Point.360 filed with the U.S. Bankruptcy Court a motion to borrow and for Court approval to use post-petition financing and related liens and adequate protection.
The motion explains, “The non-default interest rate on the DIP Credit Facility is prime plus 1.5% per annum. The maturity date of the DIP Credit Facility is October 31, 2018. Lender shall receive a first priority lien on all of the Debtor’s property (the ‘Collateral,’ as defined in the DIP Credit Facility) to secure the DIP Credit Facility. The borrowing limit is $3 million at an advance rate of 85% of eligible receivables…. Events of default include the following: The entry of an order modifying any financing order, any agreement, any loan document, or any right or remedy in favor of Lender; The entry of an order authorizing borrower to incur indebtedness or additional financing under section 364(c) or (d) of the Bankruptcy Code other than from Lender, or without the express prior written consent of Lender, unless such financing results in the simultaneous indefeasible payment and satisfaction of all Obligations owed to Lender, in full, in cash.”
In addition, “The entry of an order in the bankruptcy case appointing an interim or permanent trustee, or an examiner having enlarged powers relating to the operation of the business or assets of Borrower under section 1106(b) of the Bankruptcy Code; The entry of an order dismissing the bankruptcy case or converting the bankruptcy case to a proceeding under chapter 7 of the Bankruptcy Code….The filing (whether by borrower or any other party) of a chapter 11 plan of reorganization or entry of an order confirming a chapter 11 plan of reorganization in the bankruptcy case that does not provide for the simultaneous indefeasible payment and satisfaction of all obligations owed to Lender, in full, in cash, unless otherwise expressly agreed to by Lender.”
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