INTERNAP CORPORATION Item 1.01 Entry into a Material Definitive Agreement.
Exit Credit Agreement
On the Effective Date, the Company, certain of its subsidiaries, the lenders
party thereto and
The Exit Credit Agreement provides for, among other things, the conversion and
refinance of certain loans under INAP's DIP Facility (as defined in INAP's
Current Report on Form 8-K filed with the
Use of Proceeds. The proceeds of the Exit Credit Agreement will be used for, among other things: (i) the repayment of all obligations under the DIP Facility, (ii) the payment of related transaction costs, fees and expenses with respect to the negotiation of agreements and the Company's exit from the Chapter 11 Cases, (iii) to make other payments in accordance with the approved budget and (iv) for working capital and other general corporate purposes.
Priority and Collateral. The obligations under the Exit Credit Agreement will
rank senior in payment to the obligations under the Second Out Term Loan
Agreement (as hereinafter defined) and junior or pari passu with obligations
under revolving credit facilities that may be established from time to time in a
principal amount not to exceed
Affirmative and Negative Covenants. The Exit Credit Agreement contains certain affirmative and negative covenants, including customary affirmative covenants related to providing financial information, maintaining ordinary business operations and compliance with the obligations of the Plan and customary negative covenants related to incurrence of indebtedness, creation of liens, making of investments, engaging in mergers or combinations, disposal of assets, declaration of dividends and distributions, transaction with affiliates, compliance with leverage ratios and similar covenants.
Events of Default. The Exit Credit Agreement contains certain customary events of default, including payment of interest and loan amounts due, compliance with covenants, events of insolvency or filing for bankruptcy and similar obligations.
Maturity. The loans under the Exit Credit Agreement will mature the earlier of
(i)
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The foregoing description of the Exit Credit Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Exit Credit Agreement, a copy of which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated by reference in this Item 1.01. . . .
Item 1.02 Termination of a Material Definitive Agreement.
Equity Interests
Pursuant to the Plan, INAP's existing common stock,
Indebtedness
In accordance with the Plan, on the Effective Date, the obligations of the Debtors with respect to the following indebtedness were cancelled and discharged:
? Senior Secured Super-Priority Debtor-In-Possession Credit Agreement dated as of
thereto and
agent.
? Credit Agreement dated as of
thereto, the lenders party thereto,
agent and collateral agent,
as joint lead arrangers,
and as issuing bank, and
book manager and as swingline lender.
On the Effective Date, except as otherwise provided in the Plan, the obligations of the Debtors under the foregoing, and any other certificate, equity security, share, note, purchase right, option, warrant, or other instrument or document directly or indirectly evidencing or creating any indebtedness or obligation of, or ownership interest in, the Debtors, shall be deemed cancelled, surrendered, and discharged as to the Debtors and otherwise satisfied in full and released, and the reorganized Debtors shall not have any continuing obligations thereunder or in any way related thereto.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under
an Off-Balance Sheet Arrangement of a Registrant.
The information set forth in Item 1.01 under the headings "Exit Credit Agreement' and "Second Out Term Loan Credit Agreement" above is incorporated by reference into this Item 2.03.
Item 3.02 Unregistered Sales of
On the Effective Date, the Company issued the following in accordance with the Plan:
? 50,000,000 Common Units to Holders of Allowed Existing Loan Claims (as defined
in the Plan); and
? Warrants to purchase an aggregate of 1,120,836 Common Units to holders of
Existing Equity Interests (as defined in the Plan) who granted releases in
accordance with the Plan.
The Common Units and Warrants were issued under the Plan pursuant to exemptions from the registration requirements of the Securities Act of 1933 under Section 1145 of the Bankruptcy Code.
As of the Effective Date, there were 50,000,000 Common Units issued and outstanding.
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Item 3.03 Material Modification to Rights of Security Holders.
Pursuant to the Plan, the Company's existing Common Stock, including options, were cancelled on the Effective Date. For further information, see the Explanatory Note and Items 1.02 and 3.02 of this Current Report on Form 8-K, which are incorporated by reference herein.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
Departure of Directors
Pursuant to the Plan,
Appointment of Directors
The LLC Agreement provides that the Company will have a seven-person board of
directors (the "Board"). As of the Effective Date,
Except for arrangements relating to the implementation of the Plan, there are no
arrangements or understandings between
Officer Resignation and Appointment
On
On
Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal
Year.
LLC Agreement
On the Effective Date, to implement the Conversion, INAP filed with the
Secretary of State of the
In accordance with the Plan, the LLC Agreement of the Company became effective on the Effective Date. The description of the LLC Agreement set forth below is qualified in its entirety by reference to the full text of the LLC Agreement, which is filed herewith as Exhibit 3.3 and is incorporated by reference into this Item 5.03.
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Organization and Duration
The Company, which prior to the Conversion was named
The Company will initially have Common Units issued and authorized for issuance. Subject to the rights of any outstanding Company securities that may be authorized and issued from time to time after the Effective Date, only Common Units will be entitled to vote on matters presented to the members for approval.
