The Lycra Company LLC - Chapter 11 Plan Terms

Plan / RSA Terms

Overview

• On March 13, 2026, the Debtors entered into a Short-Form Lock-Up Deed (the “RSA”) with the Consenting Creditors, comprising holders of:
  • 100% of the ssTL Claims;
  • 100% of the Euro Notes Claims;
  • Over 90% of the Dollar Notes Claims; and
  • Over 90% of the Promissory Note Claims.
• The compromises and settlements embodied in the Plan are the result of extensive, arm’s-length, good-faith negotiations and represent a fair and reasonable compromise of all Claims, Interests, Causes of Action, and controversies, preserving value for the Debtors, their Estates, and their stakeholders while avoiding extended, uncertain, and value-destructive litigation.
• On May 6, 2026, the Debtors received court approval for the Amended Plan (Doc. 246), which was filed on May 5, 2026.

Classification and Treatment of Claims

• Class 3 (ssTL Claims), Class 4 (Euro Notes Claims), Class 5 (Dollar Notes Claims), and Class 6 (Promissory Note Claims) constitute the only Voting Classes under the Plan.
• Class 3 – ssTL Claims:
  • Allowed in the aggregate amount of $214,051,828 on the Effective Date, not subject to any counterclaim, defense, offset, or reduction.
  • Each Holder shall receive its Pro Rata share of (i) the New LYCRA Holdco Notes and (ii) the New LYCRA Holdco ssTL Common Stock, provided that distribution of the New LYCRA Holdco ssTL Common Stock is conditioned upon execution of the New LYCRA Holdco Investor Agreement by such Holders.
• Class 4 – Euro Notes Claims:
  • Allowed in the aggregate amount of €448,615,157 on the Effective Date.
  • Linx Capital Limited, as Holder of the Allowed Euro Notes Claims, shall receive:
    • 95% of the New Class A2 Warrants in respect of the Allowed Euro Notes Priority Tranche Claims; and
    • 5% of the New Class A2 Warrants and 100% of the New Class A3 Warrants in respect of the Allowed Euro Non-Priority Tranche Claims.
• Class 5 – Dollar Notes Claims:
  • Allowed in the aggregate amount of $779,907,149 on the Effective Date.
  • Each Holder shall receive its Pro Rata share of the New Class B Warrants.
• Class 6 – Promissory Note Claims:
  • Allowed in the aggregate amount of $19,446,000 on the Effective Date.
  • Each Holder shall receive its Pro Rata share of $1,000 in full and final satisfaction of such Claim.

DIP Financing

• The required Holders of ssTL Claims, Euro Notes Claims, Dollar Notes Claims, and Promissory Note Claims provided crucial forbearances on certain events of default under the prepetition debt documents, affording the Debtors the runway to file the Prepackaged Cases in an orderly manner, and provided the DIP Notes Facility, which enabled the Company to fund operations and the costs of the Restructuring Transactions prior to and during the pendency of the cases.
• The DIP Note Purchase Agreement is by and among Eagle Intermediate, as issuer, each of the Debtors as guarantors, GLAS USA LLC, as administrative agent, GLAS Trust Corporation Limited, as collateral agent, and the purchasers party thereto.
• All DIP Claims shall be deemed Allowed as of the Effective Date in an amount equal to:
  • The principal amount outstanding under the DIP Notes Facility on such date;
  • All accrued and unpaid interest thereon to the date of payment; and
  • All accrued and unpaid fees, premiums, expenses, and non-contingent indemnification obligations payable under the DIP Documents and DIP Orders.
• On the Effective Date, each Allowed DIP Claim shall, in full and final satisfaction, be paid in full in Cash from proceeds of the Exit Notes Facility; provided that, if a Holder of an Allowed DIP Claim is also a lender under the Exit Notes Facility, such Holder may elect to exchange its Allowed DIP Claim into the Exit Notes Facility on a dollar-for-dollar basis.
• Upon the Effective Date, the Reorganized Debtors are authorized and directed to:
  • Issue the New Class A1 Warrants in full and final satisfaction of the DIP Commitment Premium; and
  • Issue the DIP Exit Note in full and final satisfaction of the DIP Exit Premium, in each case with allocations to be determined and agreed among the DIP Noteholders.

Exit Notes Facility

• On the Effective Date, the Reorganized Debtors shall enter into the Exit Notes Facility pursuant to the Exit Notes Facility Documents, the terms of which shall be consistent with the RSA and the Plan.
• The Exit Notes Facility is a secured exit notes facility in an amount not less than $75,000,000, sufficient to satisfy in full all requisite payments under the Plan, including all Professional Fees, DIP Claims, and Administrative Claims.
• On the Effective Date, the Exit Notes Facility shall be issued and distributed as provided in the Restructuring Steps Plan, and all Liens and security interests granted by the Debtors or Reorganized Debtors in accordance with the Exit Notes Facility Documents:
  • Shall be deemed granted;
  • Shall constitute legal, valid, binding, automatically perfected, non-avoidable, first-priority, and enforceable Liens and security interests in the applicable collateral; and
  • Shall not be subject to avoidance, recharacterization, or equitable subordination, and shall not constitute preferential transfers, fraudulent transfers, or fraudulent conveyances under the Bankruptcy Code or any applicable nonbankruptcy law.

