Upon the occurrence of specific kinds of changes of control, the holders of the Notes will have the right to cause the Issuer to repurchase some or all of the Notes at 101% of the aggregate principal amount thereof plus accrued and unpaid interest, if any, to, but not including, the date of repurchase.
The Indenture contains covenants that, among other things, limit the Issuer’s ability and the ability of its restricted subsidiaries to:
| | • | | incur additional indebtedness or issue certain disqualified stock or preferred stock; |
| | • | | pay dividends or distributions, redeem or repurchase equity; |
| | • | | prepay junior lien indebtedness, unsecured pari passu indebtedness or subordinated indebtedness or make certain investments; |
| | • | | transfer or sell assets; |
| | • | | engage in consolidation, amalgamation or merger, or sell, transfer or otherwise dispose of all or substantially all of their assets; and |
| | • | | enter into certain transactions with affiliates. |
The covenants described above are subject to important exceptions and qualifications. These covenants will be suspended, and shall not apply at any time during which the Notes have been assigned an investment grade rating.
In addition, the Indenture requires certain intra-company agreements between the Issuer and its affiliates to remain in full force and effect and the Issuer to adhere to all terms and provisions thereof in all material respects. The Indenture also limits Intermediate’s ability to conduct certain activities.
The Notes and related guarantees were offered and sold in a private offering that was exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”). The Notes and related guarantees were offered within the United States only to persons reasonably believed to be qualified institutional buyers in accordance with Rule 144A under the Securities Act and outside the United States only to non-U.S. investors in accordance with Regulation S under the Securities Act. The Notes and related guarantees have not been registered under the Securities Act or the securities laws of any other jurisdiction. Unless so registered, the Notes and related guarantees may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws.
Amendment of Asset-Based Revolving Credit Facility
On February 19, 2021, the Issuer, as borrower, Intermediate, Party City Corporation (the “Subsidiary Borrower” and, together with the Issuer, the “Borrowers”) and certain other subsidiaries of the Issuer entered into a Fifth Amendment to ABL Credit Agreement (the “ABL Amendment”) with the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent (the “Administrative Agent”), which amended that certain ABL Credit Agreement, dated as of August 19, 2015 (as amended by that certain First Amendment to ABL Credit Agreement, dated as of August 2, 2018, that certain Second Amendment to ABL Credit Agreement, dated as of March 4, 2019, that certain Third Amendment to ABL Credit Agreement, dated as of April 8, 2019, that certain Fourth Amendment to ABL Credit Agreement, dated as of June 28, 2019, the “Existing ABL Credit Agreement” and, as amended by the ABL Amendment, the “ABL Credit Agreement”), by and among the Borrowers, Intermediate, the subsidiaries of the Issuer from time to time party thereto, the lenders from time to time party thereto and the Administrative Agent..
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