Kleopatra Finco S.à r.l. - DIP Terms

DIP Terms

Borrower(s) / Guarantor(s)

• Kleopatra Finco S.à r.l., Klöckner Pentaplast of America, Inc., and Klöckner Pentaplast GmbH, as Borrowers
• Topco, each debtor listed on Schedule I of the DIP credit agreement, any subsidiary that subsequently becomes a debtor, and each direct subsidiary of a debtor (other than excluded subsidiaries), as Guarantors

Agent / Lender(s)

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

DIP Commitments

• €984 million senior secured superpriority term loan facility comprised of:
  • €349 million in new money term loans, of which:
    • €134 million will be used to refinance the prepetition bridge facility in full upon entry of the interim order.
    • €215 million will be available for ongoing operational needs and to fund the administration of the chapter 11 cases, with €130 million available upon entry of the interim order and the remaining €85 million available upon entry of the final order.
  • €635 million in roll-up loans, comprised of:
    • Approximately €480 million in interim roll-up loans upon entry of the interim order.
    • Approximately €155 million in final roll-up loans upon entry of the final order.
• The new money loans will be funded into an escrow account, with release subject to the terms of the DIP credit agreement.
• The roll-up obligations reflect a ratio of approximately 1.8-to-1 when measured against the new money term loans. Including the prepetition bridge refinancing, the prepetition repayment ratio is approximately 3.6-to-1.

Cash Collateral

• The debtors are authorized to use cash collateral of the prepetition secured parties, subject to the conditions set forth in the DIP orders.

Interest Rate

• Term SOFR or EURIBOR Loans: 3.00% per annum payable in cash, plus 3.00% per annum payable in kind.
• Base Rate Loans: 2.00% per annum payable in cash, plus 3.00% per annum payable in kind.

Fees

• Fees are applicable to the new money term loan commitments and are payable in kind:
  • Commitment Premium: 5.00%
  • Backstop Premium: 7.00%
  • SteerCo Premium: 3.50%
• Administrative Agent and Fronting Lender fees will be paid as agreed upon in separate fee letters.

Maturity

• The earliest to occur of:
  • Nine months after the closing date;
  • The date of acceleration of the loans;
  • Conversion of the chapter 11 cases to chapter 7 or dismissal of any debtor's case;
  • The closing of a sale of all or substantially all of the loan parties' assets; or
  • The effective date of a chapter 11 plan.

Milestones

• Petition Date: No later than Nov. 4, 2025
• File Plan and Disclosure Statement: Within one calendar day after the petition date
• Interim DIP Order: Within three business days after the petition date
• Final DIP Order: Within 30 calendar days after the petition date
• Confirmation Order: Within 45 calendar days after the petition date
• Plan Effective Date: Within 90 calendar days after the petition date, with a potential 30-day extension for pending regulatory approvals

Events of Default

• The DIP facility contains customary events of default.
• Upon an event of default, the DIP secured parties must provide five business days' notice before exercising remedies. During this notice period, the debtors or any party in interest may seek an emergency hearing to contest the default.

Carve Out

• The interim order provides for a carve-out for certain statutory fees and allowed professional fees.

Use of Proceeds

• Fund working capital and general corporate expenditures
• Pay costs of administering the chapter 11 cases, including transaction fees and professional fees
• Fund the prepetition bridge refinancing
• Pay interest, fees, and expenses owed to the DIP secured parties
• Fund obligations related to the carve-out

Avoidance Actions

• The interim order grants liens on the proceeds of avoidance actions arising under chapter 5 of the Bankruptcy Code, but not on the avoidance actions themselves.

Challenge Period and Budget

Challenge Period

• The deadline to challenge the stipulations, releases, prepetition bridge refinancing, or roll-up obligations is the earlier of the plan confirmation date or:
  • For a committee, 60 days from its formation; or
  • For any other party in interest, 60 days from the entry of the interim order.
• If a chapter 7 or 11 trustee is appointed before the deadline expires, the challenge period is extended for 60 days from the date of appointment for such trustee.

Stipulations and Releases

• The interim order contains customary stipulations, subject to the challenge period, as to the validity and priority of the prepetition secured obligations and liens.
• Subject to the challenge period, the debtors and their estates provide a full release of claims against the DIP secured parties and, upon entry of the final order, the prepetition secured parties.

Securities and Priorities

• The DIP obligations are granted allowed superpriority administrative expense claims, subject to the carve-out and pari passu with certain receivables superpriority claims.
• The DIP lenders are granted valid, perfected liens on all of the debtors' pre- and postpetition property and assets (the "DIP Collateral"), subject to the carve-out and permitted liens, with the following priorities:
  • Priming liens on prepetition collateral;
  • First-priority liens on all unencumbered assets; and
  • Junior liens on assets subject to permitted liens.
• The DIP facility does not provide for non-consensual priming liens or cross-collateralization.

Adequate Protection

Prepetition Secured Parties

• For any diminution in the value of their interests in the prepetition collateral, the prepetition secured parties are granted adequate protection consisting of:
  • Replacement liens on the DIP collateral;
  • Allowed superpriority administrative expense claims pursuant to section 507(b) of the Bankruptcy Code; and
  • Payment of reasonable fees and expenses.

Waivers

• The debtors waive any right to surcharge the DIP collateral pursuant to section 506(c) of the Bankruptcy Code. Upon entry of the final order, this waiver extends to the prepetition collateral.
• The "equities of the case" exception under section 552(b) is waived with respect to the DIP collateral. Upon entry of the final order, this waiver extends to the prepetition collateral.
• Upon entry of the final order, the equitable doctrine of marshaling is waived.
• The automatic stay is modified to permit the perfection of liens and, subject to a notice period, the exercise of remedies upon an event of default.

Permitted Variance

Budget Covenants

• For any testing period:
  • Aggregate actual disbursements may not exceed 115% of budgeted disbursements.
  • Aggregate actual receipts may not be less than 85% of budgeted receipts.

Liquidity Covenant

• The debtors must not permit liquidity to be less than €80 million, tested on each specified liquidity test date.