AMENDMENT TO CREDIT AND GUARANTY AGREEMENT
Exhibit 10.1
Execution Version
This AMENDMENT, dated as of August 17, 2006 (this “First Amendment") is entered into by and
among AMERICAN ACHIEVEMENT CORPORATION, a Delaware corporation (“Company”) and AAC HOLDING CORP., a
Delaware corporation (“Holdings”) and the parties signatory hereto.
WHEREAS, Holdings and the Company have entered into that certain CREDIT AND GUARANTY AGREEMENT
(as it may be amended, restated, supplemented or otherwise modified from time to time, the “Credit
Agreement”), dated as of March 25, 2004, by and among Company, Holdings, CERTAIN SUBSIDIARIES OF
COMPANY, as Guarantors, the Lenders party thereto from time to time, XXXXXXX XXXXX CREDIT PARTNERS
L.P., as Joint Lead Arranger, Joint Book Runner, Administrative Agent (together with its permitted
successors in such capacity, “Administrative Agent”) and as Collateral Agent (together with its
permitted successors in such capacity, “Collateral Agent”), DEUTSCHE BANK SECURITIES INC., as a
Joint Lead Arranger and Joint Bookrunner and DEUTSCHE BANK AG CAYMAN ISLANDS BRANCH, as Syndication
Agent and CIT LENDING SERVICES CORPORATION, as a Co-Documentation Agent, GENERAL ELECTRIC CAPITAL
CORPORATION, as a Co-Documentation Agent and XXXXXXX XXXXX CAPITAL, A DIVISION OF XXXXXXX XXXXX
BUSINESS FINANCIAL SERVICES INC., as a Co-Documentation Agent.
WHEREAS, the terms used herein, including in the preamble and recitals hereto, not otherwise
defined herein or otherwise amended hereby shall have the meanings ascribed thereto in the Credit
Agreement;
WHEREAS, the Company desires to make certain amendments to increase its capacity to consummate
certain transactions under the Credit Agreement;
NOW, THEREFORE, in consideration of the premises and the agreements, provisions and covenants
herein contained, Holdings, the Company, the Requisite Lenders and the Administrative Agent agree
as follows:
ARTICLE ONE: AMENDMENTS
1. As of the First Amendment Effective Date (as defined in Article Two hereof), the Credit
Agreement shall be amended as set forth in this Article One.
“Holdco” means AAC Group Holding Corp., the parent company of
Holdings.
“Holdco Discount Notes Indenture” means the Indenture, dated as of
November 16, 2004, in respect of the 10.25% senior discount notes
due October 1, 2012 of Holdco.
"Parent” means American Achievement Group Holding Corp., the parent
company of Holdco.
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2. The definition of “Consolidated Excess Cash Flow” in Section 1.1 of the Credit Agreement is
hereby amended by deleting clause (f) thereof and replacing it with the following:
“(f) distributions to Holdings made pursuant to Sections 6.5(c) and 6.5(l)”
3. Section 2.14(e) of the Credit Agreement (Mandatory Prepayments/Commitment Reductions;
Consolidated Excess Cash Flow) is hereby amended by deleting the period at the end thereof and
replacing it with the following:
“; provided further, during any period in which the
Leverage Ratio (determined for any such period by reference to the
most recent Compliance Certificate delivered pursuant to Section
5.1(d) calculating the Leverage Ratio) shall be 3.00:1.00 or less, the
Company shall not be required to make any prepayments and/or
reductions otherwise required hereby.”
4. Section 2.24 of the Credit Agreement (Incremental Facilities) is hereby amended by deleting
the existing reference to “$25,000,000” in its entirety and replacing it with “$75,000,000”.
