Internap Corporation Enters into $75 Million DIP Facility with Jefferies

Internap Corporation, as debtor and debtor-in-possession ("INAP"), and certain of its subsidiaries, as debtors and debtors-in-possession (collectively with INAP, the "Company"), entered into a Senior Secured Super-Priority Debtor-In-Possession Credit Agreement (the "DIP Facility") with Jefferies Finance LLC ("Jefferies"), as administrative agent and collateral agent, and the lenders party thereto (the "DIP Lenders"). As previously reported by INAP on March 16, 2020, the Company filed voluntary petitions for relief (collectively, the "Chapter 11 Cases") under Title 11 of the United States Code with the United States Bankruptcy Court for the Southern District of New York, White Plains Division (the "Bankruptcy Court") to effect a prepackaged Chapter 11 plan of reorganization (the "Plan"). On March 19, 2020, the Bankruptcy Court entered an interim order (the "Interim Order") to approve the DIP Facility and the parties entered into such DIP Facility on the terms approved by the Bankruptcy Court.

The DIP Facility provides for, among other things, term loans in an aggregate principal amount of up to $75 million, (including the roll up of $5 million of new incremental loans made on March 13, 2020 pursuant to the credit agreement dated April 6, 2017 by and among the Company, Jefferies and the lenders party thereto (as amended, the "Credit Agreement")). All loans under the DIP Facility bear interest at a rate of either: (i) an applicable base rate plus 9% per annum or (ii) LIBOR (with a floor of 1%) plus 10% per annum.

Use of Proceeds. The Company anticipates using the proceeds of the DIP Facility to, among other things: (i) pay certain fees, interest, payments and expenses related to the Chapter 11 Cases; (ii) fund the working capital needs and expenditures of the Company during the Chapter 11 Cases; (iii) fund the Carve-Out (as defined below); and (iv) pay other related fees and expenses in accordance with budgets provided to the DIP Lenders.

Priority and Collateral. The DIP Lenders (subject to the Carve-Out as discussed below): (i) are entitled to joint and several super-priority administrative expense claim status in the Chapter 11 Cases; (ii) have a first priority lien on substantially all unencumbered assets of the Company; and (iii) have a priming first priority lien on any assets encumbered by the Credit Agreement. The Company's obligations to the DIP Lenders and the liens and super-priority claims are subject in each case to a carve out (the "Carve-Out") that accounts for certain administrative, court and legal fees payable in connection with the Chapter 11 Cases.

Affirmative and Negative Covenants. The DIP Facility contains certain affirmative and negative covenants, including requiring the Company to provide to the DIP Lenders a budget for the use of the Company's funds and the achievement of certain milestones for the Chapter 11 Cases, among other covenants customary in debtor-in-possession financings.

Events of Default. The DIP Facility contains certain events of default customary in debtor-in-possession financings, including: (i) the failure to pay loans made under the DIP Facility when due; (ii) appointment of a trustee, examiner or receiver in the Chapter 11 Cases; (iii) certain violations of the Restructuring Support Agreement dated March 13, 2020, between the Company and the lenders party thereto; and (iv) the failure of the Company to use the proceeds of the loans under the DIP Facility as set forth in the budget (subject to any approved variances).

Maturity. The DIP Facility will mature on the earliest of (i) September 16, 2020; (ii) the date on which the loans under the DIP Facility become due and payable, whether by acceleration or otherwise; (iii) the effective date of the Plan; (iv) the sale of substantially all of the assets of the Company; (v) the first business day on which the order approving the DIP Facility by the Bankruptcy Court expires by its terms, unless a final order has been entered and become effective prior thereto; (vi) the conversion or dismissal of the Chapter 11 Cases; (vii) dismissal of any of the Chapter 11 Cases unless consented to by the DIP Lenders or (viii) the final order approving the DIP Facility by the Bankruptcy Court is vacated, terminated, rescinded, revoked, declared null and void or otherwise ceases to be in full force and effect.

The foregoing description of the DIP Facility does not purport to be complete and is qualified in its entirety by reference to the full text of the DIP Facility, a copy of which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated by reference in this Item 1.01.

On March 17, 2020, INAP received a letter (the "Nasdaq Letter") from the staff of the Nasdaq Listing Qualifications Department (the "Staff") notifying INAP that, as a result of the Chapter 11 Cases and in accordance with Nasdaq Listing Rules 5101, 5110(b) and IM-5101-1, INAP's common stock (the "Common Stock") will be delisted from The Nasdaq Stock Market ("Nasdaq"). The Nasdaq Letter stated that the Staff's determination was based on: (i) the filing of the Chapter 11 Cases and associated public interest concerns raised by such Chapter 11 Cases; (ii) concerns regarding the residual equity interest of the existing listed securities holders; and (iii) concerns about INAP's ability to sustain compliance with all requirements of continued listing on Nasdaq.

Based on the Nasdaq Letter, unless INAP requests an appeal of this determination to a Nasdaq Hearings Panel, trading of the Common Stock will be suspended at the opening of business on March 26, 2020, and a Form 25-NSE will be filed with the Securities and Exchange Commission (the "SEC"), which will remove the Common Stock from listing and registration on Nasdaq.

INAP does not intend to appeal Nasdaq's determination and, therefore, it is expected that the Common Stock will be delisted. The transition does not affect the Company's operations and does not change reporting requirements under SEC rules. Upon delisting, INAP expects that its Common Stock will be quoted on the OTC under the symbol "INAP" on March 26, 2020.