Item 1.01. Entry into a Material Definitive Agreement.
Amendment to Priming Facility Credit Agreement
As previously disclosed, on December 28, 2020, the Company entered into that
certain Priming Facility Credit Agreement (as amended, restated, amended and
restated, supplemented or otherwise modified, the "Priming Facility Credit
Agreement"), among the Company, GTT Communications B.V. ("GTT B.V."), the
lenders party thereto (the "PTL Lenders") and Delaware Trust Company, as
administrative 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 PTL Lenders party
thereto and the PTL Agent entered into that certain Second Amendment to Priming
Facility Credit Agreement (the "Second PTL Amendment"). The Second PTL
Amendment, among other things, extended 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 and
provided that PTL Lenders holding a majority of the loans and commitments under
the New Term Loan Facility ("New Term Loan Facility Required Lenders") may
further extend such deadline by notice to the Company. On April 12, 2021, the
Company received a notice on behalf of PTL Lenders constituting New Term Loan
Facility Required Lenders consenting to an extension of 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
22, 2021. On April 20, 2021, the Company received a notice on behalf of PTL
Lenders constituting New Term Loan Facility Required Lenders consenting to an
extension of such deadline to May 3, 2021. On April 30, 2021, the Company
received a notice on behalf of PTL Lenders constituting New Term Loan Facility
Required Lenders consenting to a further extension of such deadline to May 10,
2021.
As previously disclosed, on May 10, 2021, the Company, GTT B.V., the PTL Lenders
party thereto constituting New Term Loan Facility Required Lenders and the PTL
Agent entered into that certain Third Amendment to Priming Facility Credit
Agreement (the "Third PTL Amendment"). The Third PTL Amendment, among other
things, extended the deadlines under the Priming Facility Credit Agreement to
deliver the Company's audited consolidated financial statements for the fiscal
year ended December 31, 2020 and the Company's unaudited consolidated financial
statements for the fiscal quarter ended March 31, 2021 (the "Late PTL Reports")
to May 17, 2021. On May 17, 2021, the Company, GTT B.V., the PTL Lenders party
thereto constituting New Term Loan Facility Required Lenders and the PTL Agent
entered into that certain Fourth Amendment to Priming Facility Credit Agreement
(the "Fourth PTL Amendment"). The Fourth PTL Amendment, among other things,
extended the deadlines to deliver the Late PTL Reports to June 3, 2021 and
provided that PTL Lenders constituting New Term Loan Facility Required Lenders
may further extend each of these deadlines by notice to the Company. On June 2,
2021, the Company received a notice on behalf of PTL Lenders constituting New
Term Loan Facility Required Lenders consenting to an extension of the deadlines
to deliver the Late PTL Reports to June 17, 2021. On June 15, 2021, the Company
received a notice on behalf of PTL Lenders constituting New Term Loan Facility
Required Lenders consenting to an extension of the deadlines to deliver the Late
PTL Reports to June 28, 2021. On June 28, 2021, the Company received a notice on
behalf of PTL Lenders constituting New Term Loan Facility Required Lenders
consenting to an extension of the deadlines to deliver the Late PTL Reports to
July 6, 2021. On July 6, 2021, the Company received a notice on behalf of PTL
Lenders constituting New Term Loan Facility Required Lenders consenting to an
extension of the deadlines to deliver the Late PTL Reports to July 12, 2021. On
July 12, 2021, the Company, GTT B.V., the PTL Lenders party thereto constituting
New Term Loan Facility Required Lenders and the PTL Agent entered into that
certain Fifth Amendment to Priming Facility Credit Agreement (the "Fifth PTL
Amendment"). The Fifth PTL Amendment, among other things, further extended the
deadlines under the Priming Facility Credit Agreement to deliver the Late PTL
Reports to July 20, 2021. On July 20, 2021, the Company received a notice on
behalf of PTL Lenders constituting New Term Loan Facility Required Lenders
consenting to an extension of the deadlines to deliver the Late PTL Reports to
July 27, 2021.
On July 25, 2021, the Company received a notice on behalf of PTL Lenders
constituting New Term Loan Facility Required Lenders consenting to an extension
of the deadlines to deliver the Late PTL Reports to August 3, 2021 (the "New
Expiration Date").
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
that certain Noteholder Forbearance Agreement (as amended, supplemented, or
otherwise modified, 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" and the holders of such Notes, the
"Noteholders"). 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,
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2020 (the "Q2 2020 Form 10-Q") and September 30, 2020 (the "Q3 2020 Form 10-Q")
and (ii) the occurrence and continuance of the "Lender Specified Defaults" as
defined in the applicable forbearance agreement with respect to the Credit
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
Forbearing Noteholders regarding their intent to terminate the Second Notes
Forbearance Agreement upon the occurrence of certain specified forbearance
defaults. 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 ("Requisite
Forbearing Noteholders").
