obligations covering any Collateral. 

(j) All books, data and records pertaining to any Collateral, whether in the form 

of a writing, photograph, microfilm or electronic media, including but not 

limited to any computer readable memory and any computer software 

necessary to process such memory. 

"Committee" means any creditors or equity security holders committee appointed in any Chapter 

11 case by the U.S. Trustee. 

“Debt" means, as of any applicable date of determination and as to any Person, all items of 

indebtedness, obligation, or liability of such Person, whether matured or unmatured, liquidated or 

unliquidated, direct or indirect, absolute or contingent, joint or several, that should be classified 

and presented as a liability on a balance sheet prepared in accordance with GAAP, including 

Case 20-20259-RAM Doc 34 Filed 09/23/20 Page 38 of 51
Page 4 of 15

without limitation any billings in excess of costs and estimated earnings on Work that has not 

been completed. 

"Event of Default" means any one or more of the following occurring after the date of this 

Agreement that is determined by SHL to constitute an Event of Default on or after its 

occurrence: 

(a) Debtors have failed or refused to comply with any provisions of the Financing 

Order or have failed or refused to perform any obligation under this 

Agreement; or 

(b) the occurrence of a default under any document relating to any Debt of 

Debtors; or the foreclosure or notice of foreclosure by any lender or holder of 

any Debt of Debtors on any collateral that secures any Debt of Debtors; or 

(c) Debtors allow a judgment creditor to obtain possession of any of the 

Collateral by any means, including, but without limitation, levy, distraint, 

replevin, or self-help; or 

(d) if Debtors violate, breach, or fail to adhere to any of the terms, conditions, or 

covenants of any of the Loan Documents or the Prepetition Loan Documents; 

or 

(e) if the Bankruptcy Cases are dismissed, suspended, or converted to cases under 

Chapter 7 of the Bankruptcy Code or a trustee will be appointed in the 

Bankruptcy Cases; or an application will be filed by Debtors for the approval 

of, or there will arise, any other claim not contemplated by this Agreement 

having priority senior to or pari passu with the claims of SHL under this 

Agreement or any other claim having priority over any or all administrative 

expenses of the kind specified in Section 503(b) or 507(b) of the Bankruptcy 

Code; or 

(f) if the Bankruptcy Court enters an order (granting relief from the automatic 

stay applicable under Section 362 of the Bankruptcy Code to any holder (other 

than SHL) of any security interest in the Collateral; or 

(g) any Person (including any Committee) will successfully prosecute any action, 

suit, or other proceeding or contested matter challenging the validity, 

perfection, or priority of any Liens of SHL, or the validity or enforceable of 

any of the Loan Documents or the Prepetition Loan Documents, or asserting 

any avoidance claims against SHL or seeking to recover any monetary 

damages from SHL; or 

(h) the determination of Debtors, whether by vote of its managers, members, or 

otherwise, to suspend the operation of Debtors' business in the ordinary 

course, liquidate all or substantially all of Debtors' assets, or the filing of a 

motion or other application in the Bankruptcy Cases, seeking authority to do 

any of the foregoing; and 

Case 20-20259-RAM Doc 34 Filed 09/23/20 Page 39 of 51
Page 5 of 15

(i) this Agreement or any related document will be terminated, revoked, or 

declared void or unenforceable or challenged by Debtors. 

Notwithstanding anything in the Prepetition Loan Documents to the contrary, no 

Event of Default will be deemed to have occurred as a result of the filing of the 

Bankruptcy Cases. 

"Financing Order" means an interim order and/or a financing order that is entered by the 

Bankruptcy Court, following proper notice and a hearing thereon, which is in all respects 

satisfactory to SHL and which, among other things, authorizes the incurrence by Debtors of postpetition secured and super administrative priority Debt as contemplated by this Agreement and 

affords adequate protection of Liens in favor of SHL. 

"GAAP" means generally accepted accounting principles set forth in the opinions and 

pronouncements of the Accounting Principles Board and the American Institute of Certified 

Public Accountants and statements and pronouncements of the Financial Accounting Standards 

Board. 

"Laws" means all ordinances, statutes, rules, regulations, orders, injunctions, writs, or decrees of 

any government or political subdivision or agency thereof, or any court or similar entity 

established by any thereof. 

