New Incremental Loans
On March 13, 2020, the Company entered into an agreement to borrow $5 million of additional incremental term loans (the “New Incremental Loans”) under the Credit Agreement. The New Incremental Loans bear interest at a rate of LIBOR (with a
1.0% floor) + 1000 basis points.
Use of Proceeds. The Company is using the proceeds of the New Incremental Loans to, among other things, (i) fund the ordinary course payments, working capital needs and other
expenditures of the Company in advance of and during the Chapter 11 Cases, (ii) pay certain fees, interest, payments and expenses related to the Chapter 11 Cases, and (iii) pay fees and expenses related to the transactions contemplated by the New
Incremental Loans in accordance with such budget.
Priority. Priority for the New Incremental Loans will be pari passu with the existing term loans under the Credit Agreement.
Affirmative and Negative Covenants. The New Incremental Loans are subject to the same as those under the Credit Agreement, as amended by the Eighth Amendment (as hereinafter defined).
Events of Default. The events of default for the New Incremental Loans are the same as those under the Credit Agreement, as amended by the Eighth
Amendment.
Maturity. The New Incremental Loans will mature on the earliest of: (i) September 11, 2020; (ii) the sale of substantially all of the Company’s assets; (iii) the date of the consummation
of the Plan or (iv) certain accelerations of the obligations under the Credit Agreement.
Incremental and Eighth Amendment to Credit Agreement
In connection with the New Incremental Loans, the Company entered into the Incremental and Eighth Amendment to Credit Agreement (the “Eighth Amendment”) on March 13, 2020. The Eighth Amendment, among other things: (i) authorizes the
incremental commitment for the New Incremental Loans under the Credit Agreement; (ii) grants additional security interests in favor of the lenders for the Company’s motor vehicles and outstanding equity interests of certain foreign subsidiaries; and
(iii) adds Internap Technology Solutions Inc. as a party to the Credit Agreement.
In addition, the Eighth Amendment amended (i) the affirmative covenants to, among other things, require the Company to provide a cash receipt and disbursement budget and rolling 13-week forecasts of the same and to meet certain milestones with
respect to the Chapter 11 Cases, including solicitation of the Plan, entry into the DIP Facility, and confirmation of the Plan by the Bankruptcy Court; and (ii) the negative covenants to, among other things: (A) further limit the debt the Company can
borrow and repay; (B) eliminate the ability of the Company to incur liens for sale and leaseback transactions, incremental debt and equity interests and real property; (C) further limit the ability of the Company to make investments; (D) eliminate
the ability of the Company to engage in mergers; (E) further limit dispositions and acquisitions of certain property; (F) eliminate the ability of the Company to pay dividends or make redemptions; (G) further limit the Company’s ability to engage in
transactions with affiliates and (H) eliminate the leverage and interest coverage ratio covenants.
The Eighth Amendment further amended the events of default to provide that it will be an event of default for the New Incremental Loans if, among other things, the Company uses the proceeds from the New Incremental Loans in a manner outside of the
budget, subject to certain variances or in connection with the Chapter 11 Cases, or the Company supports a plan of reorganization or disclosure statement that does not repay the obligations as set forth in the RSA.
The foregoing description of the Eighth Amendment does not purport to be complete and is qualified in its entirety by reference to the full text of the Eighth
Amendment, a copy of which is filed as Exhibit 10.2 to this Current Report on Form 8-K and is incorporated by reference in this Item 2.03.