Exhibit 10.1

 

FIFTEENTH AMENDMENT TO CREDIT AGREEMENT

 

 

This FIFTEENTH AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) is made
effective and executed as of November 10, 2020, by and among WILHELMINA
INTERNATIONAL, INC., a Delaware corporation (“Borrower”), ZIONS BANCORPORATION,
N.A. dba AMEGY BANK (“Bank”), and each of the Guarantors set forth on the
signature pages hereof (each a “Guarantor”, and collectively the “Guarantors”).

 

RECITALS

 

A.                 Borrower and Bank entered into that certain Credit Agreement
dated as of April 20, 2011, as amended by that certain First Amendment to Credit
Agreement dated as of January 1, 2012, that certain Second Amendment to Credit
Agreement dated as of October 24, 2012, that certain Third Amendment to Credit
Agreement dated as of July 31, 2014, that certain Fourth Amendment to Credit
Agreement dated effective October 24, 2015, that certain Fifth Amendment to
Credit Agreement dated effective May 13, 2016, that certain Sixth Amendment to
Credit Agreement and First Amendment to Line of Credit Note dated effective
November 9, 2016, that certain Seventh Amendment to Credit Agreement dated
effective May 4, 2017, that certain Eighth Amendment to Credit Agreement and
Waiver dated effective August 1, 2017, that certain Ninth Amendment to Credit
Agreement and Second Amendment to Line of Credit Note dated effective October
24, 2017, that certain Tenth Amendment to Credit Agreement dated effective July
12, 2018, that certain Eleventh Amendment to Credit Agreement and Third
Amendment to Line of Credit Note dated effective October 24, 2018, that certain
Twelfth Amendment to Credit Agreement and Fourth Amendment to Line of Credit
Note dated effective October 24, 2019, that certain Thirteenth Amendment to
Credit Agreement dated effective March 26, 2020, and that certain Fourteenth
Amendment to Credit Agreement dated effective May 12, 2020 (as amended, the
“Credit Agreement”).

 

B.                  In connection with the Credit Agreement, Borrower executed
and delivered to Bank (i) that certain Line of Credit Promissory Note dated
April 20, 2011, in the stated principal amount of $500,000.00, as amended and
restated by that certain Amended and Restated Line of Credit Promissory Note
dated as of January 1, 2012, in the stated principal amount of $1,500,000.00, as
amended and restated by that certain Second Amended and Restated Line of Credit
Promissory Note dated as of October 24, 2012, in the stated principal amount of
$5,000,000.00, as amended and restated by that certain Third Amended and
Restated Line of Credit Promissory Note dated as of October 24, 2015, in the
stated principal amount of $4,000,000.00, as amended by that certain Sixth
Amendment to Credit Agreement and First Amendment to Line of Credit Note dated
effective November 9, 2016, that certain Ninth Amendment to Credit Agreement and
Second Amendment to Line of Credit Note dated effective October 24, 2017, that
certain Eleventh Amendment to Credit Agreement and Third Amendment to Line of
Credit Note dated effective October 24, 2018, and that certain Twelfth Amendment
to Credit Agreement and Fourth Amendment to Line of Credit Note dated effective
October 24, 2019 (as amended and restated, the “Line of Credit Note”), (ii) that
certain Promissory Note dated effective October 24, 2015, in the stated
principal amount of $3,000,000.00 (the “Term Note”), and (iii) that certain
Promissory Note dated effective July 12, 2018, in the stated principal amount of
$1,000,000.00 (the “Second Term Note”).

 

C.                  In connection with the Credit Agreement, (i) Guarantors
(other than Artists at Wilhelmina LLC, Wilhelmina Licensing (Texas) LLC, and
Wilhelmina Artist Management LLC, a Delaware limited liability company) executed
and delivered to Bank that certain Unlimited Guaranty dated April 20, 2011, (ii)
Artists at Wilhelmina LLC (formerly known as Wilhelmina Creative, LLC) and
Wilhelmina Licensing (Texas) LLC executed and delivered to Bank those certain
Unlimited Guaranties dated effective October 24, 2015, and (iii) Wilhelmina
Artist Management LLC, a Delaware limited liability company, executed and
delivered to Bank that certain Unlimited Guaranty dated effective November 9,
2016 (the Unlimited Guaranties referenced in items (i) through (iii) preceding,
collectively, the “Guaranty Agreements”).

