FIRST AMENDMENT TO LOAN AGREEMENT
Exhibit 99.1
FIRST AMENDMENT TO LOAN AGREEMENT
THIS AMENDMENT is made as of September 26, 2008, by and between BANK OF AMERICA, N.A. (the
“Bank”) and PREMIER EXHIBITIONS, INC. (the “Borrower”), a Florida corporation.
Recitals
The Borrower and the Bank executed a Loan Agreement (as amended from time to time, the “Loan
Agreement”) dated October 4, 2007, pursuant to which the Bank has provided a credit facility to the
Borrower. The parties wish to amend the Loan Agreement in accordance with the terms hereof.
NOW, THEREFORE, for good and valuable consideration, the parties agree as follows:
1. Section 1 of the Loan Agreement is hereby amended so that, from and after the date hereof,
such section shall read as follows:
1. LINE OF CREDIT AMOUNT AND TERMS
1.1 Line of Credit.
(a) During the Revolving Period described below, the Bank will provide a line
of credit (the “Line of Credit”) to the Borrower. The Borrower’s obligation to
repay the Line of Credit is evidenced by a Renewal Promissory Note dated as of
September 26, 2008, in a principal amount of $25,000,000.00 executed by the Borrower
in favor of the Bank and any additional promissory notes now or hereafter executed
and delivered by the Borrower to the Bank and any renewals, modifications,
amendments and extensions thereof (collectively, the “Note”). The Note is expressly
NOT incorporated herein pursuant to Section 201.08(6), Florida Statues and Rules
12B-4.052(6)(b) and (12)(g), Florida Administrative Code.
(b) This is a revolving line of credit. During the Revolving Period, the
Borrower may borrow, repay and reborrow principal amounts under the Line of Credit
subject, however, to the limitations set forth below in Section 1.2 hereof and the
other terms and conditions set forth herein.
1.2 Borrowing Limitations.
(a) Notwithstanding any contrary provision set forth herein or in any other
loan document, the Borrower agrees that the Outstanding Credit shall not at any time
exceed the Maximum Credit Amount. If at any time the Outstanding Credit exceeds the
Maximum Credit Amount then in effect, the Borrower shall immediately pay to the Bank
the amount of such excess. For purposes hereof, the following terms shall have the
following meanings:
(i) “Maximum Credit Amount” shall initially mean $10,000,000.00. The
Borrower may from time to time request an increase in the Maximum Credit
Amount to an amount not exceeding $25,000,000.00 by written notice to the
Bank. The Bank in its discretion after any such request may elect to
increase the Maximum Credit Amount to the amount requested by the Borrower
or to such other amount as the Bank, in its discretion, deems appropriate.
Any such increase in the Maximum Credit Amount shall be effective upon the
Bank’s written notice to the Borrower specifying the amount of the increased
Maximum Credit Amount. The Borrower acknowledges that the Bank has no
obligation to increase the Maximum Credit Amount at any time, whether or not
any Event of Default is continuing hereunder, and the Bank may, in its
discretion, elect not to increase the Maximum Credit Amount then in effect.
(ii) “Outstanding Credit” shall mean the outstanding principal amount
under the Note.
(b) Notwithstanding any contrary provision set forth herein or in any other
loan document, the credit facilities contemplated herein shall be deemed uncommitted
to the extent that the Outstanding Credit would exceed the Maximum Credit Amount
then in effect after giving effect to any requested advance or other extension of
credit hereunder. The Borrower acknowledges and agrees that: (i) the Bank has no
commitment or other obligation to make advances under the Note or otherwise extend
credit hereunder if the Outstanding Credit would exceed the Maximum Credit Amount
then in effect as a result thereof; and (ii) the Bank may in its absolute discretion
elect not to make any requested advance or other extension of credit hereunder
(whether or not any Event of Default is continuing hereunder) if the Outstanding
Credit would exceed the Maximum Credit Amount then in effect as a result of the
advance or extension of credit.
