Debtor-in-Possession Credit Agreement
The RSA also contemplates that, subject to the approval of the Bankruptcy Court following the entry of the Interim DIP Order, the Company and the wholly-owned
domestic subsidiaries of the Company, as guarantors, will enter into: (i) a Senior Secured Super-Priority Term Loan Debtor-In-Possession Credit Agreement (the
DIP Credit Agreement) with Citi Bank, N.A., as DIP agent and escrow agent, and the lenders party thereto (collectively, the DIP Lenders), substantially in the form attached to the RSA as Exhibit D.
If the Debtors entry into the DIP Credit Agreement is approved by the Bankruptcy Court as proposed, the DIP Lenders would provide a senior secured
super-priority DIP term loan facility in an aggregate principal amount of $80 million (the DIP Term Loan Facility), which term loan shall accumulate interest based on an interest rate of LIBOR rate plus 10.00%, with a 1.25% LIBOR
floor. The DIP Lenders would be entitled to receive cash interest payments on term Loans through the pendency of the Chapter 11 Cases. Payments under the DIP Term Loan Facility include (i) a 5.00% backstop payment and (ii) a 3.00% upfront
payment, in each case, payable on the funding date of the term loans thereunder. Principal under the DIP Term Loan Facility is due on the maturity date under the DIP Credit Agreement. The scheduled maturity of the DIP Term Loan Facility would be six
months from the closing date thereof, subject to an extension of 30 days to the extent necessary if the Sale Order has been entered and the parties are awaiting Federal Communications Commission consents and approvals.
Borrowings under the DIP Term Loan Facility would be senior secured obligations of the Company, secured by a super priority lien on the collateral securing
the Debtors obligations under the Credit Agreement, as well as the unencumbered assets of the Debtors. The DIP Credit Agreement includes various customary covenants, including a covenant mandating compliance with a 13-week budget (subject to permitted variances), weekly variance testing with respect to disbursements and receipts forecast in the 13-week budget and reporting requirements
related to the Chapter 11 Cases, among others. The DIP Credit Agreement also includes a covenant requiring the Company to maintain, from and after the funding date under the DIP Credit Agreement, cash and cash equivalents of the Company and its
subsidiaries in an aggregate amount of not less than $20,000,000.
The RSA also contemplates that, certain Consenting First Lien Lenders will fund a new
money credit facility, plus a letter of credit facility, at the option of the Purchaser (the Exit Facility), to be incurred by the Purchaser on the closing date of the Sale Transaction (the Closing Date). The Exit Facility
contemplates a four-year maturity with an initial interest rate of LIBOR plus 10.00% with a 1.25% LIBOR floor. The Exit Facility will be secured by a first-priority lien on substantially all of the assets of the Purchaser and any guarantors, subject
to usual and customary exceptions for excluded assets. Following the Closing Date, the Purchaser will have total debt of not more than $400 million (plus letters of credit), between the Exit Facility, inclusive of takeback debt of
$275 million (the Takeback Financing Facility and, together with the Exit Facility, the Newco Facilities). The Takeback Financing Facility contemplates a five-year maturity with an initial interest rate of LIBOR plus
7.50% with a 1.25% LIBOR floor. At the Purchasers option, if liquidity of the Purchaser and its subsidiaries is less than $40 million on a pro forma basis, up to 500 bps of interest may be paid-in-kind during the first 24 months after the closing date of the Takeback Financing Facility. Borrowings under the Takeback Financing Facility will be secured by a second priority lien on the collateral
under the Exit Facility.
The DIP Term Loan Facility is subject to approval by the Bankruptcy Court, which has not been obtained at this time. The Debtors
are seeking interim approval of the DIP Term Loan Facility, and are seeking availability of a portion of the DIP Term Loan Facility in the amount not less than $30 million at an interim hearing in the Bankruptcy Court, contemplated to
occur promptly after the petition date, and are seeking final approval to access the remaining amounts available under the DIP Term Loan Facility at a final hearing. The Debtors anticipate that the DIP Credit Agreement will become effective promptly
following interim approval of the DIP Term Loan Facility by the Bankruptcy Court.
The foregoing descriptions of the DIP Credit Agreement and the Newco
Facilities do not purport to be complete and are qualified in their entirety by the full text of the RSA and the DIP Credit Agreement and the exhibits thereto, copies of which will be filed with a future Current Report on Form 8-K.
Letter of Credit Reimbursement Agreement
Subject to the approval of the Bankruptcy Court following the entry of the Interim DIP Order, the Company also expects to enter into a Senior Secured
Super-Priority Letter of Credit Reimbursement Agreement (the L/C Reimbursement Agreement) with Citibank, N.A., as the issuing bank (the Issuing Bank) on the terms and conditions set forth in the Interim DIP Order.
If the Companys entry into the L/C Reimbursement Agreement is approved by the Bankruptcy Court as proposed, the Issuing Bank would provide a $10 million
(the DIP L/C Facility Limit) super-priority letter of credit facility (the DIP Letter of Credit Facility) to provide additional letter of credit capacity in an amount equal to the DIP L/C Facility Limit less the aggregate
face amount of then issued and outstanding letters of credit provided by Citibank, N.A. under the Credit Agreement. Pricing of the DIP Letter of Credit Facility is substantially consistent with the terms applicable to existing letters of credit
under the Credit Agreement. News letters of credit issued under the DIP Letter of Credit Facility after the petition date will be fully cash collateralized. The proceeds of the DIP Term Loan Facility will be available for use as cash collateral in
respect of post-petition letters of credit issued under the DIP Letter of Credit Facility.
The foregoing description of the L/C Reimbursement Agreement
does not purport to be complete and is qualified in its entirety by the terms and conditions of the L/C Reimbursement Agreement set forth in the Interim DIP Order.