SIXTH AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT
Exhibit
10.1
SIXTH
AMENDMENT TO
AMENDED
AND RESTATED CREDIT AGREEMENT
September
28, 2007
PEI
Holdings, Inc.
000
Xxxxx Xxxxxxxxx Xxxxx
Xxxxxxx,
Xxxxxxxx 00000
Ladies
and Gentlemen:
Reference
is hereby made to that certain Amended and Restated Credit Agreement, dated as
of April 1, 2005, among PEI Holdings, Inc., a Delaware corporation
("Borrower"), the financial institutions from time to time party thereto
("Lenders"), and Bank of America, N.A., as Agent for Lenders ("Agent") (as
amended, supplemented or otherwise modified to date, the "Credit
Agreement"). Unless otherwise defined herein, capitalized terms used
herein shall have the meanings provided to such terms in the Credit
Agreement.
Borrower
has requested that Agent and Lenders agree to amend the Credit Agreement in
certain respects, and Agent and Lenders have agreed to such amendments, on the
terms, and subject to the conditions, contained herein.
Therefore,
Borrower, Agent and Lenders hereby agree as follows:
1.
Amendments to Credit
Agreement. Subject to the satisfaction of the conditions set
forth in Section 3 hereof, the Credit Agreement is hereby amended as
follows:
(a) The
definition of "Base Amount" contained in Section 1.01 of the Credit Agreement is
hereby amended and restated in its entirety as follows:
"
'Base Amount'
means 85% of Net Worth as of December 31, 2006, as reflected in Borrower's 10-K
filing as of such date."
(b) The
definition of "Increase Amount" contained in Section 1.01 of the Credit
Agreement is hereby amended and restated in its entirety as
follows:
"
'Increase
Amount' means 50% of Net Income for the period from January 1, 2007
through the last day of the applicable quarter, excluding negative results from
any quarter, if any."
(c) The
definition of "Letter of Credit Sublimit" contained in Section 1.01 of the
Credit Agreement is hereby amended by deleting the reference to "$30,000,000"
and replacing it with a reference to "$50,000,000".
(d) The
definition of "Maturity Date" contained in Section 1.01 of the Credit Agreement
is hereby amended and restated in its entirety as follows:
"
'Maturity Date'
means September 28, 2010."
(e) The
definition of "Net Worth" contained in Section 1.01 of the Credit Agreement is
hereby amended and restated in its entirety as follows:
"
'Net Worth'
means the total assets of Playboy and its Restricted Subsidiaries plus non-cash charges
of up to $35,000,000 associated with the impairment of goodwill of Playboy and
its Restricted Subsidiaries less Total
Liabilities of Playboy and its Subsidiaries, all determined on a consolidated
basis and in accordance with GAAP."
(f) The
new definition of "Sixth Amendment Closing Date" is hereby inserted into Section
1.01 of the Credit Agreement in appropriate alphabetical order, as
follows:
"
'Sixth Amendment
Closing Date' means September 28, 2007."
(g) The
following Section 2.15 is hereby added to the Credit Agreement in the
appropriate numeric order:
"2.15 Aggregate Commitment Increase
Option.
From
and after the Sixth Amendment Closing Date, Borrower shall have the right from
time to time to notify Agent and Lenders in writing that it wishes to increase
(an "Increase") the Aggregate Commitment by an aggregate amount of up to
Twenty-Five Million Dollars ($25,000,000) in one or more increases, each in a
minimum amount of not less than Ten Million Dollars ($10,000,000) and Five
Million Dollars ($5,000,000) increments in excess thereof. Each such
Increase shall become effective at the date specified in such written notice,
but in any event not less than 20 days after the date such notice is received by
Agent, so long as (a) no Default or Event of Default is in existence on
such effective date and (b) the Borrower, at its option, either
(i) obtains the consent of the then-existing Lenders to increase their
Commitments by the aggregate amount of such Increase, (ii) obtains the
consent of other third party financial institutions reasonably acceptable to
Agent and Borrower ("New Lenders") to provide new Commitments in the aggregate
amount of such Increase or (iii) obtains the consents of a combination of
then-existing Lenders and New Lenders to provide the aggregate amount of such
Increase by increasing their Commitments or providing new Commitments, as
applicable. Any Increase or portion of an
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Increase
provided by then-existing Lenders shall be effected by an amendment to this
Agreement; the addition of new Commitments by New Lenders shall be effected by
an amendment to this Agreement; provided all such amendments will be effective
with only the signatures of the Agent, the Borrower, each then-existing Lender
increasing its commitment and each New Lender, notwithstanding anything in Section 10.01 to the
contrary. The then-existing Lenders providing any portion of the
Increase or the New Lenders, as applicable, shall accept an assignment from the
existing Lenders, and the existing Lenders shall make an assignment to the
then-existing Lenders providing any portion of the Increase or the New Lenders,
as applicable, of a direct interest in each then outstanding Committed Loan such
that, after giving effect thereto, all credit exposure hereunder is held ratably
by the Lenders in proportion of their respective Commitments. In each
case, Borrower will issue to each affected Lender new Revolving Notes to the
extent required by Section
10.07(c)."
