Item 1.01
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Entry into a Material Definitive Agreement.
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On December 17, 2020, certain
subsidiaries of Exela Technologies, Inc., a Delaware corporation (the “Company” or “us”) closed on a
$145.0 million securitization facility (the “Securitization Facility”) with a five year term. Borrowings
under the Securitization Facility are subject to an improved borrowing base definition that consists of receivables and,
subject to contribution, further supported by inventory and intellectual property, in each case, subject to certain
eligibility criteria, concentration limits and reserves. The Securitization Facility provides for an initial funding of
approximately $92.0 million supported by the receivables portion of the borrowing base and, subject to contribution, a
further funding of approximately $53.0 million supported by inventory and intellectual property.
On December 17, 2020 the Company made
the initial borrowing of approximately $92.0 million under the Securitization Facility and used a portion of the proceeds to
repay the Company’s Existing Receivables Securitization Facility (as defined below). The Company will use the remaining
proceeds for general corporate purposes.
The initial documentation for the Securitization
Facility includes (i) a Loan and Security Agreement (the “Loan Agreement”), dated as of December 10, 2020, by and among
Exela Receivables 3, LLC (the “Borrower”), a wholly-owned indirect subsidiary of the Company, the lenders (each, a
“Lender” and collectively the “Lenders”), Alter Domus (US), LLC, as administrative agent (the “Administrative
Agent”) and the Company, as initial servicer, pursuant to which the Lenders will make loans to the Borrower to be used to
purchase receivables and related assets from the Parent SPE (as defined below), (ii) a First Tier Receivables Purchase and Sale
Agreement (the “First Tier Receivables Purchase and Sale Agreement”), dated as of December 17, 2020, by and among
Exela Receivables 3 Holdco, LLC (the “Parent SPE”), a wholly-owned indirect subsidiary of the Company, and certain
other indirect, wholly-owned subsidiaries of the Company listed therein (collectively, the “Originators”), and the
Company, as initial servicer, pursuant to which each Originator has sold or contributed and will sell or contribute to the Parent
SPE certain receivables and related assets in consideration for a combination of cash and equity in the Parent SPE, (iii) a Second
Tier Receivables Purchase and Sale Agreement (the “Second Tier Receivables Purchase and Sale Agreement”, and together
with the First Tier Receivables Purchase and Sale Agreement, the “Purchase and Sale Agreements”), dated as of
December 17, 2020, by and among, the Borrower, the Parent SPE and the Company, as initial servicer, pursuant to which Parent SPE
has sold or contributed and will sell or contribute to the Borrower certain receivables and related assets in consideration for
a combination of cash and equity in the Borrower SPE, (iv) the Sub-Servicing Agreement (the “Sub-Servicing Agreement”), dated as of December 17, 2020, by and among the Company and each Originator, (v) the Pledge and Guaranty (the “Guaranty”),
dated as of the December 10, 2020, between the Parent SPE and the Administrative Agent, and (vi) the Performance Guaranty (the “Performance
Guaranty”), dated as of December 17, 2020, between the Company, as performance guarantor, and the Administrative Agent
(and together with all other certificates, instruments, UCC financing statements, reports, notices, agreements and documents executed
or delivered in connection with the Loan Agreement, the “Agreements”).
The Borrower, the Company, the Parent
SPE and the Originators provide customary representations and covenants under the Agreements. The Loan Agreement provides for
certain events of default upon the occurrence of which the Administrative Agent may declare the facility’s termination
date to have occurred and declare the outstanding Loan and all other obligations of the Borrower to be immediately due and
payable, however the Securitization Facility does not include an ongoing liquidity covenant like the Existing Receivables
Securitization Facility and aligns reporting obligations with the Company’s other material indebtedness agreements.
The foregoing description of the Securitization Facility does
not purport to be complete and is qualified in its entirety by reference to the full text of the Agreements. The Loan Agreement,
the First Tier Receivables Purchase and Sale Agreement, the Second Tier Receivables Purchase and Sale Agreement, the Sub-Servicing
Agreement, the Guaranty, and the Performance Guaranty, copies of which are attached hereto as Exhibit 10.1, Exhibit 10.2, Exhibit
10.3, Exhibit 10.4, Exhibit 10.5 and Exhibit 10.6, respectively, are incorporated by reference herein.
Item 1.02
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Termination of a Material Definitive Agreement.
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On December 17, 2020, the Company
repaid in full the loans outstanding under the Loan and Security Agreement (the “Existing Receivables Securitization
Facility”), dated as of January 10, 2020, by and among Exela Receivables 1, LLC, a wholly-owned indirect subsidiary of
the Company, the lenders party thereto, TPG Specialty Lending, Inc., as administrative agent, and the Company, as initial
servicer. The aggregate outstanding principal amount of loans under the Existing Receivables Securitization Facility
was approximately $83.0 million. The early termination of the facility triggered an early termination fee of $800,000
and required repayment of approximately $415,000 in respect of principal, accrued interest and fees. All obligations
under the Existing Receivables Securitization Facility (other than contingent indemnification obligations that expressly
survive termination) have been terminated upon repayment. A description of the Existing Receivables Securitization Facility
is set forth in the Company’s Current Report on Form 8-K filed on January 15, 2020.