Item 1.01. Entry into a Material Definitive Agreement.
Amendment to Priming Facility Credit Agreement
As previously disclosed, on December 28, 2020, GTT Communications, Inc. (the “Company”) entered into that certain Priming Facility Credit Agreement (the “Priming Facility Credit Agreement”), among the Company, GTT Communications B.V. (“GTT B.V.”), the lenders party thereto and Delaware Trust Company, as administrative agent and collateral agent (the “PTL Agent”). The Priming Facility Credit Agreement provides for a priming term loan facility consisting of initial and delayed draw term loans in a principal amount of up to $275,000,000 (the “New Term Loan Facility”).
On March 29, 2021, the Company, GTT B.V., the lenders party thereto (the “Consenting PTL Lenders”) and the PTL Agent entered into that certain Second Amendment to Priming Facility Credit Agreement (the “PTL Amendment”). The PTL Amendment, among other things, extends the deadline to deliver the Company’s audited consolidated financial statements under the Priming Facility Credit Agreement for the fiscal year ended December 31, 2020 to April 15, 2021 (the “Expiration Date”). The Company also paid fees and expenses of certain advisors to the Consenting PTL Lenders and the PTL Agent in connection with the entry into the PTL Amendment.
The foregoing description of the PTL Amendment is not complete and is qualified in its entirety by the terms and provisions of the PTL Amendment, a copy of which is filed herewith as Exhibit 10.1 and is incorporated herein by reference.
Amendment to Second Notes Forbearance Agreement
As previously disclosed, on December 28, 2020, the Company and the guarantors (the “Guarantors”) under that certain Indenture, dated as of December 22, 2016 (as amended, supplemented or otherwise modified, the “Indenture”), by and between the Company, as successor by merger to GTT Escrow Corporation, and Wilmington Trust, National Association, as Trustee (the “Trustee”), entered into a Noteholder Forbearance Agreement (the “Second Notes Forbearance Agreement”) with certain beneficial owners (or nominees, investment managers, advisors or subadvisors for the beneficial owners) (the “Forbearing Noteholders”) of a majority of the outstanding aggregate principal amount of the Company’s outstanding 7.875% Senior Notes due 2024 (the “Notes”). Pursuant to the Second Notes Forbearance Agreement, the Forbearing Noteholders agreed to, among other provisions, forbear from exercising any and all rights and remedies under the Indenture, the Notes and applicable law, including not directing the Trustee to take any such action, with respect to defaults and events of default that have occurred, or that may occur as a result of, (i) the Company’s failure to timely file its Quarterly Reports on Form 10-Q for the quarters ended June 30, 2020 (the “Q2 Form 10-Q”) and September 30, 2020 (the “Q3 Form 10-Q”) and (ii) the occurrence and continuance of the “Lender Specified Defaults” as defined in the Second Credit Facilities Forbearance Agreement (as defined below), in each case until the earlier of (a) 5:00 p.m., New York City time, on March 31, 2021 and (b) the receipt of notice from the Forbearing Noteholders regarding their intent to terminate the applicable Forbearance Agreement upon the occurrence of certain specified forbearance defaults, as further described in the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission (the “SEC”) on December 29, 2020. The Second Notes Forbearance Agreement may be amended with the consent of Forbearing Noteholders holding more than 66.7% of the aggregate principal amount of the Notes held by all Forbearing Noteholders, provided that at least two of such consenting Forbearing Noteholders are unaffiliated (the “Requisite Forbearing Noteholders”).
On March 29, 2021, the Company and the Guarantors entered into that certain First Amendment to Noteholder Forbearance Agreement (the “Second Notes Forbearance Agreement Amendment”) with the Requisite Forbearing Noteholders. The Second Notes Forbearance Agreement Amendment, among other things, (i) provides that in addition to the matters originally subject to forbearance in the Second Notes Forbearance Agreement, the Forbearing Noteholders will forbear from exercising any and all rights and remedies under the Indenture, the Notes and applicable law, including not directing the Trustee to take any such action, with respect to defaults and events of default that have occurred, or that may occur as a result of, the Company’s failure to timely file its Annual Report on Form 10-K for the fiscal year ended December 31, 2020 (the “2020 Form 10-K”), (ii) amends the scheduled expiration time under the Second Notes Forbearance Agreement to 5:00 p.m., New York City time, on the Expiration Date and (iii) replaces the forbearance default with respect to the end of the forbearance period under the
Second Credit Facilities Forbearance Agreement (as defined below) with a forbearance default with respect to the end of the forbearance period under the Third Credit Facilities Forbearance Agreement (as defined below). The Company also paid fees and expenses of counsel to the Forbearing Noteholders in connection with the entry into the Second Notes Forbearance Agreement Amendment.
The foregoing description of the Second Notes Forbearance Agreement Amendment is not complete and is qualified in its entirety by the terms and provisions of the Second Notes Forbearance Agreement Amendment, a copy of which is filed herewith as Exhibit 10.2 and is incorporated herein by reference.
