GROUPON, INC. Item 1.01. Entry into a Material Definitive Agreement
OnJuly 17, 2020 , in light of the previously disclosed impact of COVID-19 on its business,Groupon, Inc. (the "Company") entered into an amendment of its existing credit agreement to obtain relief from certain financial covenants and additional flexibility in its operations. Specifically, the Company and certain of its subsidiaries entered into a First Amendment (the "Amendment") to the Second Amended and Restated Credit Agreement, dated as ofMay 14, 2019 (the "Existing Credit Agreement") withJPMorgan Chase Bank, N.A ., as Administrative Agent, and the other lenders party to that Existing Credit Agreement. From the date of the Amendment through the end of the first fiscal quarter of 2021 (or an earlier date if elected by the Company) (such period, the "Suspension Period"), the Company will be exempt from certain covenant restrictions to which it was subject under the Existing Credit Agreement, namely to maintain a maximum funded indebtedness to EBITDA ratio, a maximum senior secured indebtedness to EBITDA ratio, a minimum fixed charge coverage ratio, unrestricted cash of not less than$250 million and a minimum liquidity balance (including any undrawn amounts under the credit facility) of at least 70% of the Company's accrued merchant and supplier payables balance. Additionally, the Amendment provides that during the Suspension Period, the Company will be required to maintain specified minimum quarterly EBITDA levels and to maintain a monthly minimum liquidity balance (including any undrawn amounts under the credit facility) of at least 100% of the Company's accrued merchant and supplier payables balance for such month plus$50 million . During the Suspension Period, the Amendment further restricts certain existing negative covenants, including with respect to the Company's ability to make share repurchases, acquisitions, investments and to incur additional indebtedness and liens. After the Suspension Period, these restrictions will revert to those required under the Existing Credit Agreement. In addition to the foregoing covenant relief, the Amendment modifies the Existing Credit Agreement (as amended, the "Amended Credit Agreement") by reducing the Company's senior secured revolving line of credit from$400 million to$225 million . As ofJune 30, 2020 , the Company had$200 million of borrowings and$18.9 million of letters of credit outstanding under the Existing Credit Agreement. Accordingly, the Company did not repay any of these outstanding amounts in connection with the Amendment. The Amendment also increases pricing during the Suspension Period, raising the ABR and Canadian prime spreads to 1.50%, the fixed rate spreads to 2.50% and the commitment fee to 0.4% on the daily amount of the unused commitments under the Amended Credit Agreement. After the end of the Suspension Period, the applicable spread and commitment fee will revert to the levels set by the Existing Credit Agreement. The foregoing description of the Amendment and the Amended Credit Agreement is a summary only. It is qualified in its entirety by reference to the full text of the Amendment and the Amended Credit Agreement, which is attached hereto as Exhibit 10.1 and incorporated herein by reference.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
The information contained 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:
Exhibit No. Description
10.1 First
Amendment, dated
as of July 17,
2020 , among the
Company, the
subsidiaries of
the Company
party thereto,
JPMorgan Chase
Bank, N.A ., as
Administrative
Agent, and the
lenders party
thereto, to the
Second Amended
and Restated
Credit
Agreement, dated
as of May 14,
2019 , among the
Company,
JPMorgan Chase
Bank, N.A ., as
Administrative
Agent, and the
lenders party
thereto
104 Cover Page
Interactive Data
File (embedded
within the
Inline XBRL
document)
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