 

 

D.                 In connection with the Credit Agreement, (i) Borrower and
Guarantors (other than Wilhelmina Licensing (Texas) LLC, Artists at Wilhelmina
LLC, and Wilhelmina Artist Management LLC, a Delaware limited liability company)
executed and delivered to Bank that certain Pledge and Security Agreement dated
as of April 20, 2011, as amended from time to time, (ii) Wilhelmina Licensing
(Texas) LLC executed and delivered to Bank that certain Pledge and Security
Agreement dated effective as of October 24, 2015, as amended from time to time,
(iii) Artists at Wilhelmina LLC executed and delivered to Bank that certain
Pledge and Security Agreement dated effective as of October 24, 2015, as amended
from time to time, and (iv) Wilhelmina Artist Management LLC, a Delaware limited
liability company, executed and delivered to Bank that certain Pledge and
Security Agreement dated effective on or about November 9, 2016, as amended from
time to time (collectively, the “Security Documents” and each a “Security
Document”).

 

E.                  Borrower has requested Bank to (i) waive the Existing
Defaults (as defined below), and (ii) make certain other amendments to the
Credit Agreement, all as more fully set forth herein, and Bank has agreed to the
same upon the terms and conditions hereinafter set forth.

 

NOW, THEREFORE, in consideration of the premises herein contained and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties, intending to be legally bound, hereby agree as
follows:

 

ARTICLE I
Definitions

 

Section 1.1.             Definitions. Capitalized terms used in this Amendment,
to the extent not otherwise defined herein, shall have the same meaning as
assigned to them in the Credit Agreement, as amended hereby.

 

ARTICLE II
Amendments

 

Section 2.1.             Amendments to Credit Agreement.

 

(a)                The first sentence in Subsection 4.9(a) of the Credit
Agreement is hereby amended and restated in its entirety to hereafter read as
follows:

 

“(a) Minimum Tangible Net Worth. Minimum Tangible Net Worth of not less than
$1,500,000.00 on a quarterly basis, determined as of each fiscal quarter end,
commencing with the fiscal quarter ending December 31, 2021 and continuing for
each fiscal quarter thereafter.”

 

For the avoidance of doubt, all of the definitions set forth in Section 4.9(a)
of the Credit Agreement shall remain unchanged.

 

(b)                The first sentence in Subsection 4.9(b) of the Credit
Agreement is hereby amended and restated in its entirety to hereafter read as
follows:

 

 

“(b) Fixed Charge Coverage Ratio. Fixed Charge Coverage Ratio, tested at the end
of each fiscal quarter of Borrower, of not less than 1.25 to 1.0 for the fiscal
quarter ending December 31, 2020 and for each fiscal quarter thereafter.”

 

For the avoidance of doubt, all of the definitions set forth in Section 4.9(b)
of the Credit Agreement shall remain unchanged (except as expressly set forth
below).

 

(c)                The definition of “Fixed Charge Coverage Ratio” in Subsection
4.9(b) of the Credit Agreement is hereby amended and restated in its entirety to
hereafter read as follows:

 

“‘Fixed Charge Coverage Ratio’ means, with respect to the Loan Parties and on
the date of calculation, the ratio of (a) EBITDA plus (i) operating lease
payments, plus (ii) non-cash impairment charges, minus (iii) non-financed
capital expenditures, minus (iv) dividends and distributions, minus (v) cash
taxes, minus (vi) non-financed amounts paid by Borrower to purchase or acquire
any of its equity interests to (b) the sum of (i) Debt Service plus
(ii) operating lease payments. The Fixed Charge Coverage Ratio shall be
determined based on (1) the 6-month period then ending, for the fiscal quarter
ending December 31, 2020, (2) the 9-month period then ending, for the fiscal
quarter ending March 31, 2021, and (3) the 12-month period then ending, for the
fiscal quarter ending June 30, 2021 and for each fiscal quarter thereafter. For
purposes of determining the Fixed Charge Coverage Ratio hereunder, the payoff of
the Term Note shall be excluded from Debt Service.”

