ASP Unifrax Holdings - Chapter 11 DIP Terms

DIP Terms

Borrower(s) / Guarantor(s)

• ASP Unifrax Holdings, Inc., as Borrower (the "DIP Borrower")
• The Debtors, other than the DIP Borrower and Lydall Netherlands B.V., as Debtor DIP Guarantors, jointly and severally guaranteeing the DIP Instruments and other DIP Obligations
• The DIP Guarantors that are not Debtors, as Non-Debtor Subsidiary Guarantors, which the Debtors are directed to use reasonable best efforts to cause to guarantee on the basis set forth in the DIP Credit Agreement
• The Debtor DIP Guarantors are directed to use reasonable best efforts to cause Lydall Netherlands B.V. to enter into the UK Supplemental Share Charge

Agent / Lender(s)

• Wilmington Savings Fund Society, FSB, as Administrative Agent and Collateral Agent (the "DIP Agent")
• The lenders from time to time party thereto, as DIP Lenders

DIP Commitments

• $630 million superpriority senior secured and priming term loan and note purchase facility, consisting of:
  • $315 million of New-Money Instruments, to be used to effectuate the Prepetition RCF Repayment and to fund ongoing operational needs during and following the chapter 11 cases:
    • $265 million of Initial Instruments (new money superpriority senior secured term loans and notes) available upon entry of the Interim Order
    • $50 million of Delayed Draw Instruments available upon entry of the Final Order
  • $315 million of Roll-Up DIP Instruments:
    • $265 million of Initial Rolled-Up Instruments upon entry of the Interim Order and the occurrence of the Interim Roll-Up Date
    • $50 million of Final Rolled-Up DIP Instruments upon entry of the Final Order and the occurrence of the Final Roll-Up Date
• For every dollar of New-Money Instruments provided by the DIP Lenders, a dollar of Allowed First Lien Claims will be rolled up on a cashless, dollar-for-dollar basis
• The roll-up is effected through $315 million of Contingent Rolled-Up Term Loans and Notes. Upon entry of the Interim Order and the occurrence of the Interim Roll-Up Date, $315 million of aggregate Prepetition First Lien Obligations will be automatically deemed substituted and exchanged for the Contingent Rolled-Up Instruments, which are then substituted and exchanged for the Roll-Up DIP Instruments ($265 million upon the Initial Roll-Up and $50 million upon the Final Roll-Up)
  • The Contingent Rolled-Up Instruments recover on a pro rata and pari passu basis with the Prepetition First Lien Term Loan and Note Obligations, do not accrue interest or fees under the DIP Credit Agreement, do not constitute postpetition obligations, and are not entitled to any DIP Liens or DIP Superpriority Claims
• The DIP Documents include standard and customary conditions of borrowing, the satisfaction of which is a condition precedent to each DIP Lender's obligation to make its DIP Commitment

Cash Collateral

• Cash Collateral means all of the Debtors' cash wherever located and held, including cash in deposit accounts, that constitutes cash collateral of any of the Prepetition Secured Parties and DIP Secured Parties within the meaning of section 363(a) of the Bankruptcy Code, including balances of funds in the DIP Credit Parties' prepetition and postpetition operating bank accounts
• The Debtors are authorized to use Cash Collateral in accordance with the DIP Documents and the Approved Budget, provided that the Prepetition Secured Parties are granted the adequate protection set forth in the Interim Order; the DIP Credit Parties are permitted to use Cash Collateral to pay the Adequate Protection Fees and Expenses

Interest Rate

• ABR Loans and ABR Notes: ABR plus 7.375% per annum, with up to 50% of interest payable in kind
• Term SOFR Loans and Notes: SOFR plus 8.375% per annum, with up to 50% of interest payable in kind
• Default Rate: upon the occurrence and during the continuance of an event of default, the DIP Obligations bear interest at a rate equal to 2.00% per annum plus the rate otherwise applicable to the relevant Loans or Notes