New LYCRA Holdco Notes

• On the Effective Date, New LYCRA Holdco shall issue the New LYCRA Holdco Notes pursuant to the New LYCRA Holdco Notes Documents, the terms of which shall be consistent with the RSA and the Plan.
• The New LYCRA Holdco Notes are new secured notes in an amount equal to 95% of the Allowed amount of ssTL Claims (i.e., $214,051,828), to be issued pursuant to the New LYCRA Holdco Notes Purchase Agreement.

DIP Exit Note

• The DIP Exit Note is a $10,000,000 junior unsecured promissory note to be issued by New LYCRA Holdco on the Effective Date to the DIP Noteholders, in full and final satisfaction of the DIP Exit Premium, with allocations to be determined and agreed among the DIP Noteholders and communicated in writing to the Debtors prior to the Effective Date.

New Equity and Warrants

• On the Effective Date, New LYCRA Holdco shall issue the New LYCRA Holdco Common Stock and the New Warrants, the distribution and issuance of which shall be governed by the terms and conditions of the instruments evidencing such issuance, including the New LYCRA Holdco Organizational Documents.
• Key economic terms include:
  • New Class A Warrant Equity Cap: $480,000,000;
  • New Class B Warrant Participation Threshold: $120,000,000;
  • New Class A Warrant Strike Price: $0.01; and
  • New Class B Warrant Strike Price: $0.01.
• New LYCRA Holdco Investor Agreement:
  • As part of the Plan Supplement, the Debtors shall file the New LYCRA Holdco Investor Agreement in respect of the equity investments in New LYCRA Holdco and the New LYCRA Holdco Common Stock, which shall be largely consistent with the Equity Term Sheet attached as Schedule 4 to the RSA.
  • Any person receiving New LYCRA Holdco Common Stock or New Warrants on the Effective Date shall be required to deliver to the Debtors a signature page to the New LYCRA Holdco Investor Agreement and such other documentation reasonably requested by the Debtors (the “Share Delivery Documents”); provided that the New LYCRA Holdco Investor Agreement and other Organizational Documents shall be binding on recipients regardless of whether they actually deliver signature pages.
  • The Debtors are permitted to establish a holding period trust for a period of six months following the Effective Date to hold any New LYCRA Holdco Common Stock or New Warrants undelivered on account of a party’s failure to deliver the Share Delivery Documents.
  • Upon expiration of such six-month period, any party that has not delivered the Share Delivery Documents shall not receive New LYCRA Holdco Common Stock or New Warrants under the Plan, and all right, title, and interest in such securities shall be forfeited.

Restructuring Transactions

• The Debtors or Reorganized Debtors are authorized to enter into and effectuate the Restructuring Transactions contemplated by the Plan, the RSA, and the other Definitive Documents, including any transactions contemplated by the Restructuring Steps Plan and the Share Transfer described in Article IV.B of the Plan.
• GLAS Trustees Limited, as holder of the Holdco Interests, is authorized and directed to, on or as of the Effective Date, effectuate the Share Transfer in accordance with the Agreed Transfer Process and the Restructuring Steps Plan, and to transfer all outstanding capital stock of Eagle Holding Co B.V. to Stretch UK Topco Limited (referred to as “New LYCRA Holdco”), free and clear of all Liens, Claims, and other encumbrances (other than those created under the Plan or the Exit Notes Facility), and pursuant to Section 5.2 of the Equity Trust Deed originally dated September 5, 2025.
• The Consenting Creditors (and GLAS Trustees Limited) shall take commercially reasonable steps necessary and reasonably requested by the Debtors or Reorganized Debtors to consummate the Restructuring Transactions, the Share Transfer, and the other transactions contemplated by the Restructuring Steps Plan.
• The Reorganized Debtors are authorized, but not directed, to effectuate the dissolution of Eagle Finance BV and Eagle Finance UK from and after the Effective Date as provided in Article IV.B of the Plan, subject to applicable local law requirements; the Consenting Creditors shall take all actions reasonably necessary to effectuate such FinanceCo Dissolution.

Sources of Consideration

• The Debtors and Reorganized Debtors, as applicable, shall fund distributions under the Plan and the contemplated Restructuring Transactions with:
  • The Debtors’ Cash on hand as of the Effective Date;
  • The New LYCRA Holdco Common Stock (excluding the MIP Shares) and the New Warrant Shares; and
  • The New Debt.

Voting Results

• As evidenced by the Voting Report, each of the Voting Classes voted to accept the Plan with respect to each Debtor.
• The Consenting Creditors have supported and committed to continue to support the Debtors’ restructuring pursuant to the RSA, with the applicable Consenting Creditors agreeing to equitize their secured claims to facilitate the reorganization and negotiating for the use of their cash collateral, which provided liquidity necessary to fund the administration of the Prepackaged Cases.
• As stated on the record at the Combined Hearing:
  • Castleknight Master Fund LP, representing $27,608,008 of the Dollar Note Claims, has irrevocably rescinded its ballot rejecting the Plan and is now deemed to have accepted the Plan, and irrevocably withdrew its submitted Opt-Out Form, becoming bound by the release, exculpation, and injunction provisions in Article VIII of the Plan, including the Third-Party Release.
  • Burlington Loan Management DAC, representing $100,000 of the Dollar Note Claims, consents to the terms of the Plan as well as the release, exculpation, and injunction provisions in Article VIII of the Plan, including the Third-Party Release.

