ELEVENTH AMENDMENT TO CREDIT AND GUARANTY AGREEMENT
Exhibit 10.2
EXECUTION COPY
ELEVENTH AMENDMENT TO CREDIT AND GUARANTY AGREEMENT
ELEVENTH AMENDMENT TO CREDIT AND GUARANTY AGREEMENT, dated as of September 17, 2008 (this
“Amendment”), to the Credit and Guaranty Agreement, dated as of April 30, 2007 (as amended,
restated, supplemented or modified from time to time, the “Credit Agreement”), by and among
Xxxxxxxxx Company, a Michigan corporation (“Holdings”), Xxxxxxxxx Services Company, a
Michigan corporation (“Xxxxxxxxx Services”), certain subsidiaries of Holdings identified on
the signature page hereto as “Borrowers” (such Subsidiaries, together with Xxxxxxxxx Services, are
referred to individually as a “Borrower” and collectively, jointly and severally, as
“Borrowers”), certain subsidiaries of Holdings identified on the signature page hereto as
“Guarantors” (such subsidiaries, together with Holdings, are referred to individually as a
“Guarantor” and collectively, jointly and severally, as “Guarantors”), the lenders
party hereto from time to time (“Lenders”), and Silver Point Finance, LLC (“Silver
Point”), as administrative agent for Lenders (in such capacity, together with its successors
and assigns in such capacity, the “Administrative Agent”) and as collateral agent for
Lenders (in such capacity, together with its successors and assigns in such capacity, the
“Collateral Agent” and together with Administrative Agent, each an “Agent” and
collectively the “Agents”).
WHEREAS, Borrowers and Guarantors have requested that Agents and Lenders agree to amend
certain terms and conditions of the Credit Agreement, in each case, as more fully set forth herein;
and
WHEREAS, Agents and Lenders have agreed to make such amendments to the Credit Agreement, in
each case, subject to the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants herein contained,
and for other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:
1. Definitions. All terms used herein which are defined in the Credit Agreement and
not otherwise defined herein are used herein as defined therein.
2. Amendments to Credit Agreement.
(a) Section 1.1 of the Credit Agreement is hereby amended by adding the following new
definitions thereto, in appropriate alphabetical order, to read in their entirety as follows:
“‘Eleventh Amendment’ means the Eleventh Amendment to Credit and
Guaranty Agreement, dated as of September 17, 2008, by and among
Credit Parties, Lenders and Agents.”
“‘Eleventh Amendment Effective Date’ has the meaning ascribed to the
term ‘Amendment Effective Date’ in the Eleventh Amendment.”
“‘UK Purchase Agreement’ means the Asset Purchase Agreement, dated
as of September 16, 2008, by and between U.K. OpCo, Holdings and
Oakwood Distribution Limited.”
(b) Section 1.1 of the Credit Agreement is hereby amended by amending and restating the
definitions of the following terms to read in their entirety as follows:
“‘Blocked Cash’ means, as of any date of determination, with respect
to any Cash or Cash Equivalents maintained in Canada, the amount of
unrestricted Cash and Cash Equivalents of the Canadian Guarantors
maintained in a deposit account which is subject to a tri-party
blocked account agreement and provides Agent with perfected
first-priority Lien on such account and the contents thereof and
grants Agent sole dominion and control over such account.”
“‘Material Contract’ means, collectively, any contract or other
arrangement to which Holdings or any of its Subsidiaries is a party
(other than the Credit Documents) for which breach, nonperformance,
cancellation or failure to renew could reasonably be expected to
have a Material Adverse Effect, and including, in any event each
contract or agreement to which Holdings or any of its Subsidiaries
is a party involving aggregate consideration payable to or by
Holdings or such Subsidiary of $5,000,000 or more (other than
purchase orders in the ordinary course of the business of Holdings
or such Subsidiary and other than contracts that by their terms may
be terminated by Holdings or such Subsidiary in the ordinary course
of its business upon less than 60 days’ notice without penalty or
premium), and including, without limitation, the Xxxxxxxx Purchase
Agreement, the Canadian Purchase Agreement and the UK Purchase
Agreement, and all documents executed or delivered in connection
with any of the foregoing.”