5. Section 6.5 of the Credit Agreement (Restricted Junior Payments) is hereby amended by
deleting it in its entirety and replacing it with the following:
“6.5. Restricted Junior Payments. No Credit Party shall, nor shall
it permit any of its Subsidiaries or Affiliates through any manner or
means or through any other Person to, directly or indirectly, declare,
order, pay, make or set apart, or agree to declare, order, pay, make
or set apart, any sum for any Restricted Junior Payment except that
(a) the Company may make regularly scheduled payments of interest in
respect of Senior Subordinated Notes or Refinancing Notes in
accordance with the terms of, and only to the extent required by, and
subject to the subordination provisions contained in, the indenture or
other agreement pursuant to which such Subordinated Indebtedness was
issued; (b) the Company may prepay or redeem the Senior Subordinated
Notes in full with the proceeds of the Refinancing Notes; (c) so long
as no Default or Event of Default shall have occurred and be
continuing or shall be caused thereby, the Company may make Restricted
Junior Payments to Holdings in an aggregate amount not to exceed
$250,000 in any Fiscal Year, to the extent necessary to permit
Holdings to pay general administrative costs and expenses; (d) so long
as no Default or Event of Default shall have occurred and be
continuing or shall be caused thereby, the Company may make Restricted
Junior Payments to Holdings, Holdings may in turn make Restricted
Junior Payments to Holdco, and Holdco may, in turn, make payments to
Parent to the extent necessary to permit Holdings and/or Parent to
discharge the consolidated tax liabilities of Holdings and its
Subsidiaries, in each case so long as Holdings and/or Parent applies
the amount of any such Restricted Junior Payment for such purpose; (e)
the Company may on the Closing Date pay a transaction fee to the
Sponsor pursuant to and as expressly required by the Management Agreement and reimburse the Sponsor for
reasonable out of pocket fees, costs and expenses incurred in
connection with the Transactions; (f) so long as no Default or Event
of Default pursuant to Sections 8.1(a), 8.1(f) or 8.1(g)
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shall have occurred and be continuing or shall be caused thereby, the Company may
pay the Management Fees (plus reasonable expenses in connection with
the Management Agreement and unpaid amounts accrued for prior
periods); (g) so long as no Default or Event of Default shall have
occurred and be continuing or shall be caused thereby, the Company may
repurchase the AA Notes which were not tendered in connection with the
Debt Tender; (h) so long as no Default or Event of Default shall have
occurred and be continuing or shall be caused thereby, Holdings may
purchase or redeem, or may make Restricted Junior Payments to Holdco,
which in turn may make payments to Parent so that either Holdco or
Parent may purchase or redeem (and the Company may declare and pay
dividends or make other distributions to Holdings the proceeds of
which are to be used by Holdings to so purchase or redeem or to make
Restricted Junior Payments to Holdco for such purpose) Capital Stock
of Holdings (including related stock appreciation rights or similar
securities) held by then present or former officers or employees of
Holdings, Company or any of their Subsidiaries or by any Pension Plan
upon such person’s death, disability, retirement or termination of
employment or under the terms of any such Pension Plan or any other
agreement under which such shares of stock or related rights were
issued; provided that the aggregate amount of such Cash
purchases or redemptions under this paragraph (h) when added to the
aggregate amount of principal, interest and any other Cash amounts, if
any, paid in respect of the Subordinated Management Notes, shall not
exceed in any Fiscal Year $500,000; (i) so long as no Default or Event
of Default shall have occurred and be continuing or shall be caused
thereby, Holdings may issue Subordinated Management Notes in lieu of
the Cash purchases and redemptions under paragraph (h) hereof; (j)
Holdings may make on the Closing Date the payments required by the
Merger Agreement; (k) the Company may make Restricted Junior Payments
to Holdings and Holdings may, in turn, make Restricted Junior Payments
to Holdco to the extent necessary to permit Holdco to make regularly
scheduled payments of interest required under the Holdco Discount
Notes Indenture, beginning October 1, 2008, at the rate of 10.25% per
annum payable in cash semi-annually in arrears on April 1 and October
1 of each year (or the next succeeding Business Day), so long as at
the time of such Restricted Junior Payment and after giving effect
thereto, (i) no Default or Event of Default shall have occurred and be
continuing or shall be caused thereby, and (ii) the Leverage Ratio
(determined for any such period by reference to the most recent
Compliance Certificate delivered pursuant to Section 5.1(d)
calculating the Leverage Ratio) shall be 3.00:1.00 or less; and (l)
the Company may make Restricted Junior Payments to Holdings, Holdings
may, in turn, make Restricted Junior Payments to Holdco, and Holdco
may, in turn, make payments to Parent, in an aggregate amount not to
exceed $200,000 in any Fiscal Year, to the extent necessary to permit
Holdco and Parent to pay general administrative costs and expenses, so
long as at the time of such Restricted Junior Payment and after giving
effect thereto, (i) no Default or Event of Default shall have occurred
and be continuing or shall be caused thereby, and (ii) so long as Holdings,
Holdco and Parent apply the amount of any such Restricted Junior
Payment for such purpose.”
