Alea Holdings US Company - Chapter 11 DIP Terms

DIP Terms

Borrower(s) / Guarantor(s)

• Alea Holdings US Company, as Borrower
• FIN Alea LLC, as Parent (together with the Borrower, the "Postpetition Obligors")

Agent / Lender(s)

• Catalina Finance LLP, as Postpetition Facility Agent and Security Trustee (also Prepetition Facility Agent and Security Trustee)
• Catalina Finance LLP, as sole Postpetition Facility Lender (also Prepetition Facility Lender)

DIP Commitments

• $35 million senior secured superpriority postpetition facility (the "Postpetition Facility"), consisting of a new money incremental commitment (the "Postpetition Commitment") drawn under the Secured Facility Agreement, subject to a maximum aggregate outstanding principal amount not to exceed $35 million
  • Available on a final basis, subject to entry of the Final Order
  • The Postpetition Commitment increased the Total Commitments under the Secured Facility Agreement to $195 million as of the 2026 Effective Date
• As of the Petition Date, the aggregate outstanding principal amount drawn under the Prepetition Facility was approximately $160 million, and the Debtors stipulate that the Prepetition Obligations total not less than $231 million as of the Petition Date

Cash Collateral

• All cash, deposit accounts, securities, negotiable instruments, documents of title, chattel paper, and other cash equivalents of the Prepetition Obligors, wherever located, whether as original collateral or as proceeds of other Prepetition Collateral, that constitute "cash collateral" under section 363(a) of the Bankruptcy Code
  • As of the Petition Date, the Prepetition Obligors estimate approximately $3.1 million in cash on hand, all of which constitutes Cash Collateral subject to the Prepetition Liens

Interest Rate

• The Margin plus the applicable Compounded Reference Rate for each day of the relevant Interest Period, as set forth in the Secured Facility Documents
• Payable in kind, except when the Loans and all Notes are repaid or redeemed in full; accrued interest is settled through the issuance of Notes equal to the accrued interest, which themselves accrue interest on a self-compounding basis and are repaid or redeemed on the Termination Date

Fees

• Commitment Fee: payable at the rate set forth in the Secured Facility Agreement on each Lender's Available Commitment during the Availability Period, settled in kind through the issuance of Notes that thereafter accrue interest
• Agency and trustee fees, as set forth in the Secured Facility Documents

Maturity

• The Debtors' authorization to use Cash Collateral expires upon the earliest to occur of:
  • 35 days after the Petition Date (or such later date as the Postpetition Facility Agent may agree in writing)
  • Entry of the Final Order
  • The occurrence of a Termination Event, subject to the Remedies Notice Period
  • The effective date of any confirmed plan of reorganization
• The Prepetition Facility carries a Termination Date falling 48 months after the First Utilisation Date, which the Debtors represent occurred on July 25, 2023, resulting in a Termination Date of July 25, 2027

Carve Out

• Unpaid fees required to be paid to the Clerk of the Court and the U.S. Trustee under 28 U.S.C. § 1930(a)
• Chapter 7 Trustee Fee: up to $50,000 under section 726(b) of the Bankruptcy Code
• Pre Carve-Out Trigger Notice Cap: Allowed Professional Fees of the Estate Professionals incurred prior to delivery of a Carve-Out Trigger Notice
• Post Carve-Out Trigger Notice Cap:
  • Debtor Professionals: up to $2 million in the aggregate
  • Committee Professionals: up to $50,000 in the aggregate

Use of Proceeds

• To the extent reflected in the then-current Approved Budget:
  • Pay Adequate Protection Obligations
  • Pay costs of administration of the Chapter 11 Cases, including funding obligations within the Carve-Out and professional fees and expenses of the Debtors' and any Committee's advisors
  • Fund the management of the Debtors' insurance subsidiaries' businesses and pay intercompany obligations as and when due
  • Pursue the transactions contemplated by the RSA and the Plan, including consummation of the Permitted Sales and making distributions under the Plan
  • Working capital and general corporate needs of the Debtors
• Proceeds of postpetition borrowings under the Postpetition Facility may be used solely for the Permitted Uses