“LIBOR Daily Floating Rate” is a fluctuating rate of interest which can change on each Banking 

Day. The rate will be adjusted on each Banking Day to equal the London Interbank Offered Rate 

(or a comparable or successor rate which is approved by SHL) for U.S. Dollar deposits for 

delivery on the date in question for a one month term beginning on that date. SHL will use the 

London Interbank Offered Rate as published by Bloomberg (or other commercially available 

source providing quotations of such rate as selected by the SHL from time to time) as determined 

at approximately 11:00 a.m. London time two (2) London Banking Days prior to the date in 

question, as adjusted from time to time in the SHL’s sole discretion for reserve requirements, 

deposit insurance assessment rates and other regulatory costs. If such rate is not available at such 

time for any reason, then the rate will be determined by such alternate method as reasonably 

selected by SHL. A “Banking Day” is a day on which banks in London are open for business and 

dealing in offshore dollars. If at any time the LIBOR Daily Floating Rate is less than zero, such 

rate shall be deemed to be zero for the purposes of this Agreement. 

"Lien" means any mortgage, security interest, lien, pledge, charge, proxy, voting trust or 

arrangement, encumbrance, lease, sublease, license, or other rights of use by another or other 

interest of any character whatsoever. 

"Loan Documents" means this Agreement, the promissory note, and any other instruments, 

agreements or other documents entered into in connection herewith 

"Material Adverse Effect" means, relative to any occurrence of whatever nature (including the 

adverse determination in any litigation, arbitration, or governmental investigation or proceeding), 

(i) a material adverse effect on the financial condition, business, or business operations of 

Debtors taken as a whole, or (ii) a material impairment of the ability of Debtors to satisfy its 

Case 20-20259-RAM Doc 34 Filed 09/23/20 Page 40 of 51
Page 6 of 15

obligations to SHL under the Loan Documents or the Prepetition Loan Documents, or (iii) a 

material adverse impact on SHL’s security interest in the Collateral. 

"Obligations" means and includes the punctual payment and performance of parties’ obligations 

under this Agreement and the other Loan Documents, and all loans, advances (including, without 

limitation, interest payments to prior secured parties, mortgagees, or lienors, or for Taxes, levies, 

insurance, rent, repairs to, or maintenance or storage of any of the Collateral (provided, however, 

nothing herein will be construed as a requirement or commitment that SHL will make any 

advances). 

"Permitted Liens" means: (a) Liens of governmental agencies for taxes, assessments, or 

governmental charges not yet past due or that are being contested in good faith by appropriate 

proceedings and for which adequate reserves have been established in accordance with GAAP; 

(b) inchoate non perfected mechanics', workmen's, and repairmen's Liens or other like Liens 

arising by operation of law in the ordinary course of business of Debtor and not past due unless 

contested in good faith by appropriate proceedings; and (c) Liens on individual specific pieces of 

equipment that are evidenced by UCC financing statements validly perfected prior to the Petition 

Date. 

"Person" means any entity, whether an individual, trustee, corporation, partner, joint stock 

company, unincorporated organization, business association or firm, joint venture, a government 

or any agent or instrumentality or political subdivision thereof. 

"Petition Date" means September 22, 2020 (the date on which Debtors filed for bankruptcy 

pursuant to the Bankruptcy Code). 

“Prepetition Debt” means (a) All indebtedness or obligations under the Prepetition Loan 

Documents as of the Petition Date, including all "Indebtedness" (as defined in the Prepetition 

Security Agreement), and all fees, costs, interest, and expenses as and when due and payable 

pursuant to the Prepetition Loan Documents, plus (b) all amounts allowable under Section 506(b) 

of the Bankruptcy Code. 

“Prepetition Liens” means SHL’s asserted security interests in the Collateral under the 

Prepetition Loan Documents. 

"Proceeds" means whatever is receivable or received when Collateral or proceeds are sold, 

collected, exchanged, or otherwise disposed of, whether such disposition is voluntary or 

involuntary, and includes, without limitation, all rights to payment, including returned or rebate 

of premiums, with respect to any insurance relating thereto. 

"Records" means correspondence, memoranda, tapes, books, discs, paper, magnetic storage, and 

other documents or information of any type, whether expressed in ordinary or machine language. 

“Replacement Liens” means SHL’s Liens in the Collateral granted pursuant to the Financing 

Order. 