1.3 Revolving Period. The Borrower shall be entitled to obtain advances under
the Note, subject to the terms and conditions set forth herein, during a revolving period
(the “Revolving Period”) commencing on the date hereof and ending on the Expiration Date (as
defined herein). For purposes hereof, the “Expiration Date” shall mean September 24, 2009,
unless the Expiration Date is extended by the Bank in its discretion. The Bank may from
time to time, in its discretion, renew this Note by written notice (each, a “Renewal
Notice”) to the Borrower pursuant to which the Bank extends the Expiration Date. If at any
time the Bank extends the Expiration Date, then the term “Expiration Date”, as used herein,
shall mean the extended Expiration Date specified by the Bank in any such notice. The Line
of Credit will be considered extended if and only if the Bank has sent to the Borrower a
Renewal Notice effective as of the Expiration Date then in effect. If the Line of Credit is
so extended, the Line of Credit will continue to be subject to all the terms and conditions
set forth herein except as modified by the Renewal Notice. The Bank shall be entitled, in
any Renewal Notice, to reduce the Maximum Credit Amount then in effect. If the Bank in its
discretion reduces the Maximum Credit Amount then in effect pursuant to any Renewal Notice,
then, effective as of the extension set forth in such notice, the Maximum Credit Amount
shall mean the amount set forth in such notice. The Bank may charge, and the Borrower shall
pay, an extension fee at the Bank’s option. The amount of the extension fee will be
specified in the Renewal Notice.
1.4 Subsidiaries. The Borrower shall cause its Subsidiaries to comply with all
covenants and agreements imposed upon the Subsidiaries herein. Each provision set forth
herein obligating (or purportedly obligating) any Subsidiary to take, or refrain from
taking, any action shall obligate the Borrower to cause such Subsidiary to take, or refrain
from taking, such action. For purposes hereof, “Subsidiary” means any corporation or other
entity more than 50% of the outstanding ordinary voting shares or other equity interests of
which is at the time directly or indirectly owned by the Borrower, by one or more of its
Subsidiaries, or by the Borrower and one or more of its Subsidiaries.
2. Section 2.1 of the Loan Agreement is hereby amended so that, from and after the date
hereof, such section shall read as follows:
2.1 Fees.
(a) Annual Fee. The Borrower shall on each October 1 from and after the
date hereof (commencing on October 1, 2009) pay the Bank a fee equal to: (i) 0.50%
of the Maximum Credit Amount then in effect for so long as the Revolving Period has
not terminated; and (ii) 0.50% of the Outstanding Credit from and after the
termination of the Revolving Period.
(b) Unused Fee. The Borrower shall pay the Bank a fee equal to the
Applicable Percentage of the daily average unused amount of the Line of Credit. For
purposes of this subparagraph, the unused amount of the Line of Credit shall be
based upon
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the Maximum Credit Amount then in effect. The Borrower shall pay the fee: (i)
quarterly in arrears within 15 days after each fiscal quarter end (commencing on
October 15, 2008); and (ii) on the Expiration Date. The Applicable Percentage is
the percentage per annum (calculated on the basis of a 360 day year) set forth below
based on the Borrower’s Leverage Ratio (as defined herein).
Leverage Ratio | Applicable Percentage | |||
Greater than 1.0 to 1
|
0.50 | % | ||
Equal to or less than 1.0 to 1
|
0.25 | % |
The Applicable Percentage will be established based upon the Borrower’s most recent
quarterly compliance certificate received by the Bank, as required herein. The
Applicable Percentage will be in effect from the first day of the calendar month
following receipt of that compliance certificate until the first day of the calendar
month following receipt of the next quarterly compliance certificate. Until the
Bank receives the first compliance certificate pursuant to the Loan Agreement, the
Applicable Percentage will be 0.25%. Thereafter, if any compliance certificate is
not delivered when required under the Loan Agreement, the Applicable Percentage from
the date such certificate was due until the date that the Bank receives the same
will be 0.50%.
(c) Waiver Fee. If the Bank, at its discretion, agrees to waive or
amend any terms of this Agreement, the Borrower will, at the Bank’s option, pay the
Bank a fee for each waiver or amendment in an amount advised by the Bank at the time
the Borrower requests the waiver or amendment. Nothing in this paragraph shall
imply that the Bank is obligated to agree to any waiver or amendment requested by
the Borrower. The Bank may impose additional requirements as a condition to any
waiver or amendment.
