Wiser Solutions, Inc - Chapter 11 DIP Terms

DIP Terms

Borrower(s) / Guarantor(s)

• Wiser Solutions, Inc., as Borrower (the "DIP Facility Borrower")
• Certain subsidiaries of Wiser Solutions, Inc., as Guarantors (the "DIP Guarantors")
• The Debtors shall be jointly and severally liable for the DIP Obligations; nothing in the Final Order shall be construed to constitute a substantive consolidation of any of the Debtors' estates

Agent / Lender(s)

• Crestline Direct Finance, L.P., as Administrative Agent (the "DIP Agent")
• The lenders party thereto, as DIP Lenders

Prepetition Debt / Debtors' Stipulations

• On April 29, 2022, Crestline Direct Finance, L.P., as administrative agent and collateral agent (the "Prepetition Agent") — the same entity serving as DIP Agent — and the Prepetition Lenders entered into the Prepetition Credit Agreement and a Pledge and Security Agreement with certain of the Debtors as Credit Parties
• As of the Petition Date, the Debtors stipulate that they were indebted to the Prepetition Secured Parties, without defense, counterclaim, or offset, in an aggregate principal amount plus accrued and unpaid interest of not less than $250,559,557, plus fees, expenses, and other obligations (the "Prepetition Obligations")
• The Prepetition Obligations are secured by legal, valid, perfected, binding, enforceable, and non-avoidable liens on substantially all of the Debtors' assets (the "Prepetition Collateral"), senior to all other liens subject only to the Permitted Prior Liens
• The Debtors stipulate that they hold no claims or causes of action against the Prepetition Secured Parties, subject to the Challenge Period

DIP Commitments

• $34.2 million superpriority, senior secured, and priming debtor-in-possession multi-draw term loan credit facility comprised of:
  • $11.4 million of new money loans (the "New Money Loans")
  • $22.8 million roll-up and conversion of outstanding principal under the Prepetition Credit Agreement into DIP Loans (the "Roll-Up")
• Availability staged across the interim and final orders:
  • Upon entry of the First Interim Order: a $7.6 million interim amount, consisting of $4.2 million of New Money Loans and $3.4 million of Roll-Up Loans
  • Upon entry of the Second Interim Order: an additional $2.4 million of New Money Loans and an additional $4.8 million of Roll-Up Loans
  • Upon entry of the Final Order: the remaining New Money Loans (for a total of $11.4 million) and an additional $14.6 million of Roll-Up Loans (for a total of $22.8 million of Roll-Up Loans)
• The DIP Secured Parties would not have agreed to provide the DIP Facility without the inclusion of the Roll-Up
• The DIP Agent has no obligation to make any loan unless all conditions set forth in the DIP Credit Agreement have been satisfied in full or waived by the DIP Agent

Cash Collateral

• All of the Debtors' cash, wherever located and held, including cash in deposit accounts, whether as original Prepetition Collateral or proceeds thereof, that constitutes "cash collateral" of the Prepetition Secured Parties and DIP Secured Parties within the meaning of section 363(a) of the Bankruptcy Code
• The Debtors are authorized to use Cash Collateral, subject to the terms and conditions of the Final Order and in a manner consistent with the Approved Budget
• Nothing in the Final Order authorizes the disposition of any assets outside the ordinary course of business, or the use of any Cash Collateral or proceeds resulting therefrom, except as permitted in the Final Order

Interest Rate

• Interest accrues on all outstanding advances under the DIP Facility at the rates and on the conditions, and is payable, as set forth in the DIP Credit Agreement

Fees

• Administrative Agent Fee: $50,000
• Upfront Fee, as defined in the DIP Credit Agreement
• Commitment fees, collateral agency or security trustee fees, and any other fees or premiums payable pursuant to the DIP Credit Documents
• The Debtors shall pay all reasonable and documented prepetition and postpetition fees and out-of-pocket expenses of the DIP Agent in connection with the DIP Facility and the Chapter 11 Cases

Maturity

• All commitments shall terminate and all DIP Obligations shall become immediately due and payable in full in cash on the earliest to occur of (the "Maturity Date"):
  • 90 days after the Petition Date (or such later date as agreed in writing by the DIP Agent)
  • The filing of a motion by the Debtors seeking dismissal of any of the Chapter 11 Cases, the dismissal of any of the Chapter 11 Cases, or the filing of a motion by the Debtors seeking to convert any of the Chapter 11 Cases to Chapter 7
  • The substantial consummation of a chapter 11 plan of any Debtor (and no later than the effective date of such confirmed plan)
  • The acceleration of the DIP Obligations and termination of the DIP Commitments upon an Event of Default
  • The termination of the Stalking Horse APA for any reason without the prior written consent of the Requisite Lenders, other than a termination resulting from a default by Crestline Buyer or a termination to permit the Debtors to pursue an Alternate Transaction that results in payment in full of the Prepetition Obligations and the DIP Obligations
  • The consummation of the 363 Sale Transaction

