Multi-Color Corporation - Chapter 11 DIP Terms

DIP Terms

Borrower(s) / Guarantor(s)

• MCC Manufacturing, Inc., Multi-Color Corporation, and Labels Buyer, LLC, as borrowers under the DIP Term Loan Facility (the "DIP Loan Borrowers")
• MCC Manufacturing, Inc. and Multi-Color Corporation, as issuers under the DIP Notes Facility (the "DIP Notes Issuers," and together with the DIP Loan Borrowers, the "Borrowers")
• The other Debtors, as DIP Guarantors (together with the Borrowers, the "DIP Obligors"), jointly and severally liable for the DIP Obligations

Agent / Lender(s)

• Acquiom Agency Services LLC and Seaport Loan Products LLC, as co-administrative agents, and Acquiom as collateral agent under the DIP Term Loan Facility (together, the "DIP Term Loan Agent")
• Acquiom Agency Services LLC, as collateral agent under the DIP Notes Facility (the "DIP Notes Agent," and together with the DIP Term Loan Agent, the "DIP Representatives")
• The financial institutions or other entities from time to time party thereto, as DIP Term Loan Lenders and DIP Noteholders (together, the "DIP Lenders")

DIP Commitments

• Up to $657.5 million in aggregate principal amount under a senior secured superpriority DIP facility comprised of a term loan facility and a notes facility, consisting of:
  • $250 million in new money super priority DIP Loans:
    • $125 million available upon entry of the interim order, consisting of DIP Term Loans and DIP Notes
    • $125 million available upon entry of the final order, consisting of DIP Term Loans and DIP Notes; provided that $62.5 million is not required to be funded until the occurrence of a Final Roll-Up Approval Event
  • $250 million roll-up of Prepetition Cash Flow Obligations and Prepetition Secured Notes Obligations into Roll-Up DIP Loans, on a dollar-for-dollar basis (each dollar of new money commitment accompanied by a corresponding dollar of roll-up):
    • $125 million rolled up upon entry of the interim order
    • $62.5 million (the "First Final Roll-Up") upon entry of the final order
    • $62.5 million (the "Second Final Roll-Up") upon the earlier of (1) entry of the confirmation order consistent with the restructuring support agreement or (2) entry of a further court order granting such relief (each, a "Final Roll-Up Approval Event")
  • $7.5 million Backstop Premium, payable in kind (50% earned upon the initial funding of the New Money DIP Loans upon entry of the interim order and the remaining 50% earned upon entry of the final order)
  • Up to $150 million Incremental New Money DIP Loans under the DIP Term Loan Facility, available following entry of the final order:
    • No interest rate, original issue discount, or other fees or commissions
    • Proceeds to fund a paydown of outstanding Prepetition ABL Obligations, professional fees, and/or other cash uses in connection with emergence from the chapter 11 cases
    • Upon emergence, repaid in the form of cash or New Money Preferred Equity; at the election of the holders, proceeds may be allocated toward New Money Preferred Equity subscription proceeds to the extent not applied toward repayment of Prepetition ABL Obligations, professional fees, and/or other cash uses
• The roll-up is consideration for, and solely on account of, the DIP Lenders' agreement to extend the New Money DIP Loans. The Prepetition Secured Parties that are also DIP Lenders (or affiliates thereof) would not have consented to extend the DIP financing without the inclusion of the roll-up.
• As of the petition date, the debtors' prepetition secured obligations included:
  • Prepetition Cash Flow Obligations of not less than $1,598,824,000 in Initial Dollar Term Loans, $569,280,000 in Initial Euro Term Loans, and $200,000,000 in Initial Revolving Loans, plus accrued interest, fees, and expenses
  • Prepetition Secured Notes Obligations of not less than $500,000,000 in Initial Notes, $300,000,000 in 2028 Initial Notes, and $950,000,000 in 2031 Initial Notes, plus accrued interest, fees, and expenses
  • Prepetition ABL Obligations of not less than $445,000,000 in Revolving Credit Loans and approximately $13,100,000 in issued and undrawn letters of credit, plus accrued interest, fees, and expenses

