ASP Unifrax Holdings - Chapter 11 DIP Terms

DIP Terms

Borrower(s) / Guarantor(s)

• ASP Unifrax Holdings, Inc., as DIP Borrower
• Ulysses Parent, Inc. (as Holdings) and each of the other Debtors, other than the DIP Borrower and Lydall Netherlands B.V., as Debtor DIP Guarantors, on a joint and several basis
• The Debtors are authorized and directed to use reasonable best efforts to cause the non-Debtor subsidiary guarantors to jointly and severally guarantee the DIP Instruments and the other DIP obligations and to execute the related security, pledge, control, mortgage and intellectual property documentation
  • The Debtor DIP Guarantors are likewise directed to use reasonable best efforts to cause Lydall Netherlands B.V. to enter into the UK Supplemental Share Charge

Prepetition Capital Structure (Stipulated)

• Prepetition First Lien Credit Agreement (September 30, 2024; JPMorgan Chase Bank, N.A. as administrative agent, Wilmington Savings Fund Society, FSB as collateral agent):
  • Revolving loans: not less than $186 million
  • Term loans: not less than $1.67 billion
• First Lien Senior Secured PIK Toggle Notes (September 30, 2024; Wilmington Trust, National Association as trustee): not less than $397 million
• Second Lien Senior Secured PIK Toggle Notes (September 30, 2024): not less than $945 million
• 5.250% Senior Secured Notes due 2028, repriorized to third lien under the September 30, 2024 second supplemental indenture: not less than $102 million
• 7.500% Senior Notes due 2029 (unsecured): not less than $24 million
• Relative priorities are governed by the First Lien Pari Passu Intercreditor Agreement and the 1L/2L/3L Intercreditor Agreement, each dated September 30, 2024, which remain in full force and effect

Agent / Lender(s)

• Wilmington Savings Fund Society, FSB, as Administrative Agent and Collateral Agent
• The DIP creditors from time to time party thereto, as DIP Lenders, including an ad hoc group of certain Prepetition Secured Parties advised by Davis Polk & Wardwell LLP, Haynes and Boone, LLP and PJT Partners LP (the “Specified Ad Hoc Group Advisors”)
• The backstop DIP creditors identified on Schedule 2.05(a) to the DIP Credit Agreement, as Backstop DIP Creditors
• Barclays Bank PLC, as Fronting DIP Creditor
• Kroll Restructuring Administration LLC, as Information Agent
• Seward & Kissel LLP, as counsel to the DIP Agent

DIP Commitments

• $630 million superpriority senior secured and priming term loan and note facility comprised of:
  • $315 million in new money term loans and notes:
    • $265 million of Initial Instruments funded on the closing date
    • $50 million of Delayed Draw Instruments, available on the delayed draw borrowing date subject to entry of the final order (including approval of the roll-up), satisfaction of the applicable performance milestones, the absence of a default, accuracy of representations, payment of fees and the absence of a material adverse effect
  • $315 million roll-up of Prepetition First Lien Obligations on a cashless, dollar-for-dollar basis:
    • Upon entry of the interim order and the occurrence of the interim roll-up date, $315 million of Prepetition First Lien Obligations are deemed substituted and exchanged for Contingent Rolled-Up Term Loans and Contingent Rolled-Up Notes
    • Upon entry of the interim order, the funding of the Initial Instruments and the occurrence of the interim roll-up date, $265 million of Contingent Rolled-Up Instruments are deemed substituted and exchanged for Roll-Up DIP Instruments (the “Initial Roll-Up”)
    • Upon entry of the final order and the occurrence of the final roll-up date, the remaining $50 million of Contingent Rolled-Up Instruments are deemed substituted and exchanged for Roll-Up DIP Instruments (the “Final Roll-Up”)
• Of the $630 million, only $265 million of new money and $265 million of roll-up are authorized on an interim basis; the $50 million delayed draw and the $50 million Final Roll-Up require entry of the final order
• The Contingent Rolled-Up Instruments have identical substantive rights to, and recover on a pro rata and pari passu basis with, the Prepetition First Lien Term Loan Obligations and Prepetition First Lien Note Obligations, and are:
  • Deemed prepetition first lien term loans or notes solely for purposes of determining whether any required lender or required noteholder threshold is met and for directing the Prepetition First Lien Agents
  • Classified with, and entitled to the same voting rights and distributions as, the Prepetition First Lien Term Loan Obligations and Prepetition First Lien Note Obligations under any chapter 11 plan
  • Not accruing interest or fees under the DIP Credit Agreement, and not constituting postpetition obligations entitled to DIP liens or DIP superpriority claims
  • Subject and subordinate to the Carve Out in all respects
• Aggregate DIP backstop commitments as of the closing date are $315 million; the Initial Term Loans are initially funded by the fronting DIP creditor on behalf of the fronted DIP creditors and thereafter assigned pursuant to the interim master assignment agreement
• Amounts paid or prepaid in respect of the term loans and notes may not be reborrowed
• Minimum borrowing amounts are $250,000 for ABR loans and notes and Term SOFR loans and notes, and $50 million for delayed draw term loans and notes borrowed on the delayed draw borrowing date
• The court finds that the DIP credit parties are unable to obtain adequate unsecured credit allowable as an administrative expense under section 503(b)(1), financing on more favorable terms from sources other than the DIP lenders, or secured credit allowable under sections 364(c)(1), (c)(2) and (c)(3) without granting the DIP liens and DIP superpriority claims and incurring the adequate protection obligations, in each case subject and subordinate to the Carve Out