Case 20-20259-RAM Doc 34 Filed 09/23/20 Page 41 of 51
Page 7 of 15

"Tax" means any present or future tax, levy, impost, duty, charge, fee, deduction, or withholding 

of any nature and whatever called, by whomsoever, on whomsoever and wherever imposed, 

levied, collected, withheld, or assessed. 

"UCC" means the Uniform Commercial Code as in effect on the date hereof in the State of 

Florida as it may be amended from time-to-time; provided that if by reason of mandatory 

provisions of law, the perfection or the effect of perfection or non-perfection or priority of a 

security interest in any Collateral is governed by any state other than Florida, "UCC" means the 

Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions 

hereof relating to such perfection or effect of perfection or non-perfection. 

3. DIP Facility. Subject to the terms and conditions of this Agreement and the 

Financing Order (including SHL’s right to cease making loans to the Debtors), and subject to the 

satisfaction of the conditions precedent contained in this Agreement and the Financing Order, 

SHL agrees to make loans and advances (each, an “Advance” and collectively, the "Advances") 

to or on behalf of Debtors in the aggregate principal amount of four million dollars 

($4,000,000.00) to the extent required to pay, when due, those expenses enumerated in the 

Budget. Debtors will execute a promissory note to evidence the advances and loans to be made 

under this Agreement. Said loans and advances will be repaid to SHL as set forth in this 

Agreement and in the promissory note. So long as there exists no Event of Default and subject to 

the terms of this Agreement the Advances shall be made to the Debtors, as appropriate, in the 

amounts and in accordance with the schedule set forth in the Budget. Interest shall accrue on the 

outstanding principal amount of each Advance at a rate per annum equal to LIBOR Daily 

Floating Rate plus one and one-half percent (1.50%). Upon the occurrence of any Event of 

Default, interest on all amounts not paid when due shall accrue and be payable at a rate per 

annum equal to the highest rate permitted by applicable law. Any imposition of default interest 

shall be made retroactive to the date of the occurrence of the applicable Event of Default. All 

interest on the Advances will be computed on the basis of the actual number of days elapsed over 

a 360-day year. 

4. Superpriority Administrative Expense Claim. Advances occurring from and after 

the Petition Date will constitute a super priority administrative expense in accordance with 

Sections 507(a)(1) and 503(b) of the Bankruptcy Code, which will have priority and payment 

over all other administrative expenses and unsecured claims of any kind or nature, whether now 

or hereafter arising including all administrative expenses of the kind specified in or arising or 

ordered under Sections 105, 326, 328, 503(b), 506(e), 507 (b), 546(c), and 1114 of the 

Bankruptcy Code. Notwithstanding the foregoing, the super priority administrative expense 

claims of SHL will be subordinate to the Administrative Expense Carve Out. Debtors will not 

incur, create, assume, suffer to exist or permit or make any application or motion for any other 

super priority claim or Lien which is pari passu with or senior to the claims of SHL under the 

Loan Documents, other than as expressly contemplated and permitted under this Agreement. 

5. Security Interest. As security for the payment and performance of all Obligations, 

now existing or hereafter incurred, matured or unmatured, direct or contingent, including all 

extensions and renewals thereof, Debtors, jointly and severally, hereby assign to SHL and grants 

to SHL a Lien upon and security interest in the Collateral. The Collateral, together with all of 

Debtor's other property of any kind, both real and personal, held by, assigned to, mortgaged to, 

Case 20-20259-RAM Doc 34 Filed 09/23/20 Page 42 of 51
Page 8 of 15

or conveyed in favor of SHL, whether prior to or after the Petition Date, will stand as one 

general, continuing collateral security for all Obligations and may be retained by SHL until all 

Obligations have been paid and satisfied in full. 

The foregoing Liens will be first and prior Liens except for any Permitted Liens which 

have priority or would have priority by the operation of Law. SHL reserves the right to challenge 

the priority of any Lien of any other Person. For the avoidance of doubt, SHL’s Prepetition Liens 

and Replacement Liens will be subordinate to the foregoing Liens. 