Cash Collateral

• All of the debtors' cash, wherever located and held, including cash in deposit accounts, constituting cash collateral of the Prepetition Secured Parties or DIP Secured Parties within the meaning of section 363(a) of the Bankruptcy Code.
• The debtors are authorized to use cash collateral in accordance with the final order, the DIP documents, and the approved budget (subject to permitted variances under the DIP documents).
• The debtors shall be deemed to first expend proceeds of the DIP Loans before ABL Cash Collateral, and expenditures from commingled pools of ABL Cash Collateral and other cash collateral shall be deemed expended first from cash collateral other than ABL Cash Collateral.
• ABL Priority Collateral, including ABL Cash Collateral, shall not be transferred to non-Debtor subsidiaries in excess of $20,000,000 in the aggregate.

Fees

• Backstop Premium: $7.5 million, payable in kind. 50% earned upon the initial funding of the New Money DIP Loans upon entry of the interim order, with the remaining 50% earned upon entry of the final order. The Backstop Premium has been fully and finally earned as a bargained-for and integral part of the DIP facility.
• DIP Professional Fees: Non-refundable payment of fees in connection with the DIP facility and indemnification and expense reimbursement obligations, including reasonable and documented prepetition and postpetition fees and expenses of the Plan Sponsor Advisors and the Secured Ad Hoc Group Advisors, without the need to file any retention or fee applications.
• ABL Consent Fee: Upon entry of the interim order, the debtors paid the Prepetition ABL Agent a fee payable in kind in the amount of 75 bps of the ABL Commitments, allocated 25 bps to the Prepetition ABL Agent and 50 bps pro rata among the Prepetition ABL Lenders.
• All fees, costs, and expenses paid prior to the petition date to the DIP Secured Parties and the Prepetition Secured Parties are approved in full and not subject to recharacterization, avoidance, subordination, disgorgement, or similar recovery.
• No attorney or advisor to any DIP Secured Party or Prepetition Secured Party shall be required to file an application seeking compensation for services or reimbursement of expenses with the court.

Termination Events and Remedies

• Upon an Event of Default under the DIP documents that has not been waived, and following delivery of a DIP Termination Notice on not less than five business days' notice to the Remedies Notice Parties (the "DIP Remedies Notice Period"), the DIP Representatives may, unless the court orders otherwise:
  • Terminate the debtors' right to use cash collateral (subject to the carve out)
  • Terminate the DIP facility as to any future liability or obligation
  • Declare all DIP Obligations immediately due and payable
  • Invoke default interest under the DIP documents
  • Freeze monies in the debtors' accounts (unless such monies constitute ABL Priority Collateral or are used to fund the carve out)
  • Set off amounts in the debtors' accounts against the DIP Obligations
  • Enforce rights against the DIP Collateral, including foreclosure, occupying the debtors' premises, and sale or disposition of DIP Collateral
• During the DIP Remedies Notice Period, the debtors, the creditors' committee, and/or any party in interest may seek an emergency hearing to contest whether an Event of Default has occurred or to obtain non-consensual use of cash collateral. If such a hearing is requested, the notice period is extended until the court has ruled.
• Term/Notes Cash Collateral Termination Events (five business days' notice to the Remedies Notice Parties):
  • An uncured Event of Default or termination of all commitments under the DIP facility
  • Termination of the restructuring support agreement as to the Consenting First Lien Lenders or the RSA no longer being in full force and effect
  • The DIP facility has been repaid in full
  • Failure to deliver required reports or comply with adequate protection obligations owed to the Prepetition Cash Flow Agent or the Prepetition Secured Notes Trustee within five business days
• ABL Cash Collateral Termination Events (five business days' notice to the Remedies Notice Parties):
  • Termination of DIP commitments, an Event of Default, or failure to comply with ABL-related covenants or obligations under the DIP orders
  • Failure to make any required payment to the Prepetition ABL Agent within five business days
  • Failure to deliver required reports or comply with adequate protection obligations owed to the Prepetition ABL Agent within five business days
  • Filing of a plan or section 363 sale motion that does not provide for payment in full of Prepetition ABL Obligations upon the effective date or closing
  • Exceeding permitted budget variances
  • Failure to comply with the Prepetition ABL Cash Collateral Covenants
• The DIP Secured Parties and Prepetition Secured Parties are stayed from enforcing rights and remedies until a DIP Representative or the Prepetition ABL Agent delivers a Carve Out Trigger Notice and complies with related obligations, or consents to enforcement.
• A Qualifying Consenting Stakeholder Termination Event (including a breach of milestones or the budget variance covenant) shall not constitute a Default, Event of Default, or termination event with respect to the DIP commitments during the Cooperation Period; provided that the DIP Lenders are not required to fund commitments during any Default or Event of Default.