As previously disclosed, 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 No. 1") with Forbearing
Noteholders constituting Requisite Forbearing Noteholders. The Second Notes
Forbearance Agreement Amendment No. 1, among other things, (i) provided 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") and (ii)
amended the scheduled expiration time under the Second Notes Forbearance
Agreement to 5:00 p.m., New York City time, on April 15, 2021. On April 12,
2021, the Company received a notice on behalf of Forbearing Noteholders
constituting Requisite Forbearing Noteholders consenting to an extension of the
scheduled expiration time under the Second Notes Forbearance Agreement to 5:00
p.m., New York City time, on April 22, 2021. On April 19, 2021, the Company
received a notice on behalf of Forbearing Noteholders constituting Requisite
Forbearing Noteholders consenting to an extension of the scheduled expiration
time under the Second Notes Forbearance Agreement to 5:00 p.m., New York City
time, on May 3, 2021. On April 28, 2021, the Company received a notice on behalf
of Forbearing Noteholders constituting Requisite Forbearing Noteholders
consenting to an extension of the scheduled expiration time under the Second
Notes Forbearance Agreement to 5:00 p.m., New York City time, on May 10, 2021.
On May 10, 2021, the Company and the Guarantors entered into that certain Second
Amendment to Noteholder Forbearance Agreement (the "Second Notes Forbearance
Agreement Amendment No. 2") with Forbearing Noteholders constituting Requisite
Forbearing Noteholders. The Second Notes Forbearance Agreement Amendment No. 2,
among other things, amended the scheduled expiration time under the Second Notes
Forbearance Agreement to 5:00 p.m., New York City time, on May 17, 2021.
. . .
Item 7.01. Regulation FD Disclosure.
As reported by the Company in its prior filings with the SEC, the Company has
been unable to file on a timely basis the Q2 2020 Form 10-Q, the Q3 2020 Form
10-Q, the 2020 Form 10-K and the Q1 2021 Form 10-Q. In addition, as further
described in the Company's Current Report on Form 8-K filed on December 22,
2020, in connection with the Company's previously disclosed review of certain
accounting issues (the "Review"), the Company's board of directors concluded
that the Company's previously issued consolidated financial statements for the
years ended December 31, 2019, 2018 and 2017, each of the quarters during the
years ended December 31, 2019 and 2018 and the quarter ended March 31, 2020 (the
"Non-Reliance Periods") and certain related disclosures should no longer be
relied upon. The Company is preparing restated financial statements relating to
the Non-Reliance Periods (the "Restated Financial Statements"), which Restated
Financial Statements will be needed to produce the Q2 2020 Form 10-Q, the Q3
2020 Form 10-Q, the 2020 Form 10-K and the Q1 2021 Form 10-Q.
The Company does not expect to be able to file the Q2 2020 Form 10-Q, the Q3
2020 Form 10-Q, the 2020 Form 10-K or the Q1 2021 Form 10-Q by the New
Expiration Date, and the Company is unable to predict a specific filing date for
the Q2 2020 Form 10-Q, the Q3 2020 Form 10-Q, the 2020 Form 10-K or the Q1 2021
Form 10-Q at this time. The Company has been and intends to continue working
diligently to file the Restated Financial Statements, the Q2 2020 Form 10-Q, the
Q3 2020 Form 10-Q, the 2020 Form 10-K and the Q1 2021 Form 10-Q with the SEC as
soon as possible.
This Item 7.01 is being furnished and shall not be deemed "filed" for any
purpose. This Item 7.01 shall not be deemed incorporated by reference in any
filing under the Securities Act of 1933, as amended, or the Exchange Act,
regardless of any general incorporation language in such filing, unless
expressly incorporated by specific reference to this Item 7.01 in such filing.
Disclosures About Forward-Looking Statements
This Current Report on Form 8-K contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995 and such
statements are intended to be covered by the safe harbor provided by the same.
These statements are based on the current beliefs and expectations of the
Company's management and are subject to significant risks and uncertainties. The
above statements regarding the possibility of Lenders and Noteholders exercising
rights and remedies with respect to defaults and events of default, the Review
and the anticipated timing of filing the Restated Financial Statements, the Q2
2020 Form 10-Q, the Q3 2020 Form 10-Q, the 2020 Form 10-K and the Q1 2021 Form
10-Q constitute forward-looking statements that are based on the Company's
current expectations.