Fees

• Backstop Premium: 5.00% of the aggregate amount of each Backstop DIP Creditor's DIP Backstop Commitments as of the Closing Date, payable on a net basis or in cash
• Upfront Fee: 2.50% of all outstanding New Money Term Loans, New Money Notes and Commitments in respect thereof of each Fronted DIP Creditor, fully earned upon entry of the Interim Order and paid on a net basis on the Closing Date
• Exit Fee: 2.25% of each DIP Creditor's New Money Term Loans and New Money Notes actually funded
• Administrative Agent Fees and Collateral Agent Fees: as set forth in the Agent Fee Letter

Maturity

• The earliest to occur of:
  • The four-month anniversary of the Petition Date (the "Scheduled Maturity Date"), subject to up to two 1-month extensions, in each instance with the consent of the Required DIP Creditors and only upon payment of an extension premium (payable in kind) equal to 1.0% of the aggregate principal amount of the total loans and commitments under the DIP Facility then outstanding
  • The substantial consummation of any plan of reorganization under the chapter 11 cases
  • The date of acceleration of the DIP Instruments and the termination of unused commitments with respect thereto
  • The date the Bankruptcy Court orders a conversion of the chapter 11 cases to a chapter 7 liquidation or the dismissal of the chapter 11 case of any Debtor without the consent of the Required DIP Creditors
• On the Maturity Date, the DIP Borrower shall pay in cash the then unpaid and outstanding DIP Obligations, except as expressly set forth in the DIP Documents with respect to any exit term loan facility, equity election, or cashless funding for the equity rights offering or similar exit financing mechanism

Milestones

• Not later than 10 calendar days after the Agreement Effective Date: commencement of solicitation of acceptances of the Plan
• Not later than 6 Business Days after commencement of solicitation: occurrence of the Petition Date and filing of the Plan and Disclosure Statement
• Not later than 2 Business Days following the Petition Date: entry of the Interim Order
• Not later than 28 days following the Petition Date: entry of the Final Order
• Not later than 45 calendar days following the Petition Date: entry of an order approving the Disclosure Statement and the Confirmation Order
• Not later than 14 calendar days after entry of the Confirmation Order: occurrence of the Plan Effective Date, automatically extended by up to 60 days if the Plan Effective Date has not occurred due solely to outstanding regulatory approvals

Events of Default

• Usual and customary for financings of this type, including non-payment of obligations, defaults under covenants, breaches of representations and warranties, defaults related to the budget, attachment defaults, judgment defaults, invalidity of loan documents, change of control, and failure to achieve any of the Milestones

Carve Out

• The sum of:
  • All fees required to be paid to the Clerk of the Court and the U.S. Trustee under section 1930(a) of title 28, plus interest at the statutory rate
  • All reasonable fees and expenses up to $100,000 incurred by a chapter 7 trustee under section 726(b) of the Bankruptcy Code
  • Allowed Professional Fees of the Debtor Professionals and Committee Professionals incurred at any time before or on the first business day following delivery of a Carve Out Trigger Notice
  • Post-Carve Out Trigger Notice Cap: $4,000,000 of Allowed Professional Fees incurred after the first business day following delivery of the Carve Out Trigger Notice
• The Carve Out is senior to all liens and claims securing the DIP Obligations, the Adequate Protection Liens, the Prepetition Secured Obligations, and the DIP Superpriority Claims

Use of Proceeds

• Effectuate the Prepetition RCF Repayment by indefeasibly paying in full in cash the Prepetition First Lien Revolving Loan Obligations of approximately $188 million and cash collateralizing the Prepetition RCF Letters of Credit at 103% of face value in an amount of approximately $8.4 million
• Support the orderly continuation of the operation of the Debtors' businesses and maintain business relationships with vendors, suppliers, and customers
• Make capital expenditures in the ordinary course of business
• Pay adequate protection
• Satisfy other working capital and operational needs