(h) Section
2.05(d) of the Credit Agreement is hereby amended by deleting the reference to
"clauses (a)-(r)" and replacing it with a reference to "clauses
(a)-(s)".
(i) Section
5.12 of the Credit Agreement is hereby amended by deleting each reference to the
"Closing Date" and replacing it with a reference to the "Sixth Amendment Closing
Date".
(j) Section
6.09(a) of the Credit Agreement is hereby amended by deleting the reference to
"March 31, 2005" and replacing it with a reference to "September 30,
2007".
(k) Section
6.09(c) of the Credit Agreement is hereby amended and restated in its entirety
as follows:
"(c) Capital Expenditures.
Not to spend or incur obligations (including the total amount of any capital
leases) to acquire fixed assets, excluding any such obligations incurred as a
result of the build-out of office space ("Build-Out Obligations") which has been
reimbursed by the applicable landlord (provided that the Borrower, Playboy and
Restricted Subsidiaries of Playboy may exclude any Build-Out Obligations for the
fiscal year in which such Build-Out Obligations are incurred to the extent the
Borrower, Playboy or the applicable Restricted Subsidiary reasonably expects the
applicable landlord to reimburse such Person for such Build-Out Obligations
within six months of the date such Build-Out Obligations are incurred; provided
further, that, to the extent the applicable landlord does not so reimburse the
Borrower, Playboy or the applicable Restricted Subsidiary by the last day of
such six month period (such last day, the "Reimbursement Deadline") for such
Build-Out Obligations (such unreimbursed amounts are hereinafter referred to as
the "Unreimbursed Amounts"), the Borrower shall include such Unreimbursed
Amounts in the amount of obligations incurred for purposes of this
Section 6.09(c) (to the extent previously excluded) for the fiscal year in
which
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such
Reimbursement Deadline occurs; provided further that, to the extent that the
applicable landlord later reimburses the Borrower, Playboy or the applicable
Restricted Subsidiary for any previously Unreimbursed Amounts, then any
subsequent reimbursements of previously Unreimbursed Amounts may be deducted for
purposes of calculating the amount of obligations incurred for purposes of this
Section 6.09(c) for the fiscal year in which reimbursement is actually
received), for more than Twenty Million Dollars ($20,000,000) in any single
fiscal year on a consolidated basis."
(l) Section
6.10 of the Credit Agreement is hereby amended and restated in its entirety as
follows:
"6.10 Additional
Guarantors.
