Item 1.01
|
Entry into a Material Definitive Agreement.
|
On July 19, 2019, Global Eagle Entertainment Inc. (the Company or we) entered into an Omnibus Incremental Term
Loan and Seventh Amendment to Credit Agreement and Amendment to Security Agreement (the First Lien Amendment) among the Company, the guarantors party thereto (the Guarantors), the lenders party thereto and Citibank, N.A., as
administrative agent (in such capacity, the Administrative Agent), which First Lien Amendment amends the terms of (i) that certain Credit Agreement, dated as of January 6, 2017, by and among the Company, the Guarantors
identified on the signature pages thereto, each lender from time to time party thereto (collectively, the Lenders) and Citibank, N.A., as Administrative Agent, L/C Issuer, and Swing Line Lender (as amended, supplemented or otherwise
modified from time to time, including pursuant to the First Lien Amendment, the Credit Agreement) and (ii) that certain Security Agreement, dated as of January 6, 2017 (as amended, supplemented or otherwise modified from time
to time, including pursuant to the First Lien Amendment, the Security Agreement), by and among the Grantors identified on the signature pages thereto and the Administrative Agent.
In addition, on July 19, 2019, the Company entered into a Second Amendment to Securities Purchase Agreement and Amendment to Security
Agreement (the Second Lien Amendment) among the Company, the Guarantors, Cortland Capital Market Services LLC, as collateral agent, and each purchaser party thereto, which Second Lien Amendment amends that certain Securities Purchase
Agreement, dated as of March 8, 2018, by and among the Company, Searchlight II TBO, L.P., Searchlight II
TBO-W,
L.P., and Cortland Capital Market Services LLC, as collateral agent (as amended,
supplemented or otherwise modified from time to time, including pursuant to the Second Lien Amendment, the Purchase Agreement; the notes issued thereunder, the Second Lien Notes). In addition, in connection with the foregoing
amendments, the applicable parties to the Intercreditor Agreement (as defined in the Credit Agreement) agreed to certain amendments to that agreement (the Intercreditor Amendment and together with the First Lien Amendment and the Second
Lien Amendment, the Amendments).
First Lien Amendment
The First Lien Amendment modified the Credit Agreement, including, with respect to the following terms:
|
|
|
Certain of the Lenders provided the Company with incremental term loans (the Incremental Term Loans)
in the aggregate principal amount of $40,000,000, which Incremental Term Loans are
pari passu
in right of payment and security with the existing term loans under the Credit Agreement.
|
|
|
|
The interest rate and maturity date for the Incremental Term Loans are the same as the existing term loans under
the Credit Agreement.
|
|
|
|
The amortization schedule for the existing term loans is being reset as of the closing date of the First Lien
Amendment, which requires an adjustment to the stated amortization rate from 5.0% per annum, to 5.33333% per annum, but which adjustment will not change the actual cash amount of amortization payments received by the existing term loan Lenders in
respect of their existing term loans.
|
|
|
|
All Incremental Term Loans and all existing term loans under the Credit Agreement have been converted into a new
class of term loans under the Credit Agreement (Amortization Holiday Loans), which shall amortize on the following reduced schedule (from the previous schedule of 5.33333% per annum (payable quarterly)): (i) 1.0666% per annum (payable
quarterly) for a four (4) payment date period commencing on and including the September 30, 2019 payment date and continuing until and including the June 30, 2020 payment date and (ii) 2.6666% per annum (payable quarterly) for the
September 30, 2020 payment date and the December 31, 2020 payment date. To the extent certain additional conditions described in the First Lien Amendment are satisfied as of future principal payment dates, the amortization holiday may be
extended on such principal payment dates with respect to the Amortization Holiday Loans. 100% of the existing term loans will be converted into Amortization Holiday Loans.
|
|
|
|
The Incremental Term Loans were issued with original issue discount of 5.5% and each Lender providing Incremental
Term Loans received an incremental term fee equal to 1.00% of the principal amount of the Incremental Term Loans provided by such Lender. In addition, each existing term loan Lender that has agreed to convert its existing term loans into
Amortization Holiday Loans received an amendment fee equal to 0.25% of the principal amount of such Lenders existing term loans.
|
|
|
|
As additional collateral security, 100% of the equity interests of (i) all domestic subsidiaries not
previously pledged (including any immaterial subsidiaries) and (ii) all first tier foreign subsidiaries, in each case, shall be pledged (the Additional Equity Pledges). With respect to foreign subsidiaries, before giving effect to
the First Lien Amendment, only 65% of the equity interests of material first tier foreign subsidiaries was pledged as collateral under the Security Agreement.
|
|
|
|
The definition of Consolidated EBITDA has been amended and the quarterly net first lien leverage
ratio financial maintenance covenant levels have been reset.
|
1