At the request of SHL, Debtors will execute and deliver to SHL documentation 

satisfactory to SHL evidencing the security interests and Liens and providing for the perfection 

of such Liens. The automatic stay provisions of Section 362 of the Bankruptcy Code are 

modified to permit the execution, delivery, and filing of such documentation; provided, however, 

that no such documentation will be required as a condition to the validity, priority, or perfection 

of Liens created pursuant to this Agreement, which Liens will be deemed valid and properly 

perfected upon entry of the Financing Order approving this Agreement. Each Debtor irrevocably 

makes, constitutes, and appoints SHL (and all other Persons designated by SHL for the purpose) 

as Debtors' true and lawful agent and attorney in fact to sign Debtors' names on any such 

agreements, instruments, and documents referred to in this section and to deliver such 

agreements, instruments, and documents to such Persons as SHL in its sole and absolute 

discretion may elect. Debtors agree to pay on demand any recording tax, filing fees, or other 

costs incurred by SHL in connection with recording or filing any documentation requested in this 

section, provided, that, SHL advances the amount of such recording or filing fee. 

6. Existence and Authority; Enforceability of this Agreement. Debtors are a 

registered entity duly organized, validly existing, and in good standing under the laws of the 

State of Delaware and the State of Florida, as applicable. Debtors will maintain their limited 

liability existence or registered status (in good standing where appropriate under state law) and 

remain or become duly qualified or licensed (and in good standing where appropriate under state 

law) as a foreign limited liability company in each jurisdiction in which the conduct of its 

businesses requires such qualification or license except where the failure to be so qualified could 

not reasonably be expected to have a Material Adverse Effect. 

The execution and performance of this Agreement will not violate the governing 

document provisions of the Debtors, or violate any laws or result in a default under any contract, 

agreement, or instrument to which Debtors are a party or by which Debtors or their property is 

bound, except for such violations or defaults that would not have a Material Adverse Effect. 

Debtors have the power and authority to enter into and perform this Agreement and the Loan 

Documents, and to incur the obligations herein and therein provided for, and have taken all 

corporate or other action necessary to authorize the execution, delivery, and performance of this 

Agreement and the Loan Documents. Upon the execution of this Agreement and the other Loan 

Documents by Debtors, this Agreement and the Loan Documents will be valid and binding 

against Debtors, enforceable against such parties in accordance with the terms thereof. 

7. Termination of Automatic Stay. Any Order entered approving this Agreement 

will provide that the automatic stay, including specifically, but not limited to, the stay imposed 

by Section 362 of the Bankruptcy Code, is immediately and absolutely lifted and terminated 

Case 20-20259-RAM Doc 34 Filed 09/23/20 Page 43 of 51
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without the need of further order by Court as to the exercise by SHL of any and all of its rights 

under the terms of this Agreement. 

8. Books and Records. Debtors will permit SHL at all times during regular business 

hours to free access, with twenty four (24) hours advance notice, to the Records and similar 

items of Debtors including, without limitation, its Records, computer software, and other 

computer stored information, and all plans, specifications, drawings, surveys, and related 

materials, and computer software, licenses, copyrights, patents, and other intellectual property, 

for the purpose of using, examining, copying, or reproducing same for the purpose of examining, 

copying, or reproducing the same. Debtors authorize and requests any and all depositories in 

which funds of Debtors may be deposited to furnish to SHL statements of account and any other 

documents reflecting receipts and disbursements and any Person doing business with Debtors is 

authorized to furnish any information requested by SHL concerning any transaction. SHL may 

furnish copies of any and all statements, agreements, and financial statements and any 

information which it now has or may obtain concerning Indemnitors to other Persons or 

companies during the investigation of claims that may be, or have been, asserted against SHL. 

9. Acceleration; Deposit of Collateral; Remedies. Upon the occurrence of any Event 

of Default, SHL may, at its option, immediately declare all Obligations to be immediately due 

and payable, whereupon the same will become forthwith due and payable, without presentment, 

demand, protest, or any notice of any kind. 

Upon the occurrence of any Event of Default, all Collateral held by or assigned to SHL 

by Debtors may be used by SHL at any time in payment of any Obligations; SHL will have, in 

addition to the rights and remedies given by the Loan Documents, all those allowed by all 

applicable Laws, including, but without limitation, the UCC as enacted in any jurisdiction in 

which any Collateral may be located. After deducting from the Proceeds of sale or other 

disposition of the Collateral all expenses, including all expenses for legal services (including 

allocated costs of in-house counsel), such Proceeds will be applied toward the satisfaction of the 

Obligations. Any remainder of the Proceeds after satisfaction in full of the Obligations will be 

distributed as required by applicable Laws. 

