Tedder Industries - Chapter 11 DIP Terms

DIP Terms

Borrower(s) / Guarantor(s)

• Tedder Industries, LLC (formerly known as Tedder Acquisition, LLC), as Debtor, Debtor-in-Possession, and Borrower under the Loan Agreement, together with certain of its subsidiaries

Agent / Lender(s)

• Main Street Capital Corporation, as Administrative and Collateral Agent
• Certain financial institutions party to the agreement, as Lenders

DIP Commitments

• $700,000 senior secured super-priority credit facility (the "DIP Facility") provided under the existing prepetition Loan Agreement dated August 31, 2018 (as amended), which includes:
  • An existing $2.3 million revolving loan facility
  • An existing term loan facility of up to $21 million

Cash Collateral

• The Debtor is authorized to use cash collateral in accordance with the approved budget.
• The DIP Agents and Lenders are granted automatically perfected security interests in and liens on all cash collateral.

Interest Rate

• Applicable Rate: Up to 12.0% per annum (based on a tiered grid from 9.0% to 12.0% tied to the Funded Debt to EBITDA Ratio per the Third Amendment; deemed Level I at 12.0% during any Default, including the Chapter 11 filing)
• Default Rate: Applicable Rate plus 2.0% (subject to the Maximum Rate)

Fees

• The Debtor is authorized to pay fees and expenses provided under the DIP Documents, including:
  • Unused Commitment Fee: 0.375% per annum on the amount by which the Revolving Loan Commitments exceed the Revolving Loan Principal Debt, payable monthly in arrears.
  • Draw Fee: 1.0% of the amount of each draw under the Revolving Credit Facility that represents an increase above the highest amount previously outstanding, subject to a maximum total fee payment of $23,000 per applicable period.

Maturity

• The earliest to occur of:
  • The sale of the Debtor's assets
  • Confirmation of a Chapter 11 plan
  • April 9, 2026

Use of Proceeds

• Bridge short-term liquidity issues to fund payroll obligations
• Payment of postpetition payables as permitted under the DIP Documents
• All uses must be consistent with the Approved Budget and subject to permitted variances as set forth in the Cash Collateral Order

Credit Bid

• The Lenders and the Agent (or any assignee or designee thereof) are authorized to credit bid some or all of their claims in connection with any sale process authorized by the Court, to the extent permitted by section 363(k) of the Bankruptcy Code.
• The Lenders and the Agent are deemed "Qualified Bidders" with respect to their rights to acquire all or any of the Debtor's assets by credit bid.

Avoidance Actions

• The DIP Liens exclude Avoidance Actions under the Bankruptcy Code.
• However, upon entry of the order, the DIP Liens attach to the proceeds of any successful Avoidance Action solely to the extent all other DIP Collateral is insufficient to satisfy the DIP Claims.

Securities and Priorities

• The DIP obligations constitute allowed superpriority administrative expense claims against the Debtor, with priority over all other administrative expenses.
• The DIP Lenders are granted valid, perfected security interests in and liens on all prepetition and postpetition property (the "DIP Collateral"), with the following priorities:
  • First priority senior priming liens on all prepetition and postpetition property (including Cash Collateral), senior to the Lenders' own prepetition security interests
  • First priority liens on all unencumbered property
  • Junior liens on property subject to valid, perfected, and unavoidable liens in existence prior to the petition date (other than the Prepetition Lenders' liens)

Adequate Protection

Prepetition Secured Parties (Agent and Lenders)

• Adequate Protection Liens (as defined in the Cash Collateral Order) on all DIP Collateral, junior only to the DIP Liens and otherwise senior to all other security interests.
• Adequate Protection Superpriority Claim (as set forth in the Cash Collateral Order), junior to the DIP Superpriority Claim.

Other Prepetition Lienholders

• Post-petition replacement liens against collateral on which such lienholder holds a valid prepetition lien, in the same priority as such prepetition lien but subject and subordinate to the DIP Liens.
• Such replacement liens secure payment of an amount equal to the diminution in value of such lienholder's interest in the collateral.

Waivers

• Section 506(c): No costs or expenses may be charged against the collateral.
• Section 552(b): The "equities of the case" exception shall not apply.
• Marshaling: The doctrine of marshaling shall not apply to the Lenders or the collateral.

Permitted Variance

• The Debtor must comply with the Approved Budget at all times, subject to the variances set forth in the Cash Collateral Order. Failure to comply constitutes an Event of Default following the expiration of any applicable cure period under the Loan Agreement.