Item 1.01 Entry into a Material Definitive Agreement.
On
Pursuant to the terms of the Amendment, the Company, the administrative agent and the lenders party thereto (the "Term Credit Agreement Lenders") agreed to modify certain terms of the Term Credit Agreement to, among other things:
(i) increase the interest rate applicable to the term loans under the Term Credit
Agreement (a) in the case of Eurodollar loans, from the adjusted LIBO rate plus 8.00% to the adjusted LIBO rate plus 8.50%, and (b) in the case of alternate base rate loans, from the alternate base rate plus 7.00% to the alternate base rate plus 7.50%;
(ii) (a) require a
Amendment, (b) increase the quarterly amortization payment to be paid onSeptember 30, 2020 to$8.0 million from$5.0 million , and (c) increase each quarterly amortization payment thereafter to$10.0 million ;
(iii) change provisions related to prepayment fees such that (a) prepayment fees
will be waived for a period of 90 days following the date of the Amendment for prepayments in connection with certain refinancings of the term loans and (b) prepayment fees will be 2% for a period of twelve months after such 90-day period, and 1% for next twelve-month period;
(iv) reduce the minimum liquidity levels required to be maintained by the Company
at the end of each fiscal month, through and includingNovember 2020 , from$150.0 million to$125.0 million ;
(v) waive the quarterly test for maximum total leverage ratio for fiscal year
2020 and the first three fiscal quarters of fiscal year 2021, and during such period require the Company to maintain specified minimum levels of EBITDA; and
(vi) increase the amount of equity interests in certain "first tier" foreign
subsidiaries that must be pledged as collateral securing the obligations under the Term Credit Agreement from 65% to 100% of such equity interests.
In connection with the execution of the Amendment, the Company paid certain fees and expenses to the administrative agent and the Term Credit Agreement Lenders.
Certain of the Term Credit Agreement Lenders and certain of their respective affiliates have performed investment banking, commercial lending and underwriting services for the Company and its subsidiaries and respective affiliates, from time to time, for which such lenders and their affiliates have received customary fees and expenses. These parties may, from time to time, engage in transactions with, and perform services for the Company, its subsidiaries or their respective affiliates in the ordinary course of their business.
The foregoing description is not complete and is qualified in its entirety by the Amendment, which is filed herewith 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 set forth in Item 1.01 is hereby incorporated by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits 10.1 Amendment No. 3 to Term Credit Agreement, dated as ofJune 5, 2020 , by and amongFossil Group, Inc. , the lenders party thereto andJPMorgan Chase Bank, N.A ., as administrative agent. 104 Cover Page Interactive Data File (embedded within the Inline XBRL document).
© Edgar Online, source