Item 1.01 Entry into a Material Definitive Agreement.
On June 28, 2019, certain subsidiaries of Party City Holdco Inc. (the “Company”) completed the sale of its Chester, New York distribution
center, its Eden Prairie, Minnesota metallic balloons manufacturing facility and its Los Lunas, New Mexico injection molded plastics manufacturing facility to Spirit Realty, L.P., in connection with a sale-leaseback transaction (the
“Sale-Leaseback Transaction”).
The Company will receive $128 million of proceeds from the sale and will use half of the net proceeds to
repay amounts outstanding under its term loan credit agreement and half of the net proceeds to repay amounts outstanding under its ABL credit agreement.
The foregoing description of the Purchase and Sale Agreement does not purport to be complete, and is qualified in its entirety by reference to the Purchase
and Sale Agreement, filed as Exhibit 10.1 to this Current Report on Form
8-K,
which is incorporated herein by reference.
Under the terms of the Master Lease Agreement, the Company will lease each of the three facilities for 20 years. Additionally, the agreement contains four
renewal periods of five years each. The total annual rent for all three facilities will start at $8.32 million and will increase by 2% per year.
The
foregoing description of the Master Lease Agreement does not purport to be complete, and is qualified in its entirety by reference to the Master Lease Agreement, filed as Exhibit 10.2 to this Current Report on Form
8-K,
which is incorporated herein by reference.
Also on June 28, 2019, certain of the Company’s
subsidiaries entered into (i) the Third Amendment to Term Loan Credit Agreement, among Party City Holdings Inc. (the “Borrower Agent”), Party City Corporation (the “Subsidiary Borrower”, and together with the Borrower Agent,
the “Borrowers”), PC Intermediate Holdings, Inc. (“Holdings”), Deutsche Bank AG New York Branch (the “TLB Agent”) and each of the Lenders party thereto (the “Third Term Loan Amendment”), which amends the
Credit Agreement, dated as of August 19, 2015 by and among the Borrowers, Holdings, the TLB Agent, DBNY, as collateral agent, the subsidiaries of the Borrowers party thereto from time to time and the Lenders party thereto from time to time, and
(ii) the Fourth Amendment to ABL Credit Agreement, among the Borrowers, PC Intermediate Holdings, Inc. (“PC Intermediate”), a wholly-owned indirect subsidiary of the Company, JPMorgan Chase Bank, N.A. (the “ABL Agent”) and
each of the Lenders party thereto (the “Fourth ABL Amendment”), which amends the ABL Credit Agreement, dated as of August 19, 2015 by and among the Borrowers, PC Intermediate, the ABL Agent, the various lenders party thereto and the
other agents named therein, to permit the Sale-Leaseback Transactions. The foregoing description of the Third Term Loan Agreement and the Fourth ABL Amendment does not purport to be complete, and is qualified in its entirety by reference to the
Third Term Loan Agreement and the Fourth ABL Amendment, filed as Exhibits 10.3 and 10.4, respectively, to this Current Report on Form
8-K.