 

Section 2.2.             Waiver. Borrower has failed to be in compliance with
Subsections 4.9(a) and 4.9(b) of the Credit Agreement for the fiscal quarter
ending September 30, 2020 (collectively, the “Existing Defaults”). Borrower
acknowledges and agrees that the Existing Defaults constitute Events of Default.
Subject to Borrower’s and each Guarantor’s compliance with the terms and
conditions of this Amendment and the other Loan Documents, including without
limitation the complete satisfaction of the conditions precedent set forth in
this Amendment, Bank hereby waives the Existing Defaults. Except for the waiver
expressly set forth in this Section 2.2, nothing contained herein shall
otherwise be deemed a consent to any violation of, or a waiver of compliance
with, any term, provision, or condition set forth in any of the Loan Documents
or a consent to or waiver of any other or future violations, breaches, Defaults,
or Events of Default. The waiver set forth above in this Section 2.2 is made
only with respect to Subsections 4.9(a) and 4.9(b) of the Credit Agreement for
the fiscal quarter ending September 30, 2020, and said waiver shall not apply to
any other provisions or measurement periods.

 

ARTICLE III
Conditions Precedent

 

Section 3.1.             Conditions. The effectiveness of this Amendment is
subject to the satisfaction of the following conditions precedent, unless
specifically waived by the Bank:

 

(a)                The following instruments shall have been duly and validly
executed and delivered to Bank by the parties thereto, all in form, scope and
content satisfactory to the Bank:

 

(i)                 this Amendment executed by Borrower and Guarantors; and

 

 

(ii)               resolutions of the Board of Directors (or other governing
body) of Borrower and each Guarantor certified by the Secretary or an Assistant
Secretary (or other custodian of records of each such entity) which authorize
the execution, delivery, and performance by Borrower and each Guarantor of this
Amendment and the other Loan Documents to be executed in connection herewith.

 

(b)                The representations and warranties contained herein, in the
Credit Agreement, as amended hereby, and in each other Loan Document, as amended
hereby, shall be true and correct as of the date hereof, as if made on the date
hereof, except to the extent such representations and warranties relate to an
earlier date.

 

(c)                No Event of Default shall have occurred and be continuing and
no Default shall exist, unless such Event of Default or Default has been
specifically waived in writing by Bank.

 

(d)                All corporate proceedings taken in connection with the
transactions contemplated by this Amendment and all documents, instruments and
other legal matters incident thereto, shall be satisfactory to Bank and its
legal counsel.

 

(e)                There shall have been no material adverse change in the
condition (financial or otherwise) of Borrower or any Guarantor since July 12,
2018.

 

ARTICLE IV
Ratifications, Representations, Warranties

 

Section 4.1.             Ratifications. The terms and provisions set forth in
this Amendment shall modify and supersede all inconsistent terms and provisions
set forth in the Credit Agreement and except as expressly modified and
superseded by this Amendment, the terms and provisions of the Credit Agreement
and the other Loan Documents are ratified and confirmed and shall continue in
full force and effect. Borrower and Guarantors agree that the Credit Agreement,
as amended hereby, and the other Loan Documents, as amended hereby, shall
continue to be legal, valid, binding obligations of Borrower and Guarantors,
enforceable against Borrower and Guarantors in accordance with their respective
terms.

 

Section 4.2.             Renewal of Security Interests. Each of Borrower and
Guarantors hereby renews, regrants and affirms the liens and security interests
created and granted in the Credit Agreement and in all other Loan Documents
(including, without limitation, the Security Documents, as amended), to secure
the prompt payment of all indebtedness and obligations of Borrower and each
Guarantor under the Loan Documents as amended by the terms hereof, including
without limitation any Letter of Credit Liabilities, the Line of Credit, and the
Second Term Loan. Each of Borrower and Guarantors agree that this Amendment
shall in no manner affect or impair the liens and security interests securing
the indebtedness of Borrowers and Guarantors to Bank and that such liens and
security interests shall not in any manner be waived, the purposes of this
Amendment being to modify the Credit Agreement as herein provided, and to carry
forward all liens and security interests securing same, which are acknowledged
by Borrower and Guarantors to be valid and subsisting.