Credit Bid

• Subject to the lien priorities set forth in the Interim Order, the DIP Agent (acting directly or via one or more acquisition vehicles and at the direction of the Required DIP Creditors) shall have the right to credit bid up to the full amount of the DIP Obligations in any sale of the DIP Collateral
• Each Prepetition First Lien Agent (acting directly or via one or more acquisition vehicles and at the direction of the applicable required parties) shall have the right to credit bid up to the full amount of the applicable Prepetition First Lien Obligations (including any Adequate Protection Obligations) in the sale of the Prepetition Collateral, provided that the DIP Obligations are indefeasibly repaid in full in cash and the DIP Commitments are terminated

Avoidance Actions

• Subject to entry of the Final Order, the Interim Order grants liens on the proceeds of claims and causes of action arising under chapter 5 of the Bankruptcy Code (the Avoidance Proceeds), but not on the Avoidance Actions themselves

Challenge Period and Budget

• The deadline to bring a challenge is the earlier of:
  • The entry of an order confirming a plan of reorganization
  • The later of:
    • As to the Creditors' Committee only, 60 calendar days after its appointment if appointed within 30 days of the Petition Date, and in any event not more than 90 days of the Petition Date
    • As to any chapter 7 or chapter 11 trustee, the later of 75 calendar days after entry of the Interim Order and 30 calendar days after its appointment
    • As to all other parties in interest, 75 calendar days after entry of the Interim Order
    • Any later date agreed to by the DIP Agent and the Prepetition Agents, or ordered by the Court for cause
• The Creditors' Committee may use the proceeds of the DIP Instruments and/or DIP Collateral, including Cash Collateral, to investigate, but not to prosecute or initiate the prosecution of, the claims and liens of and potential claims against the Prepetition Secured Parties, up to an aggregate cap of no more than $25,000
• The Debtors will use the proceeds of the DIP Facility and Cash Collateral in accordance with the Initial Budget (subject to permitted variances) and each subsequent Approved Budget

Securities and Priorities

• Pursuant to section 364(c)(1) of the Bankruptcy Code, all DIP Obligations constitute allowed superpriority administrative expense claims (the "DIP Superpriority Claims") against the DIP Credit Parties on a joint and several basis, with priority over all other claims other than the Carve Out, payable from and with recourse to all prepetition and postpetition property of the DIP Credit Parties and all proceeds thereof, and, subject to entry of the Final Order, the Avoidance Proceeds
• As security for the DIP Obligations, the DIP Agent is granted the following automatically and fully perfected DIP Liens on all DIP Collateral, subject and junior to the Carve Out and in accordance with the priorities set forth in the Interim Order:
  • Pursuant to section 364(c)(2), first priority senior liens on all Unencumbered Property (other than the Avoidance Actions, but including, subject to entry of the Final Order, the Avoidance Proceeds)
  • Pursuant to section 364(d)(1), first priority senior priming liens on all Prepetition Collateral, senior to the Prepetition Liens and subordinate to the Carve Out and any Permitted Prior Liens
  • Pursuant to section 364(c)(3), junior liens on all other property, junior and subordinate to the Carve Out and any Permitted Prior Liens and senior to the Adequate Protection Liens
• The Prepetition Secured Parties have consented or are deemed to have consented to the priming of the Prepetition Liens; accordingly, the DIP Orders do not provide for non-consensual priming liens

Adequate Protection

Prepetition First Lien Secured Parties

• Prepetition RCF Adequate Protection: payment of interest accrued at the non-default rate on the Prepetition First Lien Revolving Loan Obligations up to the date of consummation of the Prepetition RCF Repayment
• Prepetition First Lien Adequate Protection Liens: valid, perfected replacement liens on all of the DIP Collateral (excluding Avoidance Actions but including, subject to entry of the Final Order, the Avoidance Proceeds), senior to all other liens on the DIP Collateral and subordinate to the Carve Out, Permitted Prior Liens, and DIP Liens
• Prepetition First Lien 507(b) Claims: allowed superpriority administrative expense claims against each Debtor on a joint and several basis, subject and subordinate to the Carve Out and the DIP Superpriority Claims
• Adequate Protection Fees and Expenses: payment in cash of the reasonable and documented prepetition and postpetition fees and expenses of the DIP Lenders and the Prepetition First Lien Agents, Prepetition Second Lien Trustee, and Prepetition Second Lien Collateral Agent, including the fees and out-of-pocket expenses of their respective advisors