Notify
Agent at the time that any Person becomes a Wholly-Owned Restricted Subsidiary
of Playboy; and promptly thereafter, cause each such Person that (i) at the
time such notice is given (A) owns at least 10% of the book value of the
combined assets of all of the Wholly-Owned Restricted Subsidiaries of Playboy
(calculated as of the most recent month end for which financial statements are
available) or (B) is otherwise requested by Agent or (ii) at the time
such notice is given earns at least 10% of the combined earnings of all of the
Wholly-Owned Restricted Subsidiaries of Playboy during any 12 month period
(calculated as of the most recent month end for which financial statements are
available) or (C) is otherwise requested by Agent, (a) other than a
Foreign Subsidiary, to become a Guarantor by executing and delivering to Agent a
Loan Guaranty or Loan Guaranty joinder in a form reasonably acceptable to Agent,
(b) other than a Foreign Subsidiary, to deliver to Agent documents
reasonably necessary to grant to Agent (and permit Agent to perfect) a Lien on
the personal property of such Person to the extent permitted herein, (c) to
cause the appropriate Person to deliver to Agent a Pledge Agreement granting to
Agent a Lien on the Equity Interests of such Person (excluding China and
Gibraltar, unless otherwise agreed by Agent and Borrower) and (d) to
deliver to Agent documents of the types referred to in clause (iv) of Section 4.01(a) and
favorable opinions of counsel (including in-house counsel) to such Person (which
shall cover, among other things, the legality, validity, binding effect and
enforceability of the documentation referred to in clauses (a), (b) and (c)), as
applicable, all in form, content and scope reasonably satisfactory to Agent;
provided, that compliance with clauses (b), (c) and (d) of this Section 6.10 shall
not be required with respect to any Person until 60 days after request therefor
by Agent (which request may be made by Agent in its sole discretion); provided
further that, if any Person becomes a Wholly-Owned Restricted Subsidiary of
Playboy after the Sixth Amendment Closing Date (other than Foreign Subsidiaries)
but does not meet the thresholds set forth in clauses (i) or (ii) above at the
time the Borrower gives the Agent notification thereof, but subsequently such
Person meets the thresholds set forth in clause (i) or (ii) above, or the Agent
otherwise requests,
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the
Agent may request the Borrower thereafter to cause the requirements of clauses
(a), (b), (c) and (d) above to be met with respect to such Person within 60 days
of any request therefor by the Agent and the Borrower shall cause such
requirements to be satisfied in accordance with such request. The
Borrower shall deliver to the Agent, concurrently with the delivery of the
financial statements referred to in Section 6.01(a) and the Compliance
Certificate delivered with respect thereto, with respect to each Person that
becomes a Wholly-Owned Restricted Subsidiary of Playboy (other than a Foreign
Subsidiary) after the Sixth Amendment Closing Date, a calculation of
(i) the book value of the assets of such Wholly-Owned Restricted Subsidiary
as a percentage of the book value of the combined assets of all of the
Wholly-Owned Restricted Subsidiaries of Playboy (calculated as of the most
recent month end for which financial statements are available) and (ii) the
percentage of the earnings of such Wholly-Owned Restricted Subsidiary as a
percentage of the combined earnings of all of the Wholly-Owned Restricted
Subsidiaries of Playboy (calculated for the most recently ended 12 month period
for which financial statements are available)."
(m) Section
7.01(ee) of the Credit Agreement is hereby amended and restated in its entirety
as follows:
"(ee) Liens
not otherwise permitted hereunder securing Indebtedness in a principal amount at
any time outstanding not in excess of $15,000,000."
(n) Section
7.02(i) of the Credit Agreement is hereby amended and restated in its entirety
as follows:
"(i) Investments
made after the Sixth Amendment Closing Date in joint ventures to which Playboy,
Borrower or a Restricted Subsidiary of Playboy is party and not otherwise
permitted hereunder, in an aggregate amount not to exceed $20,000,000, so long
as each such joint venture is in the same or a similar line of business as
Playboy, Borrower or a Restricted Subsidiary;"
(o) Section
7.02(n) of the Credit Agreement is hereby amended and restated in its entirety
as follows:
"(n) advances
to officers, directors and employees of Borrower and Subsidiaries made after the
Sixth Amendment Closing Date in an aggregate amount not to exceed $2,000,000 at
any time outstanding;"
(p) Section
7.02(q) of the Credit Agreement is hereby amended and restated in its entirety
as follows:
"(q) Investments
existing on the Sixth Amendment Closing Date and set forth on Schedule 7.02 and any
modification, replacement, renewal or
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extension
thereof; provided, that the amount of the original investment is not increased
except by the terms of such investment or as otherwise permitted by this Section
7.02;"
(q) Section
7.02(s) of the Credit Agreement is hereby amended and restated in its entirety
as follows:
"(s) Investments
not otherwise permitted hereunder in any Person having an aggregate fair market
value (measured on the date each such Investment was made and without giving
effect to subsequent changes in value), when taken together with all other
Investments made pursuant to this clause (s) since the Sixth Amendment Closing
Date, do not exceed $25,000,000."
