Patriot National filed with the U.S. Bankruptcy Court a motion for entry of interim and final orders authorizing the Debtors to obtain post-petition financing, authorizing the use of cash collateral, granting liens and super-priority claims, granting adequate protection to pre-petition secured lenders, modifying the automatic stay and scheduling a final hearing.
The motion explains, “In consultation with their legal and financial advisors, PNI, as borrower, the remaining Debtors, as guarantors, and Cerberus Business Finance, LLC (the ‘DIP Agent’), as administrative and collateral agent for certain lenders (the ‘DIP Lenders,’ and, together with the Borrower and the Guarantors, the ‘DIP Parties’), have negotiated the DIP Facility. The Guarantors will provide guarantees of the obligations incurred by PNI under the DIP Facility.”
In addition, “The DIP Agreement provides for a postpetition loan commitment in an aggregate principal amount not to exceed $15.5 million; provided that, until the Court enters the Final Order, no loans under the DIP Agreement shall be made other than loans in an aggregate principal amount not to exceed $5 million. Upon entry of the Final Order, PNI intends to borrow the amount necessary to repay the $4.955 million in Prepetition Collateral Agent Advances plus all fees, expenses and accrued and unpaid interest (including default interest) thereon.”
The financing will bear an interest rate of either (i) the sum of the reference rate plus 7.5% per annum or (ii) the sum of the LIBOR Rate plus 9.25% per annum.
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