Item 1.01 Entry into a Material Definitive Agreement.
On July 20, 2020, Entercom Media Corp. (the “Borrower”), a wholly owned subsidiary of Entercom Communications Corp. (the “Company”), entered into Amendment No. 5 (the “Amendment”) to the Credit Agreement, dated October 17, 2016 (as previously amended, the “Existing Credit Agreement” and, as amended by the Amendment, the “Credit Agreement”), with the guarantors party thereto, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent and collateral agent. The Amendment, among other things:
(a)amended the Borrower’s financial covenants under the Credit Agreement by (i) suspending the testing of the Consolidated Net First Lien Leverage Ratio (as defined in the Credit Agreement) through the Test Period (as defined in the Credit Agreement) ending December 31, 2020, (ii) adding a new minimum liquidity covenant of $75 million until December 31, 2021, or such earlier date as the Borrower may elect (the “Covenant Relief Period”) and (iii) imposing certain restrictions during the Covenant Relief Period, including, among other things, certain limitations on incurring additional indebtedness and liens, making restricted payments or investments, redeeming notes and entering into certain sale and lease-back transactions;
(b)increased the interest rate under the Credit Agreement during the Covenant Relief Period applicable to (i) 2024 Revolving Credit Loans (as defined in the Credit Agreement) to (x) in the case of Eurodollar Rate Loans (as defined in the Credit Agreement), a customary Eurodollar rate formula plus a margin of 2.50% per annum, and (y) in the case of Base Rate Loans (as defined in the Credit Agreement), a customary base rate formula plus a margin of 1.50% per annum, and (ii) Letter of Credit (as defined in the Credit Agreement) fees to 2.50% times the daily maximum amount available to be drawn under any such Letter of Credit; and
(c)modified the definition of Consolidated EBITDA by setting fixed amounts for the fiscal quarters ending June 30, 2020, September 30, 2020, and December 31, 2020, for purposes of testing compliance with the Consolidated Net First Lien Leverage Ratio financial covenant during the Covenant Relief Period, which fixed amounts correspond to the Borrower’s Consolidated EBITDA as reported under the Existing Credit Agreement for the Test Period ended March 31, 2020, for the fiscal quarters ending June 30, 2019, September 30, 2019, and December 31, 2019, respectively.
The foregoing summary of the Amendment does not purport to be complete and is qualified in its entirety by reference to the complete terms of the Amendment, a copy of which is filed with this Current Report on Form 8-K as Exhibit 10.1 and is incorporated herein by reference.
On July 20, 2020, the Company issued a press release (the “Press Release”) announcing the Amendment. A copy of the Press Release is attached as Exhibit 99.1 to this Current Report on Form 8-K.