“‘Working Capital Borrowing Base’ has the meaning assigned to the
term “Borrowing Base” in the Working Capital Agreement, as in effect
on the Closing Date, whether or not such agreement remains in
effect, plus, without duplication, the amount of
unrestricted Cash and Cash Equivalents of the Credit Parties
maintained in a deposit account in the U.S. which is subject to a
tri-party blocked account agreement and provides Collateral Agent
with perfected first-priority Lien on such account and the contents
thereof and grants Agent sole dominion and control over such
account;”
(c) Section 3.2(a)(vi) of the Credit Agreement is hereby amended and restated to read in its
entirety as follows:
“(vi) after giving effect to such Credit Extension, (A) the
aggregate Cash and Cash Equivalents of Holdings and its Subsidiaries
shall not exceed the amounts specified in Section 6.6(a) or any
clause thereof, and (B) the aggregate amount of Cash and Cash
Equivalents of Holdings and its Subsidiaries maintained in the
United States (whether or not in Blocked Accounts) shall not exceed
$50,000 for more than one Business Day (excluding (x) amounts
required to be maintained pursuant to Section 6.28, (y) amounts held
in the payroll account not in excess of the amount required to pay
the immediately-succeeding payroll payment, and (z) amounts received
by any Credit Party in any Deposit Account following the daily sweep
of all funds contained therein to Administrative Agent’s Account);”
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(d) Section 5.1(q) of the Credit Agreement is hereby amended and restated to read in its
entirety as follows:
“(q) Borrowing Base Certificate. On (i) each Business Day,
current as of the close of business on the immediately preceding
Business Day (except (A) the Accounts and Inventory of Crave
Entertainment Group, Inc. and its Subsidiaries, which shall be
current as of the close of business on the second preceding Business
Day, (B) the Accounts of Xxxxxxxxx UK Limited, which shall be
current on a weekly basis and (C) the accounts payable aging report
of each Credit Party, which shall be current on a weekly basis), (x)
a Borrowing Base Certificate, supported by schedules showing the
derivation thereof and containing such detail and other information
as the Administrative Agent may reasonably request from time to
time, (y) an Accounts aging report of each Credit Party
(collectively and by individual customer), and (z) an accounts
payable aging report of each Credit Party (collectively and by
individual vendor); and (ii) the twentieth day of each Fiscal Month,
or if such date is not a Business Day, the next succeeding Business
Day, a final Borrowing Base Certificate, current as of the close of
business on the last Business Day of the immediately preceding
Fiscal Month, supported by schedules showing the derivation thereof
and containing such detail and other information as Agents may
reasonably request from time to time, together with all accrual
updates since the previous Borrowing Base Certificate delivered
pursuant to this clause (ii); provided that (A) (1) the
Working Capital Borrowing Base set forth in the Borrowing Base
Certificate shall be effective from and including the date such
Borrowing Base Certificate is duly received by the Agents but not
including the date on which a subsequent Borrowing Base Certificate
is received by the Agents, unless the Agents dispute the eligibility
of any property included in the calculation of the Working Capital
Borrowing Base or the valuation thereof, and (2) in the event of any
dispute about the eligibility of any property included in the
calculation of the Working Capital Borrowing Base or the valuation
thereof, the Agents’ good faith business judgment shall control, and
(B) for the period from September 19, 2008 (the “Start
Date”) until October 1, 2008 (the “End Date”), the
following adjustments shall be made to the calculation of the
Working Capital Borrowing Base: (x) the amount of “Eligible
Accounts” shall be determined on the Start Date and reduced on a
daily basis by the amount of Cash received by the Credit Parties on
each such day until the End Date, and (y) the percentage of Accounts
that do not constitute “Eligible Accounts” shall be determined on
the Start Date and deemed to apply until the End Date;”
(e) Section 5.21 of the Credit Agreement is hereby amended and restated to read in its
entirety as follows:
“5.21 U.K. Deposit Accounts. After the occurrence and during the
continuance of an Event of Default, Credit Parties shall,
immediately upon the request of the Administrative Agent, transfer
all Cash and Cash
Equivalents of the Credit Parties then held in the United Kingdom to
a Blocked Account in the United States.“
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(f) Section 6.1 of the Credit Agreement is hereby amended by adding a new clause (m) thereto
to read in its entirety as follows:
“(m) the guarantee made by each of U.K. Opco and Holdings under the
UK Purchase Agreement, as in effect on the date hereof.”