Application of 363 Sale Proceeds

• If the DIP Agent or an Agent Assignee is not the successful bidder, proceeds of the 363 Sale Transaction (other than the Excluded Cash) shall be paid directly to the DIP Agent upon closing and applied: (i) first, to fund a segregated account of $150,000 (the "Excluded Cash") for the Debtors to pay accrued administrative expenses and reasonable and necessary wind-down costs; (ii) second, to reduce outstanding DIP Obligations; (iii) third, to outstanding Prepetition Obligations; and (iv) any surplus retained by the Debtors pending further order of the Court
• All Excluded Cash remains subject to the DIP Liens, and any Excluded Cash not used for administrative expenses and wind-down costs is applied through the same waterfall (or, where the DIP Agent or Agent Assignee is the successful Stalking Horse Bidder, deemed Acquired Assets and paid over to the DIP Agent or Agent Assignee)

Events of Default / Remedies

• Upon the occurrence and during the continuation of an Event of Default, the DIP Agent, acting at the direction of the Requisite Lenders, may exercise enforcement remedies subject to five (5) days' prior written notice (the "Remedies Notice Period") delivered to lead restructuring counsel to the Debtors, lead counsel to the Committee, and the U.S. Trustee (the "Remedies Notice Parties")
• Remedies include ceasing to make DIP Loans and/or terminating the commitments, declaring all DIP Obligations immediately due and payable, terminating the Debtors' use of Cash Collateral, charging interest at the default rate, and foreclosing on or setting off against the DIP Collateral
• Default interest accrues immediately upon the occurrence of an Event of Default, regardless of notice and without being subject to the Remedies Notice Period
• During the Remedies Notice Period, the Debtors, the Committee, or any party in interest may seek an emergency hearing limited to whether an Event of Default has occurred and is continuing; the DIP Agent shall not oppose such a request
• During the Remedies Notice Period, the Debtors may use Cash Collateral and DIP proceeds solely to fund the Carve-Out and Carve-Out Reserves and amounts critically necessary to preserve the Debtors and their estates in compliance with the Approved Budget (subject to the Permitted Variance)

Milestones

• On or before June 15, 2026: the Debtors' bid deadline for submission of bids from Qualified Bidders in respect of the 363 Sale Transaction shall have occurred
• On or before June 18, 2026: the Debtors shall have held an auction in connection with the 363 Sale Transaction if more than one qualified bid is timely received
• On or before June 23, 2026: the Court shall have entered the Sale Order
• On or before June 30, 2026: the Debtors shall have consummated the 363 Sale Transaction pursuant to the Sale Order

Carve Out

• 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, if any
• Chapter 7 Trustee Fee: up to $50,000 incurred by a trustee under section 726(b) of the Bankruptcy Code
• Pre-Carve-Out Trigger Notice Cap: all unpaid Allowed Professional Fees of Estate Professionals provided for in the Approved Budget incurred on or before the first business day following delivery of a Carve-Out Trigger Notice (other than any restructuring, sale, success, or other transaction fee of any investment bankers or financial advisors)
• Post-Carve-Out Trigger Notice Cap: $50,000 of Allowed Professional Fees incurred after the first business day following delivery of a Carve-Out Trigger Notice
• Prior to delivery of a Carve-Out Trigger Notice, the Debtors shall fund a segregated Funded Reserve Account on a weekly basis for the benefit of Estate Professionals in an amount equal to the estimated accrued and unpaid fees based on the Approved Budget

Use of Proceeds

• Fund the Roll-Up
• Fund postpetition operating expenses and working capital needs of the Debtors
• Make intercompany advances to the non-Debtor Foreign Subsidiaries, solely to fund their ordinary course operating expenses and working capital needs and to preserve their going-concern value
• Pay costs, fees, and expenses (including attorneys' fees) to the DIP Agent and the Prepetition Agent
• Fund fees and expenses incurred in connection with the 363 Sale Transaction
• Pay Professional Fees and expenses as provided for in the Approved Budget
• Fund the Carve-Out
• Pay certain other costs and expenses of administration of the Chapter 11 Cases

Credit Bid

• In connection with any sale process authorized by the Court, whether effectuated through sections 363, 725, or 1123 of the Bankruptcy Code, the DIP Agent and the Prepetition Agent shall have the right to credit bid, pursuant to section 363(k), all or any portion of the Prepetition Obligations and the DIP Obligations, and shall not be prohibited or limited from making such credit bid "for cause"
• The DIP Agent and the Prepetition Agent may assign all or any portion of the Prepetition Obligations and DIP Obligations to an acquisition vehicle, affiliate, or any other Person (the "Agent Assignee"), which shall have the right to credit bid the obligations so assigned in any sale of the Debtors' assets

