FLOAT Alaska LLC, et al. - Chapter 11 DIP Terms

DIP Terms

Borrower(s) / Guarantor(s)

• New Pacific Airlines, Inc., FLOAT Alaska LLC, FLOAT Alaska Holdings LLC, FlyCoin, Inc., FLOAT Alaska IP LLC, Corvus Alaska Holdings Inc., and FLOAT Shuttle Inc., as DIP Borrowers
• FLOAT Alaska Real Estate, LLC, as DIP Guarantor

Agent / Lender(s)

• Jones Holding, LLC, as DIP Lender

DIP Commitments

• $3.33 million senior secured delayed draw term loan facility comprised of:
  • New money term loans in an aggregate principal amount not to exceed the lesser of (i) $3.33 million and (ii) the amounts permitted by the Approved DIP Budget
  • Cashless roll-up and conversion of Prepetition Lender Secured Obligations:
    • During the interim period, upon each advance of new money term loans, a cashless roll-up and conversion of Prepetition Lender Secured Obligations in an aggregate principal amount equal to such advances into postpetition obligations under the DIP Facility
    • Upon entry of the final order, a cashless roll-up of the Prepetition Lender Secured Obligations in an amount equal to the Term Loan Commitment minus the Interim Roll Up Loans
• Amounts repaid in respect of the Roll Up Loans may not be reborrowed; provided, however, that the aggregate principal amount of Roll Up Loans shall not exceed the Term Loan Commitment.

Cash Collateral

• All of the debtors' cash, including cash and other amounts on deposit or maintained in any banking, checking, or other deposit accounts, any amounts generated by the collection of accounts receivable or other disposition of the prepetition collateral existing as of the petition date or deposited into the debtors' banking, checking, or other deposit accounts after the petition date, and the proceeds of any of the foregoing, wherever located.
• The debtors are authorized to use all cash collateral, but solely for the purposes set forth in the final order and in accordance with the Approved DIP Budget (subject to permitted variances) from the date of entry of the interim order through the date of termination of the DIP Credit Agreement.

Interest Rate

• Prime Rate + 5.0%, payable in-kind (PIK) monthly in arrears (Per Doc 30).
• Default Rate Increase: 2.0% (Per Doc 30).

Fees

• Upfront Fee: 2.50% of the term loan commitment, payable in-kind monthly in arrears (Per Doc 30).
• All reasonable and documented costs and expenses as may be due from time to time, including the reasonable and documented fees and expenses of counsel and other professionals, including Orrick, Herrington & Sutcliffe LLP (as counsel) and Klehr Harrison Harvey Branzburg LLP (as local bankruptcy counsel) (collectively, the "DIP Advisors"), which shall not be subject to the approval of the court.

Maturity

• The earliest to occur of:
  • May 22, 2026
  • The effective date of a confirmed Chapter 11 plan
  • Dismissal of the cases or conversion to Chapter 7
  • Acceleration of the obligations following an event of default, including failure to comply with case milestones

Carve Out

• Statutory fees payable to the Clerk of the Court and the U.S. Trustee
• Chapter 7 Trustee Fee: $25,000
• Professional Fees:
  • All allowed and unpaid professional fees incurred prior to the delivery of a Carve Out Trigger Notice
  • Post-Carve Out Trigger Notice Cap: $125,000

Use of Proceeds

• Pay fees, costs, and expenses associated with the DIP facility
• Finance general corporate needs and working capital in accordance with the approved budget
• Fund the carve-out

Credit Bid

• The DIP Lender and Prepetition Lender are authorized to credit bid up to the full amount of their respective obligations in connection with any sale of the collateral

Avoidance Actions

• All avoidance actions shall be excluded from DIP Collateral and preserved for the benefit of the estates.
• The DIP Collateral shall not include avoidance actions, but shall include avoidance action proceeds, subject to the Committee Resolution.
• The proceeds of avoidance actions shall constitute DIP Collateral, but the DIP Lender's right to recover against such proceeds is limited as follows:
  • The first $300,000 in avoidance action proceeds shall be distributed to the estates and neither the DIP Lender nor holders of Jones Prepetition Unsecured Claims shall be entitled to recover against such proceeds
  • Any proceeds in excess of $300,000 shall be used to satisfy unpaid DIP Claims (including Roll Up Loans), but the DIP Lender must look to such proceeds as the last form of collateral to satisfy such claims
  • Any remaining proceeds after satisfaction of DIP Claims shall be distributed to the estates, provided, however, if there has not been a successful Challenge, the Committee expressly waives its Challenge rights, or if the Challenge Period has expired without a Challenge commenced by the Committee, the holders of the Jones Prepetition Unsecured Claims shall not share in any such proceeds
• The DIP Collateral also excludes: (i) commercial tort claims, (ii) any claims and causes of action against the DIP Lender and its affiliates including Josh Jones, (iii) D&O insurance assets and related insurance proceeds, (iv) the Domain Name, (v) intellectual property, (vi) tax refunds (including any ERC credits), and (vii) any property or proceeds derived from the foregoing.

Challenge Period and Budget

• The stipulations, admissions, waivers, and releases contained in the final order, including the debtors' stipulations, shall be binding upon the debtors and their estates in all circumstances.
• The stipulations shall be binding upon all creditors and other parties in interest, including any committee, unless a party in interest with proper standing timely files an adversary proceeding or contested matter:
  • Before seventy-five calendar days after entry of the interim order (the "Challenge Period")
  • Seeking to avoid, object to, or otherwise challenge the findings or debtors' stipulations regarding the validity, enforceability, extent, priority, or perfection of the mortgages, security interests, and liens of the Prepetition Lender, or the validity, enforceability, allowability, priority, secured status, or amount of the Prepetition Lender Secured Obligations
• Any trustee appointed prior to the expiration of the Challenge Period will have the longer of (i) the remaining Challenge Period and (ii) fourteen calendar days from the date of such trustee's appointment to commence a Challenge.
• No more than $25,000 of the proceeds of the DIP Facility or the DIP Collateral, including cash collateral, in the aggregate, may be used by the Committee, solely to investigate, within the Challenge Period, the claims, causes of action, adversary proceedings, or other litigation against the Prepetition Lender solely concerning the legality, validity, priority, perfection, enforceability or extent of the claims, liens, or interests held by or on behalf of the Prepetition Lender related to the Prepetition Lender Secured Obligations, including any Prepetition Lender Secured Obligations that are rolled up into DIP Loans.
• The Approved DIP Budget shall be set and tested in accordance with the requirements in Section 5.8 of the DIP Credit Agreement.

Securities and Priorities

• DIP obligations constitute superpriority administrative expense claims against each debtor, subject only to the carve-out
• Perfected liens on and security interests in substantially all of the debtors' assets ("DIP Collateral"), with the following priorities:
  • First priority priming liens on all DIP Collateral, senior to existing prepetition liens and security interests
  • First priority liens on previously unencumbered assets

Adequate Protection

Prepetition Senior Secured Parties

• Replacement liens on all DIP collateral, junior to the DIP liens
• Superpriority administrative expense claims, junior to the DIP superpriority claims and the carve-out

Waivers

• Subject to entry of the final order:
  • Section 506(c): The debtors waive the right to surcharge collateral
  • Section 552(b): The "equities of the case" exception shall not apply
  • The doctrine of marshaling shall not apply

Permitted Variance

• Actual disbursements (tested on a rolling three-week basis) and professional fee accruals (tested on a rolling eight-week basis) shall not exceed 115% of the amounts set forth in the approved budget
• Favorable variances may be carried forward to subsequent periods