 

Section 4.3.             Representations and Warranties. Borrower and Guarantors
hereby represent and warrant to Bank as follows:

 

(a)                The execution, delivery and performance of this Amendment and
any and all other Loan Documents executed and delivered in connection herewith
have been authorized by all requisite corporate action on the part of Borrower
and each Guarantor and do not and will not conflict with or violate any
provision of any applicable laws, rules, regulations or decrees, the
organizational documents of Borrower or any Guarantor, or any agreement,
document, judgment, license, order or permit applicable to or binding upon
Borrower or any Guarantor or their respective assets. No consent, approval,
authorization or order of, and no notice to or filing with, any court or
governmental authority or third person is required in connection with the
execution, delivery or performance of this Amendment or to consummate the
transactions contemplated hereby;

 

 

(b)                The representations and warranties contained in the Credit
Agreement, as amended hereby, and the other Loan Documents, as amended hereby,
are true and correct in all material respects on and as of the date hereof as
though made on and as of the date hereof, except to the extent such
representations and warranties relate to an earlier date;

 

(c)                No Event of Default under the Credit Agreement or any Loan
Document has occurred and is continuing, except to the extent waived in writing
by Bank;

 

(d)                Borrower and Guarantors are in full compliance with all
covenants and agreements contained in the Credit Agreement, as amended hereby,
and the other Loan Documents to which each is a party, each as amended hereby,
except to the extent waived in writing by Bank;

 

(e)                Neither Borrower nor any Guarantor has amended any of its
organizational documents since the date of the original execution of the Credit
Agreement; and

 

(f)                 As of November 4, 2020, the unpaid principal amount of the
Line of Credit Note was $0.00, the unpaid principal amount of the Second Term
Note was $758,499.00, and the aggregate Letter of Credit Liabilities were
$221,743.00, which amounts are unconditionally owed by Borrower to Bank without
offset, defense or counterclaim of any kind or nature whatsoever.

 

Section 4.4.             Guarantors’ Consent and Ratification. Each Guarantor
hereby consents and agrees to the terms of this Amendment, and agrees that the
Guaranty Agreement to which it is a party shall remain in full force and effect
and shall continue to be the legal, valid and binding obligation of such
Guarantor, enforceable against such Guarantor in accordance with its terms.
Furthermore, each Guarantor hereby agrees and acknowledges that (a) the Guaranty
Agreements are Loan Documents, (b) the Guaranty Agreements are not subject to
any claims, defenses or offsets, (c) nothing contained in this Amendment or any
other Loan Document shall adversely affect any right or remedy of Bank under the
Guaranty Agreements, (d) the execution and delivery of this Amendment shall in
no way reduce, impair or discharge any obligations of any Guarantor pursuant to
the Guaranty Agreements and shall not constitute a waiver by Bank against any
Guarantor, (e) by virtue hereof and by virtue of the Guaranty Agreements, each
Guarantor hereby guarantees to Bank the prompt and full payment and full and
faithful performance by the Borrower of the entirety of the Guaranteed
Indebtedness (as defined in the Guaranty Agreements) including, without
limitation, all amounts owing under the Line of Credit Note, the Term Note, the
Second Term Note, and all Letter of Credit Liabilities, (f) no Guarantor’s
consent is required to the effectiveness of this Amendment, and (g) no consent
by any Guarantor is required for the effectiveness of any future amendment,
modification, forbearance or other action with respect to the Credit Agreement
or any present or future Loan Document.

 

ARTICLE V
Miscellaneous

 

Section 5.1.             Survival of Representations and Warranties. All
representations and warranties made in the Credit Agreement or any other Loan
Document, including without limitation, any Loan Document furnished in
connection with this Amendment, shall survive the execution and delivery of this
Amendment and the other Loan Documents, and no investigation by Bank or any
closing shall affect such representations and warranties or the right of Bank to
rely thereon.