Prepetition Second Lien and Third Lien Secured Parties

• Prepetition Second Lien Adequate Protection Liens: replacement liens on all of the DIP Collateral (excluding Avoidance Actions but including, subject to entry of the Final Order, the Avoidance Proceeds), subordinate to the Carve Out, Permitted Prior Liens, DIP Liens, Prepetition First Lien Adequate Protection Liens, and Prepetition IL Liens
• Prepetition Second Lien 507(b) Claims: allowed superpriority administrative expense claims against each Debtor on a joint and several basis, subordinate to the DIP Superpriority Claims, the Carve Out, and the Prepetition First Lien 507(b) Claims
• Prepetition Third Lien Adequate Protection Liens: replacement liens on all of the DIP Collateral (excluding Avoidance Actions but including, subject to entry of the Final Order, the Avoidance Proceeds), subordinate to the Permitted Prior Liens, Carve Out, DIP Liens, Prepetition First Lien Adequate Protection Liens, Prepetition IL Liens, Prepetition Second Lien Adequate Protection Liens, and Prepetition 2L Liens
• Prepetition Third Lien 507(b) Claims: allowed superpriority administrative expense claims against each Debtor on a joint and several basis, subordinate to the DIP Superpriority Claims, the Carve Out, the Prepetition First Lien 507(b) Claims, and the Prepetition Second Lien 507(b) Claims
• In accordance with the Prepetition IL/2L/3L Intercreditor Agreement, the Prepetition Second Lien and Third Lien Secured Parties shall not retain any distributions, proceeds, or recoveries from their respective Adequate Protection Liens and 507(b) Claims until the senior Prepetition Obligations are indefeasibly paid in full

Waivers

• Granted under the Interim Order, in each case without prejudice to any provisions of the Final Order (and, as to Section 506(c), without prejudice to any Final Order provisions with respect to costs or expenses incurred following entry of the Final Order):
  • Section 506(c): No costs or expenses of administration of the chapter 11 cases shall be charged against or recovered from the DIP Collateral (including Cash Collateral) or the Prepetition Collateral under section 506(c) of the Bankruptcy Code without the prior written consent of the DIP Agent (acting at the direction of the Required DIP Creditors)
  • Section 552(b): The “equities of the case” exception shall not apply to any of the Prepetition Secured Parties
  • The equitable doctrine of “marshaling” and other similar doctrines shall not apply to the DIP Secured Parties or the Prepetition Secured Parties with respect to the DIP Collateral, the DIP Obligations, the Prepetition Obligations, or the Prepetition Collateral (including Cash Collateral)

Releases

• Effective upon entry of the Interim Order, each of the Debtors and their estates (on their own behalf and, to the extent permitted by law, on behalf of the Non-Debtor Subsidiary Guarantors and their respective predecessors, successors, and assigns) absolutely, unconditionally, and irrevocably release and discharge each Prepetition Secured Party, each DIP Secured Party, and each of their respective Representatives (the “Released Parties”) from all claims and causes of action arising out of or related to the Prepetition Credit Documents or the DIP Documents and the transactions reflected thereby, in each case arising on or prior to the date of the Interim Order
• The release does not relieve any party of its obligations under the Restructuring Support Agreement (dated July 19, 2026) or the Definitive Documents (including the DIP Documents), and does not release the commitments or obligations of the DIP Secured Parties under the DIP Facility

Permitted Variance

• Budget Variance Covenant: on each Budget Variance Test Date, actual total disbursements (other than Professional Fee Disbursements, U.S. Trustee Fee Disbursements, and adequate protection payments), on a cumulative basis for the applicable Budget Variance Test Period, shall not be greater than 112.5% of the forecasted total disbursements for such period in the Approved Budget
• Liquidity Covenant: the Credit Parties shall not permit Liquidity as of each Liquidity Test Date to be less than $32,500,000