Credit Bid

• The Postpetition Facility Agent, on behalf of the Postpetition Facility Lender, has the right to credit bid all or any portion of the Postpetition Obligations and/or the Prepetition Obligations in connection with any sale of all or any portion of the Postpetition Collateral and/or Prepetition Collateral under section 363, a chapter 11 plan, or otherwise, without further order of the Court
• Any credit bid in connection with a Permitted Sale is subject to the terms and conditions of any sale and purchase agreement approved by the Finance Parties in writing

Avoidance Actions

• Avoidance Actions constitute Excluded Assets; the proceeds of Avoidance Actions shall constitute Postpetition Collateral only upon entry of the Final Order, if so provided therein

Challenge Period and Budget

• The deadline to bring a Challenge, as applicable to the party, is the latest of the applicable base period below and any agreed or court-ordered extension:
  • As to any Committee, 60 calendar days from formation of the Committee
  • As to any chapter 7 or chapter 11 trustee appointed or elected in the event the Chapter 11 Cases are converted to chapter 7 (prior to the end of the Challenge Period), the later of 60 calendar days after entry of the Interim Order or 30 calendar days after such appointment
  • As to all other parties in interest, 45 calendar days after entry of the Interim Order
  • Any later date agreed to in writing by the Debtors, the Postpetition Facility Agent, and the Prepetition Facility Agent
  • Any later date ordered by the Court for cause upon a timely filed and served motion
• A Committee may use proceeds of the Postpetition Facility and Cash Collateral to investigate (but not to prosecute or initiate the prosecution of) the claims and liens of, and potential claims against, the Prepetition Facility Secured Parties, up to an aggregate cap of $25,000

Securities and Priorities

• Subject to entry of the Final Order, the Postpetition Facility Agent is granted valid, binding, continuing, enforceable, non-avoidable, and automatically perfected security interests in and liens upon all Postpetition Collateral (the "Postpetition Liens"), subject to the Carve-Out, with the following priorities:
  • First-priority, senior and priming liens on all Postpetition Collateral subject to the Prepetition Liens, senior to and priming the Prepetition Liens, under section 364(d)(1)
  • First-priority liens on all Postpetition Collateral not otherwise subject to a valid, perfected, and non-avoidable lien as of the Petition Date, under section 364(c)(2)
  • Junior liens on all Postpetition Collateral subject to a valid, perfected, and non-avoidable lien as of the Petition Date other than the Prepetition Liens, under section 364(c)(3)
• The Postpetition Facility Secured Parties are granted an allowed superpriority administrative expense claim (the "Postpetition Superpriority Claim") under section 364(c)(1), with priority over all administrative expense and other claims against the Postpetition Obligors, subject only to the Carve-Out

Adequate Protection

Prepetition Facility Secured Parties

• Adequate Protection Replacement Liens on all Postpetition Collateral (excluding the Excluded Assets), to the extent of any Diminution in Value, with the following priority:
  • On Postpetition Collateral in which the Prepetition Facility Secured Parties held Prepetition Liens as of the Petition Date, senior to all other claims and encumbrances, subject only to the Postpetition Liens (upon entry of the Final Order) and the Carve-Out
  • On all other Postpetition Collateral, second-priority liens, junior only to the Postpetition Liens (upon entry of the Final Order) and the Carve-Out
• Adequate Protection Superpriority Claim under section 507(b), to the extent of any Diminution in Value, subordinate to the Carve-Out and (upon entry of the Final Order) the Postpetition Superpriority Claim, and senior to all other claims against the Prepetition Obligors
• Adequate Protection Payments:
  • All accrued and unpaid interest at the rate and in the manner set forth in the Prepetition Facility Documents, solely through the payment-in-kind mechanics via issuance of Notes
  • All fees, costs, charges, and expenses as and when due under the Prepetition Facility Documents
  • All reasonable and documented costs and expenses, including legal fees subject to any agreed caps, incurred in connection with the Prepetition Facility Documents and the Chapter 11 Cases
• Reporting and information rights, including weekly variance reports, concurrent delivery of information provided to any Committee, prompt event notices, and such other information as reasonably requested
• Preservation of the Prepetition Collateral, including maintenance of required insurance, payment of taxes and charges, and reasonable access to the Debtors' books, records, and collateral
• Defense of the Interim Order and any Final Order

