Anthology - Plan / RSA Terms

RSA Terms

Overview

• On Sept. 29, 2025, Anthology Inc. and certain of its affiliates (the “Company Parties” or “Debtors”) entered into a Restructuring Support Agreement with certain lenders and the company’s sponsor to implement a comprehensive restructuring.
• The RSA contemplates a dual-path restructuring process through chapter 11 cases to be filed in the U.S. Bankruptcy Court for the Southern District of Texas, consisting of:
  • The sale of certain assets, including the Enterprise Operations, Lifecycle Management and Student Success assets, pursuant to section 363 of the Bankruptcy Code (the “Sale Transactions”); and
  • A restructuring of the Debtors’ remaining assets pursuant to a chapter 11 plan of reorganization (the “Plan Transactions”).
• The chapter 11 cases will be funded by a DIP facility, and the plan will be supported by a new money investment.

Parties to the RSA

• The parties to the RSA include:
  • The Company Parties, including Anthology Inc. and Astra Intermediate Holding Corp.;
  • Consenting holders of Prepetition Superpriority First Out, Second Out and Third Out claims (collectively, the “Consenting Lenders”);
  • Certain Consenting Lenders in their capacity as backstop parties for the DIP facility (the “DIP Backstop Parties”); and
  • An affiliate of Veritas Capital Fund Management L.L.C. as the “Consenting Sponsor.”

Sale Transactions

• The Debtors will continue a prepetition marketing process to solicit bids for their Enterprise Operations, Lifecycle Engagement and Student Success assets (collectively, the “Sale Assets”).
• In connection with the sale process, the Debtors have entered into stalking horse purchase agreements with:
  • Ellucian Company LLC for the Enterprise Operations Assets; and
  • Encoura, LLC for the Lifecycle Engagement and Student Success Assets.
• Net cash proceeds from the Sale Transactions would be applied on the plan effective date in the following order of priority:
  • First, to repay DIP claims;
  • Second, to repay Prepetition Superpriority First Out Claims, subject to a minimum cash balance of up to $70 million for the reorganized debtors; and
  • Third, to repay other outstanding claims and interests in order of priority.
• If a sale closes before the plan effective date, the net proceeds would be held in trust and distributed in accordance with the plan.

DIP Financing

• The chapter 11 cases would be funded by a DIP term facility, with participation offered ratably to all holders of Prepetition Superpriority First Out Claims that are Consenting Lenders.
• The DIP facility will be backstopped by the DIP Backstop Parties, who will be entitled to a DIP Backstop Premium for their commitment.
• The Debtors are required to file a motion seeking approval of the DIP facility on the petition date.

New Money Investment

• The plan will be funded by New Money Investments, which will be fully backstopped by certain members of the ad hoc group of lenders (the “New Money Backstop Parties”). The investments consist of:
  • A Direct Investment Preferred Equity Raise for $15 million, plus an additional amount not to exceed $22.7 million to fund cash-out options for certain lenders; and
  • An Equity Rights Offering to raise $35 million in New Preferred Equity Interests, with subscription rights offered to holders of allowed Prepetition Superpriority First Out Claims.
• In consideration for their commitment, the New Money Backstop Parties will receive a commitment premium equal to 10% of the total New Money Investment, payable in-kind in New Preferred Equity Interests.
• Proceeds will be used to fund the cash-out options and provide the reorganized debtors with at least $50 million in balance sheet cash.
• DIP lenders that are also New Money Backstop Parties may elect to fund their new money allocation on a cashless basis in exchange for a dollar-for-dollar satisfaction of their DIP claims.