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6. Section 6.7 of the Credit Agreement (Investments) is hereby amended by deleting clause (i)
in its entirety and replacing it with the following:
“(i) other Investments (excluding Investments in Foreign
Subsidiaries) in an aggregate amount not to exceed at any time
$7,500,000;”
7. Section 6.8(c) of the Credit Agreement (Maximum Consolidated Capital Expenditures) is
hereby amended by deleting the existing reference to “$11,000,000” in its entirety and replacing it
with “$16,000,000”.
8. Section 6.8(d) of the Credit Agreement (Certain Calculations) is hereby amended by adding
after the words “Section 6.8” and before the comma following such words in the third line thereof
the following:
“and for purposes of calculating the Leverage Ratio as such ratio is
otherwise applicable under this Agreement”
9. Section 6.9 of the Credit Agreement (Fundamental Changes; Disposition of Assets;
Acquisitions) is hereby amended by deleting clause (e) in its entirety and replacing it with the
following:
“(e) Permitted Acquisitions, the consideration for which constitutes
less than $15,000,000 in the aggregate from the Closing Date to the
date of determination; provided that so long as the Leverage
Ratio is less than 4.0:1.0, the Company may make Permitted
Acquisitions the consideration for which constitutes less than
$50,000,000 when aggregated with the proceeds of all other Permitted
Acquisitions made within the same Fiscal Year and $100,000,000 in the
aggregate from the Closing Date to the date of determination; and”
ARTICLE TWO: CONDITIONS PRECEDENT TO EFFECTIVENESS
The provisions set forth in Article One hereof shall be effective as of the date (the “First
Amendment Effective Date”) on which each of the following conditions shall have been satisfied (or
waived in accordance with Section 10.5 of the Credit Agreement):
1. The Credit Parties, the Administrative Agent and the Requisite Lenders shall have indicated
their consent by the execution and delivery of the signature pages to the Administrative Agent.
2. The Company shall have paid all fees, costs and expenses owing to the Administrative Agent
and its counsel invoiced to the Company on or before the date hereof and reimbursable by the
Company under the terms of the Credit Agreement.
3. The Company shall have paid to each Lender executing this First Amendment on or prior to
First Amendment Effective Date, an amendment fee equal to 0.10% of the aggregate amount of such
Lender’s outstanding Loans on the First Amendment Effective Date.
ARTICLE THREE: REPRESENTATIONS AND WARRANTIES
In order to induce the Agents and Lenders to enter into this First Amendment, each Credit Party represents and warrants to each Agent and each Lender, that:
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1. Representations and Warranties. As of the First Amendment Effective Date, each of
the representations and warranties contained in each of the Credit Documents is true, correct and
complete in all material respects to the same extent as though made on and as of that date, except
to the extent such representations and warranties specifically relate to an earlier date, in which
case such representations and warranties shall have been true, correct and complete in all material
respects on and as of such earlier date.
