Item 1.01. Entry into a Material Definitive Agreement.
Restructuring Support Agreement
On
Pursuant to the Agreement Regarding Convertible Notes dated
The RSA states that the Company has until
The RSA also provides that the Company will continue to work with the Supporting Noteholder on an exclusive basis in respect of any restructuring, financing or other material transaction concerning the Company or its assets, with the exception of a Permitted Refinancing consummated on or before the Permitted Refinancing Deadline.
The RSA also provides for certain milestones requiring, among other things: (a) the filing of the Plan and a disclosure statement related thereto by no later than the Petition Date, (b) entry of an order confirming the Plan by no later than seventy-five (75) calendar days after the Petition Date, and (c) consummation of the Plan by no later than ninety (90) calendar days after the Petition Date (the "Effective Date").
The RSA contains certain covenants on the part of the Supporting Noteholder, including commitments to:
† vote its claims to accept the Plan; † consent to and not opt-out of the releases set forth in the Plan;
† not pursue any claims that the Supporting Noteholder may have against certain released parties under the Plan, including the current and former directors and officers of the Company;
† negotiate in good faith and use commercially reasonable efforts to negotiate, execute, and deliver such other related definitive documents as may be required; and
† work in good faith to negotiate (i) a term sheet and credit agreement (the "DIP Credit Agreement") evidencing and providing a senior secured super-priority debtor-in-possession priming loan facility (the "DIP Financing) and (ii) an exit financing commitment letter (the "Exit Financing Commitment Letter") for a new first lien credit facility (the "Exit Facility") to be provided by the Supporting Noteholder and an exit facility credit agreement (the "Exit Facility Credit Agreement") in accordance therewith.
The RSA similarly contains certain covenants on the part of the Company, including commitments to:
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† redeem
† not rescind, cancel, modify, supplement or replace its Preferred
Stock Rights Agreement, dated as of
† preserve the value of the Company's tax attributes;
† use commercially reasonable efforts to facilitate solicitation of the Plan and obtain entry of interim and final orders approving the DIP Financing, approval of the disclosure statement, confirmation of the Plan, and all necessary regulatory and third-party approvals;
† negotiate in good faith and use commercially reasonable efforts to execute and deliver the definitive documents and any other required agreements to effectuate and consummate the restructuring transactions contemplated by the RSA and the Term Sheet; and
† negotiate in good faith and execute the (i) DIP Credit Agreement and finalize and seek approval of the interim and final orders approving the DIP Financing consistent with the DIP Financing and the DIP Credit Agreement and related term sheet and (ii) the Exit Financing Commitment Letter and the Exit Facility Credit Agreement.
The RSA provides for certain termination events, including without limitation,
immediate termination of the RSA upon the completion of the Permitted
Refinancing by the Permitted Refinancing Deadline or the Effective Date. If the
Supporting Noteholder terminates the RSA pursuant to certain enumerated
triggers, the Company will be required to promptly remit
Proposed Chapter 11 Restructuring
The Plan, which remains subject to the Company's commencement of chapter 11
cases, solicitation of votes, confirmation of the Plan by the
† holders of DIP Financing claims, administrative expense claims, priority tax claims, and other priority claims will be paid in full;
† if holders of the 10.375% Senior Secured Notes due 2024 and all
claims under that certain Indenture dated as of
† holders of claims under the Convertible Notes Indenture will be
allowed in an amount not less than
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† holders of allowed general unsecured claims will be paid from a
segregated account containing an amount sufficient to pay allowed general
unsecured claims in full in cash on the later of the effective date of the Plan
or when they become allowed, and the
† intercompany claims will be reinstated, cancelled, or compromised as determined by the reorganized Company;
† all claims subordinated under section 510 of the Bankruptcy Code will not receive any distributions under the Plan; provided, that holders of subordinated claims may participate in the 9019 Settlement (as defined below) if certain Conditions (as defined below) are satisfied; and
† all interests will be disallowed and will be cancelled under the Plan; however, pursuant to a settlement in accordance with Federal Rule of Bankruptcy Procedure 9019 (the "9019 Settlement"), to the extent a holder of issued and outstanding VIVUS common stock as of the Petition Date (a) does not . . .
Item 7.01. Regulation FD Disclosure.
On
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits. Exhibit No. Description 99.1 Press release, datedJune 2, 2020 . 5
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