Carve Out

• The carve out consists of:
  • All fees required to be paid to the Clerk of the Court and the U.S. Trustee under 28 U.S.C. § 1930(a), plus statutory interest
  • Reasonable fees and expenses up to $100,000 incurred by a trustee under section 726(b) of the Bankruptcy Code
  • All unpaid Allowed Professional Fees incurred before or on the first business day following delivery of a Carve Out Trigger Notice
  • Post-Carve Out Trigger Notice Cap: $8,000,000 in Allowed Professional Fees incurred after the first business day following delivery of the Carve Out Trigger Notice
• A Carve Out Trigger Notice may be delivered by email by (1) the DIP Representatives, following an Event of Default and acceleration or termination of cash collateral usage, or (2) the Prepetition ABL Agent, following an ABL Cash Collateral Termination Event and termination of ABL Cash Collateral usage.
• Professional Persons must deliver weekly statements estimating fees and expenses. The debtors are required to fund a weekly reserve equal to the sum of (A) the greater of aggregate unpaid Estimated Fees and Expenses or budgeted Allowed Professional Fees, plus (B) the Post-Carve Out Trigger Notice Cap, plus (C) two weeks of budgeted Allowed Professional Fees.
• Upon delivery of a Carve Out Trigger Notice, the debtors shall utilize all cash on hand, including cash in the Funded Reserve Account, to fund a reserve equal to the then-unpaid amounts of Allowed Professional Fees. To fund the carve out reserves, the debtors shall first use cash that is not ABL Priority Collateral.
• Following delivery of a Carve Out Trigger Notice, the DIP Representatives and Prepetition Secured Parties shall not sweep or foreclose on cash until the carve out reserves have been fully funded, but shall have a first-lien, automatically perfected security interest in any residual interest in the reserves.
• 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 any and all other forms of adequate protection, liens, or claims securing the DIP Obligations and the Prepetition Secured Obligations.
• None of the DIP Representatives, DIP Lenders, or Prepetition Secured Parties shall be responsible for the payment or reimbursement of any fees or disbursements of any Professional Person incurred in connection with the chapter 11 cases.

Use of Proceeds

• Proceeds of the DIP facility shall be used for all purposes permitted under the DIP documents and the DIP orders, subject to the approved budget (subject to permitted variances, which may only be amended with the written consent of the Prepetition ABL Agent, not to be unreasonably withheld).
• Incremental New Money DIP Loans shall be used to fund a paydown of outstanding Prepetition ABL Obligations, professional fees, and/or other cash uses in connection with emergence from the chapter 11 cases.
• The creditors' committee may use up to $100,000 in aggregate of DIP proceeds and cash collateral to investigate, but not to prosecute, (a) the claims and liens of the Prepetition Secured Parties and (b) potential claims, counterclaims, causes of action, or defenses against the Prepetition Secured Parties.