Releases

• Article VIII.C of the Plan describes certain releases granted by the Debtors in accordance with section 1123(b) of the Bankruptcy Code (the “Debtor Release”).
• Article VIII.D of the Plan describes certain releases granted by the Releasing Parties (the “Third-Party Release”), which is:
  • Consensual;
  • Essential to the Confirmation of the Plan;
  • Given in exchange for the good and valuable consideration provided by the Released Parties;
  • A good faith settlement and compromise of such Claims and Causes of Action;
  • In the best interests of the Debtors, their Estates, Holders of Claims and Interests, and all other parties in interest;
  • Fair, equitable, and reasonable;
  • Given and made after due notice and opportunity for hearing; and
  • A bar to any of the Releasing Parties asserting any Claim or Cause of Action released pursuant thereto.
• The Third-Party Release was a core negotiation point and an integral component of the RSA, instrumental in developing a Plan that maximized value for all of the Debtors’ stakeholders, and was critical to incentivizing parties to support the Plan, facilitating participation in the RSA and the chapter 11 process, and preventing potentially significant, time-consuming, and value-depleting litigation.
• The Third-Party Release provides that any Entity shall not be a Released Party if it opts out (or, with respect to the Deemed Rejecting Classes and Holders of Class 6 Claims who are not a party to the RSA, opts in to), or timely objects to, the Third-Party Release.
• Chubb Surety shall be deemed to have opted out of any releases provided in the Plan and is not a “Releasing Party” thereunder.

Exculpation

• The exculpation provision set forth in Article VIII.E of the Plan is essential to the Plan, with the carve-out for actual fraud, willful misconduct, or gross negligence consistent with section 1125(e) of the Bankruptcy Code.

Executory Contracts and Unexpired Leases

• Article V of the Plan provides for the assumption of the Debtors’ Executory Contracts and Unexpired Leases not previously assumed, assumed and assigned, or rejected during the Prepackaged Cases under section 365 of the Bankruptcy Code, and the payment of Cures, if any, related thereto.
• The assumption of Executory Contracts and Unexpired Leases (including the HELM Agreements) may include the assignment of certain such contracts to Affiliates.
• On the Effective Date, any Executory Contract or Unexpired Lease not listed on the Rejected Executory Contract and Unexpired Lease List is deemed assumed (including the HELM Agreements and the Chubb Surety Documents), without further notice or Bankruptcy Court action.
• The Confirmation Order constitutes the Bankruptcy Court’s final approval and assumption of the HELM Agreements, as well as a finding that the assumption reflects a sound exercise of the Debtors’ business judgment and that the HELM Agreements are: (a) in the best interests of the Debtors, their Estates, and Holders of Claims and Interests; (b) fair, equitable, and reasonable; and (c) the product of good-faith, arm’s-length negotiations.

Non-U.S. Facility

• The Non-U.S. Facility is a short-term borrowing facility between Debtor The LYCRA Company Industria E Comercio Textil Ltda, as borrower, and Itaú Unibanco S.A. Nassau Branch (Bahamas), as lender.
• On the Effective Date, all Non-U.S. Facility Claims shall be deemed Allowed Claims and shall be Reinstated, with the New Debt Documents providing for and allowing the continuation of the Non-U.S. Facility on and after the Effective Date.

Management Incentive Plan

• Following the Effective Date, the New LYCRA Holdco Board is authorized to adopt the Management Incentive Plan, which shall provide for grants of equity and equity-based awards to employees, directors, consultants, and/or other service providers of the Reorganized Debtors, as determined at the discretion of the New LYCRA Holdco Board.
• The MIP Shares, representing up to 10% of the aggregate number of shares of New LYCRA Holdco Common Stock issued on the Effective Date calculated on a fully diluted basis (after taking into account the issuance of all New Warrant Shares), are reserved for issuance under the Management Incentive Plan as a separate class of New LYCRA Holdco Common Stock.

Directors and Officers

• Article IV.J of the Plan sets forth the process for appointment and identification of officers and the New LYCRA Holdco Board, which shall consist of Kathy Choi, Stefan Binder, Katherine Harper, Tom Waldron, and Bruce D. Rubin, designated in accordance with the New LYCRA Holdco Organizational Documents included in the Plan Supplement.
• The other Governing Bodies shall be appointed in accordance with the New LYCRA Holdco Organizational Documents.

Restructuring Expenses

• The Restructuring Expenses of the Restructuring Expense Parties (including the Ad Hoc Group Advisors) and the reasonable and documented out-of-pocket expenses of the members of the Ad Hoc Group shall be paid in full without the requirement of any application to, or review or approval by, the Bankruptcy Court.