Exhibit 10.1
Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by asterisks ("*****"), and the omitted text has
been filed separately with the Securities and Exchange Commission.
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:
*****
(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 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
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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 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
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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, 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
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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 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;"
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(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) *****
(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;"
(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)"
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(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 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
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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.
Very truly yours,
BANK OF AMERICA, N.A., as Agent
By /s/ Xxxxxxx Xxxxxxxx
------------------------------------
Its Vice President
------------------------------------
BANK OF AMERICA, N.A., as a Lender
By /s/ Xxxxx X. XxXxxxx
------------------------------------
Its Senior Vice President
------------------------------------
LASALLE BANK NATIONAL ASSOCIATION,
as a Lender
By /s/ Xxxx X. Xxxxx
------------------------------------
Its Officer
------------------------------------
ACKNOWLEDGED AND AGREED TO
THIS 28th DAY OF SEPTEMBER, 2007:
PEI HOLDINGS, INC., as Borrower
By /s/ Xxxxxx X. Xxxxxxxx
-----------------------------------
Its Treasurer
-----------------------------------
EXHIBIT A
Updated Schedules
See attached.
EXHIBIT B
Closing Checklist
See attached.