Credit Bid

• The DIP Representatives, acting at the direction of the Required DIP Lenders, shall have the right to credit bid up to the full amount of the DIP Obligations (except with respect to the Second Final Roll-Up, unless and until a Final Roll-Up Approval Event occurs) in any sale of the DIP Collateral, without the need for further court order, whether effectuated through section 363(k), 1123, or 1129(b) of the Bankruptcy Code, by a chapter 7 trustee, or otherwise; provided that any credit bid with respect to ABL Priority Collateral shall be subject to ABL priority protections.
• Each Prepetition Representative shall have the right, subject to the intercreditor agreements and the challenge period, to credit bid up to the full amount of the applicable Prepetition Secured Obligations in the sale of the applicable prepetition collateral, consistent with the provisions of the prepetition debt documents (and providing for the DIP Obligations to be either assumed or indefeasibly repaid in full in cash); provided that the Prepetition ABL Agent shall have the exclusive right to credit bid the aggregate outstanding Prepetition ABL Obligations on a dollar-for-dollar basis in connection with any sale of ABL Priority Collateral.
• If a sale includes both ABL Priority Collateral and Term/Note Priority Collateral and the parties are unable, after negotiating in good faith, to agree on the allocation of the purchase price, any of their respective agents may apply to the court for a determination consistent with the intercreditor agreements.
• The DIP Representatives and Prepetition Agents shall have the absolute right to assign, sell, or otherwise dispose of their respective credit bid rights to any acquisition entity or joint venture formed in connection with such bid. Each shall be deemed a qualified bidder in connection with any sale.

Avoidance Actions

• The DIP Superpriority Claims shall not be payable from Avoidance Actions or Recovery Actions but shall include any proceeds or property recovered as a result thereof (the "Avoidance/Recovery Proceeds").
• The DIP Secured Parties and the Prepetition Secured Parties agree to exercise commercially reasonable efforts to marshal away from Avoidance/Recovery Proceeds before turning to such assets to collect on any DIP Obligations or Prepetition Secured Obligations.

Challenge Period and Budget

• The deadline to bring a challenge is the earlier of:
  • 75 calendar days after entry of the interim order (i.e., April 20, 2026) for the creditors' committee and all other parties in interest
  • If a chapter 7 or chapter 11 trustee is appointed prior to expiration of the challenge period, the later of (1) 75 calendar days after entry of the interim order (i.e., April 20, 2026) or (2) 30 calendar days after their appointment
  • The date of an order confirming the debtors' chapter 11 plan
• A later date as agreed in writing by the applicable Prepetition Representative, or as ordered by the court for cause upon a timely motion.
• The filing of a motion seeking standing to file a challenge that attaches a proposed complaint shall toll the challenge period until such motion is resolved, but only as to the filing party and the challenges asserted in the proposed complaint.
• If no challenge is timely filed or the court does not rule in favor of the plaintiff, the debtors' stipulations shall be binding on all parties, the prepetition obligations shall constitute allowed claims, and the prepetition liens shall be deemed legal, valid, binding, and perfected as of the petition date.
• The creditors' committee may use up to $100,000 in DIP proceeds and cash collateral to investigate, but not to prosecute, the Prepetition Secured Parties' claims and liens.
• The current DIP budget, attached as Schedule 1 to the final order, reflects anticipated operating receipts, operating disbursements, non-operating disbursements, net operating cash flow, and liquidity. The budget may be modified from time to time with the approval of the Required DIP Lenders and the consent of the Prepetition ABL Agent (not to be unreasonably withheld).

