The DIP Credit Agreement provides for a credit facility pursuant to
which up to $75 million of aggregate claims of the holders of
the Convertible Notes that are DIP Lenders (or affiliates, partners
or investors of the DIP Lenders) will, upon entry of the Final DIP
Order, automatically be deemed substituted and exchanged for, and
converted, into (such conversion, the “Roll Up”) debtor-in-possession loans (the
“Roll Up Loans”) (such credit facility, together with the New Money
DIP Facility, the “DIP Facility”) on a cashless dollar for dollar
basis, in each case, in accordance with and subject to the terms
and conditions in the DIP Credit Agreement.
Borrowings under the New Money DIP Facility will bear interest at a
rate of 10% which, together with certain fees payable in connection
with the DIP Facility, will be payable in kind. Roll Up Loans will
not bear interest. The DIP Lenders will receive upfront commitment
fees equal to 2% of the aggregate commitments under the New Money
DIP Facility when drawn, payable in kind, and exit fees equal to
(i) in the case of an acceptable exit roll transaction,
(x) 3% of the accreted outstanding principal amount of the New
Money Loans at such time, and (y) 2% of the outstanding
principal amount of the Roll Up Loans as set forth in the DIP
Credit Agreement and (ii) otherwise, (x) 15% of the
accreted outstanding principal amount of the New Money Loans at
such time and (y) 2% of the outstanding principal amount of
the Roll Up Loans at such time as set forth in the DIP Credit
Agreement. The DIP Credit Agreement includes milestones,
representations and warranties, covenants applicable to the
Debtors, and events of default. If an event of default under the
DIP Credit Agreement occurs, the Administrative Agent may, among
other things, permanently reduce any remaining commitments and
declare the outstanding obligations under the DIP Credit Agreement
to be immediately due and payable.
The DIP Credit Agreement has a maturity date of June 21, 2023,
which can be extended, under certain conditions, by an additional
three months to September 21, 2023. The DIP Credit Agreement
will also terminate on the date that is the earliest of the
following (i) January 25, 2023, if no Final DIP Order is
entered (or such later date as may be agreed in writing by the
Required Lenders), (ii) the maturity date, (ii) the date
of consummation of any transaction pursuant to which all or
substantially all of the assets of the Company and the other credit
parties will be sold, transferred or otherwise disposed,
(iii) the effective date of a plan in the Chapter 11
Cases, and (iv) the date on which all amounts owed thereunder
become due and payable and the commitments are terminated.
The foregoing description of the DIP Credit Agreement does not
purport to be complete and is qualified in its entirety by
reference to the full text of the DIP Credit Agreement, which is
filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated by reference
herein.
The Restructuring Support
Agreement
On December 22, the Debtors entered into a Restructuring Support
Agreement (together with all exhibits and schedules thereto, the
“RSA”) with certain holders of (x) Convertible Notes and/or
(y) DIP Commitments (as defined in the RSA) or loans under the
DIP Facility (the “Consenting Creditors”), pursuant to which, among
other things, the Consenting Creditors agreed to vote in favor a
joint plan of reorganization (the “Plan”) of the Debtors under the
Bankruptcy Code. Capitalized terms used but not defined herein have
the meanings ascribed to them in the RSA.
The RSA, the accompanying restructuring term sheet, and Plan
contemplate, among other things:
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At emergence, (i) the refinancing of the DIP Facility with
third-party exit financing for an amount not to exceed the sum of
(a) 112% of the then-outstanding principal amount of the DIP
Facility on the Effective Date, and (b) interest, fees, and other
amounts arising thereunder or payable pursuant thereto (and in any
event an amount sufficient to repay the DIP Facility in full, in
cash) or (ii) the rolling of the DIP Facility into
4-year exit term loan
facility on the same terms and the issuance of warrants to the DIP
lenders for up to 30% of the New Common Shares, subject to dilution
by the Management Incentive Plan and warrants issued to holders of
general unsecured claims and existing equityholders.
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The equitization of the Convertible Notes in exchange for 97% of
the New Common Shares, subject to dilution by the Management
Incentive Plan, the warrants issued in connection with the rolling
of the DIP Facility and the warrants issued to holders of general
unsecured claims and existing equityholders;
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The issuance of up to $75 million in New Second Lien Notes to
certain holders of Convertible Notes at their option;
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