Item 1.01. Entry into a Material Definitive Agreement.
Letter Agreement
On December 30, 2022, INNOVATE Corp. (the "Company") entered into a letter
agreement (the "CGIC Letter Agreement") with Continental General Insurance
Company ("CGIC") pursuant to which CGIC and its affiliates agreed to vote
certain shares of the Company's Series A-3 Convertible Participating Preferred
Stock, par value $0.001 per share, and the Company's Series A-4 Convertible
Participating Preferred Stock, par value $0.001 per share, to the extent such
shares result in CGIC beneficially owning more than 9.9% of the aggregate voting
power of the Company, in the same manner as the majority of the holders holding
less than 10% of the Company's common stock, par value $0.001 per share, vote
their shares with respect to any matter pursuant to which such shares are
entitled to vote. The foregoing description of terms of the CGIC Letter
Agreement is a summary of certain of its terms only and is qualified in its
entirety by the full text of the CGIC Letter Agreement, filed as Exhibit 10.1 to
this Current Report on Form 8-K and incorporated herein by reference.
Item 7.01. Regulation FD Disclosure
As previously disclosed, on October 27, 2022, INNOVATE Corp. received a written
notice from the New York Stock Exchange (the "NYSE") that it was not in
compliance with the continued listing standard set forth in Section 802.01C of
the NYSE's Listed Company Manual ("Section 802.01C"), as the average closing
price of the Company's common stock (the "Common Stock") was less than $1.00 per
share over a consecutive 30 trading-day period. On January 3, 2022, the Company
received a written notice from the NYSE that for the 30 trading days ending
December 30, 2022, the average closing price of the Common Stock was above the
$1.00 minimum requirement, and the Company is in compliance with Section
802.01C.
The information in Item 7.01 of this Current Report on Form 8-K is being
furnished and shall not be deemed "filed" for purposes of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), nor shall it be deemed
incorporated by reference into any of the Company's filings under the Securities
Act of 1933, as amended, or the Exchange Act, whether made before or after the
date hereof and regardless of any general incorporation language in such
filings, except to the extent expressly set forth by specific reference in such
a filing.
Item 8.01. Other Events.
Seventh Omnibus Amendment and Warrant Amendments
On December 30, 2022, HC2 Broadcasting Holdings Inc. ("HC2 Broadcasting")
entered into a Seventh Omnibus Amendment to Secured Notes (the "Note Amendment")
with HC2 Station Group, Inc., HC2 Broadcasting Inc., HC2 Network Inc., HC2
Broadcasting License Inc., DTV America Corporation, HC2 Broadcasting
Intermediate Holdings Inc., HC2 Broadcasting Holdings Inc., MSD PCOF Partners
XVIII, LLC, MassMutual Ascend Life Insurance Company ("MassMutual"), and Great
American Insurance Company ("GAIC"), which, among other things, extended $52.2
million of its Senior Secured Notes, due December 30, 2022 to May 31, 2024. The
$52.2 million of Senior Secured notes consisted of $19.3 million of 8.5% Senior
Secured notes and $32.9 million of 10.5% Senior Secured Notes.
The terms on the $19.3 million 8.5% Senior Notes remained the same. At the time
of the extension, HC2 Broadcasting had accrued interest and other fees $6.9
million.
The interest rate on the $32.9 million 10.5% Senior Notes were increased to
11.45% and accrued interest and fees of $17.5 million were capitalized into the
principal balance. All other terms were essentially the same.
Total outstanding principal after the refinancing was $69.7 million and $6.9
million of accrued interest and fees remain accrued.
The foregoing description of terms of the Note Amendment is a summary of certain
of their respective terms only and is qualified in its entirety by the full text
of the Note Amendment, filed as Exhibit 10.2 to this Current Report on Form 8-K
and incorporated herein by reference.
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Concurrently therewith and as part of the consideration for extending the 10.5%
Senior Notes, HC2 Broadcasting amended warrants to purchase 145,825 shares of
common stock of HC2 Broadcasting Holdings common stock held by the lenders of
the 10.5% Senior Notes by extending the time to exercise such to the second half
of 2026 and reducing the exercise price per share (i) from $140 to $.01 in the
case of the certain of the warrants and (ii) from $130 to $.01 in the case of
the remaining warrants.
Mutual Release and Termination Agreement with Azteca International Corporation
and TV Azteca S.A.B. de C.V.
On December 31, 2022, HC2 Network, Inc. entered into that certain Mutual Release
and Termination Agreement (the "MTA") with Azteca International Corporation and
TV Azteca, S.A.B. de C.V. (collectively, "TVA"), pursuant to which the parties
agreed to terminate that certain Program Licensing Agreement entered into as of
November 29, 2017 (the "PLA"), and the Binding Term Sheet: La Academia (the
"Term Sheet"), dated as of November 10, 2019, and exchange mutual releases of
any and all claims based on, arising out of or related to the PLA and certain
other agreements to which HC2 Networks and TVA were previously parties.
The foregoing description of terms of the MTA is a summary of certain of its
terms only and is qualified in its entirety by the full text of the MTA, filed
as Exhibit 10.3 to this Current Report on Form 8-K and incorporated herein by
reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. Description
10.1 Letter Agreement with Continental General Insurance Company
10.2 Seventh Omnibus Amendment to Secured Notes
10.3 Mutual Release and Termination Agreement with Azteca International Corporation
and TV Azteca, S.A.B. de C.V.
104 Cover Page Interactive Data File (the cover page XBRL tags are embedded within
the inline XBRL document).
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