Notice of any sale or other disposition will be given to Debtors at least ten (10) days 

before the time of any intended public sale or of the time after which any intended private sale or 

other disposition of the Collateral is to be made which Debtors hereby agree will be reasonable 

notice of such sale or other disposition. At any such sale, the Collateral, or portions thereof, to be 

sold may be sold in one lot as an entirety or in separate lots, as SHL may, in its sole and absolute 

discretion, determine. Debtors agree to assemble, or to cause to be assembled, at their own 

expense, the Collateral under its control or ownership at such place or places as SHL will 

designate. At any such sale or other disposition, SHL may to the extent permissible under 

applicable Laws, purchase the whole or any part of the Collateral, free from any right of 

redemption on the part of the Debtors, which right is hereby expressly waived and released. 

SHL will not be liable and Debtors agree to make no claim against SHL for decrease in 

value lost to any Collateral, however caused, other than for willful reckless misconduct or gross 

negligence. SHL will not be obligated to make any sale of the Collateral if it will determine not 

to do so, regardless of the fact that notice of sale of the Collateral may have been given. SHL 

Case 20-20259-RAM Doc 34 Filed 09/23/20 Page 44 of 51
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may, without notice or publication, adjourn any public or private sale or cause the same to be 

adjourned from time to time by announcement at the time and place fixed for sale, and such sale 

may, without further notice, be made at the time and place to which the same was so adjourned. 

In case sale of all or any part of the Collateral is made on credit or for future delivery, the 

Collateral so sold may be retained by SHL until the sale price is paid by the purchaser or 

purchasers thereof, but SHL will not incur any liability in case any such purchaser or purchasers 

will fail to take up and pay for the Collateral so sold and, in case of any such failure, such 

Collateral may be sold again upon like notice. 

As an alternative to exercising the power of sale herein conferred, SHL may proceed by a 

suit or suits at law or in equity to foreclose this Agreement and to sell the Collateral, or any 

portion thereof, pursuant to a judgment or decree of a court or courts of competent jurisdiction. 

The costs, including reasonable legal fees of SHL, will be added to any outstanding indebtedness 

and paid by Debtors. 

Without limiting the generality of any of the rights and remedies conferred upon SHL, 

SHL may upon the occurrence of an Event of Default, to the full extent permitted by applicable 

Laws (including without limitation seeking relief from the automatic stay, if applicable): 

(a) Enter upon the premises of Debtors, exclude therefrom Debtors, and take immediate 

possession of the Collateral, either personally or by means of a receiver appointed by a court of 

competent jurisdiction, using all necessary and lawful self-help to do so; 

(b) at SHL’s option, use, operate, manage, and control the Collateral in any lawful 

manner; 

(c) collect and receive all rents, income, revenue, earnings, issues, and profits therefrom; 

and 

(d) maintain, repair, renovate, alter, or remove the Collateral as SHL may determine in its 

discretion. 

10. Authority of SHL to Elect Remedies. Each right, remedy, and power of SHL 

provided in this Agreement, the Loan Documents, or by law, equity, or statute will be 

cumulative, and the exercise by SHL of any right, remedy, or power will not preclude SHL’s 

simultaneous or subsequent exercise of any or all other rights, powers, or remedies. The failure 

or delay by SHL to exercise any right, power, or remedy will not waive any right, power, or 

remedy. Except as required herein, no notice or demand upon SHL by Debtors will limit or 

impair SHL's right to take any action under this Agreement or to exercise any right, power, or 

remedy. All remedies hereunder are cumulative and are not exclusive of any other remedies 

provided by law. 

11. Condition Precedent to Effectiveness of this Agreement. The effectiveness of this 

Agreement is subject to the condition precedent that SHL will have received on or before the day 

hereof each of the following, in form and substance satisfactory to SHL and its counsel: 

(a) This Agreement and each of the other Loan Documents duly executed by 

Debtors. 

Case 20-20259-RAM Doc 34 Filed 09/23/20 Page 45 of 51
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(b) no orders will have been entered by the Bankruptcy Court which SHL 

reasonably determines are likely to have a Material Adverse Effect; 

(c) all of the "first day orders" presented to the Bankruptcy Court at or about the 

time of the commencement of the Bankruptcy Cases will be satisfactory in 

form and substance to SHL; and 

(d) receipt of a copy of the duly executed Financing Order (an interim order to be 

followed in due course by a final order) entered by the Bankruptcy Court, in 

form acceptable to SHL;without limiting the generality of the foregoing, the 

Financing Order will (i) ratify the Prepetition Obligors' obligations under the 

Prepetition Loan Documents; (ii) authorize Debtors to enter into this 

Agreement, and all other documents contemplated by this Agreement; (iii) 

confirms the waivers and releases contained infra.; and (iv) provide SHL 

adequate protection. 