 

 

Section 5.2.             Reference to Credit Agreement. Each of the Loan
Documents, including the Credit Agreement, and any and all other agreements,
documents or instruments now or hereafter executed and delivered pursuant to the
terms hereof or pursuant to the terms of the Credit Agreement, as amended
hereby, are hereby amended so that any reference in such Loan Documents to the
Credit Agreement or any of the Loan Documents shall mean a reference to the
Credit Agreement or such Loan Documents in each case as amended hereby.

 

Section 5.3.             Expenses of Bank. As provided in the Credit Agreement,
Borrower agrees to pay on demand all reasonable costs and expenses incurred by
Bank in connection with the preparation, negotiation and execution of this
Amendment and the other Loan Documents executed pursuant hereto and any and all
amendments, modifications, and supplements hereto, including, without
limitation, the reasonable costs and fees of Bank’s legal counsel, and all
reasonable costs and expenses incurred by Bank in connection with the
enforcement or preservation of any rights under the Credit Agreement, as amended
hereby, and any other Loan Document, as amended hereby, including, without
limitation, the reasonable costs and fees of Bank’s legal counsel.

 

Section 5.4.             RELEASE. BORROWER AND EACH GUARANTOR HEREBY VOLUNTARILY
AND KNOWINGLY RELEASE AND FOREVER DISCHARGE BANK, ITS DIRECTORS, OFFICERS,
AGENTS, EMPLOYEES, SUCCESSORS AND ASSIGNS, FROM ALL POSSIBLE CLAIMS, DEMANDS,
ACTIONS, CAUSES OF ACTION, DAMAGES, COSTS, EXPENSES, AND LIABILITIES WHATSOEVER,
KNOWN OR UNKNOWN. ANTICIPATED OR UNANTICIPATED, SUSPECTED OR UNSUSPECTED, FIXED,
CONTINGENT, OR CONDITIONAL, AT LAW OR IN EQUITY, ORIGINATING IN WHOLE OR IN PART
ON OR BEFORE THE DATE THIS AMENDMENT IS EXECUTED, WHICH BORROWER AND ANY
GUARANTOR MAY NOW OR HEREAFTER HAVE AGAINST BANK, ITS DIRECTORS, OFFICERS,
AGENTS, EMPLOYEES, SUCCESSORS AND ASSIGNS, IF ANY, AND IRRESPECTIVE OF WHETHER
ANY SUCH CLAIMS ARISE OUT OF CONTRACT, TORT, VIOLATION OF LAW OR REGULATIONS, OR
OTHERWISE, AND ARISING FROM ANY LOAN, INCLUDING, WITHOUT LIMITATION, ANY
CONTRACTING FOR, CHARGING, TAKING, RESERVING, COLLECTING OR RECEIVING INTEREST
IN EXCESS OF THE HIGHEST LAWFUL RATE APPLICABLE, THE EXERCISE OF ANY RIGHTS AND
REMEDIES UNDER THE LOAN DOCUMENTS, AND NEGOTIATIONS FOR AND EXECUTION OF THE
LOAN DOCUMENTS.

 

Section 5.5.             Severability. Any provision of this Amendment held by a
court of competent jurisdiction to be invalid or unenforceable shall not impair
or invalidate the remainder of this Amendment and the effect thereof shall be
confined to the provision so held to be invalid or unenforceable.

 

Section 5.6.             GOVERNING LAW. THIS AMENDMENT SHALL BE DEEMED TO HAVE
BEEN MADE AND TO BE PERFORMABLE IN AND SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.

 

Section 5.7.             Successors and Assigns. This Amendment is binding upon
and shall inure to the benefit of the parties hereto and their respective
successors, assigns, heirs, executors, and legal representatives, except that
none of the parties hereto other than Bank may assign or transfer any of its
rights or obligations hereunder without the prior written consent of Bank.