Treatment of Claims and Interests

• Administrative Expense, Priority Tax, DIP, Other Secured and Other Priority Claims are slated to be paid in full in cash.
• Prepetition Superpriority First Out Claims: Holders would receive:
  • A pro rata share of 99% of the New Common Equity Interests, subject to dilution from a management incentive plan;
  • The right to participate pro rata in the Equity Rights Offering; and
  • A pro rata share of all net sale proceeds and other remaining cash after funding restructuring transactions and maintaining a minimum cash balance for the reorganized debtors.
  • Alternatively, holders (other than New Money Backstop Parties) may elect a cash-out option to receive a pro rata share of $59.4 million in lieu of the equity and rights offering participation.
• Prepetition Superpriority Second Out Claims: Holders would receive:
  • A pro rata share of 1% of the New Common Equity Interests, subject to dilution; and
  • A pro rata share of approximately 1% of the total New Preferred Equity Interests.
  • Alternatively, holders may elect a cash-out option to receive a pro rata share of $2 million in lieu of the equity consideration.
• Prepetition Superpriority Third Out Claims, Prepetition 2021 First Lien Claims, Prepetition Second Lien Claims and General Unsecured Claims: Treatment for these classes is to be determined.
• Existing Equity Interests: All existing equity interests would be canceled, released and extinguished with no recovery.

Corporate Governance & New Equity

• Upon emergence, the reorganized parent will be a Delaware limited liability company with two classes of equity interests: New Common Equity and New Preferred Equity.
• The New Preferred Equity will rank senior to the New Common Equity and feature the following terms:
  • A 5.65% annual yield, compounded and added to the liquidation preference quarterly if not paid in cash;
  • A 20-year maturity, with automatic acceleration upon a change of control or other liquidation event;
  • Voting rights on an as-converted basis, voting together with common equity as a single class; and
  • Convertible into New Common Equity at the holder's option at any time, and automatically upon a qualified public offering or change of control.
• The initial board of the reorganized company will consist of seven directors, including the CEO and six directors designated by certain lenders:
  • Two directors designated by Nexus;
  • Two directors designated by Oaktree; and
  • Two directors designated by other non-major equity holders on the ad hoc group’s steering committee.
• The reorganized debtors may implement a management incentive plan providing for equity-based awards of up to 15% of the new equity.

Alternative Transactions

• The company parties are permitted to consider unsolicited alternative restructuring proposals consistent with their fiduciary duties.
• An “Acceptable Alternative Transaction” is defined as a sale of all or substantially all remaining assets that, among other things:
  • Pays all DIP claims and Prepetition Superpriority First Out Claims in full in cash;
  • Provides recoveries for all other classes equal to or greater than those under the plan; and
  • Is not subject to material contingencies.
• The company parties must consult with the Consenting Lenders before pursuing any such transaction.

Milestones

• The RSA contains several milestones, including:
  • Sept. 29, 2025: Chapter 11 filing and filing of first day pleadings.
  • Petition Date + 3 Business Days: Entry of interim DIP order.
  • Petition Date + 35 Calendar Days: Entry of final DIP order.
  • Petition Date + 45 Calendar Days: Bid deadline for Sale Assets.
  • Petition Date + 50 Calendar Days: Auction for Sale Assets.
  • Petition Date + 85 Calendar Days: Plan confirmation hearing.
  • 14 Calendar Days After Confirmation: Plan effective date.

RSA Support & Termination

• The RSA becomes effective once executed by the company parties and holders of at least 66.7% of the Prepetition Superpriority First Out Claims, among other conditions.
• Consenting Lenders and the Consenting Sponsor commit to support the restructuring and vote in favor of the plan.
• The RSA may be terminated by the Required Consenting Lenders upon the failure to achieve any milestone. The company parties may terminate the agreement if their boards determine that proceeding with the restructuring would be inconsistent with their fiduciary duties.
• Consenting Lenders are subject to transfer restrictions, requiring any transferee of their claims to execute a transfer agreement to become bound by the RSA’s terms.

Releases & Exculpation

• The plan will include customary release and exculpation provisions for the benefit of the Debtors, Consenting Lenders, Consenting Sponsor, Stalking Horse Purchasers and their respective related parties, among others.