(r) Section
7.03(c) of the Credit Agreement is hereby amended and restated in its entirety
as follows:
"(c) Indebtedness
outstanding on the Sixth Amendment Closing Date and listed on Schedule
7.03;"
(s) Section
7.03(d) of the Credit Agreement is hereby amended and restated in its entirety
as follows:
"(d) Indebtedness
in respect of Capital Lease Obligations, Synthetic Lease Obligations, mortgage
financings and purchase money obligations to acquire, construct or improve fixed
or capital assets within the limitations set forth in Section 7.01(g);
provided, however, that the
aggregate principal amount of all such Indebtedness incurred after the Sixth
Amendment Closing Date at any one time outstanding shall not exceed
$7,500,000."
(t)
Section 7.03(i) of the Credit Agreement is hereby amended and restated in its
entirety as follows:
"(i) the
incurrence by Foreign Subsidiaries after the Sixth Amendment Closing Date of
Indebtedness in an aggregate principal amount at any time outstanding not to
exceed $5,000,000;"
(u) Section
7.05(a) of the Credit Agreement is hereby amended and restated in its entirety
as follows:
"(a) (i) any
single transaction or series of related transactions that involves assets having
a fair market value of less than $5,000,000 and an aggregate fair market value
for all such Dispositions (A) in the period from the Sixth Amendment
Closing Date through and including December 31, 2007 of less than
$7,500,000 and (B) in any other fiscal year of less than $7,500,000 and
(ii) any Dispositions made in the period from January 1, 2007 up to
but excluding the Sixth Amendment Closing Date;"
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(v) Section
7.05 of the Credit Agreement is further amended by (i) deleting the word
"and" from the end of Section 7.05(r), (ii) renumbering clause (s) as
clause (t) and (iii) inserting the following as a new clause
(s):
"(s) the
sale of all of the stock and/or all or part of the assets of Andrita Studios,
Inc.; provided
that the terms of such sale are acceptable to Agent in its reasonable
discretion; and"
(w) Section
7.06(e) of the Credit Agreement is hereby amended and restated in its entirety
as follows:
"(e) so
long as no Default or Event of Default is in existence or would result
therefrom, any Equity Interests of Playboy or any Restricted Subsidiary of
Playboy held by (a) any member of Playboy's (or any of its Restricted
Subsidiaries') management pursuant to any management equity subscription
agreement or stock option agreement or (b) any employee benefit plan for
employees, directors or former directors, may be repurchased, redeemed,
defeased, acquired or retired, provided that
exclusive of the Equity Interests described on Schedule 7.06(e), the
aggregate amount of cash consideration paid for all such repurchased, redeemed,
defeased, acquired or retired Equity Interests shall not exceed $250,000 in any
twelve-month period commencing after the Sixth Amendment Closing Date, with any
unused portion available for future periods;"
(x) Section
7.06(n) of the Credit Agreement is hereby amended and restated in its entirety
as follows:
"(n) so long as no Default or Event of
Default is in existence or would result therefrom, Playboy, Borrower and the
Restricted Subsidiaries may make Restricted Payments not otherwise permitted
hereunder in an amount not to exceed $5,000,000 in the aggregate during the
period (i) up to but excluding the Sixth Amendment Closing Date and
(ii) in an amount not to exceed $5,000,000 in the aggregate during the
period from the Sixth Amendment Closing Date through and including the Maturity
Date."
(y) Section
7.11(c) of the Credit Agreement is hereby amended and restated in its entirety
as follows:
"(c) advances
to employees made after the Sixth Amendment Closing Date for moving,
entertainment and travel expenses, drawing accounts and similar expenditures in
the ordinary course of business and in any case in an aggregate amount
outstanding not exceeding $2,000,000 at any time;"
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(z) Section
10.07(b)(v) of the Credit Agreement is hereby amended and restated in its
entirety as follows:
"(v) except
in the case of an assignment to a Lender or an Affiliate of a Lender, if no
Default or Event of Default has occurred and is then continuing, Borrower
consents to such assignment (such consent not to be unreasonably withheld or
delayed)"
(aa) Schedules
5.12, 7.02 and 7.03 to the Credit Agreement are amended and restated in their
entirety in the forms of the corresponding Schedules attached hereto as Exhibit
A.
2.
Scope. Except
as amended hereby, the Credit Agreement remains unchanged and in full force and
effect.
