Pretium Packaging, L.L.C., et al. - Chapter 11 DIP Terms

DIP Terms

Borrower(s) / Guarantor(s)

• Pretium PKG Holdings, Inc., as Borrower
• The Debtors and their respective subsidiaries, as joint and several Guarantors

Agent / Lender(s)

• DIP Term Loan Facility:
  • Wilmington Savings Fund Society, FSB, as Administrative Agent and Collateral Agent (the "DIP Term Loan Agent")
  • Financial institutions and other entities party thereto from time to time, as DIP Term Loan Lenders
• DIP ABL Facility:
  • Wells Fargo Bank, National Association, as Administrative Agent and Collateral Agent (the "DIP ABL Agent")
  • Financial institutions and other entities party thereto from time to time, as DIP ABL Lenders

DIP Commitments

• $533.5 million senior secured superpriority DIP Term Loan Facility comprised of:
  • $401 million Initial Draw (including new money and refinancing of Prepetition Tranche A Term Loans), available upon entry of the Interim Order
  • Up to $132.5 million in Delayed Draw Term Loan commitments, available in one or more draws upon entry of the Final Order
• $100 million senior secured superpriority DIP ABL revolving credit facility (including a $20 million Canadian revolving credit commitment), with all Prepetition ABL Obligations automatically rolled up into DIP ABL Obligations upon entry of the Interim and Final Orders
• Amounts repaid or prepaid under the facilities may not be reborrowed.

Cash Collateral

• All of the Debtors' cash, wherever located and held, including cash in deposit accounts, that constitutes or will constitute "cash collateral" of any of the Prepetition Secured Parties, DIP Term Loan Secured Parties, and DIP ABL Secured Parties, to be used in accordance with the Approved Budget (subject to permitted variances) and the DIP Orders and DIP Documents
• All collections and proceeds of ABL Priority Collateral shall be deposited into designated lock-box and/or deposit accounts subject to the sole dominion and control of the DIP ABL Agent, and remitted to the DIP ABL Agent for application per the DIP Documents and Final Order

Interest Rate

• DIP Term Loan Facility:
  • Base Rate Loans: Base Rate + 4.25% per annum
  • SOFR Loans: Term SOFR + 5.25% per annum (1.00% floor)
  • Default Rate Increase: 2.00% per annum

Fees

• Backstop Premium and Participation Premium (collectively, the "DIP Premiums"), payable to the DIP Term Loan Lenders per the DIP Term Loan Documents; amounts not specified in the order but deemed approved upon entry of the Interim Order on an irrevocable basis
• Commitment fees, agent fees, and other fees and expenses as set forth in the DIP ABL Documents
• Professional fees of DIP lender advisors, including Milbank LLP, Moelis & Company LLC, and others for the DIP Term Loan; and Morgan, Lewis & Bockius LLP, Berkeley Research Group, LLC, and others for the DIP ABL, payable without the need to file retention applications

Maturity

• The earliest to occur of:
  • The scheduled maturity date as set forth in the DIP Term Loan Documents and DIP ABL Documents
  • The date on which all Term Commitments have been terminated and all DIP Obligations (other than contingent indemnification obligations as to which no claim has been asserted) have been paid in full in cash
  • Acceleration following an Event of Default under the applicable DIP Documents

Carve Out

• Post-Carve Out Trigger Notice Cap: $8,000,000 for aggregate Allowed Professional Fees incurred after delivery of a Carve Out Trigger Notice
• Chapter 7 Trustee Fee: Not to exceed $75,000
• Pre-Carve Out Trigger Notice amounts include all Allowed Professional Fees incurred prior to delivery of the Carve Out Trigger Notice, as contemplated in the Approved Budget
• The Carve Out is senior to all DIP Liens, DIP Superpriority Claims, Adequate Protection Liens, and Adequate Protection 507(b) Claims
• Following delivery of a Carve Out Trigger Notice, neither the DIP Agents nor the Prepetition Secured Parties may sweep or foreclose on cash until the Carve Out Reserves are fully funded

Use of Proceeds

• Refinancing of all Prepetition Tranche A Term Loans and Payment in Full of all First Out Priority Obligations from the Initial Draw
• Working capital and general corporate purposes
• Orderly continuation of the Debtors' businesses and maintenance of going concern value
• Funding administrative expenses, professional fees, adequate protection payments, and the Carve Out

Credit Bid

• The DIP Term Loan Agent shall have the right to credit bid up to the full amount of DIP Term Loan Obligations in any sale of DIP Collateral, subject to section 363(k) of the Bankruptcy Code; provided that DIP Term Loan Obligations may not be used to credit bid in any disposition of ABL Priority Collateral unless such sale provides for Payment in Full of all ABL Obligations (including Prepetition ABL Obligations and DIP ABL Obligations)
• The DIP ABL Agent shall have the right to credit bid up to the full amount of DIP ABL Obligations in any sale of DIP Collateral, subject to section 363(k) of the Bankruptcy Code
• The Prepetition Secured Parties retain the right to credit bid up to the full amount of their respective Prepetition Obligations, subject to certain limitations and restrictions set forth in the Final Order and DIP Documents
• The Administrative Agent is authorized to form one or more acquisition vehicles and to assign any successful credit bid to such acquisition vehicle(s)

Avoidance Actions

• DIP Collateral does not include Avoidance Actions themselves, but does include the proceeds of Avoidance Actions ("Avoidance Proceeds")
• Avoidance Proceeds are available to satisfy DIP Obligations, subject to the Carve Out and Senior First Out Obligations

