Backstop Agreement
On July 9, 2020, the Partnership and certain of its subsidiaries entered into a Backstop Agreement (the Backstop Agreement) with certain of the Supporting Holders of the Existing Notes (the Backstop Parties), to which the Backstop Parties have agreed to purchase any unsubscribed New Notes that have not been purchased by eligible holders in the Rights Offering, or if the Exchange Offer and Cash Tender Offer are not consummated, to the Plan (as defined below).
The Partnership has agreed to pay the Backstop Parties a backstop commitment fee of $3.75 million allocated between the Backstop Parties based on their pro rata share of the backstop commitment, which commitment fee will be paid in New Notes. However, if the Restructuring Support Agreement is terminated due to the Partnerships governing body exercising its fiduciary duties, if the backstop agreement is materially breached by the Partnership and therefore terminated by the Backstop Parties, or if the New Notes are not issued by August 17, 2020 and the Partnership has not commenced chapter 11 cases, the commitment fee will be paid in cash.
The transactions contemplated by the Backstop Agreement are conditioned upon satisfaction or waiver of customary conditions for transactions of this nature, including, without limitation, that the Exchange Offer and consent solicitation, or Plan, as applicable, shall have been consummated or are being consummated substantially concurrently with closing of the Backstop Agreement, and the Rights Offering shall have been conducted, in each case in all material respects, in accordance with the Restructuring Support Agreement, the Backstop Agreement and other definitive documents described therein.
The transactions are being disclosed in this Current Report on Form 8-K for completeness of disclosure of the terms of the amended Restructuring Support Agreement and the Backstop Agreement. This report shall not constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of any of these securities, in any jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. The Exchange Notes and New Notes to be offered in the Exchange Offer and Rights Offering have not been registered under the Securities Act of 1933, as amended (the Securities Act), or any state securities laws, and unless so registered, may not be offered or sold in the United States or to U.S. persons except to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws.
The foregoing description of the Backstop Agreement, set forth in this Item 1.01, does not purport to be complete and is qualified in its entirety by reference to the text of the Backstop Agreement, a copy of which is filed as Exhibit 10.2 hereto and is incorporated herein by reference.
The information set forth above in Item 1.01 regarding the Eleventh Amendment is incorporated by reference into this Item 2.03.
Item 7.01. Regulation FD Disclosure.
On July 9, 2020, the Partnership issued a press release announcing (1) the commencement of an exchange offer to certain eligible holders of the Existing Notes (the Exchange Offer) for a combination of cash, Exchange Notes, and rights (the Rights) to acquire (the Rights Offering) New Notes, and (2) a cash tender offer to certain other holders of the Existing Notes (the Cash Tender Offer), in each case subject to certain conditions. In conjunction with the Exchange Offer and the Cash Tender Offer, as applicable, the Partnership has also commenced a solicitation of consents from the respective holders of the Existing Notes to amend certain provisions of the indenture governing the Existing Notes. As contemplated by the Restructuring Support Agreement, and in conjunction with the Exchange Offer, the Partnership is also soliciting votes (the Plan Solicitation) to accept a prepackaged plan of reorganization (the Plan). A copy of the press release is filed herewith as Exhibit 99.1 and incorporated by reference herein.
