Corporate Air - DIP Terms

DIP Terms

Borrower(s) / Guarantor(s)

• Corporate Air, LLC, Steel City Aviation, LLC, Cheyenne, LLC, Schreiner Air Investments, LLC, Pittsburgh Flight Training Center, Inc., Steel City Aviation, Inc., and CAM Investments, Inc., as Borrowers

Agent / Lender(s)

• Vantage ACG LLC, as Agent
• The lenders party thereto from time to time, as DIP Lenders

DIP Commitments

• $4.5 million subordinated, senior secured super-priority multi-draw term loan facility comprised of:
  • $1.5 million in new money term loans available upon entry of the interim order
  • An additional $1.5 million available upon entry of the final order
  • The remaining balance available in multiple draws of no less than $150,000 per draw
• Amounts repaid or prepaid under the facility may not be reborrowed.

Cash Collateral

• The debtors are authorized to use cash collateral, defined as all of the debtors’ cash, wherever located, including cash in deposit accounts.

Interest Rate

• 15.0% per annum, payable in cash or in kind at the borrowers' option
• Default Rate Increase: 5.0%

Fees

• Commitment Fee: 2.0% of the term loan commitments, fully earned and nonrefundable upon entry of the interim order.
• The debtors are authorized to pay all reasonable and documented prepetition and postpetition fees and out-of-pocket expenses of the agent and the DIP lenders.

Maturity

• The earliest to occur of:
  • 12 months after the petition date
  • The effective date of a chapter 11 plan
  • The entry of an order dismissing any of the chapter 11 cases or converting any case to a case under chapter 7
  • Acceleration of the loans following an event of default, which includes the failure to meet any case milestones

Carve Out

• The DIP liens are subject to a carve-out for U.S. Trustee fees, court clerk fees, and allowed professional fees and expenses.
• Post-Carve Out Trigger Notice Cap: $75,000 for allowed fees and expenses of estate professionals.
• Chapter 7 Trustee Fee: Up to $10,000.
• A segregated carve-out reserve account is to be funded bi-weekly in accordance with the approved budget.

Use of Proceeds

• To provide working capital and for other general corporate purposes
• To pay professional fees and other administration costs of the chapter 11 cases
• To pay fees and expenses of the agent and the DIP lenders
• All uses must be in accordance with an approved budget.

Credit Bid

• The DIP lenders have the right to credit bid up to the full amount of the DIP obligations in connection with any sale of the DIP collateral, provided that any such bid provides for the repayment in full in cash of all prepetition senior secured obligations.

Avoidance Actions

• The DIP liens exclude avoidance actions; however, upon entry of the final order, the DIP collateral will include a senior lien on the proceeds of any avoidance actions.

Challenge Period and Budget

• The deadline to bring a challenge is:
  • For any official committee, 60 days after its appointment
  • For all other parties in interest, 60 days after entry of the interim order
• A committee may use up to $25,000 from the carve-out to investigate, but not litigate, any potential challenges.
• The debtors must operate in accordance with an approved budget, and any modifications require the DIP lender's written consent.

Securities and Priorities

• The DIP obligations are granted superpriority administrative expense claims against each of the debtors, junior only to the carve-out and the adequate protection claims.
• The DIP lenders are granted perfected liens on and security interests in all of the debtors’ prepetition and postpetition assets and properties (the "DIP Collateral"), subject to the carve-out, with the following priorities:
  • First-priority liens on all unencumbered assets, including, upon entry of the final order, the proceeds of avoidance actions
  • Senior priming liens on collateral securing the prepetition bridge loan
  • Junior liens on collateral securing the prepetition senior secured obligations (held by Huntington National Bank and the SBA)

Adequate Protection

Prepetition Secured Lenders

• To the extent of any diminution in value of their interests in the prepetition collateral, the prepetition secured lenders are granted:
  • Allowed superpriority administrative expense claims, junior to the carve-out
  • Replacement liens on the DIP collateral, junior to the carve-out and the prepetition senior secured liens
  • Payment of postpetition interest at the non-default rate
  • Financial and other reporting

Waivers

• Subject to entry of the final order:
  • Section 506(c): The debtors waive their right to surcharge the DIP or prepetition collateral.
  • Section 552(b): The “equities of the case” exception shall not apply.
  • The equitable doctrine of “marshaling” shall not apply with respect to the DIP or prepetition collateral.