Item 2.04. Triggering Events That Increase a Direct Financial Obligation or an
Obligation under an Off-Balance Sheet Arrangement.
As previously disclosed, AgileThought, Inc. (the "Company") is party to the
following:
•that certain Financing Agreement, dated as of May 27, 2022 (as amended to date,
the "Financing Agreement"), by and among the Company and the other loan parties
thereto (collectively, the "Financing Agreement Loan Parties"), the lenders
thereunder, and Blue Torch Finance LLC, as administrative and collateral agent
for such lenders (the "Finance Agreement Administrative Agent"), and
•that certain Credit Agreement, dated as of November 22, 2021 (as amended to
date, the "Credit Agreement"), by and among the Company and the other loan
parties thereto (collectively, the "Credit Agreement Loan Parties"), the lenders
therein, GLAS AMERICAS LLC, as collateral agent (the "Credit Agreement
Collateral Agent") and GLAS USA LLC, as administrative agent (the "Credit
Agreement Administrative Agent").
The Company today announces certain defaults and consequences described below
under the Financing Agreement and the Credit Agreement and notes that it is in
discussions with the Finance Agreement Administrative Agent and the lenders
under the Credit Agreement regarding forbearance terms. The Company is working
with its team of legal advisors and a leading financial advisor in evaluating
all options available to it in executing on a recapitalization plan. There can
be no assurance that the Company will be successful in these efforts.
On April 3, 2023, the Company notified the Finance Agreement Administrative
Agent that the Financing Agreement Loan Parties (i) will default in making its
March 31, 2023 interest payment under the Finance Agreement, which three
business days thereafter constitutes an event of default under the Financing
Agreement (the "Interest Payment Event of Default"), and (ii) will not be in
compliance with their obligation under the Financing Agreement not to permit the
Liquidity (as defined in the Financing Agreement) of any Financing Agreement
Loan Party to be less than $2,000,000 at any time after March 24, 2023 but on or
prior to April 15, 2023, which also constitutes an event of default under the
Financing Agreement.
Relatedly, on April 3, 2023, the Company also notified the Credit Agreement
Collateral Agent and the Credit Agreement Administrative Agent that (i) the
Interest Payment Event of Default constitutes a cross-default under the Credit
Agreement, and (ii) the Credit Agreement Loan Parties will not be in compliance
with their obligation under the Credit Agreement not to permit any such Credit
Agreement Loan Party or its subsidiaries to have any accounts payable that are
more than 60 days past due in an aggregate amount greater than or equal to, at
any time after March 24, 2023 but on or prior to April 15, 2023, $3,600,000,
which constitutes an event of default under the Credit Agreement.
As a result of the foregoing and not being in compliance on March 25, 2023 of
the requirement not to have any accounts payable that are more than 60 days past
due in an aggregate amount greater than or equal to $3,000,000 at any time after
March 24, 2023 but on or prior to April 15, 2023, the Finance Agreement
Administrative Agent and the lenders under the Financing Agreement notified the
Company on April 6, 2023, that interest on the loans under the Financing
Agreement (i) will, based on previously disclosed defaults, continue to be
calculated at the alternative reference rate, which is payable monthly, instead
of SOFR, which had a three month interest period, and (ii) will accrue from and
after March 25, 2023 at the post-default rate, which is 2% in excess of the
interest rate otherwise applicable to loans under the Financing Agreement.
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