2. Corporate Power and Authority. As of the First Amendment Effective Date, each and
every Credit Party has all requisite power to own and operate its properties, to carry on its
business as now conducted and as proposed to be conducted, to enter into this First Amendment, and
to carry out the transactions contemplated hereby. The execution, delivery and performance of this
First Amendment has been duly authorized by all necessary action on the part of each Credit Party
that is a party to this First Amendment.
3. No Conflict; Governmental Consents. The execution, delivery and performance by
each of the Credit Parties to this First Amendment and the consummation of the transactions
contemplated by this First Amendment do not and will not (a) violate any provision of any law or
any governmental rule or regulation applicable to any of the Credit Parties, any Governmental
Authorization, any of the Organizational Documents of Company or any of its Subsidiaries, or any
order, judgment or decree of any court or other agency of government binding on any of the Credit
Parties, (b) conflict with, result in a breach of or constitute (with due notice or lapse of time
or both) a default under any Contractual Obligation of any Credit Party, (c) result in or require
the creation or imposition of any Lien upon any of the material properties or assets of any Credit
Party or any of its Subsidiaries (other than any Liens created under this First Amendment or any of
the other Credit Documents in favor of Collateral Agent on behalf of the Secured Parties) or (d)
require any registration with, consent or approval of, or notice to, or other action to, with or
by, any Governmental Authority or any Person under any Contractual Obligation; except for such
registration, consent or approval obtained by the First Amendment Effective Date and disclosed in
writing to Lenders.
4. Binding Obligation. This First Amendment has been duly executed and delivered by
each Credit Party and is the legally valid and binding obligation of such Credit Party, enforceable
against such Credit Party in accordance with its respective terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or limiting
creditors’ rights generally or by equitable principles relating to enforceability.
5. Absence of Default. No event has occurred and is continuing or will result from
the consummation of the transactions contemplated by this Amendment that would constitute a Default
or an Event of Default.
ARTICLE FOUR: AGREEMENT, ACKNOWLEDGMENT AND CONSENT
1. Each of the Company and the Guarantors hereby acknowledges that it has reviewed the terms
and provisions of the Credit Agreement and this First Amendment and consents to the modifications
effected pursuant to this First Amendment. Each of the Company and the Guarantors hereby: (i)
confirms that each Credit Document to which it is a party or otherwise bound and all Collateral
encumbered thereby will continue to guarantee or secure, as the case may be, to the fullest extent
possible in accordance with the Credit Documents, the payment and performance of all Guaranteed
Obligations under the Credit Agreement and Secured Obligations (as such term is defined in the
Second Lien Pledge and Security Agreement) under the Second Lien Pledge and Security Agreement now
or hereafter existing under or in respect of the Credit Agreement, and confirms its grants to the
Collateral Agent of a continuing lien on and security interest in and to all Collateral as
collateral security for the prompt
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payment and performance in full when due of the Guaranteed Obligations under the Credit Agreement and the Secured Obligations (as such term is defined in the
Second Lien Pledge and Security Agreement) under the Second Lien Pledge and Security Agreement
(whether at stated maturity, by acceleration or otherwise) and (ii) acknowledges and agrees that
any of the Credit Documents to which it is a party or otherwise bound shall continue in full force
and effect and that all of its obligations thereunder shall be valid and enforceable (subject to
the qualifications set forth in Section 4.6 of the Credit Agreement) and shall not be impaired or
limited by the execution or effectiveness of this Amendment. Each Credit Party hereby agrees and
admits that it has no defenses to or offsets against any of its obligations to any Agent or any
Lender under the Credit Documents.
2. Each Guarantor acknowledges and agrees that (i) notwithstanding the conditions to
effectiveness set forth in this First Amendment, such Guarantor is not required by the terms of the
Credit Agreement or any other Credit Document to consent to the amendments effected pursuant to
this First Amendment, and (ii) nothing in the Credit Agreement, this First Amendment or any other
Credit Document shall be deemed to require the consent of such Guarantor to any future waivers or
amendments to the Credit Agreement.
