Events of Default. The New Notes Indenture provides for the following events of default (each, an “Event of Default”): (i) default in payment of principal or premium on the Notes at maturity, upon repurchase, acceleration, optional redemption or otherwise; (ii) default for 30 days in payment of interest on the Notes; (iii) the failure by the Company or certain restricted subsidiaries to comply with other agreements in the New Notes Indenture or the Notes, in certain cases subject to notice and lapse of time; (iv) the failure of any guarantee by certain significant Subsidiary Guarantors to be in full force and effect and enforceable in accordance with its terms, subject to notice and lapse of time; (v) certain accelerations (including failure to pay within any grace period) of other indebtedness of the Company or any restricted subsidiary if the amount accelerated (or so unpaid) is at least $15.0 million; (vi) certain judgments for the payment of money in excess of $15.0 million; (vii) certain events of bankruptcy or insolvency with respect to the Company or any significant subsidiary; (vii) certain defaults with respect to any collateral having a fair market value in excess of $15.0 million; and (viii) if any of the Intercreditor Agreements cease for any reason (other than in accordance with their terms) to be in full force and effect in a manner that materially adversely affects the enforceability, validity, perfection or priority of the liens on a material portion of the collateral securing the Notes. If an Event of Default occurs and is continuing, the New Trustee or the holders of at least 25% in principal amount of the outstanding Notes may declare the principal of the Notes and any accrued interest on the Notes to be due and payable immediately, subject to remedy or cure in certain cases. Certain events of bankruptcy or insolvency are Events of Default which will result in the Notes being due and payable immediately upon the occurrence of such Events of Default.
Change of Control. In the event of a change of control (as defined in the New Notes Indenture) of the Company, holders of the Notes have the right to require the Company to repurchase their Notes at a purchase price equal to 101% of the principal amount thereof plus accrued and unpaid interest to, but not including, the repurchase date.
The Notes have not been and will not be registered under the Securities Act, or the securities laws of any other jurisdiction, and may not be offered or sold in the United States or to U.S. persons absent registration or an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act or any state securities laws. This current report on Form 8-K is neither an offer to sell nor the solicitation of an offer to buy the Notes or any other securities and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale would be unlawful.
First Supplemental Indenture. On September 10, 2021, the Company, the guarantors party thereto and the Existing Trustee, acting with the consent and at the direction of holders of more than 50% in aggregate principal amount of the Existing Notes then outstanding, entered into the First Supplemental Indenture to the Existing Indenture, to include as permitted debt and permitted liens thereunder, respectively, the issuance of the New Notes and the guarantees thereof and the incurrence of liens on the Notes Priority Collateral, to direct the Existing Trustee to enter into the Intercreditor Agreement and to effect certain other changes relating thereto.
Intercreditor Arrangements. On September 10, 2021, in connection with the issuance of the New Notes, the Company, the grantors party thereto, the Existing Collateral Agent and the New Collateral Agent, entered into an Intercreditor Agreement (the “Intercreditor Agreement”) providing among other things that the liens upon the Notes Priority Collateral and the ABL Priority Collateral of the New Collateral Agent will be senior in priority to the liens in the Notes Priority Collateral and the ABL Priority Collateral to the liens in favor of the Existing Collateral Agent.
Pursuant to the terms of the Intercreditor Agreement, the New Collateral Agent holds a senior priority security interest in the common collateral for the benefit of holders of the New Notes, and the Existing Collateral Agent holds a junior priority lien in the common collateral for the benefit of the holders of the Existing Notes. A release of common collateral by the New Collateral Agent will result in a release of the second-priority liens in favor of the holders of the Existing Notes without the consent of the holders of the Existing Notes, and the rights of the Existing Collateral Agent to exercise rights with respect to the common collateral in a bankruptcy proceeding are restricted under the Intercreditor Agreement.
Security Agreement. On September 10, 2021, in connection with the issuance of the New Notes, the Company, the grantors party thereto and the New Collateral Agent entered into a Security Agreement (the “Notes Security Agreement”) providing for a first-priority security interest in the Notes Priority Collateral for the benefit of the New Collateral Agent, and certain security and collateral documents ancillary thereto.
A copy of each of the Exchange Agreement, the Purchase Agreement, the Supplemental Indenture, the New Notes Indenture, the form of the Notes, the Notes Security Agreement and the Intercreditor Agreement is attached as Exhibit 4.1, Exhibit 4.2, Exhibit 4.3, Exhibit 4.4, Exhibit 4.5, Exhibit 4.6 and Exhibit 10.1, respectively, to this current report on Form 8-K. The foregoing descriptions of the Exchange Agreement, the Purchase Agreement, the Supplemental Indenture, the New Notes Indenture, the form of the Notes, the Notes Security Agreement and the Intercreditor Agreement are qualified in their entirety by reference to such exhibits, which are incorporated herein by reference.
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