Avoidance Actions

• The DIP Collateral includes the proceeds of any Avoidance Actions brought under chapter 5 or section 724(a) of the Bankruptcy Code or any other avoidance actions under the Bankruptcy Code or applicable state or foreign law; provided that no liens shall attach to the Avoidance Actions themselves

Challenge Period and Budget

• The deadline to file a Challenge is the expiration of the following applicable period:
  • With respect to any party in interest other than the Committee, the earlier of (i) one business day prior to the hearing to consider approval of the Sale Transactions and (ii) 75 days after entry of the First Interim Order
  • With respect to the Committee, the earlier of (i) 60 days after the appointment of the Committee, (ii) 75 days after entry of the First Interim Order, and (iii) one business day prior to the hearing to consider approval of the Sale Transactions
• An investigation budget in an aggregate amount of $25,000 of the DIP Loans and/or Prepetition Collateral, including Cash Collateral, may be used by the Committee to investigate, but not to prepare, initiate, litigate, prosecute, object to, or otherwise challenge, the Debtors' Stipulations and the Releases

Securities and Priorities

• Subject to the Carve-Out, the DIP Facility and all DIP Obligations are granted allowed superpriority administrative expense claim status pursuant to section 364(c)(1) of the Bankruptcy Code (the "DIP Superpriority Claims"), with priority over any and all administrative expense and unsecured claims against the Debtors or their estates
• As security for the DIP Obligations, the DIP Agent is granted valid, binding, continuing, enforceable, non-avoidable, and automatically perfected liens and security interests (the "DIP Liens") on all of the Debtors' assets, including the Prepetition Collateral, Cash Collateral, and Avoidance Action Proceeds (the "DIP Collateral"), subject to the Carve-Out, with the following priorities:
  • Pursuant to section 364(d), priming first-priority liens on the DIP Collateral, senior to the Prepetition Liens and all other liens other than the Permitted Prior Liens
  • Pursuant to section 364(c)(2), first-priority liens on DIP Collateral not subject to a valid, perfected, and non-avoidable lien in existence as of the Petition Date
  • Pursuant to section 364(c)(3), immediately junior liens on DIP Collateral subject to Permitted Prior Liens on the Petition Date
• The DIP Liens shall not be made subject to or pari passu with any other lien or security interest, shall not be subject to sections 510, 549, or 550 of the Bankruptcy Code, and no lien preserved under section 551 shall be pari passu with or senior to the DIP Liens

Adequate Protection

Prepetition Secured Parties

• The Prepetition Secured Parties are entitled to adequate protection of their interests in the Prepetition Collateral, including Cash Collateral, solely to the extent of any diminution in value of their interests
• Adequate Protection Liens: a valid, perfected replacement security interest in and lien on the DIP Collateral, subject and subordinate in all respects only to (A) the Carve-Out, (B) the DIP Liens, and (C) the Permitted Prior Liens, in addition to and not in substitution for the Prepetition Liens
• Section 507(b) Claims: an allowed administrative expense claim against the Debtors on a joint and several basis with priority over all other administrative claims (other than the DIP Superpriority Claims), payable from all prepetition and postpetition property of the Debtors, excluding the Carve-Out
• The receipt of such adequate protection shall not be deemed an admission that the interests of the Prepetition Secured Parties are adequately protected, and the Prepetition Secured Parties retain the right to seek new, different, or additional adequate protection upon a change in circumstances

Waivers

• The Debtors waive:
  • Section 506(c): the right to surcharge any collateral pursuant to sections 105(a) and 506(c) of the Bankruptcy Code or otherwise
  • Section 552(b): the "equities of the case" exception, which shall not apply to the proceeds, product, offspring, or profits of any Prepetition Collateral or DIP Collateral
  • The equitable doctrine of marshaling and other similar doctrines with respect to the DIP Collateral and the Prepetition Collateral

Permitted Variance

• Commencing after the second full calendar week following the Petition Date, no positive disbursements variance for any line item in the Approved Budget may exceed 15% for both the weekly and cumulative Testing Period as of any date on which a Budget Variance Report is delivered or required to be delivered
• When testing "Operating Disbursements," the only line item tested for any Testing Period is the line item labeled "Total Operating Disbursements"
• The DIP Agent, at the written direction of the Requisite Lenders, may authorize the Debtors in writing to exceed the Permitted Variance for any Testing Period

Releases

• Subject to the Challenge provisions, the Debtors and the other Releasing Parties unconditionally release the DIP Secured Parties and the Prepetition Secured Parties (and their related parties, the "Released Parties") from all claims and causes of action arising prior to entry of the Final Order, including "lender liability" and equitable subordination claims and avoidance actions, but excluding the DIP Lenders' obligations to the Debtors under the DIP Credit Documents
• For the avoidance of doubt, no insiders of the Debtors are Released Parties