 

 

Section 5.8.             WAIVER OF TRIAL BY JURY. THE PARTIES HERETO AGREE THAT
NO PARTY SHALL REQUEST A TRIAL BY JURY IN THE EVENT OF LITIGATION BETWEEN THEM
CONCERNING THE LOAN DOCUMENTS OR ANY CLAIMS OR TRANSACTIONS IN CONNECTION
THEREWITH, IN EITHER A STATE OR FEDERAL COURT, THE RIGHT TO TRIAL BY JURY BEING
EXPRESSLY WAIVED BY BANK, BORROWER AND GUARANTORS. EACH OF BANK, BORROWER AND
GUARANTORS ACKNOWLEDGES THAT SUCH WAIVER IS MADE WITH FULL KNOWLEDGE AND
UNDERSTANDING OF THE NATURE OF THE RIGHTS AND BENEFITS WAIVED HEREBY, AND WITH
THE BENEFIT OF ADVICE OF COUNSEL OF ITS CHOOSING.

 

Section 5.9.             Counterparts. This Amendment may be executed in one or
more counterparts, each of which when so executed shall be deemed to be an
original, but all of which when taken together shall constitute one and the same
instrument.

 

Section 5.10.          Descriptive Headings. The captions in this Amendment are
for convenience only and shall not define or limit the provisions hereof.

 

Section 5.11.          ENTIRE AGREEMENT. THIS AMENDMENT, THE CREDIT AGREEMENT
AND ALL OTHER LOAN DOCUMENTS EXECUTED AND DELIVERED IN CONNECTION WITH AND
PURSUANT TO THIS AMENDMENT AND THE CREDIT AGREEMENT REPRESENT THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. PURSUANT TO SUBSECTION 26.02(c)
OF THE TEXAS BUSINESS AND COMMERCE CODE, THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HERETO SHALL BE DETERMINED SOLELY FROM THE LOAN DOCUMENTS, AND ANY PRIOR
ORAL AGREEMENTS BETWEEN THE PARTIES ARE SUPERSEDED BY AND MERGED INTO THE LOAN
DOCUMENTS.

 

Section 5.12.          Arbitration. All disputes, claims, and controversies
arising from this Amendment shall be arbitrated in accordance with Section 7.15
of the Credit Agreement.

 

[Remainder of Page Intentionally Left Blank]

 

 

EXECUTED as of the date first written above.

 

  BORROWER:       WILHELMINA INTERNATIONAL, INC.,   a Delaware corporation      
By: /s/ James McCarthy     James McCarthy     Chief Financial Officer          
    GUARANTORS:       WILHELMINA LICENSING LLC,   a Delaware limited liability
company               By: /s/ James McCarthy     James McCarthy     Chief
Financial Officer               WILHELMINA LICENSING (TEXAS) LLC,   a Texas
limited liability company               By: /s/ James McCarthy     James
McCarthy     Chief Financial Officer               WILHELMINA FILM & TV
PRODUCTIONS LLC,
a Delaware limited liability company               By: /s/ James McCarthy    
James McCarthy     Chief Financial Officer               WILHELMINA ARTIST
MANAGEMENT LLC,
a New York limited liability company               By: /s/ James McCarthy    
James McCarthy     Chief Financial Officer

 

 

 

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  WILHELMINA-MIAMI, INC.,   a Florida corporation               By: /s/ James
McCarthy     James McCarthy     Chief Financial Officer               WILHELMINA
INTERNATIONAL, LTD.,   a New York corporation               By: /s/ James
McCarthy     James McCarthy     Chief Financial Officer               WILHELMINA
WEST, INC.,   a California corporation               By: /s/ James McCarthy    
James McCarthy     Chief Financial Officer               WILHELMINA MODELS,
INC.,   a New York corporation               By: /s/ James McCarthy     James
McCarthy     Chief Financial Officer                     LW1, INC.,   a
California corporation               By: /s/ James McCarthy     James McCarthy  
  Chief Financial Officer

 

 

 

 

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  ARTISTS AT WILHELMINA LLC,   a Florida limited liability company   (formerly
known as Wilhelmina Creative, LLC)               By: /s/ James McCarthy    
James McCarthy     Chief Financial Officer         WILHELMINA ARTIST MANAGEMENT
LLC,   a Delaware limited liability company               By: /s/ James McCarthy
    James McCarthy     Chief Financial Officer

 

 

 

 

 

 

 

 

 

 

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  BANK:         ZIONS BANCORPORATION, N.A. dba AMEGY BANK         By: /s/
Nicholas J. Diaz     Nicholas J. Diaz     Executive Vice President