Page 16 of 23 – SEC Filing
The Notes contain (and
any Option Notes will contain) certain affirmative and restrictive covenants with which the Issuer must comply, including covenants
with respect to (i) limitations on additional indebtedness, (ii) limitations on liens, (iii) limitations on certain payments, (iv)
maintenance of certain minimum cash balances and (v) the filing of the Form 10-K and certain other disclosures with the SEC.
Pursuant to the Purchase
Agreement, the Issuer agreed to issue to the Starboard Buyers on the earlier of the closing of the Rights Offering and October
16, 2018, Warrants to acquire the Warrant Shares pursuant to the terms and conditions of a Warrant to Purchase Common Stock (the
“Warrant Agreement”). The Warrants will entitle the holders thereof to purchase, on a one-for-one basis, shares of
Common Stock at a price of $0.01 per share, and will be exercisable for five years from the date of issuance. The Warrants will
not be subject to any anti-dilution protection, other than standard adjustments in the case of stock splits, stock dividends and
the like.
As contemplated by the
Purchase Agreement, on the Closing Date, the Issuer entered into a registration rights agreement with the Starboard Buyers (the
“Registration Rights Agreement”), pursuant to which the Issuer has agreed to file one or more registration statements
allowing for the resale of the Conversion Shares (including any Conversion Shares which may become issuable following the sale
of any Option Notes), the Warrant Shares and the PIK Interest Shares. The Registration Rights Agreement requires, among other things,
the Issuer to file a registration statement covering the resale of such securities within 30 days of the Issuer filing with the
SEC the Form 10-K, and to use commercially reasonable efforts to have such registration statement declared effective within ninety
days following the filing thereof. The Registration Rights Agreement also includes other customary provisions relating to, among
other things, suspension periods and indemnification.
The foregoing descriptions
of each of the Purchase Agreement, the form of the Note Agreement, the Guaranty Agreement, the Security Agreement, the form of
the Warrant Agreement and the Registration Rights Agreement (collectively the “Agreements”) are qualified in their
entirety by reference to each of the Agreements, which are filed as exhibits to the Issuer’s Form 8-K filed with the SEC
on January 16, 2018 and are incorporated herein by reference.
| Item 5. | Interest in Securities of the Issuer. |
Item 5 is hereby amended
and restated to read as follows:
The aggregate percentage
of Shares reported owned by each person named herein is based upon (i) 54,689,047 Shares outstanding (representing 57,289,047 Shares
outstanding as of December 31, 2017, which is the total number of Shares outstanding as reported in the Purchase Agreement minus
the 2,600,000 Shares surrendered by the Reporting Persons as part of the purchase price pursuant to the Purchase Agreement) and
(ii) certain of the 150,000,000 Shares issuable upon the conversion of certain Notes, as described above.
| A. | Starboard V&O Fund |
| (a) | As of the close of business on January 16, 2018, Starboard V&O Fund beneficially owned 2,440,466 Shares, including 500,000 Shares underlying a certain forward purchase contract and 1,287,790 Shares issuable upon the conversion of certain Notes. |
Percentage: Approximately 4.4%
| (b) | 1. Sole power to vote or direct vote: 2,440,466 2. Shared power to vote or direct vote: 0 3. Sole power to dispose or direct the disposition: 2,440,466 4. Shared power to dispose or direct the disposition: 0 |
