Kaye Scholer Represents Cantor Fitzgerald Securities as Agent in RadioShack Credit Facility, as Successor to GE Capital

October 3, 2014

On October 3, RadioShack Corporation entered into agreements to restructure a portion of its existing debt, to provide additional near-term liquidity and serve as a first step in its efforts to effect a recapitalization. Together with certain subsidiaries designated as credit parties, RadioShack entered into a Loan Sale Agreement with General Electric Capital Corporation (GE Capital), certain other entities party thereto (together with GE Capital, collectively, the Sellers) and others. Thereafter, RadioShack and the credit parties entered into a First Amendment to Credit Agreement (First Amendment) with lenders and Kaye Scholer client Cantor Fitzgerald Securities, in its capacity as the successor to GE Capital as the administrative agent for the lenders.

The First Amendment amended a December 2013 RadioShack Credit Agreement (ABL Credit Agreement) and subdivided the revolving credit commitments under the ABL Credit Agreement into (1) a facility of outstanding revolving loans that were converted into term loans on October 3, 2014 in an aggregate principal amount of $275,000,000, (2) a facility available solely for letters of credit in an aggregate principal amount of $120,000,000, and (3) a facility available solely for revolving loans in an aggregate principal amount of up to $140,000,000, in each case on the terms and subject to the conditions set forth therein. Term Loans in an aggregate principal amount of $50,000,000 were left outstanding under the ABL Credit Agreement.

The First Amendment also included an agreement among the parties to release the discretionary borrowing base reserves under the ABL Credit Agreement and restore the methods used to calculate the borrowing base to those used in December 2013, in each case, until the earlier of an event of default and March 15, 2015. After such time, the lenders may impose discretionary reserves and change the method of calculating the borrowing base. These changes increased the amount of borrowing availability as of October 3, 2014 by approximately $142.3 million, which was immediately accessed by RadioShack.

The Kaye Scholer deal team representing Cantor was led by Stephen Castro, along with Samantha Braunstein and Jonathan Agudelo.

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