Cash Collateral

• Cash collateral is defined as 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), including balances in the DIP credit parties’ prepetition and postpetition operating 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 receive the adequate protection set forth in the interim order; absent those terms, the debtors are enjoined from using cash collateral without further court order
• Cash collateral may be used to pay the adequate protection fees and expenses
• Proceeds of the new money term loans must be held in a dedicated DIP term loan proceeds deposit account at a financial institution reasonably acceptable to the required DIP creditors (the credit parties’ JPMorgan Chase Bank account ending x9539 is deemed satisfactory); withdrawals are permitted only if the funds are applied in accordance with the budget (subject to permitted variance) or with the prior written consent of the required DIP creditors, and the account may not be closed
• The debtors shall maintain their cash management arrangements consistent with the applicable “first day” order
• The debtors may not sell, transfer, lease, encumber or otherwise dispose of any portion of the DIP collateral except as provided in the DIP documents or otherwise permitted by court order

Interest Rate

• Alternate Base Rate + 7.375% (2.00% base rate floor), or
• Adjusted Term SOFR + 8.375% (1.00% floor)
• Default Rate Increase: 2.00%
• Interest is payable in arrears in cash on each interest payment date; during a PIK election period, an amount equal to 50% of the interest accrued and payable on each interest payment date is paid in kind and capitalized to principal
  • Each interest accrual period ending on or prior to the maturity date is a PIK election period unless the borrower notifies the administrative agent in writing at least five business days prior to the applicable interest payment date
• Interest is computed on the basis of a 360-day year, except interest computed by reference to the base rate, which is computed on a 365/366-day basis
• The Contingent Rolled-Up Term Loans and Contingent Rolled-Up Notes do not accrue interest or fees under the DIP Credit Agreement, but may bear interest as set forth in the orders; any payment of interest thereon is made by the administrative agent to each lender as directed by the Ad Hoc Group Advisors
• Interest accrues on the Roll-Up DIP Instruments at the DIP rates following the substitution and exchange of the Contingent Rolled-Up Instruments