Waivers

• Subject to entry of the Final Order:
  • Section 506(c): The Debtors waive any right to surcharge the Prepetition Collateral or the Postpetition Collateral
  • Section 552(b): The "equities of the case" exception shall not apply
  • The equitable doctrine of "marshaling," or any similar doctrine, shall not apply with respect to the Prepetition Collateral or Postpetition Collateral

Permitted Variance

• Actual net cash disbursements in any category, other than fees and expenses incurred by Debtor Professionals, may not exceed the amounts set forth in the Approved Budget by more than 15% in the aggregate on a cumulative basis for any rolling four-week period, without the prior written consent of the Prepetition Facility Agent
• Budget Period:
  • Under the Interim Order, the period from the Petition Date through the date that is four weeks following the Petition Date
  • Under the Final Order, the four-week trailing period specified in the then-current Approved Budget, as may be extended by agreement among the Debtors, the Prepetition Facility Agent, and the Postpetition Facility Agent
• The Approved Budget covers the 13 weeks following the Petition Date, setting forth the Debtors' anticipated cash receipts and disbursements on a line-item basis

Termination Events and Remedies

• The occurrence and continuance of any of fourteen enumerated Termination Events, including: failure to comply with the Interim Order or the Approved Budget (subject to the Permitted Variance), if uncured within 3 business days after notice; reversal, modification, vacation, or stay of the Interim or Final Order; failure to enter the Interim Order within 3 business days, or the Final Order within 30 calendar days, of the Petition Date; appointment of a trustee, or an examiner with expanded powers; conversion or dismissal of any Chapter 11 Case; a challenge to the Prepetition or Postpetition Liens or Obligations; entry of any order granting a senior or pari passu lien or superpriority claim; stay relief as to the Prepetition or Postpetition Collateral; a non-Permitted section 363 sale; termination or modification of exclusivity; any event of default under the Secured Facility Documents (after notice and cure); any action impairing or subordinating the secured parties' liens or claims (uncured within 3 business days); and failure to comply with the RSA Milestones, unless waived or extended by the Prepetition and Postpetition Facility Agents
• Remedies Notice Period: upon a Termination Event, the Prepetition and/or Postpetition Facility Agent may deliver a written Default Notice (filed with the Court) to the Debtors, their counsel, the U.S. Trustee, and any Committee; during the ensuing five (5) business-day Remedies Notice Period the Debtors or any party in interest may seek an emergency hearing to contest the Termination Event or to obtain authority for non-consensual use of Cash Collateral
• Upon expiration of the Remedies Notice Period, the automatic stay terminates to the extent necessary for enumerated remedies (including termination/reduction of Cash Collateral use, acceleration of the Postpetition Obligations, cancellation of commitments, and delivery of a Carve-Out Trigger Notice), subject to the Carve-Out; exercise of any other right or remedy against the collateral requires a Stay Relief Motion on at least five (5) business days' notice
• No Remedies Notice Period or Stay Relief Motion is required for a Termination Event arising from conversion, appointment of a trustee or examiner with expanded powers, or any circumstance involving imminent dissipation, transfer, encumbrance, or impairment of the collateral

Stipulations and Release

• Subject to the Challenge Period, the Debtors stipulate to the validity, perfection, priority, and non-avoidability of the Prepetition Liens and Prepetition Obligations (not less than $231 million as of the Petition Date), and, effective on entry of the Interim Order, release the Finance Parties and their Representatives (the 'Released Parties') from prepetition claims, except claims determined by final order to result from bad faith, fraud, gross negligence, or willful misconduct

Final Hearing

• Final Hearing before the Hon. Christopher M. Lopez on 8/17 at 2:00 p.m. (prevailing Central Time); objections to final relief must be filed and served no later than seven (7) days before the Final Hearing