Norcold - Chapter 11 DIP Terms

DIP Terms

Borrower(s) / Guarantor(s)

• Norcold LLC, as Borrower
• Yosemite Intermediate I, Inc. and certain non-debtor affiliates, as Guarantors

Agent / Lender(s)

• Dave Carter & Associates, Inc., as DIP Lender Representative
• The lenders party thereto from time to time, as DIP Lenders

DIP Commitments

• $13 million superpriority priming senior secured multiple-draw revolving loan facility comprised of:
  • $6.5 million available on an interim basis in weekly draws
  • The remaining balance available upon entry of the final order in multiple weekly draws

Cash Collateral

• The debtor is authorized to use cash collateral solely in accordance with the final order, the DIP documents, and the approved budget, subject to permitted variances
• Cash collateral is defined as all of the debtor's cash, including deposit accounts and proceeds of prepetition collateral

Interest Rate

• 10.0% per annum, payable in kind monthly
• Default Rate Increase: 2.0%

Fees

• Unused Line Fee: 0.375% per annum on the difference between the outstanding principal and the commitment amount, payable in kind monthly
• Payment of all reasonable and documented costs and expenses incurred by the DIP Lenders, including the fees and disbursements of one outside counsel

Maturity

• The earliest to occur of:
  • 120 days following the petition date
  • 35 days after the petition date, if the final order has not been entered
  • The effective date of a confirmed chapter 11 plan
  • The sale of all or substantially all of the debtor's assets
  • Conversion of the case to chapter 7 or dismissal of the case
  • Acceleration of the loans following an event of default

Carve Out

• Post Carve Out Trigger Notice Cap:
  • $375,000 for Debtor professionals
  • $125,000 for Committee professionals
• Chapter 7 Trustee Fee: $25,000
• Statutory fees payable to the Clerk of the Court and the U.S. Trustee are not subject to a cap

Use of Proceeds

• Provide working capital and fund general corporate purposes
• Pay costs of administration, including professional fees and adequate protection payments
• Pay fees and interest under the DIP facility

Credit Bid

• The DIP Lender Representative, with the consent of the Required DIP Lenders, has the right to credit bid up to the full amount of the DIP obligations in connection with any sale of DIP collateral
• The right to credit bid is assignable to any acquisition vehicle formed in connection with such bid

Avoidance Actions

• Upon entry of the final order, the DIP collateral includes the proceeds of avoidance actions

Challenge Period and Budget

• The deadline to bring a challenge is 75 days after the entry of the interim order
• The Committee is allocated an investigation budget of up to $50,000 to investigate liens, claims, and potential claims

Securities and Priorities

• The DIP obligations are granted superpriority administrative expense claims, subject only to the carve-out, with priority over all other administrative expenses
• The DIP Lenders are granted valid, perfected liens on all property and assets (the "DIP Collateral"), subject to the carve-out, with the following priorities:
  • First priority liens on all unencumbered assets
  • First priority priming liens on all assets securing the Prepetition Guaranty
  • Junior liens on assets subject to valid, perfected third-party liens existing on the petition date

Adequate Protection

Prepetition Senior Secured Parties

• Superpriority administrative expense claims to the extent of any diminution in value, junior to the DIP superpriority claims and the carve-out
• Replacement liens on all DIP collateral, including avoidance action proceeds
• Payment of reasonable and documented professional fees and expenses

Waivers

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

Permitted Variance

• Tested on a rolling four-week basis starting the fourth full week following the petition date:
  • Operating disbursements (excluding professional fees) shall not exceed the budget by more than 20%
  • Receipts shall not be less than 80% of the budgeted amount