Because these forward-looking statements involve risks and uncertainties, there
are important factors that could cause future events to differ materially from
those in the forward-looking statements, many of which are outside of the
Company's control. These factors include, but are not limited to, the effects on
the Company's business and clients of general economic and financial market
conditions, as well as the following: (i) the Company may fail to satisfy
certain covenants relating to financial statement delivery obligations and
representations regarding the Company's financial statements contained in its
financing agreements without obtaining an amendment and/or waiver thereof, which
may result in (A) events of default under the Indenture, the Credit Agreement
and the Priming Facility Credit Agreement, (B) if the Company is unable to
obtain further agreements from creditors with respect to forbearing from
exercising remedies, the acceleration of the Notes and the Company's obligations
under the Credit Agreement and the Priming Facility Credit Agreement and (C) the
Company being unable to satisfy its obligations thereunder; (ii) the Company has
announced that its previously issued financial statements for the Non-Reliance
Periods and related disclosures and communications should no longer be relied
upon as a result of preliminary findings of the Company's ongoing Review; (iii)
the completion of the Review and the completion and filing of the Restated
Financial Statements, the Q2 2020 Form 10-Q, the Q3 2020 Form 10-Q, the 2020
Form 10-K or the Q1 2021 Form 10-Q and any subsequent delayed periodic SEC
filings may take longer than expected as a result of the timing or findings of
the Review or the Company's independent registered public accounting firm's
review process; (iv) the conditions to access funding under the Priming Facility
Credit Agreement may not be satisfied and the Company may be unable to access
such funding, and
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existing cash balances and funds generated from operations may not be sufficient
to finance the Company's operations and meet its cash requirements; (v) the
Company is subject to risks associated with the actions of network providers and
a concentrated number of vendors and clients; (vi) the Company could be subject
to cyber-attacks and other security breaches; (vii) the Company's network could
suffer serious disruption if certain locations experience damage or as the
Company adds features and updates its network; (viii) the Company is subject to
risks associated with purchase commitments to vendors for longer terms or in
excess of the volumes committed by the Company's underlying clients, or sales
commitments to clients that extend beyond the Company's commitments from its
underlying suppliers; (ix) the Company may be unable to establish and maintain
peering relationships with other providers or agreements with carrier neutral
data center operators; (x) the Company's business, results of operation and
financial condition are subject to the impacts of the COVID-19 pandemic and
related market and economic conditions; (xi) the Company may be affected by
information systems that do not perform as expected or by consolidation,
competition, regulation or a downturn in the Company's industry; (xii) the
Company may be liable for the material that content providers distribute over
its network; (xiii) the Company has generated net losses historically and may
continue to do so; (xiv) the Company may fail to successfully integrate any
future acquisitions or to efficiently manage its growth; (xv) the Company may be
unable to retain or hire key employees; (xvi) the Company recently announced
management changes; (xvii) the Company is subject to risks relating to the
international operations of its business; (xviii) the Company may be affected by
tax assessments, unfavorable tax audit outcomes, delayed tax filings and future
increased levels of taxation; (xix) the Company has substantial indebtedness,
which could prevent it from fulfilling its obligations under its debt agreements
or subject the Company to interest rate risk; (xx) the Sellers and the Buyer may
be unable to obtain the necessary approvals for the Sale Transaction or the
corporate reorganization (the "Reorganization") contemplated in connection with
the Sale Transaction from governmental authorities in a timely manner, on terms
acceptable to the Sellers and the Buyer, or at all; (xxi) the Company may be
unable to obtain from the Lenders or the holders of Notes the further
forbearances, waivers, consents, releases or other agreements that may be
necessary to prevent a default under the Credit Agreement, the Priming Facility
Credit Agreement or the Indenture that may be necessary to satisfy the
conditions to the closing of the Sale Transaction, either on terms acceptable to
the Company or at all, in which case that certain Sale and Purchase Agreement,
dated as of October 16, 2020, among the Sellers and the Buyer relating to the
Infrastructure SPA may terminate unless the Buyer provides a waiver; (xxii) the
Company may not be able to obtain the consent of certain parties to contracts
with the Sellers and their subsidiaries that will be necessary to fully
implement the Sale Transaction or the Reorganization, on terms acceptable to the
Company or at all; (xxiii) the Buyer may be unable to obtain financing
sufficient to enable it to consummate the Sale Transaction as required at the
closing under the Infrastructure SPA; (xxiv) the potential failure to satisfy,
or obtain waivers of, other closing conditions under the Infrastructure SPA,
including the completion of audited financial statements of the Company for the
fiscal year ended December 31, 2020, which may result in the Sale Transaction
not being consummated; (xxv) the potential failure of the Company to realize
anticipated benefits of the Sale Transaction; (xxvi) risks from relying on the
Buyer for various critical transaction services and network services for an
extended period under the transition services agreement and the master services
agreement contemplated by the Infrastructure SPA; (xxvii) the potential impact
of announcement or consummation of the Reorganization and the Sale Transaction
on relationships with third parties, including customers, employees and
competitors; (xxviii) the ability to attract new customers and retain existing
customers in the manner anticipated; and (xxix) the Company has announced that
it expects to report material weaknesses in internal control over financial
reporting and its internal control over financial reporting may have further
weaknesses of which the Company is not currently aware or which have not been
detected; such material weaknesses, among other things, could impact the
Company's ability to appropriately provide for the purchase price adjustment
. . .
Item 9.01. Financial Statements and Exhibits
(d) Exhibits
The following exhibits are filed as part of this report:
Number Description
10.1 Fifth Amendment to Noteholder Forbearance Agreement, dated as of July 27,
2021, by and among GTT Communications, Inc., the guarantors party thereto
and each of the beneficial owners (or nominees, investment managers,
advisors or subadvisors for the beneficial owners) of Notes party thereto.
104 Cover Page Interactive Data File (embedded within the Inline XBRL document).
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