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.
Asset Purchase Agreement
As provided for in the RSA, the Company, the other Debtors and the Consenting First Lien Lenders have agreed upon a form of the Asset Purchase Agreement (the
Asset Purchase Agreement) by and between the Company and the Purchaser. Pursuant to the terms of the Asset Purchase Agreement, the Debtors will agree to sell substantially all of their assets (the Assets, and such sale, the
Sale) to the Purchaser and the Purchaser will agree to assume from the Debtors, certain specified liabilities (the Assumed Liabilities).
The purchase price under the Asset Purchase Agreement will be comprised of (a) a credit bid pursuant to Section 363(k) of the Bankruptcy Code
against (i) up to 100% of the obligations owed by Debtors under the First Lien Loans as of the closing of the transactions contemplated by the Asset Purchase Agreement (the Closing) and (ii) to the extent necessary to acquire
any DIP Collateral (as defined in the DIP Credit Agreement), up to $5.0 million of the Obligations (as defined in the DIP Credit Agreement), (b) the payment of an amount in cash equal to (i) the amount of a budget to be agreed by the
Debtors and Purchaser for the wind-down of the Debtors estates plus (ii) an amount equal to the Obligations (as defined in the DIP Credit Agreement) outstanding as of the Closing, less the amount described in foregoing clause (a)(ii), and
(c) the assumption of certain liabilities as more fully set forth therein (the Purchase Price).
The Asset Purchase Agreement contains
customary representations and warranties and covenants by the Debtors and the Purchaser.
The Asset Purchase Agreement also contains customary conditions
that must be satisfied before the Debtors and the Purchaser are obligated to effect the Closing, including the accuracy of representations and warranties, compliance with covenants, the receipt of specified consents, the absence of any laws or
orders preventing the Closing,the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act, the receipt of approvals required by governmental agencies, including the Federal Communications Commission, and the timely
approval by the Court of the Bid Procedures Order (defined below) and a Sale Order and the ability to deliver certain closing deliverables.
The Asset
Purchase Agreement may be terminated upon the occurrence of certain events, including if the Closing has not occurred prior to October 30, 2020 (subject to extension in certain cases to no later than December 29, 2020).
Upon entry, the Asset Purchase Agreement, which is subject to Court approval, is intended to constitute a stalking horse bid for the Assets in
accordance with the form of bid procedures order (the Bid Procedures Order) and the bid procedures attached to the Bid Procedures Order (the Bid Procedures), which shall be filed in a bid procedures motion with the Court
pursuant to the Restructuring Term Sheet (the Bid Procedures Motion). The Asset Purchase Agreement includes certain bid protections for the Purchaser payable in accordance with the terms thereof, including an expense reimbursement of all
reasonable and documented out of pocket fees of Purchaser (the Expense Reimbursement). The Debtors will seek to have a hearing to consider the Bid Procedures Motion, and the entry of the Bid Procedures Order, is scheduled to be held,
subject to the Courts availability, within 28 days of the Petition Date.
The Bid Procedures Order, if approved, will establish certain Bid
Procedures for an auction that allows other qualified bidders to submit higher or otherwise better offers to purchase all or substantially all of the Assets (any such offer, a Competing Transaction). The Bid Protections are payable upon
the consummation of a Competing Transaction.
The Bid Procedures Order, if approved, will set (i) a deadline to submit initial acceptable bids
(Initial Acceptable Bids) as 42 calendar days following the Petition Date (the Initial Acceptable Bid Deadline), and (ii) assuming adequate Initial Acceptable Bids are received by the Initial Acceptable Bid Deadline,
will set the deadline (the Bid Deadline) to submit qualified bids for the Debtors assets as 75 days following the Petition Date. Upon the receipt of at least one qualified offer from other bidders proposing a Competing Transaction
by the Bid Deadline, the Debtors propose to hold an auction with respect to the Assets on or about 80 calendar days following the Petition Date. Additional information regarding the proposed auction and the requirements for qualified bids with
respect to a Competing Transaction can be found in the Restructuring Term Sheet and the Bid Procedures Order.
The foregoing description of the Asset
Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to Asset Purchase Agreement, which has been filed with the Court and is attached hereto as Exhibit 10.4 and incorporated herein by reference.
Cautionary Note Regarding Forward-Looking Statements
In
this Current Report on Form 8-K, we make forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These
forward-looking statements are based on information available to us as of the date hereof and on our current expectations, forecasts and assumptions, and involve substantial risks and uncertainties. Actual results may vary materially from those
expressed or implied by the forward-looking statements herein due to a variety of other factors, including the risks and uncertainties set forth in our most recent Annual Report on Form 10-K and any
subsequently filed Quarterly Reports on Form 10-Q.