3. Sections 7.21 and 7.22 of the Loan Agreement are hereby amended so that, from and after the
date hereof, such sections shall read as follows:
7.21 Earnings Ratios.
(a) The Borrower shall maintain on a consolidated basis a Basic Fixed Charge
Coverage Ratio of at least 2.0 to 1 (calculated as of the end of each fiscal quarter
on a rolling four quarter basis). For purposes hereof, the “Basic Fixed Charge
Coverage Ratio” means the ratio of: (i) EBITDA (as defined below) calculated as of
the end of each fiscal quarter on a rolling four quarter basis minus income taxes,
minus dividends, withdrawals, other distributions and stock redemption amounts for
the applicable period, to (ii) the sum of interest expense, the current portion of
long term debt and the current portion of capitalized lease obligations for the
applicable period.
(b) For purposes hereof, the following terms shall have the following meanings:
• “EBITDA” shall mean, for any period, net consolidated earnings of
the Borrower for any applicable period determined excluding all amounts
expensed as reflected on the Borrower’s financial statements for such
period with respect to (i) Interest Charges with respect to permitted
debt, (ii) federal and state income tax expenses, (iii) depreciation
expense, (iv) amortization expense, and (v) with the consent of the Bank
as to any such item, any extraordinary, unusual, or non-recurring non-cash
expenses or losses (including, whether or not otherwise includable as a
separate item in the statement of such earnings for such period non-cash
losses or sales of assets outside the ordinary course of business and
inventory write-up).
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• “Interest Charges” shall mean, for any period, the sum of: (i) all
interest, charges and related expenses payable with respect to that fiscal
period to a lender in connection with borrowed money or the deferred
purchase price of assets that are treated as interest in accordance with
GAAP, plus (ii) the portion of Capitalized Lease Obligations with respect
to that fiscal period that should be treated as interest in accordance
with GAAP.
• “Capitalized Lease Obligations” shall mean, as to any Person, all
rental obligations of such Person, as lessee under a Capital Lease which
are or will be required to be capitalized on the books of such Person.
• “Capital Lease” shall mean, as to any Person, a lease of any
interest in any kind of property or asset, whether real, personal or
mixed, or tangible or intangible, by such Person, as lessee, that is, or
should be, in accordance with Financial Accounting Standards Board
Statement No. 13, as amended from time to time, or, if such statement is
not then in effect, such statement of GAAP as may be applicable, recorded
as a “capital lease” on the financial statements of such Person prepared
in accordance with GAAP.
• “Person” shall mean any natural person, partnership, limited
liability company, corporation, trust, joint venture, joint stock company,
association, unincorporated organization, government or agency or
political subdivision thereof, or other entity, whether acting in an
individual, fiduciary or other capacity.
7.22 Leverage Ratio. The Borrower shall maintain on a consolidated
basis a Leverage Ratio not exceeding 1.5 to 1 (calculated as of the end of each
fiscal quarter). The Leverage Ratio shall mean the ratio of ratio of Funded Debt to
EBITDA calculated on a consolidated basis for the Borrower and its Subsidiaries.
For purposes hereof, the following terms shall have the following meanings
(calculated on a consolidated basis):
(a) “EBITDA” has the meaning set forth above. EBITDA shall be
calculated as of the end of each fiscal quarter on a rolling four quarter
basis for purposes of calculating the Leverage Ratio.
(b) “Funded Debt” means all outstanding liabilities for borrowed money
and other interest-bearing liabilities, including current and long term
debt, less the non-current portion of Subordinated Liabilities.
(c) “Subordinated Liabilities” means liabilities subordinated to the
Borrower’s obligations to the Bank in a manner acceptable to the Bank in its
sole discretion.
4. The Borrower shall on the date hereof pay the Bank a non-refundable fee of $50,000.00 for
providing the modifications contemplated herein.
5. The Borrower certifies that as of the date hereof: (a) all of its representations and
warranties in the Loan Agreement are true and correct as if made on the date hereof; and (b) no
Default or Event of Default has occurred under the Loan Agreement. The Loan Agreement shall
continue in full force and effect except as modified herein.
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DATED the day and year first above written.
PREMIER EXHIBITIONS, INC. | ||||||||
By: | ||||||||
Xxxxxx X. Xxxxxxx, Its Chief Financial Officer | ||||||||
BANK OF AMERICA, N.A. | ||||||||
By: | ||||||||
Its: | ||||||||
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