JAKKS PACIFIC, INC. Item 1.01. Entry into a Material Definitive Agreement.
ABL Revolving Credit Facility
The Company and certain of its subsidiaries, as borrowers, entered into a Credit
Agreement (the "ABL Credit Agreement"), dated as of
The ABL Credit Agreement contains negative covenants that, subject to certain exceptions, limit the ability of the Company and its subsidiaries to, among other things, incur additional indebtedness, make restricted payments, pledge their assets as security, make investments, loans, advances, guarantees and acquisitions, undergo fundamental changes and enter into transactions with affiliates. Under certain circumstances the Company is also subject to a springing fixed charge coverage ratio covenant of not less than 1.1 to 1.0, as described in more detail in the ABL Credit Agreement.
The ABL Credit Agreement contains events of default that are customary for a facility of this nature, including (subject in certain cases to grace periods and thresholds) nonpayment of principal, interest, fees or other amounts, material inaccuracy of representations and warranties, violation of covenants, cross-default to certain other existing indebtedness, bankruptcy or insolvency events, certain judgment defaults, loss of liens or guarantees and a change of control as specified in the ABL Credit Agreement. If an event of default occurs, the commitments of the lenders to lend under the ABL Credit Agreement may be terminated and the maturity of the amounts owed may be accelerated.
The obligations under the ABL Credit Agreement are guaranteed by the Company, the subsidiary borrowers thereunder and certain of the other existing and future direct and indirect subsidiaries of the Company and are secured by substantially all of the assets of the Company, the subsidiary borrowers thereunder and such other subsidiary guarantors, in each case, subject to certain exceptions and permitted liens.
New Term Loan
The Company and certain of its subsidiaries, as borrowers, entered into a First
Lien Term Loan Facility Credit Agreement, dated as of the Closing Date (the "New
Term Loan Agreement"), with
Amounts outstanding under the New Term Loan will bear interest at either (i)
LIBOR plus 6.50% - 7.00% (determined by reference to a net leverage pricing
grid), subject to a 1.00% LIBOR floor, or (ii) base rate plus 5.50% - 6.00%
(determined by reference to a net leverage pricing grid), subject to a 2.00%
base rate floor. The New Term Loan matures in
The New Term Loan Agreement contains negative covenants that, subject to certain
exceptions, limit the ability of the Company and its subsidiaries to, among
other things, incur additional indebtedness, make restricted payments, pledge
their assets as security, make investments, loans, advances, guarantees and
acquisitions, undergo fundamental changes and enter into transactions with
affiliates. Commencing with the fiscal quarter ending
The New Term Loan Agreement contains events of default that are customary for a facility of this nature, including (subject in certain cases to grace periods and thresholds) nonpayment of principal, nonpayment of interest, fees or other amounts, material inaccuracy of representations and warranties, violation of covenants, cross-default to certain other existing indebtedness, bankruptcy or insolvency events, certain judgment defaults and a change of control as specified in the New Term Loan Agreement. If an event of default occurs, the maturity of the amounts owed under the New Term Loan Agreement may be accelerated.
--------------------------------------------------------------------------------
The obligations under the New Term Loan Agreement are guaranteed by the Company, the subsidiary borrowers thereunder and certain of the other existing and future direct and indirect subsidiaries of the Company and are secured by substantially all of the assets of the Company, the subsidiary borrowers thereunder and such other subsidiary guarantors, in each case, subject to certain exceptions and permitted liens and subject to the priority lien granted under the ABL Credit Agreement.
The agent and Sole Lead Arranger under the New Term Loan are affiliates of an affiliate of the Company, which affiliate owns common stock and 2023 Convertible Notes of the Company, as well as a majority of the Company's outstanding preferred stock giving the affiliates various rights as described in the Company's public filings.
The foregoing descriptions of the ABL Credit Agreement and the New Term Loan Agreement are qualified in their respective entireties by reference to the respective agreements attached as exhibits to this Form 8-K and incorporated by reference in this Item 1.01.
Item 1.02. Termination of a Material Definitive Agreement.
On the Closing Date, the Company repaid in full and terminated the Existing Term
Loan Agreement, dated as of
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The information set forth under Item 1.01 of this Form 8-K with respect to the New ABL Facility and the New Term Loan is incorporated by reference into this Item 2.03.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits Exhibit Description 10.1* Credit Agreement, dated as ofJune 2, 2021 , by and amongJAKKS Pacific, Inc. ,Disguise, Inc. ,JAKKS Sales LLC , andMoose Mountain Marketing, Inc. , as borrowers, other Loan Parties hereto, the Lenders party thereto andJPMorgan Chase Bank, N.A ., as Administrative Agent 10.2* First Lien Term Loan Facility Credit Agreement, dated as ofJune 2, 2021 , by and amongJAKKS Pacific, Inc. and its subsidiaries parties thereto as borrowers, the lenders party thereto, as lenders, andBSP Agency, LLC , as agent
* Certain schedules have been omitted pursuant to Item 601(a)(5) of Regulation
S-K under the Securities Act. The Company agrees to furnish supplementally any
omitted schedules to the
--------------------------------------------------------------------------------
© Edgar Online, source