Fees

• Fees applicable to the new money commitments:
  • Backstop Premium: 5.00% of each backstop DIP creditor’s DIP backstop commitments as of the closing date, fully earned and approved upon entry of the interim order and paid on a net basis against such creditor’s initial commitments (or in cash to the extent the premium exceeds those commitments); no backstop premium is payable on the rolled-up term loans or notes
  • 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 and approved upon entry of the interim order and paid on a net basis against funding on the closing date
  • Exit Fee: 2.25% of each DIP creditor’s new money term loans and notes actually funded, fully earned on the date of each borrowing and payable in cash on the plan effective date; upon any earlier prepayment, repayment or termination, the proportionate share attributable to the amounts so prepaid, repaid or terminated is payable on that date, with the balance payable on the plan effective date
• Extension Premium: 1.0% of the aggregate principal amount of each DIP creditor’s term loans, notes and commitments then outstanding — which, following the roll-up, includes the rolled-up term loans and notes, since the new money and rolled-up instruments constitute a single class — payable in kind and capitalized to principal on the initial or first extended scheduled maturity date, as applicable; may be waived for all DIP creditors with the consent of the required DIP creditors
• Administrative Agent and Collateral Agent Fees: as set forth in the Agent Fee Letter between the company and Wilmington Savings Fund Society, FSB
• All fees and premiums are non-refundable once earned and paid
• The debtors are authorized to pay the DIP fees and expenses, including the fees and expenses of professionals retained by the DIP Agent (Seward & Kissel LLP and one local counsel) and the Specified Ad Hoc Group Advisors, without retention motions or fee applications and without allowance or review by the court
  • Such professionals are not required to comply with U.S. Trustee fee guidelines, but must provide summary invoices to the debtors, the U.S. Trustee and counsel to any statutory committee, subject to a 10-calendar-day review period; undisputed amounts are payable within five business days of the end of the review period, and the court retains jurisdiction over any disputed portion
  • DIP fees and expenses incurred on or prior to the closing date are payable on the closing date without prior delivery of invoices to the review parties
  • Fees, costs and expenses paid prior to the petition date in connection with the DIP facility or these cases are approved in full and are not subject to recharacterization, avoidance, subordination or disgorgement

Maturity

• The earliest to occur of:
  • The scheduled maturity date, being the four-month anniversary of the petition date, as extended
  • Substantial consummation of any plan of reorganization in the chapter 11 cases
  • The date of acceleration of the term loans and notes and termination of unused commitments
  • The date the bankruptcy court orders conversion of the chapter 11 cases to chapter 7 or dismissal of any debtor’s case without the consent of the required DIP creditors
• The company may elect two successive one-month extensions of the scheduled maturity date, in each case subject to the consent of the required DIP creditors, written notice not less than three business days prior to the then-applicable maturity date, and payment of the 1.0% PIK extension premium
• Optional prepayments are permitted at any time, subject to the Exit Fee, in integral multiples of $100,000 and not less than $250,000 (or the entire principal amount then outstanding)
• Mandatory prepayments of 100% of net cash proceeds are required from:
  • Asset sales, within five business days of receipt
  • Debt issuances, substantially concurrently with receipt
  • Casualty events, within five business days of receipt
  • Extraordinary receipts, within five business days of receipt
  • Prepayments in respect of asset sales, casualty events and extraordinary receipts are required only to the extent net cash proceeds exceed a $5 million aggregate threshold for all such events over the term of the DIP Credit Agreement, and are not required to the extent the proceeds will be applied, reinvested or otherwise used as expressly set forth in the approved budget (including a future-period budget, subject to permitted variance) or with the consent of the required DIP creditors; any such amounts not so applied as of the maturity date must be paid to the administrative agent, and prepayments by or with respect to foreign subsidiaries are limited where they would result in materially adverse tax or regulatory consequences or be restricted by local law
  • Any such proceeds required to be prepaid are subject and subordinate to the Carve Out in all respects
• All outstanding term loans and notes are repayable on the maturity date; on the maturity date the DIP borrower shall pay in cash the then unpaid DIP obligations, except as expressly provided 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
• Upon the conversion date (satisfaction or waiver of the conditions in Exhibit B of the RSA), $315 million of new money term loans and notes automatically continue on a pro rata basis as a term loan under the exit facility, the remaining new money term loans and notes are paid in full or discharged pursuant to an acceptable plan of reorganization, each DIP creditor becomes an exit facility lender, and the DIP Credit Agreement is superseded and replaced by the exit facility credit agreement