SHL may waive compliance with any of the foregoing, with or without notice to Debtors. 

12. Notices. Any notice, request, demand, or other communications required, 

permitted or otherwise contemplated by this Agreement will be in writing and either delivered 

personally, sent by regularly scheduled overnight air courier service, or postage prepaid certified 

United States mail, return receipt requested, to the following addresses: 

SHL: SHL Holdings, Inc. 

 401 East Las Olas Boulevard, Suite 800 

 Fort Lauderdale, Florida 33301 

With a copy to: Stearns Weaver Miller 

 150 West Flagler Street, Suite 2200 

 Miami, Florida 33130 

 Attn.: Eric J. Silver, Esq. 

Debtors: It’Sugar LLC 

With a copy to: Meland Budwick, P.A. 

 3200 Southeast Financial Center 

 200 South Biscayne Boulevard 

 Miami, Florida 33131 

 Attn: Michael S. Budwick, Esq. 

 

13. Reaffirmation of Validity and Enforceability of the Prepetition Loan Documents. 

Prepetition Obligors reaffirm each for themselves that the Prepetition Loan Documents are valid 

and binding obligations of the Prepetition Obligors, that all terms, covenants, conditions, 

representations, warranties and agreements contained in the Prepetition Loan Documents are 

hereby ratified and confirmed in all respects. Debtors acknowledge and agree that there are no 

claims, offsets, or other actions against SHL, and that there are no set-offs, counterclaims or 

Case 20-20259-RAM Doc 34 Filed 09/23/20 Page 46 of 51
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defenses to the payment of the Prepetition Debt. Atlantic City and FLGC reaffirm their 

obligations under the Guaranty. 

14. Waiver and Release. To the maximum extent permitted by applicable Laws, 

Debtors: 

(a) Waive: (i) protest of all commercial paper at any time held by SHL on which Debtors 

are in any way liable; and (ii) notice and opportunity to be heard before exercise by SHL 

of the remedies of self-help, setoff, or of other summary procedures permitted by any 

applicable Laws or by any agreement with Debtors, and, except where required hereby or 

by any applicable Laws, notice of any other action taken by SHL; 

(b) release SHL, its officers, directors, attorneys, employees, and agents from all claims 

for loss or damage caused by any act or omission on the part of any of them, except for 

their willful misconduct or gross negligence; 

(c) waive any defense arising by reason of, and agree that the rights of SHL and the 

Obligations will be absolute and unconditional irrespective of, (i) any disability or other 

defense of any other Person; (ii) the unenforceability or cessation from any cause 

whatsoever, other than the indefeasible payment in full, of all Obligations; (iii) the 

application by Debtors of the Proceeds of any Collateral for purposes other than the 

purposes represented by Debtors to SHL; (iv) any modification of the Obligations in any 

form whatsoever, including without limitation the renewal, extension, acceleration, or 

other changes in the time for payment, or other change in the terms of the Obligations or 

any part thereof; and (vi) any other circumstance that might otherwise constitute a 

defense available to, or a discharge of, any other Person in respect to the Obligations; 

 (d) waive all claims, direct or indirect, absolute or contingent, against any other 

borrower, guarantor, endorser, or surety arising from or relating to this Agreement, any of 

the other Loan Documents, and/or the Obligations. Without limiting the foregoing, each 

Debtor waives all rights of reimbursement, exoneration, indemnification, and/or 

contribution from any other borrower, guarantor, endorser, or surety under or relating to 

this Agreement, any of the other Loan Documents, and or the Obligations. SHL may 

proceed against any Collateral securing the Obligations and against parties liable therefor 

in such order as it may elect, and neither Debtors nor, to the extent allowable by law, any 

creditor of Debtors will be entitled to require SHL to marshal assets. The benefit of any 

rule of law or equity to the contrary is hereby expressly waived; and 

(e) release, waive, discharge, covenant not to sue, acquit, satisfy and forever discharge 

