E. Gluck Corporation - DIP Terms

DIP Terms

Borrower(s) / Guarantor(s)

• E. Gluck Corporation, as Borrower

Agent / Lender(s)

• Israel Discount Bank of New York, as DIP Agent, DIP Lender, and Prepetition Lender

DIP Commitments

• $29 million senior secured, superpriority, priming asset-based revolving credit facility, subject to a borrowing base. The facility amends and restates the debtor's prepetition facility, under which approximately $27 million was outstanding, and provides up to $2 million in additional liquidity.
  • Up to $3.3 million is available on an interim basis.
  • The full $29 million is available upon entry of the final order.

Cash Collateral

• The debtor is authorized to use cash collateral, defined as all cash in the debtor's possession or in which it has an interest as of the petition date, in accordance with the approved budget.

Interest Rate

• Prime Rate + 0.25%, or
• Federal Funds Effective Rate + 3.12%

Fees

• The facility does not include a commitment fee.
• The debtor is required to reimburse the lender for reasonable professional fees and expenses in accordance with the approved budget.

Maturity

• The earliest to occur of:
  • 75 days after the petition date
  • Consummation of a sale
  • Acceleration of the loans following an event of default
  • Dismissal or conversion of the chapter 11 case

Carve Out

• The DIP liens and claims are subject to a carve-out for certain fees and expenses, with the available amount dependent on the issuance of a Carve Out Trigger Notice following an event of default.
  • Prior to a trigger notice: The carve-out covers statutory fees payable to the U.S. Trustee and the clerk of court, as well as allowed professional fees as set forth in the approved budget.
  • Following a trigger notice: The carve-out is limited to statutory fees and an aggregate amount of $75,000 for professional fees.
• The carve-out excludes fees and expenses related to litigation against the lender, except for amounts available under the investigation budget cap.

Use of Proceeds

• Fund working capital needs and the administration of the chapter 11 case, including professional fees, in accordance with the approved budget.

Challenge Period and Budget

• The interim order establishes deadlines for any statutory committee and other parties in interest to challenge the prepetition liens.
• A creditors' committee may use up to $15,000 for the investigation of potential claims against the prepetition lender.

Securities and Priorities

• The DIP obligations are granted superpriority administrative expense claims against the debtor's estate, senior to all other administrative expenses and unsecured claims.
• The DIP lender is granted perfected, senior priming security interests in and liens on all of the debtor's prepetition and postpetition assets.

Adequate Protection

Prepetition Secured Parties

• In exchange for the use of cash collateral and the priming of its liens, the prepetition lender is granted adequate protection in the form of:
  • Allowed superpriority administrative expense claims under section 507(b).
  • Valid, perfected, postpetition replacement liens on all collateral.
  • Cash payments for outstanding prepetition obligations, including interest.
  • Payment of reasonable and documented professional fees and expenses.