2024 (the “DIP Term Sheet”), by and among the Company, as Borrower, the other Debtors, as guarantors, Cantor Fitzgerald Securities, as administrative agent, and the lenders party thereto, including certain of the Reporting Persons (collectively, the “DIP Lenders”), and in connection with the Chapter 11 Cases and the Restructuring Support Agreement, the DIP Lenders have agreed to provide a priming, senior secured, superpriority debtor-in-possession delayed draw term loan facility (the “DIP Facility”) in an aggregate principal amount equal to up to $17,500,000 to the Company on the terms set forth in the DIP Term Sheet, the Bankruptcy Court’s (as defined below) order governing the DIP Facility and any other definitive documentation to be negotiated, executed, and delivered by the Company, Cantor Fitzgerald Securities, and the DIP Lenders in connection therewith. The DIP Lenders’ obligations to provide the DIP Facility are subject to various conditions customary for DIP financings of this type, as described in the DIP Term Sheet.
The Restructuring Support Agreement contains customary representations, warranties, affirmative and negative covenants, and events of default. The Restructuring Support Agreement contains milestones relating to the Chapter 11 Cases (as defined below), which include the dates by which the Debtors are required to, among other things, file certain motions and documents (including the Prepackaged Plan and disclosure statement for the Prepackaged Plan (the “Disclosure Statement”)) with the Bankruptcy Court, obtain certain orders of the Bankruptcy Court, and consummate the Debtors’ emergence from chapter 11 protection.
The Restructuring Support Agreement may be mutually terminated by the Required Consenting Creditors (as defined in the Restructuring Support Agreement) and the Company. The Restructuring Support Agreement will automatically terminate after the effective date of the Prepackaged Plan. Moreover, the Consenting Creditors, the Consenting Non-Debtor Guarantors, and the Company each have termination rights if certain conditions, including milestones set forth in the Restructuring Support Agreement, as applicable, are not met.
The entry into the Restructuring Support Agreement constitutes an event of default that accelerated the Debtors’ respective obligations under certain debt instruments, including but not limited to the Credit Agreement, pursuant to which certain Reporting Persons are lender parties. The terms of the Credit Agreement provide that, as a result of the entry into the Restructuring Support Agreement, the principal and accrued and unpaid interest due thereunder shall be immediately due and payable. The amount of the obligations due under the Credit Agreement is approximately $52,108,299. Any efforts to enforce such payment obligations under the Credit Agreement are automatically stayed as a result of the Chapter 11 Cases, and the creditors’ rights to enforce the Credit Agreement are subject to the applicable provisions of the Bankruptcy Code.
As contemplated by the Restructuring Support Agreement, on April 2, 2024 (the “Petition Date”), the Debtors filed voluntary petitions in the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”) for relief under chapter 11 of the Bankruptcy Code, thereby commencing the chapter 11 cases (the “Chapter 11 Cases”).
The transactions contemplated by the Restructuring Support Agreement, the Prepackaged Plan, and the DIP Term Sheet are subject to certain customary conditions, including approval by the Bankruptcy Court. Accordingly, no assurance can be given that the transactions described in the Restructuring Support Agreement, including the Prepackaged Plan, or that the DIP Facility, will be consummated.
The foregoing description of each of the Restructuring Support Agreement, including the Prepackaged Plan and the DIP Term Sheet, does not purport to be complete and is qualified in its entirety be reference to the full and complete terms of the Restructuring Support Agreement, including the Prepackaged Plan attached as Exhibit B thereto, and the DIP Term Sheet, a copy of each of which is attached as an exhibit to this Schedule 13D and is incorporated by reference herein.