Item 1.01 Entry into a Material Definitive
Agreement
As further
described below, on May 18, 2020, Exela Technologies, Inc. (the “Company”) entered into an amendment to its
Credit Agreement that, among other things, extends the time for the delivery of (i) its audited financial statements for the
year ended December 31, 2019 to June 15, 2020 and (ii) its financial statements for the quarter ended March 31, 2020 to ten
business days after delivery of such audited annual financial statements, and waives all existing defaults. The Company
expects to obtain similar extensions to its financial statement delivery requirements under its A/R Facility (as defined
below). Although the Company believes that it should be able to deliver its financial statements within the new time frame,
there can be no assurance that the Company will be able to do so, or that it will be able to obtain an extension of the
delivery times under the A/R Facility. The Company will report the receipt of any extension of the delivery times under the
A/R Facility on Form 8-K. If the Company receives a similar extension of the delivery times under the A/R Facility and
delivers the annual and quarterly financial statements described above within the stated time frames, the Company will, upon
delivery of such financial statements, be in compliance with the Credit Agreement, the Indenture (as defined below) and the
A/R Facility with respect to the financial statement delivery requirements set forth therein. As of May 19, 2020, the
Company had cash on hand and available borrowings of approximately $100 million.
First Lien Credit Agreement
On April 14, 2020, the Company disclosed the
occurrence of certain defaults under the terms of the First Lien Credit Agreement, dated as of July 12, 2017, as amended and restated
as of July 13, 2018 and as further amended and restated as of April 16, 2019 (as amended, the “Credit Agreement”),
among Exela Intermediate, LLC (“Exela Borrower”), Exela Intermediate Holdings LLC (“Holdings”), the Lenders
party thereto and Wilmington Savings Fund Society, FSB, in its capacity as administrative agent and collateral agent (“Agent”), and
under the terms of the Indenture, dated July 12, 2017, by and among Exela Borrower and Exela Finance Inc. as Issuers, the Subsidiary
Guarantors party thereto and Wilmington Trust, National Association (the “Trustee”), as Trustee (as supplemented by
the First Supplemental Indenture thereto, dated as of the same date, the “Indenture”), based on the Company’s
failure to deliver to the Agent and the Trustee the Company’s audited financial statements for its fiscal year ended December
31, 2019 by April 14, 2020 (the “Reporting Default”). On May 15, 2020, Exela Borrower, Holdings, certain subsidiaries
thereof, Agent and certain consenting Lenders entered into an agreement, pursuant to which the Agent and the consenting Lenders
agreed to forbear from exercising their respective rights and remedies under the Credit Agreement resulting from the Reporting
Default. The agreement terminated upon the earlier of 11:59 p.m., New York City time on May 18, 2020 and the occurrence of certain
specified events.
Prior to expiration of such agreement, on
May 18, 2020, Exela Borrower, Holdings, certain subsidiaries thereof, Agent and certain consenting Lenders entered into a Third
Amendment to First Lien Credit Agreement and First Amendment to Collateral Agency and Security Agreement (First Lien) (the “Third
Amendment”), pursuant to which the Agent and the consenting Lenders agreed to temporarily waive the Reporting Default or
a default based on the Company’s failure to deliver to the Agent and the Trustee the Company’s financial statements
for the fiscal quarter ended March 31, 2020 (the “Limited Waiver”). If Exela Borrower delivers the audited financial
statements for its fiscal year ended December 31, 2019 together with certain related certifications and documentation, each meeting
the requirements of the Credit Agreement (“Compliant Reporting Package”), by 11:59 p.m., New York City time on June
15, 2020, the Limited Waiver will terminate and the Reporting Default will be finally and absolutely waived under the Credit Agreement.
If the Compliant Reporting Package is not delivered by 11:59 p.m., New York City time on June 15, 2020, the Limited Waiver will
terminate at 11:59 p.m., New York City time on June 19, 2020 (or, if earlier, upon the occurrence of certain specified events,
including the occurrence of an additional event of default under the Credit Agreement).
As consideration for the waivers under the
Third Amendment, Exela Borrower paid a consent fee to the consenting lenders. Pursuant to the Third Amendment, the Company also
agreed to amend the Credit Agreement to, among other things: restrict Exela Borrower and its subsidiaries’ ability to designate
or invest in unrestricted subsidiaries; incur certain debt; create certain liens; make certain investments; pay certain dividends
or other distributions on account of its equity interests; make certain asset sales or other dispositions (or utilize the proceeds
of certain asset sales to reinvest in the business); or enter into certain affiliate transactions pursuant to the negative covenants
under the Credit Agreement. Exela Borrower is also required to maintain a minimum Liquidity (as defined therein) of $35,000,000.
The foregoing description of the Third Amendment
does not purport to be a complete description of all of the terms, provisions, covenants and agreements contained in the Third
Amendment, and is subject to and qualified in its entirety by reference to the full text of the agreement, a copy of which is filed
as Exhibit 10.1 and incorporated herein in its entirety by reference. Annex A to Exhibit 10.1 includes a conformed copy of the
Credit Agreement, incorporating the Third Amendment.
A/R Facility
As previously
reported, on May 11, 2020, the Company, Exela Receivables 1, LLC and Exela Receivables Holdco, LLC entered into a Forbearance
Agreement relating to its Loan and Security Agreement, dated as of January 10, 2020 (as amended, the “A/R
Facility”), with TPG Specialty Lending, Inc., as administrative agent, and the lenders party thereto (the
“Forbearance Agreement”), pursuant to which the administrative agent and each lender agreed to forbear from
exercising their respective rights and remedies under the A/R Facility resulting from the Company's failure to timely deliver
audited financial statements for its fiscal year ended December 31, 2019 until the earlier of May 21, 2020 or the occurrence
of an Additional Event of Default (as such term is defined in the Forbearance Agreement). On May 18, 2020, the parties
entered into an amended and restated Forbearance Agreement (the “A&R Forbearance Agreement”) pursuant to
which the parties agree to expand the scope of the forbearance to cover the Company's failure to timely deliver quarterly
financial statements for its fiscal year ended March 31, 2020 and certain monthly financial information, as well as the
Reporting Default under the Credit Agreement (such defaults, together with the failure to timely deliver the audited annual financial statements, the "Specified Defaults"). The foregoing description of the A&R Forbearance Agreement does not
purport to be a complete description of all of the terms, provisions, covenants and agreements contained in the A&R
Forbearance Agreement, and is subject to and qualified in its entirety by reference to the full text of the agreement, a copy
of which is filed as Exhibit 10.2 and incorporated herein in its entirety by reference.
The Company expects to enter into an amendment and waiver to the A/R Facility with TPG Specialty Lending, Inc., as administrative
agent, and the lenders party thereto containing the following terms: (i) the time for delivery of the Company's audited financial
statements for its fiscal year ended December 31, 2019 would be extended to June 14, 2020; (ii) the deadline for the delivery
of the Company's financial statements for the quarter ended March 31, 2020 would b extended to June 30, 2020; (iii) the Applicable
Margin of the LIBOR Rate Loans and Base Rate Loans (as defined therein) would be increased to 6.75% and 5.75%, respectively;
(iv) a weekly reporting requirement with respect to certain financial metrics would be added; and (v) the Specified Defaults
would be waived. The entry into such amendment and waiver will be reported on Form 8-K following execution thereof, although
there can be no assurance that the Company will enter into such agreement(s).