Page 9 of 15 – SEC Filing
The term “Registrable Securities”
means the Initial Registrable Securities and the Additional Registrable Securities; provided, however, Registrable Securities shall
cease to constitute Registrable Securities to the extent such securities may be sold pursuant to Rule 144 promulgated under the
Securities Act (or any similar provision then in force) without regard to volume or manner of sale limitations and constitute less
than 2.5% of the outstanding Common Stock on an as-converted basis and on an aggregate basis.
Underwritten Public Offering.
Pursuant to the Registration Rights Agreement, among other things, any Investor holding Registrable Securities whose resale is
covered by an effective registration statement filed pursuant to the Registration Rights Agreement may request that the Issuer
perform its obligations under the Registration Rights Agreement in the form of a firm commitment underwritten public offering.
The Issuer, however, will not be obligated to conduct an underwritten public offering unless the aggregate proceeds reasonably
anticipated to be generated, net of underwriting discounts and commissions, equals or exceeds $10 million or unless such Underwritten
Offering includes all of the Registrable Securities then owned by the requesting Investors.
The Registration Rights Agreement includes customary
indemnification provisions.
The foregoing summary of the Registration Rights
Agreement does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Registration
Rights Agreement filed herewith as Exhibit 2, which is incorporated herein by reference.
Convertible Notes
On the Effective Date and pursuant to the Plan,
the Issuer issued to the Reporting Persons $49,659,301 aggregate principal amount of Convertible Notes, in respect of claims under
the 2018 Notes and the 2019 Notes and for cash pursuant to a commitment agreement, dated as of June 16, 2017 (as amended, the “Commitment
Agreement“), by and among the Issuer, the Reporting Persons and certain other creditors of the Issuer. The Convertible
Notes are convertible at the election of the holder at any time into shares of Common Stock, cash or a combination of Common Stock
and cash, at the option of the Issuer. The Convertible Notes held by the Reporting Persons are initially convertible into 13,177,915
shares of Common Stock. The Reporting Persons disclaim beneficial ownership of any shares of Common Stock that they might receive
upon conversion of the Convertible Notes.
Pursuant to the Plan, on the Effective
Date, the Issuer entered into an Indenture (the “Convertible Notes Indenture“) with Wilmington Savings Fund Society,
FSB (“WSFS, FSB“), as trustee and collateral agent (“Indenture Agent“) and, pursuant thereto,
issued the Convertible Notes.
The Convertible Notes are five year senior
obligations of the Issuer and certain of its subsidiaries, secured by a lien on all or substantially all of the assets of the Issuer,
its domestic subsidiaries and certain of its foreign subsidiaries, which lien the Indenture Agent has agreed will be junior to
the lien of the agent for the Issuer’s senior credit agreement.
The Convertible Notes are convertible
into shares of the Issuer’s common stock at any time at the initial conversion rate of 0.2654 shares of Common Stock per $1.00
principal amount of Convertible Notes, which rate is subject to adjustment as set forth in the Convertible Notes Indenture. The
value of shares of Common Stock for purposes of the settlement of the conversion right will be calculated as provided in the Convertible
Notes Indenture, using a 20 trading day observation period. Upon conversion, the Issuer will pay and/or deliver, as the case may
be, cash, shares of the Issuer’s common stock or a combination of cash and shares of the Issuer’s common stock, at the Issuer’s
election, together with cash in lieu of fractional shares.