Carve Out

• The Carve Out consists of:
  • Statutory fees payable to the Clerk of the Court and the U.S. Trustee under 28 U.S.C. § 1930(a), plus interest at the statutory rate
  • Chapter 7 Trustee Fee: up to $100,000 of fees and expenses incurred by a trustee under section 726(b)
  • Allowed professional fees of debtor and committee professionals incurred at any time before or on the first business day following delivery of a Carve Out Trigger Notice, excluding any restructuring, sale, success, capital raising or other transaction fee of any investment banker or financial advisor (monthly fees are included)
  • Post-Carve Out Trigger Notice Cap: $4 million of allowed professional fees incurred after the first business day following delivery of a Carve Out Trigger Notice
• Each professional person must deliver a weekly statement of estimated fees and expenses by 7:00 p.m. New York time on the third business day of each week, starting with the first full calendar week following the petition date, and a final statement within one business day of the termination declaration date; a professional that fails to deliver a weekly statement within three calendar days of its due date is limited, for the applicable period, to the amount of its allowed professional fees included in the approved budget
• Commencing with the week ended July 31, 2026, and on or before the fourth business day of each week thereafter, the debtors must fund a segregated funded reserve account held in trust in an amount equal to the greater of estimated and budgeted unpaid professional fees, plus the Post-Carve Out Trigger Notice Cap, plus budgeted allowed professional fees for the following week
  • To the extent the debtors draw on the DIP facility to fund the funded reserve account, the DIP obligations increase accordingly, though disbursements from the Carve Out reserves do not constitute DIP instruments or otherwise increase or reduce the DIP obligations
  • If no Carve Out Trigger Notice has been delivered prior to repayment and discharge of all DIP obligations, amounts remaining in the funded reserve account revert to the reorganized debtors upon approval of final fee applications and payment of all unpaid allowed professional fees; any professional fee reserve contemplated by a confirmed plan is funded first from the funded reserve account
• Following delivery of a Carve Out Trigger Notice, the DIP Agent and the Prepetition Secured Parties may not sweep or foreclose on cash until the Carve Out reserves are fully funded, but retain a first-lien, automatically perfected security interest in any residual interest therein
• Payments of allowed professional fees made prior to the termination declaration date do not reduce the Carve Out; payments made on or after that date reduce it on a dollar-for-dollar basis
• The Carve Out is senior to all liens and claims securing the DIP obligations, the adequate protection liens, the prepetition secured obligations, the DIP superpriority claims and all other adequate protection liens or claims, and neither the budget nor the Carve Out operates as a cap on allowed professional fees

Use of Proceeds

• Proceeds of the DIP facility and cash collateral may be used solely in accordance with the interim order, the final order and the other DIP documents and the approved budget (subject to permitted variances) to:
  • Indefeasibly pay in full in cash the Prepetition First Lien Revolving Loan Obligations, in the amount of approximately $188 million, and terminate all commitments thereunder (the revolving commitments are reduced to $0 and the Prepetition First Lien Revolving Lenders cease to be Prepetition First Lien Secured Parties, other than as to surviving obligations), and contemporaneously cash collateralize the prepetition RCF letters of credit at 103% of face value, in an amount of approximately $8.4 million, in each case in accordance with the prepetition RCF payoff letter
    • The DIP liens do not attach to the Letter of Credit Cash Collateral, but do attach to the debtors’ residual interest therein; the Issuing Banks are granted automatically perfected senior first priority liens on that cash collateral, and any excess returned to the debtors following cancellation or undrawn return of a letter of credit (within ten business days) automatically becomes subject to the DIP liens
    • JPMorgan Chase Bank, N.A. is deemed a DIP Secured Party for purposes of providing cash management and cash concentration services, and the debtors’ obligations in respect thereof constitute DIP obligations
  • Pay costs, fees and expenses related to the chapter 11 cases, including the Carve Out and the fees payable under the DIP Credit Agreement or upon emergence
  • Fund the working capital needs and expenditures of the debtors and their non-debtor affiliates during the chapter 11 cases, and otherwise fund cash to the balance sheet for general corporate purposes
  • Make adequate protection payments
• No proceeds of the DIP instruments, DIP collateral, prepetition collateral (including cash collateral) or the Carve Out may be used to investigate, initiate or prosecute claims or causes of action against the DIP Secured Parties or Prepetition Secured Parties, to challenge the DIP or prepetition obligations and liens, to hinder enforcement or realization on the collateral, to seek liens or superpriority claims senior to or pari passu with the DIP liens and claims, or to pay prepetition claims other than as authorized
  • Subject to a $25,000 aggregate cap for a creditors’ committee to investigate, but not prosecute or initiate prosecution of, the claims and liens of the Prepetition Secured Parties
  • The limitation does not restrict the debtors’ right to use DIP collateral to contest whether an event of default has occurred