ARTICLE FIVE: MISCELLANEOUS
1. This Amendment shall be binding upon the parties hereto and their respective successors and
assigns and shall inure to the benefit of the parties hereto and the successors and assigns of
Lenders. No Credit Party’s rights or obligations hereunder or any interest therein may be assigned
or delegated by any Credit Party without the prior written consent of all Lenders.
2. Except as expressly amended hereby, the Credit Agreement and all other documents,
agreements and instruments relating thereto are and shall remain unmodified and in full force and
effect. On and after the First Amendment Effective Date, each reference in the Credit Agreement to
“this Agreement”, “hereunder”, “hereof”, “herein” or words of like import, and each reference in
the Notes to the Credit Agreement, shall mean and be a reference to the Credit Agreement as amended
hereby, and this First Amendment and the Credit Agreement shall be read together and construed as a
single instrument.
3. In case any provision in or obligation hereunder shall be invalid, illegal or unenforceable
in any jurisdiction, the validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
4. Except as specifically waived by this Amendment, the Credit Agreement and the other Credit
Documents shall remain in full force and effect and are hereby ratified and confirmed.
5. The execution, delivery and performance of this Amendment shall not, except as expressly
provided herein, constitute a waiver of any provision of, or operate as a waiver of any right,
power or remedy of any Agent or Lender under, the Credit Agreement or any of the other Credit
Documents.
6. Section headings herein are included herein for convenience of reference only and shall not
constitute a part hereof for any other purpose or be given any substantive effect.
7. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED
BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK,
INCLUDING, WITHOUT LIMITATION, SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW
AND RULE 327(b) OF THE NEW YORK CIVIL PRACTICE LAW AND RULES.
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8. This Amendment may be executed in any number of counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts together shall
constitute but one and the same instrument. As set forth herein, this Amendment shall become
effective upon the execution of a counterpart hereof by each of the parties hereto and receipt by
the Company and Agents of written or telephonic notification of such execution and authorization of
delivery thereof.
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AAC HOLDING CORP. |
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By: | /s/ Xxxxxxx Bench | |||
Name: | Xxxxxxx Bench | |||
Title: | Chief Financial Officer | |||
AMERICAN ACHIEVEMENT CORPORATION |
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By: | /s/ Xxxxxxx Bench | |||
Name: | Xxxxxxx Bench | |||
Title: | Chief Financial Officer | |||
EDUCATIONAL COMMUNICATIONS, INC. COMMEMORATIVE BRANDS, INC. XXXXXX SENIOR HOLDING CORP. TP HOLDING CORP. XXXXXX PUBLISHING COMPANY CBI NORTH AMERICA, INC. |
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By: | /s/ Xxxxxxx Bench | |||
Name: | Xxxxxxx Bench | |||
Title: | Chief Financial Officer | |||
XXXXXX PUBLISHING MANUFACTURING, L.P. |
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By: | Xxxxxx Publishing Company | |||
its General Partner | ||||
By: | /s/ Xxxxxxx Bench | |||
Name: | Xxxxxxx Bench | |||
Title: | Chief Financial Officer | |||
XXXXXX MANUFACTURING HOLDINGS, LLC |
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By: | Xxxxxx Publishing Company | |||
its Sole Member | ||||
By: | /s/ Xxxxxxx Bench | |||
Name: | Xxxxxxx Bench | |||
Title: | Chief Financial Officer | |||
XXXXXXX SACHS CREDIT PARTNERS L.P., as Joint Lead Arranger, Joint Bookrunner, Administrative Agent, Collateral Agent and a Lender |
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By: | /s/ Xxxxxxxxx Xxxxxxx | |||
Authorized Signatory | ||||