Securities and Priorities

• The DIP Obligations, including the Roll-Up DIP Loans (subject to a Final Roll-Up Approval Event for the Second Final Roll-Up) and the Backstop Premium, constitute allowed superpriority administrative expense claims (the "DIP Superpriority Claims") against the DIP Obligors on a joint and several basis, with priority over all claims, including sections 503(b) and 507(b) administrative expenses and the Adequate Protection Obligations; provided that the DIP Superpriority Claims shall not be payable from ABL Priority Collateral until the Prepetition ABL Obligations (including any administrative expense claims in favor of the Prepetition ABL Secured Parties) are paid in full in cash.
• The DIP Lenders are granted valid, enforceable, non-avoidable, and automatically perfected security interests and liens (the "DIP Liens") on all DIP Collateral, subject to the carve out, with the following priorities:
  • First priority senior priming liens on all Term/Notes Priority Collateral, subject to the carve out
  • Junior priority priming liens on all ABL Priority Collateral, priming only the Prepetition Cash Flow Liens and Prepetition Secured Notes Liens and, at all times, junior to the Prepetition ABL Liens and ABL Adequate Protection Liens
  • First priority liens on all Unencumbered Property (excluding Avoidance Actions, Recovery Actions, and the carve out reserves, but including Avoidance/Recovery Proceeds), subject to the carve out
  • Liens on property subject to Prepetition Permitted Senior Liens, junior to such existing liens and subject to the carve out
• Priority waterfall (per Exhibit 3):
  • ABL Priority Collateral: (1) Carve Out, (2) Prepetition ABL Permitted Senior Liens, (3) ABL Adequate Protection Liens, (4) Prepetition ABL Liens, (5) DIP Liens, (6) Cash Flow / Secured Notes Adequate Protection Liens, (7) Prepetition Cash Flow / Secured Notes Liens
  • Term/Notes Priority Collateral: (1) Carve Out, (2) Prepetition Cash Flow / Secured Notes Permitted Senior Liens, (3) DIP Liens, (4) Cash Flow / Secured Notes Adequate Protection Liens, (5) Prepetition Cash Flow / Secured Notes Liens, (6) ABL Adequate Protection Liens, (7) Prepetition ABL Liens
  • Unencumbered Property: (1) Carve Out, (2) DIP Liens, (3) Adequate Protection Liens
• The DIP Liens shall not be subject or subordinate to or made pari passu with any lien avoided and preserved under section 551, any postpetition liens (unless otherwise provided), or any intercompany liens.
• The intercreditor agreements remain in full force and effect and continue to govern the relative priorities, rights, and remedies of the Prepetition Secured Parties.

Adequate Protection

Prepetition ABL Secured Parties

• Replacement liens on all DIP Collateral (the "ABL Adequate Protection Liens"), in the order of priority set forth in Exhibit 3, to the extent of any diminution in value.
• Allowed superpriority administrative expense claim under section 507(b) (the "ABL 507(b) Claim"), senior to all other claims except: (i) the carve out, (ii) the DIP Superpriority Claims (except solely with respect to ABL Priority Collateral), and (iii) the Cash Flow 507(b) Claim and Secured Notes 507(b) Claim solely with respect to Term/Notes Priority Collateral. Pari passu with the Cash Flow 507(b) Claim and Secured Notes 507(b) Claim with respect to DIP Collateral that is neither Term/Notes Priority Collateral nor ABL Priority Collateral.
• Current cash payment of all reasonable and documented prepetition and postpetition fees and out-of-pocket expenses of the Prepetition ABL Agent, including professional fees (postpetition fees limited to one counsel, one local counsel if necessary, and one financial advisor).
• Current cash payment of all interest accruing before or after the petition date at the default interest rate under the Prepetition ABL Credit Agreement.
• ABL Consent Fee: 75 bps of ABL Commitments, payable in kind upon entry of the interim order (25 bps to the Prepetition ABL Agent, 50 bps pro rata among the Prepetition ABL Lenders).
• Compliance with Sections 7.4, 7.5, 7.6, and 7.8 of the Prepetition ABL Credit Agreement during the chapter 11 cases.
• On or after 120 days of the petition date, one appraisal and one field examination at the debtors' expense; a second appraisal and field examination on or after 240 days of the petition date, also at the debtors' expense.
• Financial reporting at the same time as reporting provided to the DIP Secured Parties, including budget reporting and variances.

Prepetition Cash Flow Secured Parties

• Replacement liens on all DIP Collateral (the "Cash Flow Adequate Protection Liens"), in the order of priority set forth in Exhibit 3, to the extent of any diminution in value.
• Allowed superpriority administrative expense claim under section 507(b) (the "Cash Flow 507(b) Claim"), pari passu with the Secured Notes 507(b) Claim, senior to all other claims except: (i) the carve out, (ii) the DIP Superpriority Claims, and (iii) the ABL 507(b) Claim with respect to ABL Priority Collateral.
• Current cash payment of all reasonable and documented fees and out-of-pocket expenses of the Secured Ad Hoc Group Advisors and the Prepetition Cash Flow Agent, including professional fees (postpetition fees limited to one counsel, one local counsel if necessary, and one financial advisor).
• Non-cash accrual of interest at the applicable non-default rate under the Prepetition Cash Flow Documents.
• Financial reporting at the same time as reporting provided to the DIP Secured Parties.