Credit Bid

• Subject to the lien priorities set forth in the interim order, the DIP Agent, acting directly or through one or more acquisition vehicles at the direction of the required DIP creditors, has 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 through one or more acquisition vehicles at the direction of the applicable required parties, has the right to credit bid up to the full amount of the applicable Prepetition First Lien Obligations (including any adequate protection obligations) in any sale of the prepetition collateral, provided that the DIP obligations are indefeasibly repaid in full in cash and the DIP commitments terminated
• Such rights apply without further court order and whether the sale is effectuated under section 363(k), 1123 or 1129(b), by a chapter 7 trustee under section 725, or otherwise, in each case unless the court for cause orders otherwise

Avoidance Actions

• The DIP collateral, the DIP superpriority claims and the adequate protection liens and 507(b) claims exclude avoidance actions under sections 502(d), 544, 545, 547, 548 and 550 and any other avoidance actions, but include, subject to and effective upon entry of the final order, any proceeds or property recovered from avoidance actions, whether by judgment, settlement or otherwise

Challenge Period and Budget

• The debtors’ stipulations, admissions, releases, the prepetition RCF repayment and the Roll-Up DIP Instruments are binding on all parties in interest unless a party with requisite standing timely files a challenge by no later than the earlier of:
  • Entry of an order confirming a plan of reorganization
  • The later of:
    • For a creditors’ committee, 60 calendar days after its appointment if appointed within 30 days of the petition date, and in any event not more than 90 days after the petition date
    • For a chapter 7 or chapter 11 trustee appointed prior to the end of the challenge period, the later of 75 calendar days after entry of the interim order and 30 calendar days after its appointment
    • For 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, at the direction of the applicable required parties, or ordered by the court for cause
• Challenge pleadings must set forth the basis for the challenge with specificity; challenges not so specified prior to expiration of the challenge period are deemed forever waived, released and barred. The stipulations are set aside only upon a final, non-appealable order sustaining a timely challenge, and then only as to the challenging party — they remain binding and preclusive on all other parties in interest
• The Initial Roll-Up authorized upon entry of the interim order is final, subject only to the right of parties in interest (other than the DIP credit parties, DIP lenders and consenting stakeholders under the RSA) to seek a determination that it resulted in payment of an unsecured prepetition claim of the Prepetition First Lien Creditors
• A committee’s investigation budget is capped at $25,000 in the aggregate
• Budget:
  • The initial DIP budget covers a 13-week period commencing on or about the petition date and reflects anticipated sources and uses of cash, net cash flows, liquidity and weekly disbursements
  • Updated 13-week rolling budgets are due by 5:30 p.m. New York time on every fourth Friday; an updated budget substantially consistent with the initial budget is deemed acceptable, as is any updated budget to which the required DIP creditors do not object within 10 business days
  • If an updated budget is not approved, the approved budget then in effect remains in effect
  • A budget variance report is due by 5:30 p.m. New York time each Friday for the most recently ended budget variance test period
  • The commencement dates for the updated budget and variance report deliveries are left blank in the filed (posting-version) DIP Credit Agreement, with drafting notes stating that they are to be the Friday of the fourth full calendar week occurring after the petition date
  • The debtors may enter into consensual non-material modifications to the approved budget or the DIP documents without further court order

Securities and Priorities

• All DIP obligations constitute allowed superpriority administrative expense claims under section 364(c)(1) against the DIP credit parties on a joint and several basis, with priority over all other claims other than the Carve Out, including claims under sections 503(b) and 507(b), payable from and with recourse to all prepetition and postpetition property and proceeds thereof (excluding avoidance actions but including, upon entry of the final order, avoidance proceeds)
• Subject and subordinate to the Carve Out, the DIP Agent, for itself and the other DIP Secured Parties, is granted automatically perfected, non-avoidable DIP liens on all DIP collateral (excluding excluded property) with the following priorities:
  • First priority liens under section 364(c)(2) on all unencumbered property, including, subject to entry of the final order, avoidance proceeds, subject only to the Carve Out
  • First priority senior priming liens under section 364(d)(1) on all prepetition collateral, senior in all respects to the prepetition liens and subordinate only to the Carve Out and permitted prior liens
  • Junior liens under section 364(c)(3) on all other property, junior to the Carve Out and permitted prior liens and senior in all respects to the adequate protection liens
• The DIP liens are not subject or subordinated to, or made pari passu with, any lien avoided and preserved under section 551, any liens arising after the petition date (including governmental liens), any intercompany or affiliate liens, or any lien granted under sections 361, 363 or 364 after entry of the interim order
• The DIP liens and adequate protection liens are automatically perfected upon entry of the interim order without further filing or recordation, and the interim order is sufficient and conclusive evidence of their validity, perfection and priority; the DIP Secured Parties and Prepetition Secured Parties are authorized but not required to take further perfection actions
• The adequate protection liens are not subject to sections 506(c), 510, 549 or 550
• Any party receiving payment on account of a lien on, or proceeds of, DIP collateral prior to indefeasible payment in full of the DIP obligations holds such amounts in trust for the DIP Agent and DIP Secured Parties and must immediately turn them over