SHL, its officers, directors, employees, agents and its affiliates and assigns from any and 

all liability, claims, counterclaims, defenses, actions, causes of action, suits, 

controversies, agreements, promises and demands whatsoever in law or in equity which 

the Debtors ever had, now have or may have, or which any personal representative, 

successor, heir or assign of obligor’s hereafter can, shall or may have against lender and 

yellow leaf, their officers, directors, employees, agents, and their affiliates and assigns, 

for, upon or by reason of any matter, cause or thing whatsoever including all actions of 

SHL taken or to be taken in connection with the Prepetition Loan Documents and the 

Case 20-20259-RAM Doc 34 Filed 09/23/20 Page 47 of 51
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Loan Documents. In addition to, and without limiting the generality of the foregoing, and 

in consideration of SHL's execution of this Agreement, the Debtors each covenant with 

and warrant unto SHL, and its affiliates and assigns, that there exist no claims, 

counterclaims, defenses, objections, offsets or claims of offsets against SHL or the 

obligation of the Debtors to pay the Prepetition Debt and the DIP Loan to SHL when and 

as they become due and payable.. 

15. Further Assurances. The parties will cooperate reasonably with each other and 

with their respective representatives in connection with any steps required to be taken as part of 

their respective obligations under this Agreement, and the parties agree (i) to furnish upon 

request to each other such further information, (ii) to execute and deliver to each other such other 

documents, and (iii) to do such other acts and things, all as the other party may reasonably 

request for the purpose of carrying out the intent of this Agreement and the transactions 

contemplated hereby 

16. Governing Law and Jurisdiction. This Agreement will be deemed to be a contract 

under the laws of the State of Florida and for all purposes will be governed by and construed and 

enforced in accordance with the laws of such State. Unless the jurisdictional prerequisites are not 

met, the parties hereto irrevocably consent to the exclusive jurisdiction of the United States 

District Courts of Florida and of all state courts without waiver of right or removal, for the 

purpose of any litigation concerning this Agreement. No party hereto will object to or contest 

Florida as the proper venue for any action or proceeding to enforce terms hereof. 

Notwithstanding the foregoing, all disputes regarding this Agreement involving Debtors arising 

during the pendency of the Bankruptcy Cases will be heard and determined by the Bankruptcy 

Court. 

17. Jury Waiver. TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW 

WHICH CANNOT BE WAIVED, EACH PARTY HERETO HEREBY WAIVES, AND 

COVENANTS THAT IT WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT, 

OR OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF 

ANY ISSUE, CLAIM, DEMAND, ACTION, OR CAUSE OF ACTION ARISING OUT OF OR 

BASED UPON THIS AGREEMENT, ANY OTHER OF THE LOAN DOCUMENTS, OR THE 

SUBJECT MATTER HEREOF, IN EACH CASE WHETHER NOW EXISTING OR 

HEREAFTER ARISING OR WHETHER IN CONTRACT OR TORT OR OTHERWISE. 

EACH PARTY HERETO ACKNOWLEDGES THAT IT HAS BEEN INFORMED THAT THE 

PROVISIONS OF THIS SECTION CONSTITUTE A MATERIAL INDUCEMENT UPON 

WHICH THE OTHER PARTIES HAVE RELIED, ARE RELYING, AND WILL RELY IN 

ENTERING INTO THIS AGREEMENT. THE PARTIES HERETO MAY FILE AN 

ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT A

WRITTEN EVIDENCE OF THE CONSENT OF SUCH OTHER PARTY TO THE WAIVER 

OF ITS RIGHTS TO TRIAL BY JURY. 

18. Binding Effect, Assignment, Amendment and Negotiation. This Agreement will 

inure to the benefit of, and will be binding upon, the respective successors and permitted assigns 

of the parties hereto. Debtors have no right to assign any of their rights or obligations hereunder 

without the prior written consent of SHL. This Agreement may be amended only by a writing 

Case 20-20259-RAM Doc 34 Filed 09/23/20 Page 48 of 51
Page 14 of 15

signed on behalf of each party. This Agreement has been negotiated by the parties and each party 

has had the benefit of counsel. This Agreement will not be construed against any party. 

19. Severability. The provisions of this Agreement are intended to be severable. If 

any provision of this Agreement is held invalid or unenforceable in whole or in part in any 

jurisdiction such provision will, as to such jurisdiction, be ineffective to the extent of such 

invalidity or unenforceability without in any manner affecting the validity or enforceability of 

such provision in any other jurisdiction or the remaining provisions of this Agreement in any 

jurisdiction. 