Prepetition Secured Notes Secured Parties

• Replacement liens on all DIP Collateral (the "Secured Notes Adequate Protection Liens"), in the order of priority set forth in Exhibit 3, to the extent of any diminution in value.
• Allowed superpriority administrative expense claim under section 507(b) (the "Secured Notes 507(b) Claim"), pari passu with the Cash Flow 507(b) Claim, senior to all other claims except: (i) the carve out, (ii) the DIP Superpriority Claims, and (iii) the ABL 507(b) Claim with respect to ABL Priority Collateral. No Adequate Protection 507(b) Claim (other than the ABL 507(b) Claim) shall be payable from ABL Priority Collateral until the Prepetition ABL Obligations and related adequate protection obligations are paid in full in cash.
• Current cash payment of all reasonable and documented fees and out-of-pocket expenses of the Secured Ad Hoc Group Advisors and the Prepetition Secured Notes Trustee, including legal advisors (limited to one counsel, one local counsel if necessary).
• Non-cash accrual of interest at the applicable non-default rate under the Prepetition Secured Notes Documents.
• Financial reporting at the same time as reporting provided to the DIP Secured Parties.

RSA Termination

• In the event the restructuring support agreement is terminated, holders of Prepetition Cash Flow Obligations or Prepetition Secured Notes Obligations who are RSA signatories shall be entitled to request additional or different adequate protection or to move to vacate the automatic stay on an emergency basis; provided that the debtors' rights to object to any such relief are fully preserved.

Waivers

• Section 506(c): The debtors waive their right to surcharge the prepetition collateral and the DIP Collateral. Except to the extent of the carve out, no costs or expenses of administration shall be charged against any DIP Secured Party, Prepetition Secured Party, DIP Collateral, or prepetition collateral (including cash collateral) without the prior written consent of the DIP Representatives and/or each Prepetition Representative, as applicable.
• Section 552(b): The "equities of the case" exception shall not apply to the Prepetition Secured Parties with respect to proceeds, products, offspring, or profits of any prepetition collateral.
• Marshaling: The equitable doctrine of "marshaling" shall not apply with respect to the DIP Collateral or the prepetition collateral; provided that the DIP Secured Parties and Prepetition Secured Parties agree to exercise commercially reasonable efforts to marshal away from Avoidance/Recovery Proceeds before turning to such assets to collect on any DIP Obligations or Prepetition Secured Obligations.
• All payments or proceeds remitted to the DIP Secured Parties or Prepetition Secured Parties shall be irrevocable and received free and clear of any claim, charge, or assessment, including any claim arising under sections 506(c) or 552(b) of the Bankruptcy Code.
• Any applicable stay (including under Bankruptcy Rule 6004) is waived, and the final order is immediately effective upon entry.

Permitted Variance

• The DIP Secured Parties relied, in part, upon the DIP Obligors' agreement to comply with the approved budget, subject to permitted variances under the DIP documents. Such variances may only be amended with the written consent (not to be unreasonably withheld) of the Prepetition ABL Agent.
• Updates, modifications, and supplements to the approved budget and extensions or waivers of milestones under the DIP documents do not require further court approval.
• The debtors shall obtain the Prepetition ABL Agent's consent (not to be unreasonably withheld) in connection with the approved budget.
• The debtors are required to provide the Prepetition ABL Agent with (i) a mid-month Borrowing Base Certificate based on estimated balances as of the 15th of each month, delivered by the 5th of the following month, and (ii) a monthly Borrowing Base Certificate, delivered by the 20th business day of the following month.
• If, after delivery of the monthly Borrowing Base Certificate, Specified Availability would be less than 7.5% of Availability, the debtors shall, within two business days, deposit cash sufficient to cause Specified Availability to be at least 7.5% of Availability into one or more segregated accounts upon which the Prepetition ABL Agent shall have a first-priority, automatically perfected security interest (a "True Up Deposit").
• The covenants contained in Sections 7.4, 7.5, 7.6 (except Section 7.6(b) with respect to appraisals and field examinations), and 7.8 of the Prepetition ABL Credit Agreement shall be applicable during the chapter 11 cases.