Third Credit Facilities Forbearance Agreement
As previously disclosed, on December 28, 2020, the Company and GTT B.V. entered into an Amendment No. 4 to Credit Agreement and Consent (the “Amendment No. 4 and Consent”) to that certain Credit Agreement, dated as of May 31, 2018, by and among the Company and GTT B.V., as borrowers, KeyBank National Association, as administrative agent and letter of credit issuer (the “Agent”), and the lenders and other financial institutions party thereto from time to time (as amended, restated, amended and restated, supplemented or otherwise modified, the “Credit Agreement”), with the other credit parties party thereto, the lenders party thereto (the “Amendment No. 4. Consenting Lenders”) holding (1) a majority of the outstanding loans and revolving commitments under the Credit Agreement (“Required Lenders”) and (2) a majority of the revolving commitments under the Credit Agreement (“Required Revolving Lenders”) and the Agent. The Amendment No. 4 and Consent, among other things, provided that the Amendment No. 4 Consenting Lenders consented to the terms of a new Lender Forbearance Agreement (the “Second Credit Facilities Forbearance Agreement”). Pursuant to the Second Credit Facilities Forbearance Agreement, the Amendment No. 4 Consenting Lenders agreed to, among other things, forbear from exercising any and all rights and remedies under the Loan Documents (as defined in the Credit Agreement) and applicable law, including not directing the Agent to take any such action, with respect to defaults and events of default that have occurred, or that may occur as a result of, (i) the Company’s failure to timely file the Q2 Form 10-Q and the Q3 Form 10-Q, (ii) any amendment, supplement, modification, restatement and/or withdrawal or public statement of non-reliance on (A) any audit opinion related to historical consolidated financial statements or (B) historical consolidated financial statements and (iii) the occurrence and continuance of the “Noteholder Specified Defaults” as defined in the Second Notes Forbearance Agreement (clauses (i) through (iii), collectively, the “Prior Lender Forbearance Events”).
On March 29, 2021, the Company, GTT B.V. and the other credit parties party thereto entered into that certain Third Lender Forbearance Agreement and Amendment No. 5 to Credit Agreement (the “Third Credit Facilities Forbearance Agreement”) with lenders constituting Required Lenders and Required Revolving Lenders, certain hedge providers to the Company (the “Secured Hedge Providers” and collectively with the lenders party to the Third Credit Facilities Forbearance Agreement, the “Consenting Lenders”)) and the Agent.
Pursuant to the Third Credit Facilities Forbearance Agreement, the Consenting Lenders have agreed to, among other things, forbear from exercising any and all rights and remedies under the Loan Documents (as defined in the Credit Agreement), any secured hedge agreement with the Secured Hedge Providers (the “Secured Hedge Agreements”) and applicable law (as applicable), including not directing the Agent to take any such action with respect to certain defaults and events of default under the Credit Agreement and certain events of default under any Secured Hedge Agreement (as applicable) that have occurred, or that may occur as a result of, (i) the Prior Lender Forbearance Events and (ii) the Company’s failure to timely file the 2020 Form 10-K.
The forbearance period under the Third Credit Facilities Forbearance Agreement ends on the earlier of 5:00 p.m., New York City time, on the Expiration Date and the receipt of notice regarding intent to terminate the Third Credit Facilities Forbearance Agreement from Consenting Lenders upon the occurrence of any of the specified forbearance defaults described therein. The forbearance defaults include, without limitation, (i) the occurrence of any event of default under the Credit Agreement other than any of the specified defaults in the Third Credit Facilities Forbearance Agreement; (ii) amendments to the Indenture or the Notes that require the payment of additional interest and/or compensation to the holders of Notes or amendments to prepayment provisions of the Indenture or Notes that are adverse to the Consenting Lenders; (iii) the Company or its subsidiaries (w) incurring indebtedness for borrowed money or providing certain guarantees of indebtedness, subject to certain exceptions, (x) allowing a non-U.S. subsidiary to provide a guarantee of the Notes, (y) transferring assets or equity interests of
credit parties under the Credit Agreement to non-credit parties, outside of the ordinary course of business, unless such transaction is necessary to consummate the internal reorganization and/or the disposition of all or any portion of the Company’s infrastructure business in accordance with the terms of that certain Sale and Purchase Agreement, dated as of October 16, 2020, among the Company, its subsidiaries GTT Holdings Limited, Global Telecom and Technology Holdings Ireland Limited, Hibernia NGS Limited and GTT Americas, LLC (collectively, the “Sellers”), and Cube Telecom Europe Bidco Limited (the “Buyer”), as amended by the Project Apollo – KPMG VDD Reports Deadline Extension Letter dated as of February 15, 2021 (as amended, the “Infrastructure SPA”) or a replacement infrastructure sale agreement that is reasonably satisfactory to Required Lenders, or (z) granting liens to secure the Notes; (iv) breaches of the Third Credit Facilities Forbearance Agreement by the Company; (v) the end of the forbearance period under the Second Notes Forbearance Agreement; (vi) 60 days after the termination of the Infrastructure SPA unless a replacement infrastructure sale agreement that is reasonably acceptable to the Required Lenders and Required Revolving Lenders is effective within 45 days of such termination; or (vii) the occurrence of the maturity date under the New Term Loan Facility. The Third Credit Facilities Forbearance Agreement also provides that the Company shall not enter into any amendment, restatement, supplement, waiver or modification to the Credit Agreement or any other Loan Document that directly or indirectly adversely impacts any holder of revolving commitments under the Credit Agreement without the prior written consent of holders of 66 2/3% of such revolving commitments, subject to certain exceptions in relation to the corporate reorganization (the “Reorganization”) contemplated in connection with the pending infrastructure sale transaction announced by the Company on October 16, 2020 (the “Sale Transaction”) under the Infrastructure SPA. The Company also paid fees and expenses of counsels to the Agent and certain of the Consenting Lenders in connection with the entry into the Third Credit Facilities Forbearance Agreement.
The foregoing description of the Third Credit Facilities Forbearance Agreement is not complete and is qualified in its entirety by the terms and provisions of the Third Credit Facilities Forbearance Agreement, a copy of which is filed herewith as Exhibit 10.3 and is incorporated herein by reference.