First Brands Group - DIP Terms

DIP Terms

Borrower(s) / Guarantor(s)

• First Brands Group, LLC, as Borrower
• First Brands Group Intermediate, LLC, as Parent
• Certain debtors other than the Borrower, as DIP Guarantors, initially including the prepetition IL term loan guarantors
• Viceroy Private Capital, LLC and First Brands Group Holdings, LLC, as Parent Guarantors, pursuant to a separate parent guarantee
• The SPV Debtors are not DIP Guarantors.
• Certain foreign subsidiaries may be required to become guarantors within 30 days of the interim order.

Agent / Lender(s)

• Wilmington Savings Fund Society, FSB, as Administrative, Collateral, and Escrow Agent
• The financial institutions party thereto from time to time, as DIP Lenders
• Morgan Stanley Senior Funding, Inc., as Fronting Lender
• OPY Credit Corp., as Trading Agent

DIP Commitments

• $4.4 billion senior secured, superpriority, priming term loan facility comprised of:
  • $1.1 billion in new money term loans, with certain loans to be denominated in Euros:
    • Up to $500 million available on an interim basis
    • The remaining $600 million available upon entry of the final order
  • $3.3 billion roll-up of prepetition first lien obligations, structured as a fee for providing the financing:
    • $1.5 billion interim roll-up, effective upon the initial new money draw
    • $1.8 billion final roll-up, effective upon the final new money draw
• The roll-up is effectuated on a cashless basis, whereby for every $1 of new money loans purchased, the lender is deemed to have exchanged $3 of its eligible prepetition claims for $3 of roll-up loans.
• The facility is subject to syndication procedures, offering participation rights to eligible prepetition lenders.
• Amounts repaid or prepaid under the facility may not be reborrowed.

Cash Collateral

• The debtors are authorized to use cash collateral, defined as all cash of the DIP loan parties and parent guarantors, in accordance with the approved budget and subject to the provision of adequate protection.

Interest Rate

• New Money Term Loans:
  • SOFR / EURIBOR + 10.0% (1.55% cash, 8.45% PIK)
  • Base Rate + 9.0% (1.55% cash, 7.45% PIK)
• Roll-Up Loans:
  • SOFR / EURIBOR + 7.0% (all PIK)
  • Base Rate + 6.0% (all PIK)
• Default Rate Increase: 2.0%
• Floor: 1.0%

Fees

• Upfront Premium: 5.0% of new money commitments, PIK.
• Anchor Premium: 10.0% of new money commitments, payable to certain allocation parties, PIK.
• Exit Premium: 5.0% of the then-outstanding term loans, payable in cash upon prepayment or maturity.
• Extension Premium: 0.75% of the then-outstanding term loans, payable in cash for a borrower-elected maturity extension or PIK for a mutually agreed extension.

Maturity

• The earliest to occur of:
  • A specified date in 2026, subject to certain 45-day extensions at the borrower's election and 30-day extensions by mutual agreement
  • The closing of a sale of all or substantially all of the debtors' assets
  • The consummation date of a chapter 11 plan
  • The expiration of the interim order, if the final order has not been entered
  • The date on which the final order is vacated or terminated
• Mandatory prepayments are required from the proceeds of certain asset sales, casualty events, and unpermitted debt incurrences.

Carve Out

• The carve-out is senior to all DIP and prepetition liens and claims.
• The carve-out is defined as the sum of statutory fees, up to $125,000 for a chapter 7 trustee, and allowed professional fees.
• Post-Carve-Out Trigger Notice Cap: $25 million for allowed professional fees incurred after the delivery of a trigger notice.

Use of Proceeds

• Repay the prepetition bridge facility
• Fund working capital and general corporate purposes
• Pay costs of administering the chapter 11 cases, including professional fees
• Fund the carve-out
• All uses of proceeds must be in accordance with the approved budget.

Credit Bid

• The DIP agent and prepetition agents have the right to credit bid the full amount of their respective obligations in connection with any sale of collateral.
• Roll-up lenders may not credit bid their obligations unless the new money loans are indefeasibly repaid in full in cash or the new money lenders otherwise consent.

Avoidance Actions

• Upon entry of the final order, the DIP collateral will include the proceeds of any avoidance actions.

Challenge Period and Budget

• The deadline to bring a challenge is:
  • For a creditors' committee, 60 days after its appointment
  • For a chapter 7 or 11 trustee, the later of 60 days after the interim order or 30 days after appointment
  • For all other parties in interest, 60 days after entry of the interim order
• A creditors' committee may use up to $50,000 of DIP proceeds or cash collateral to investigate, but not prosecute, potential challenges.
• The debtors must operate in accordance with an approved 13-week budget, which will be updated monthly.

Securities and Priorities

• The DIP obligations are granted superpriority administrative expense claims against the DIP loan parties and parent guarantors, subject only to the carve-out.
• The DIP lenders are granted perfected liens on all prepetition and postpetition property of the DIP loan parties and parent guarantors (the "DIP Collateral"), subject to the carve-out, with the following priorities:
  • First-priority priming liens on prepetition term priority collateral
  • First-priority liens on all unencumbered assets, including, upon entry of the final order, avoidance action proceeds
  • Junior liens on assets subject to valid and perfected prepetition liens

Adequate Protection

Prepetition ABL Secured Parties

• Allowed 507(b) superpriority administrative expense claims, junior to the DIP claims and the carve-out.
• Replacement liens on all collateral to the extent of any diminution in value.
• Current cash payment of reasonable and documented fees and expenses, including professional fees.
• Current cash payment of postpetition interest at the applicable contractual default rate (supply chain obligations are PIK).
• Additional protections, including information and consultation rights regarding the budget and the benefit of any financial covenants provided to the DIP lenders, subject to a cushion.

Prepetition First and Second Lien Term Loan Secured Parties

• Allowed 507(b) superpriority administrative expense claims, junior to the DIP claims and the carve-out.
• Replacement liens on all collateral to the extent of any diminution in value.
• Current cash payment of reasonable and documented fees and expenses, including professional fees.
• Current payment-in-kind of postpetition interest at the applicable contractual default rate.

Waivers

• Upon entry of the interim order and subject to the final order, the debtors waive their rights to:
  • Surcharge the collateral under section 506(c)
  • Invoke the "equities of the case" exception under section 552(b)
  • Apply the equitable doctrine of "marshaling"
• These waivers do not apply to the ABL secured parties.

Permitted Variance

• Actual cash receipts may not be less than 85% of budgeted receipts (80% for the initial period), tested cumulatively.
• Total operating disbursements may not exceed budgeted amounts by more than 15% (20% for the initial period), tested cumulatively.
• The debtors must maintain minimum liquidity of $50 million at all times.