Adequate Protection

Prepetition First Lien Secured Parties

• Payment of interest accrued at the non-default rate on the Prepetition First Lien Revolving Loan Obligations through the date of consummation of the prepetition RCF repayment, as contemplated in the initial DIP budget
• Valid, perfected replacement liens on all DIP collateral (excluding avoidance actions but including, subject to entry of the final order, avoidance proceeds), senior to all other liens on the DIP collateral and subordinate to the Carve Out, permitted prior liens and the DIP liens
• Allowed superpriority administrative expense claims under section 507(b) against each debtor on a joint and several basis, subject and subordinate to the Carve Out and the DIP superpriority claims
• Payment in cash of all reasonable and documented prepetition and postpetition fees and expenses of the DIP lenders’ advisors and of the Prepetition First Lien Agents and their advisors, subject to the invoice review procedures
• Financial and other periodic reporting on the same basis as required to be provided to the DIP Agent and DIP Secured Parties
• Upon indefeasible payment in full of the DIP obligations and termination of the DIP commitments, continued budget updates and performance of the financial and other covenants set forth in sections 5 and 6 of the DIP Credit Agreement (to which the Prepetition Second Lien Noteholders are likewise entitled), with the required lenders under the prepetition first lien pari passu intercreditor agreement constituting the required DIP creditors for purposes of any related amendment or waiver
• Continued maintenance and insurance of the prepetition collateral and DIP collateral as required under the prepetition credit documents and DIP documents

Prepetition Second Lien Secured Parties

• Valid, perfected replacement liens on all DIP collateral (excluding avoidance actions but including, subject to entry of the final order, avoidance proceeds), senior to all other liens on the DIP collateral and subordinate to the Carve Out, permitted prior liens, the DIP liens, the prepetition first lien adequate protection liens and the prepetition first lien liens
• Allowed superpriority administrative expense claims under section 507(b) against each debtor on a joint and several basis, subject and subordinate to the DIP superpriority claims, the Carve Out and the prepetition first lien 507(b) claims
• Payment of the reasonable and documented fees and expenses of the Prepetition Second Lien Trustee and Prepetition Second Lien Collateral Agent and their advisors, and continued financial reporting
• Consistent with the prepetition 1L/2L/3L intercreditor agreement, the Prepetition Second Lien Secured Parties may not retain any distributions, proceeds or recoveries from such liens or claims until the Prepetition First Lien Obligations are indefeasibly paid in full

Prepetition Third Lien Secured Parties

• Valid, perfected replacement liens on all DIP collateral (excluding avoidance actions but including, subject to entry of the final order, avoidance proceeds), senior to all other liens on the DIP collateral and subordinate only to permitted prior liens, the Carve Out, the DIP liens, the prepetition first lien adequate protection liens, the prepetition first lien liens, the prepetition second lien adequate protection liens and the prepetition second lien liens
• Allowed superpriority administrative expense claims under section 507(b) against each debtor on a joint and several basis, subject and subordinate to the DIP superpriority claims, the Carve Out and the prepetition first lien and second lien 507(b) claims
• Consistent with the prepetition 1L/2L/3L intercreditor agreement, the Prepetition Third Lien Secured Parties may not retain any distributions, proceeds or recoveries from such liens or claims until the Prepetition First Lien Obligations and Prepetition Second Lien Obligations are indefeasibly paid in full