3.
Effectiveness. This
Sixth Amendment to Amended and Restated Credit Agreement (the "Amendment") shall
be effective when executed by Lenders and Agent and agreed to by Borrower, and
returned to Agent, together with the following, all in form and substance
reasonably satisfactory to Agent:
(a) the
agreements, instruments and documents set forth on Exhibit B hereto
(other than as provided in Section 5 hereof); and
(b) payment
to Agent of an upfront fee equal to $87,500, for the benefit of Lenders in
accordance with their respective Pro Rata Shares.
4.
Representations and
Warranties. To induce Lenders to execute and deliver this Amendment,
Borrower hereby represents and warrants to Lenders on the date hereof that,
after giving effect to this Amendment:
(a) All
representations and warranties contained in the Loan Agreement and the other
Loan Documents are true and correct in all material respects on and as of the
date of this Amendment, except to the extent such representations and warranties
expressly relate solely to an earlier date (in which case such representations
and warranties shall be true and accurate in all material respects as of such
earlier date), and except that the representations and warranties contained in
subsections (a) and (b) of Section 5.05 shall be
deemed to refer to the most recent statements furnished pursuant to clauses (a)
and (b), respectively, of Section
6.01.
(b) No
Default or Event of Default has occurred which is continuing.
(c) Since
December 31, 2006, no event or circumstance has occurred that has had or would
reasonably be expected to have a Material Adverse Effect.
(d) This
Amendment, and the Loan Agreement, as amended hereby, constitute valid and
binding obligations of Borrower and are enforceable against Borrower in
accordance with their respective terms, except as enforceability may be limited
by applicable
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bankruptcy,
insolvency, reorganization, moratorium or similar Laws affecting the enforcement
of creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
(e) The
execution and delivery by Borrower of this Amendment does not require the
consent or approval of any Person, except such consents and approvals as have
been obtained except for any such approval, consent, exemption, authorization or
other action, or notice of filing that has been made, obtained or given or that
if not obtained would not be reasonably likely to have a Material Adverse
Effect.
5.
Post-Closing
Agreements. Borrower hereby agrees to deliver, or cause to be delivered,
the following items to Agent on or before October 12, 2007, each in form and
substance reasonably satisfactory to Agent, and Borrower hereby agrees that any
failure to do so shall constitute an Event of Default under the Credit Agreement
unless the time for such delivery is postponed by Agent in its sole
discretion:
(a) Fully-executed
certified board resolutions of Playboy authorizing the execution of the
Reaffirmation of Guaranty of even date herewith among Guarantors and Agent (the
"Reaffirmation"); and
(b) A
legal opinion with respect to the execution by Playboy of the
Reaffirmation.
6.
Severability. If
any provision of this Amendment or the other Loan Documents is held to be
illegal, invalid or unenforceable, (a) the legality, validity and
enforceability of the remaining provisions of this Amendment and the other Loan
Documents shall not be affected or impaired thereby and (b) the parties
shall endeavor in good faith negotiations to replace the illegal, invalid, or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the illegal, invalid or unenforceable
provisions. The invalidity of a provision in a particular
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
7.
Counterparts. This
Amendment may be executed in one or more counterparts, each of which shall
constitute an original, but all of which taken together shall be one and the
same instrument.
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8.
Governing
Law. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF ILLINOIS; PROVIDED THAT BORROWER,
AGENT AND EACH LENDER SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL
LAW.
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Very
truly yours,
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BANK
OF AMERICA, N.A., as Agent
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By
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/s/
Xxxxxxx Xxxxxxxx
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Its
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Vice
President
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BANK
OF AMERICA, N.A., as a Lender
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By
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/s/
Xxxxx X. XxXxxxx
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Its
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Senior
Vice President
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LASALLE
BANK NATIONAL ASSOCIATION,
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as
a Lender
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By
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/s/
Xxxx Xxxxx
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Its
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Officer
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ACKNOWLEDGED
AND AGREED TO
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THIS
28th DAY OF SEPTEMBER, 2007:
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PEI
HOLDINGS, INC., as Borrower
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By
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/s/
Xxxxxx X. Xxxxxxxx
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Its
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Treasurer
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Updated
Schedules
See
attached.
EXHIBIT
B
Closing
Checklist
See
attached.