Tax Election
The Company has elected to be treated as a corporation for
Distribution Rights
The Board shall have sole and absolute discretion regarding the amount and timing of distributions to the members, subject to approval by holders of not less than a majority of the Common Units, and all such distributions shall be made pro rata in accordance with the number of Common Units held by each member.
Authorization to Issue Units
The Company will initially have 57,500,000 Common Units authorized for issuance. The Company is authorized to issue additional units in one or more classes, or one or more series of any such classes, with such designations, preferences, rights, powers and duties (which may be senior to existing classes and series of units), as shall be fixed by the Board, subject to approval by holders of not less than a majority of the Common Units.
If the Company proposes to issue equity securities, subject to specified exceptions, each holder of Common Units shall have the right, but not an obligation, to purchase its pro rata portion of such equity securities.
Transfer Restrictions
The Common Units are subject to specified restrictions on transfer as set forth in the LLC Agreement, including restrictions designed to protect the Company's net operating loss carryforwards. In addition to the transfer restrictions, Common Units are subject to certain further transfer obligations, including a right of first offer to certain existing holders, "tag along" obligations and "drag along" obligations.
Registration Rights
Certain holders of Common Units have the ability under the LLC Agreement to cause the Company to file and have declared effective a registration statement for the offering of the Company's securities. In the event that there is a public offering of units by the Company, the holders of Common Units generally have the ability to offer and sell their securities along with the Company's securities.
Member Approval
The LLC Agreement specifies various Company actions that require the separate approval by the members of the Company, in addition to Board approval.
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Board of Directors
The business and affairs of the Company shall be managed by or under the direction of the Board. The number and identities of the directors appointed as of the Effective Time is set forth in Item 5.02 of this Current Report on Form 8-K.
The number of directors and may be increased or decreased from time to time by resolution of the Board, subject to the approval of the members of the Company and the restrictions specified in the LLC Agreement. Certain members have the right to appoint a director for so long as their ownership of Common Units exceeds a specified level.
Duties and Liability
Pursuant to the LLC Agreement, each party to the LLC Agreement broadly waives fiduciary duties and prohibitions on usurping opportunities of the Company, that absent such waiver, may be implied at law or in equity or otherwise owed to another party. The LLC Agreement also contains broad exculpatory provisions that apply to the members and certain related parties.
In performing its duties, each director shall be entitled to rely in good faith on the provisions of the LLC Agreement and on information, opinions, reports or statements of one or more officers or employees of any of the Company or its subsidiaries, any attorney, independent accountant or other person employed or engaged by the Company or any of its subsidiaries, or any other person who has been selected with reasonable care by or on behalf of the Company or any of its subsidiaries, in each case, as to matters which such relying person reasonably believes to be within such other person's professional or expert competence.
Special Meeting
Special meetings of the members of the Company may be called by one or more members who are collectively record holders of 25% or more of the Common Units. Each special meeting shall be held at a time and place determined by the Board on a date not less than 20 days nor more than 60 days after the mailing of notice of the meeting. To call a special meeting, members must deliver to the Company one or more requests in writing stating that the signing members wish to call a special meeting and indicating the general or specific purposes for which the special meeting is to be called.
Action Without a Meeting
Members may take any action required or permitted to be taken at any meeting of the members without a meeting, if members having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted . . .
Item 8.01 Other Events.
Deregistration of
The Company intends to file a Form 15 with the
Forward-Looking Statements
Certain statements in this Form 8-K contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are often identified by words such as "may," "will," "seeks," "anticipates," "believes," "estimates," "expects," "projects," "forecasts," "plans," "intends," "continue," "could" or "should," that an "opportunity" exists, that the Company is "positioned" for a particular result, statements regarding the Company's vision or similar expressions or variations. These statements are based on the beliefs and expectations of the Company's management team based on information available at the time such statements are made. Such forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties that could cause actual results to differ materially from those contemplated by such forward-looking statements.
Therefore, actual future results and trends may differ materially from what is
forecast in such forward-looking statements due to a variety of factors. These
risks and other important factors discussed under the caption "Risk Factors" in
the Company's most recent Annual Report on Form 10-K filed with the
Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results. All forward-looking statements attributable to the Company or persons acting on the Company's behalf are expressly qualified in their entirety by the foregoing forward-looking statements. All such statements speak only as of the date made, and the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits 3.1 Certificate of Conversion of the Company, datedMay 8, 2020 3.2 Certificate of Formation of the Company, datedMay 8, 2020 3.3 Limited Liability Company Agreement, datedMay 8, 2020 10.1 Senior Secured Term Loan Credit Agreement dated as ofMay 8, 2020 , among the Company, the guarantors from time to time party hereto, the several banks and other financial institutions from time to time party hereto andWilmington Trust, National Association , as administrative agent for the lenders and as collateral agent 10.2 Second Out Term Loan Credit Agreement dated as ofMay 8, 2020 , among the Company, the guarantors from time to time party hereto, the several banks and other financial institutions from time to time party hereto andWilmington Trust, National Association , as administrative agent and as collateral agent 10.3 Warrant Agreement, datedMay 8, 2020 , by and between the Company andAmerican Stock Transfer & Trust Company, LLC 10.4 Release Agreement, datedMay 8, 2020 between INAP andPeter Aquino
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