Challenge Period and Budget

• Challenge Period as defined in the Interim Order and reaffirmed in the Final Order; upon expiration of the Challenge Period without a timely challenge, or upon final non-appealable disposition of any timely challenge, stipulations and admissions in the Final Order become binding
• Budget Variance Test Dates: Every second Friday after the Petition Date (first occurring on the Friday of the fourth full calendar week after the Petition Date, or the next Business Day if such Friday is not a Business Day)
• Budget Variance Report required on each such Friday for the most recently ended Budget Variance Test Period, in the form required by the DIP Documents

Securities and Priorities

• The DIP Secured Parties are granted valid, binding, continuing, fully perfected, enforceable, and non-avoidable security interests and liens on all of the Debtors' prepetition and postpetition assets and properties (the "DIP Collateral"), effective automatically upon entry of the Interim Order, with the following priority structure:
  • On ABL Priority Collateral: DIP ABL Liens hold first-priority senior priming liens (priming all Prepetition Liens, including Prepetition ABL, 1L, and 2L Liens); DIP Term Loan Liens hold junior priority priming liens (priming Prepetition 1L and 2L Liens, but junior to Prepetition ABL Liens and DIP ABL Liens)
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  • On Term Priority Collateral: DIP Term Loan Liens hold first-priority senior priming liens (priming all Prepetition Liens, including Prepetition 1L, 2L, and ABL Liens), subject only to the Carve Out, Prepetition 1L Permitted Senior Liens, and Senior First Out Obligations
  • On Term Priority Collateral: DIP Term Loan Liens hold senior priming liens, priming Prepetition ABL and 2L Liens; DIP Term Loan Liens are junior to Prepetition 1L Liens
  • First-priority liens on all unencumbered property, including, upon entry of the Final Order, Avoidance Proceeds
• All DIP Term Loan Obligations and DIP ABL Obligations constitute allowed superpriority administrative expense claims against all DIP Obligors on a joint and several basis, pursuant to section 364(c)(1) of the Bankruptcy Code, with priority over all claims including administrative expenses under sections 503(b) and 507(b), subject only to the Carve Out and Senior First Out Obligations
• The relative priorities of the DIP Secured Parties and Prepetition Secured Parties are governed by the existing Intercreditor Agreements (including the Prepetition First Out/Second Out Intercreditor Agreement, the Prepetition 1L/2L Intercreditor Agreement, and the Prepetition ABL Intercreditor Agreement), which remain in full force and effect and are not amended or modified by the DIP Orders or DIP Documents

Adequate Protection

Prepetition ABL Secured Parties

• ABL Adequate Protection Liens: Valid, perfected replacement security interests and liens on all DIP Collateral and proceeds, to the extent of the Prepetition ABL Parties' Diminution in Value, senior to DIP Term Loan Liens and 2L Adequate Protection Liens, subject to the Carve Out
• ABL 507(b) Claim: Allowed administrative expense claim pursuant to section 507(b) of the Bankruptcy Code, to the extent of Diminution in Value, subordinate to the Carve Out and DIP Superpriority Claims; with respect to DIP Term Priority Collateral, also subordinate to the 1L 507(b) Claim and 2L 507(b) Claim

Prepetition First Lien Term Loan Secured Parties

• 1L Adequate Protection Liens: Valid, perfected replacement security interests and liens on all DIP Collateral and proceeds, to the extent of the Prepetition 1L Parties' Diminution in Value, junior to ABL Adequate Protection Liens, subject to the Carve Out
• 1L 507(b) Claim: Allowed administrative expense claim pursuant to section 507(b) of the Bankruptcy Code, to the extent of Diminution in Value, subordinate to the Carve Out, Senior First Out Obligations, and DIP Superpriority Claims; with respect to DIP ABL Priority Collateral, also subordinate to the ABL 507(b) Claim

Prepetition Second Lien Term Loan Secured Parties

• 2L Adequate Protection Liens: Valid, perfected replacement security interests and liens on all DIP Collateral and proceeds, to the extent of the Prepetition 2L Parties' Diminution in Value, junior to ABL and 1L Adequate Protection Liens, subject to the Carve Out
• 2L 507(b) Claim: Allowed administrative expense claim pursuant to section 507(b) of the Bankruptcy Code, to the extent of Diminution in Value, subordinate to the Carve Out, Senior First Out Obligations, DIP Superpriority Claims, ABL 507(b) Claim, and 1L 507(b) Claim

Waivers

• Subject to entry of the Final Order:
  • Section 506(c): The Debtors waive their right to surcharge the DIP Collateral or Prepetition Collateral against any DIP Secured Party or Prepetition Secured Party
  • Section 552(b): The "equities of the case" exception shall not apply to the DIP Collateral or Prepetition Collateral; the DIP Secured Parties and Prepetition Secured Parties are entitled to all other benefits of section 552(b)
  • Marshaling: The equitable doctrine of marshaling shall not apply with respect to the DIP Collateral or Prepetition Collateral for the benefit of any party other than the DIP Secured Parties and Prepetition Secured Parties, respectively

Permitted Variance

• Tested on a rolling two-week basis on each Budget Variance Test Date:
  • Actual total receipts (excluding Extraordinary Receipts) shall not be less than 70.0% of forecasted receipts for the applicable Budget Variance Test Period
  • Actual total disbursements shall not exceed 120.0% of forecasted total disbursements for the applicable Budget Variance Test Period
• If the Borrower is not in compliance on any Budget Variance Test Date due to a Budget Variance Test Period that encompasses a period covered by an Updated Budget not yet received, compliance testing shall be delayed until receipt and review of such Updated Budget
• Updates, modifications, and supplements to the Approved Budget, and extensions or waivers of any Milestones as defined in the DIP Documents, require no further Court approval