Events of Default and Remedies

• Events of default include failure to pay principal when due; failure to pay interest, fees, amounts required under the orders or other amounts due under the loan documents, subject to a three-business-day cure period; and any violation of the terms of the interim order (after written notice by the DIP Agent to the DIP Borrower)
• Other events of default include breach of the performance milestones (Section 5.17) and of the negative covenants in Article VI, including the budget variance and liquidity covenants, in each case without a cure period; material misstatement of any representation or warranty; breach of other covenants, subject to a five-business-day cure for the budget, variance report, DIP creditor call and liquidity certificate obligations and a fifteen-calendar-day cure after written notice for other covenants; cross-default on other indebtedness aggregating more than $1 million; and an unsatisfied money judgment in excess of $500,000 that remains unstayed for 60 consecutive days
• Upon the occurrence and continuance of an event of default, and without the need to seek relief from the automatic stay, the DIP Secured Parties may deliver an enforcement notice providing at least five days’ advance written notice, following which:
  • The DIP Secured Parties have no further obligation to extend credit
  • All amounts outstanding may, at the DIP Agent’s option, be accelerated and become immediately due and payable
  • The DIP Agent may terminate the debtors’ right to use cash collateral, provided that during the notice period the debtors may use cash collateral to pay budgeted expenses necessary to avoid immediate and irreparable harm to the estates
  • The DIP Agent may charge the default rate of interest
• To exercise remedies against the DIP collateral, the DIP Agent must file a stay relief motion on not less than five business days’ notice to the debtors, their counsel and counsel to the DIP Secured Parties and Prepetition Secured Parties
• The credit parties must comply with the performance milestones set forth on Annex C to the DIP Credit Agreement, as such dates may be extended in writing by the required DIP creditors, and must notify the administrative agent within one business day of any failure to comply
• Annex C (Performance Milestones), Annex A (Commitments, Fronting Schedule and Rolled-Up Debt Schedule) and Schedule 2.05(a) are referenced but not populated in the filed document; accordingly, no milestone dates or creditor-level allocations are available

Waivers

• The interim order authorizes the following waivers, in each case without prejudice to the provisions of the final order:
  • Section 506(c): No costs or expenses of administration of the chapter 11 cases or any successor cases may be charged against or recovered from the DIP collateral (including cash collateral) or the prepetition collateral 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 does not apply to the Prepetition Secured Parties with respect to proceeds, products, offspring or profits of any prepetition collateral
  • Neither the DIP Secured Parties nor the Prepetition Secured Parties are subject to the equitable doctrine of “marshaling” or any similar doctrine with respect to the DIP collateral, the DIP obligations, the prepetition obligations or the prepetition collateral
• Payments or proceeds remitted to the DIP Agent or the Prepetition Secured Agents, including the prepetition RCF repayment, are irrevocable and received free and clear of any claim or charge, including any arising under sections 506(c) or 552(b)
• Effective upon entry of the interim order, the debtors and their estates release the Prepetition Secured Parties, the DIP Secured Parties and their respective representatives from all claims and causes of action arising out of or related to the prepetition credit documents or the DIP documents; the release does not relieve any party of its obligations under the restructuring support agreement dated July 19, 2026 or the definitive documents, and does not release the DIP Secured Parties’ commitments under the DIP facility
• The debtors separately waive, discharge and release any right to challenge the Prepetition First Lien, Second Lien and Third Lien Obligations and the validity, extent and priority of the liens securing each of them, in each case subject to the challenge period
• The debtors waive any defense to their indemnification obligations in favor of the DIP Agent, the other DIP Secured Parties and the Prepetition Secured Parties

Permitted Variance

• On each budget variance test date, actual total disbursements, other than professional fee disbursements, U.S. Trustee fee disbursements and adequate protection payments, may not exceed 112.5% of forecasted total disbursements for the applicable budget variance test period on a cumulative basis
  • Budget variance test dates occur each Friday, commencing with the Friday of the fourth full calendar week after the petition date, and each test period runs from the petition date through the Sunday immediately preceding delivery of the applicable variance report
  • Each variance report must include a written explanation for every line item with a variance greater than 12.5% of the forecasted disbursement amount for the testing period
• Liquidity Covenant: liquidity, defined as unrestricted cash of Holdings and its restricted subsidiaries on a consolidated basis, may not be less than $32.5 million as of each liquidity test date, tested by 5:30 p.m. New York time on the last Friday of each month, commencing July 31, 2026 (the commencement date is bracketed in the filed posting version of the DIP Credit Agreement and remains subject to confirmation)

Hearing Dates

• A final hearing is scheduled for August 25, 2026, at 9:30 a.m. CT, with objections due by August 19, 2026, at 4:00 p.m. CT