Out the Gate - DIP Terms

DIP Terms

Borrower(s) / Guarantor(s)

• Out The Gate, Inc., as Borrower

Agent / Lender(s)

• Plannatech (USA) Corporation, as DIP Lender
• Plannatech (USA) Corporation and Neapeg Investment Limited Partners are the Prepetition Secured Parties.

DIP Commitments

• $6.5 million senior secured, superpriority, priming term loan facility, consisting of:
  • Up to $907,567 available on an interim basis
  • The remaining $5.59 million available upon entry of the final order
• The facility is available through multiple draws.

Cash Collateral

• The debtor is authorized to use cash collateral, defined as cash subject to the liens of the DIP lender and the prepetition secured parties, in accordance with an approved budget.
• The debtor and prepetition secured parties reserve all rights regarding whether the prepetition secured parties hold a valid lien on the debtor’s prepetition cash.

Fees

• The debtor is authorized to pay fees as provided in the DIP documents, including commitment fees and professional fees and expenses of the DIP lender.

Maturity

• The DIP facility terminates and all obligations become immediately due and payable upon the occurrence of an event of default and the delivery of a termination declaration by the DIP lender.
• Following a termination declaration, parties in interest have a five-day remedies notice period to seek an emergency hearing to contest whether an event of default has occurred.
• If no court order is issued to the contrary, the automatic stay terminates at the end of the notice period, allowing the DIP lender to exercise remedies.

Carve Out

• The carve-out is for the payment of statutory fees, professional fees, and certain trustee expenses, and includes the following components:
  • All statutory fees payable to the Clerk of the Court and the U.S. Trustee.
  • Up to $50,000 for fees and expenses incurred by a chapter 7 trustee.
  • Allowed and unpaid professional fees incurred by debtor and committee professionals prior to the delivery of a carve-out trigger notice.
  • Post-Carve-Out Trigger Notice Cap:
    • $250,000 for debtor professionals.
    • $100,000 for committee professionals.

Use of Proceeds

• To fund the administration of the chapter 11 case, general corporate and working capital needs, and make payroll, in each case subject to an approved budget.
• Use of DIP proceeds and cash collateral is restricted from funding any investigation or litigation against the DIP lender or prepetition secured parties, with the exception that a statutory committee may use up to $50,000 to investigate, but not prosecute, potential claims against the prepetition secured parties.

Credit Bid

• The DIP lender has the right to credit bid up to the full amount of the DIP obligations in connection with any sale of the DIP collateral.
• Subject to entry of the final order, the prepetition secured parties have the right to credit bid up to the full amount of the prepetition secured debt in any sale of the prepetition collateral, provided the DIP obligations are paid in full in cash.

Avoidance Actions

• Upon entry of the final order, the DIP liens will attach to the proceeds of any avoidance actions, but not the avoidance actions themselves.

Challenge Period and Budget

• Parties in interest have 75 days from the entry of the interim order to challenge the validity, priority, or extent of the prepetition secured debt or liens.
• If a chapter 7 or chapter 11 trustee is appointed before the expiration of the challenge period, the deadline is extended to the later of the remaining period or 14 days after the trustee's appointment.
• The debtor’s use of funds is governed by an approved budget.

Securities and Priorities

• The DIP obligations are granted superpriority administrative expense claims, senior to all other administrative expenses, including 507(b) claims, and subordinate only to the carve-out.
• The DIP lender is granted perfected liens on all of the debtor’s prepetition and postpetition assets (the "DIP Collateral"), subject to the carve-out, with the following priorities:
  • Senior priming liens on all collateral subject to prepetition liens.
  • First-priority liens on all unencumbered assets, including, upon entry of the final order, the proceeds of avoidance actions.

Adequate Protection

Prepetition Secured Parties

• For any diminution in the value of their collateral, the prepetition secured parties are granted the following adequate protection:
  • Replacement liens on all DIP collateral, junior to the DIP liens and the carve-out.
  • Allowed superpriority administrative expense claims under section 507(b), junior to the DIP superpriority claims and the carve-out.
• No cash payments for fees, expenses, or interest are authorized as adequate protection absent a further court order.

Waivers

• Subject to entry of the final order, the debtor waives:
  • The right to surcharge collateral under section 506(c).
  • The “equities of the case” exception under section 552(b).
  • The equitable doctrine of “marshaling.”

Permitted Variance

• The debtor’s use of DIP proceeds and cash collateral must comply with an approved budget, subject to any permitted variances set forth in the DIP documents.