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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December
17, 2020
EXELA TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
Delaware |
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001-36788 |
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47-1347291 |
(State or other
jurisdiction of |
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(Commission File
Number) |
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(I.R.S.
Employer |
incorporation or
organization) |
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Identification
Number) |
2701 E. Grauwyler Rd. |
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Irving,
TX |
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75061 |
(Address of principal
executive offices) |
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(Zip Code) |
Company’s telephone number, including area code: (844)
935-2832
Securities registered pursuant to Section 12(b) of the
Act:
Title of Each Class |
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Trading Symbol |
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Name of Each Exchange on Which
Registered |
Common Stock, Par Value $0.0001 per share |
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XELA |
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The Nasdaq Stock Market LLC |
Check the appropriate box below if the Form 8-K filing is
intended to simultaneously satisfy the filing obligation to the
registrant under any of the following provisions:
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Written communications pursuant to
Rule 425 under the Securities Act (17 CFR 230.425) |
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¨ |
Soliciting material pursuant to
Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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¨ |
Pre-commencement communications
pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b)) |
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¨ |
Pre-commencement communications
pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth
company as defined in Rule 405 of the Securities Act of 1933
or Rule 12b-2 of the Securities Exchange Act of 1934.
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¨ |
Emerging growth company |
¨ If an emerging growth
company, indicate by check mark if the registrant has elected not
to use the extended transition period for complying with any new or
revised financial accounting standards provided pursuant to
Section 13(a) of the Exchange Act.
Item 1.01 |
Entry into a
Material Definitive Agreement. |
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 |
Termination of
a Material Definitive Agreement. |
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.
Item 2.03 |
Creation of a Direct Financial
Obligation or an Obligation under an Off-Balance Sheet Arrangement
of a Registrant. |
The information set forth in Item 1.01 of this Current Report on
Form 8-K is incorporated herein by reference.
Item 9.01 |
Financial
Statements and Exhibits. |
(d) Exhibits
10.2+ |
First
Tier Receivables Purchase and Sale Agreement, dated as of December
17, 2020, by and among Parent SPE, and certain other indirect,
wholly-owned subsidiaries of the Company listed therein, and the
Company, as initial servicer. |
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10.3+ |
Second
Tier Receivables Purchase and Sale Agreement, dated as of December
17, 2020, by and among, the Borrower, the Parent SPE and the
Company, as initial servicer, pursuant to which the 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 |
10.4 |
Sub-Servicing Agreement, dated as of December 17,
2020, by and among the Company, as initial servicer, and BancTec,
Inc., SourceHOV, LLC, Economic Research Services, Inc., Exela
Enterprise Solutions, Inc., SourceHOV Healthcare, Inc., United
Information Services, Inc., HOV Enterprise Services, Inc., HOV
Services, Inc., HOV Services, LLC, J&B Software, Inc., Novitex
Government Solutions, LLC, Regulus Group II LLC, Regulus Group LLC,
Regulus Integrated Solutions LLC, SourceCorp BPS Inc., Sourcecorp
Management, Inc., as sub-servicers. |
104 |
Cover Page Interactive Data File
(embedded within the Inline XBRL document) |
* Schedules
and certain exhibits to this agreement have been omitted pursuant
to Item 601(a)(5) of Regulation S-K.
+
Portions of
this exhibit have been omitted pursuant to Item 601(b)(10)(iv) of
Regulation S-K.
The
Registrant agrees to furnish a copy of all omitted portions,
exhibits and schedules to the SEC upon its request.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
Dated: December 17, 2020
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EXELA
TECHNOLOGIES, INC. |
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By: |
/s/ Erik L.
Mengwall |
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Name: |
Erik L. Mengwall |
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Title: |
Secretary |