20. Survival. All of the representations and warranties set forth in this Agreement, the 

other Loan Documents will survive until all Obligations are paid and satisfied in full. 

21. Counterparts. This Agreement may be executed in counterparts (including by 

means of facsimile or pdf signature pages), any one of which need not contain the signatures of 

more than one party, but all such counterparts taken together will constitute one and the same 

agreement. This Agreement and each other agreement or instrument entered into in connection 

herewith or therewith or contemplated hereby or thereby, and any amendments hereto or thereto, 

to the extent signed and delivered by means of a facsimile machine or other electronic 

transmission (including .pdf files), will be treated in all manner and respects and for all purposes 

as an original agreement or instrument and will be considered to have the same binding legal 

effect as if it were to the original signed version thereof delivered in person. At the request of 

any party hereto or to any such agreement or instrument, each other party hereto or thereto will 

re-execute original forms thereof and deliver them to all other parties, except that the failure of 

any party to comply with such a request will not render this Agreement invalid or unenforceable. 

No party hereto or to any such agreement or instrument will raise the use of a facsimile machine 

or other electronic transmission to deliver a signature or the fact that any signature or agreement 

or instrument was transmitted or communicated through the use of a facsimile machine or other 

electronic transmission as a defense to the formation or enforceability of a contract and each 

party forever waives any such defense. 

22. Section Headings. The section headings in this Agreement are for convenience 

only and do not limit, define, or construe the contents of the sections. 

23. Seal. This Agreement is intended to take effect as an instrument under seal. 

24. No Contrary Action. Debtors will not apply to the Bankruptcy Court for the 

authority to take any action that is prohibited by the terms of this Agreement or any of the other 

Loan Documents or refrain from taking any action that is required to be taken by the terms of 

this Agreement or any of the other Loan Documents. The parties acknowledge that the foregoing 

will not preclude the entry of any order of the Bankruptcy Court approving or authorizing an 

amendment or modification to this Agreement or the other Loan Documents permitted by this 

Agreement, which order will be acceptable to SHL whose consent is required to approve such 

amendment or modification. 

Case 20-20259-RAM Doc 34 Filed 09/23/20 Page 49 of 51
Page 15 of 15

SHL HOLDINGS, INC. 

By: 

Its: 

IT’SUGAR LLC 

By: 

Its: 

IT’SUGAR ATLANTIC CITY LLC 

By: 

Its: 

IT’SUGAR FLGC LLC 

By: 

Its: 

 IT’SUGAR FL I, LLC 

By: 

Its: 

Case 20-20259-RAM Doc 34 Filed 09/23/20 Page 50 of 51
IT'SUGAR, LLC

DIP Loan - For the Period 9/23/20 to 12/12/20

Receipts:

Projected Store Sales $ 10,129,585

Projected Wholesale Sales $ 225,783

Projected e-commerce & Partnering $ 1,114,851

Projected New Temp Store Sales $ 496,111

Sales Tax Collected $ 506,479

 Total Receipts $ 12,472,808

Disbursements:

Sales Taxes Paid $ (362,877)

Inventory Purchases $ (4,486,928)

Store Payroll Disbursement $ (2,935,408)

Corporate Payroll Disbursement $ (1,263,740)

Severances $ (64,369)

Shared Services Allocation $ (105,000)

Store Controllables $ (507,160)

Corporate Controllables $ (381,703)

Capex Funding - Temp Stores $ (1,248,198)

Occupancy $ (4,940,685)

 Subtotal Operating Costs $ (16,296,068)

Filing Fees & Expenses:

Legal - M&B (160,000)

US Trustee (4,750)

Financial Advisor - Algon (240,000)

Creditor's Committee Counsel (16,000)

 Subtotal Filing Fees (420,750)

 Total Disbursements $ (16,716,817)

Net Change in Cash $ (4,244,009)

Recap of Cash Activity

Beginning Cash - 9/23/20 $ 500,000

Net Change in Cash $ (4,244,009)

DIP Financing Requested $ 4,000,000

Projected Cash - 12/12/20 $ 255,991

DIP Financing Requested $ 4,000,000

EXHIBIT A 

Case 20-20259-RAM Doc 34 Filed 09/23/20 Page 51 of 51