(g) Section 6.6(a) of the Credit Agreement is hereby amended and restated to read in its
entirety as follows:
“(a) Investments in Cash and Cash Equivalents; provided,
that, the aggregate amount of Cash and Cash Equivalents of Holdings
and its Subsidiaries (i) maintained in Deposit Accounts in the
United States that do not constitute Blocked Accounts will not
exceed $50,000, (ii) maintained in Deposit Accounts in Canada that
do not constitute Blocked Accounts will not exceed $50,000, (iii)
maintained in Canada, whether or not in Blocked Accounts, but
excluding any Blocked Cash, will not exceed $150,000 for more than
one Business Day; (iv) maintained in Canada and constituting Blocked
Cash will not exceed $500,000, and (v) maintained in the United
Kingdom will not exceed £13,000,000 for more than one Business Day,
or £7,000,000 for more than two Business Days; provided;
however, that notwithstanding anything to the contrary contained
in this Section 6.6(a), under no circumstances shall Deposit
Accounts used for collection of customer payments be maintained
unless such Deposit Account is also a Blocked Account;”
Section 6.7(e) of the Credit Agreement is hereby amended and restated to read in its entirety
as follows:
“(e) Minimum Asset Coverage. Credit Parties shall not
permit, at any time (i) between the Eleventh Amendment Effective
Date through (but not including) October 31, 2008, the positive
difference between (A) the Working Capital Borrowing Base at such
time (without taking into account the Term Loan Reserve, the Minimum
Availability Amount or any other Reserves (as defined in the Working
Capital Agreement)) and (B) the principal amount of all Indebtedness
outstanding under this Agreement at such time (such positive
difference, the “Minimum Asset Coverage”) to be less than an amount
equal to the greater of (x) the principal amount of all Indebtedness
outstanding under this Agreement at such time, and (y) $20,000,000,
and (ii) on and after October 31, 2008, the Minimum Asset Coverage
to be less than $70,000,000.”
(h) Clause (b) of Section 6.24 of the Credit Agreement is hereby amended and restated to read
in its entirety as follows:
“(b) by not later than October 31, 2008, a historical and projected
return on investment report for each title owned by the Crave
Entities for which there are any outstanding obligations, which
report shall be in form and substance satisfactory to Agents.”
(i) Article VI of the Credit Agreement is hereby amended by adding a new Section to the end
thereof to read in its entirety as follows:
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“6.28 Unencumbered Cash. At all times following the Eleventh
Amendment Effective Date, Credit Parties shall not fail to maintain
unrestricted Cash in an aggregate amount of at least $3,000,000 in a
deposit account which is subject to a tri-party blocked account
agreement and provides Collateral Agent with perfected
first-priority Lien on such account and the contents thereof and
grants Agent sole dominion and control over such account.”
3. Conditions to Effectiveness. This Amendment shall become effective (the
“Amendment Effective Date”) upon satisfaction in full of the following conditions
precedent:
(a) Immediately after giving effect to this Amendment, (i) the representations and
warranties contained in this Amendment, the Credit Agreement and the other Credit Documents
shall be correct on and as of the date of this Amendment as though made on and as of such
date (except where such representations and warranties relate to an earlier date in which
case such representations and warranties shall be true and correct as of such earlier date)
and (ii) no Default or Event of Default shall have occurred and be continuing (or would
result from this Amendment becoming effective in accordance with its terms).
(b) Administrative Agent shall have received counterparts of this Amendment that bear
the signatures of each of Credit Parties, Agents and Lenders.
4. Credit Parties’ Representations and Warranties. Each Credit Party represents and
warrants to Agents and Lenders as follows:
(a) Such Credit Party (i) is duly organized, validly existing and in good standing
under the laws of the state of its organization and (ii) has all requisite power, authority
and legal right to execute, deliver and perform this Amendment and to perform the Credit
Agreement, as amended hereby.
(b) The execution, delivery and performance by such Credit Party of this Amendment and
the Purchase Documents and the performance by such Credit Party of the Credit Agreement, as
amended hereby (i) have been duly authorized by all necessary action, (ii) do not and will
not violate or create a default under such Credit Party’s organizational documents, any
applicable law or any contractual restriction binding on or otherwise affecting such Credit
Party or any of such Credit Party’s properties, and (iii) except as provided in the Credit
Documents, do not and will not result in or require the creation of any Lien, upon or with
respect to such Credit Party’s property.
(c) No authorization or approval or other action by, and no notice to or filing with,
any governmental authority is required in connection with the due execution, delivery and
performance by such Credit Party of this Amendment or the Purchase Documents or the
performance by such Credit Party of the Credit Agreement, as amended hereby.
(d) This Amendment and the Credit Agreement, as amended hereby, and the Purchase
Documents constitute the legal, valid and binding obligations of such Credit Party,
enforceable against such Credit Party in accordance with their terms except to the extent
the enforceability thereof may be limited by any applicable bankruptcy, insolvency,
reorganization,
moratorium or similar laws from time to time in effect affecting generally the
enforcement of creditors’ rights and remedies and by general principles of equity.
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(e) Immediately after giving effect to this Amendment, (i) the representations and
warranties contained in the Credit Agreement are correct on and as of the date of this
Amendment as though made on and as of the date hereof (except where such representations and
warranties relate to an earlier date in which case such representations and warranties shall
be true and correct as of such earlier date), and (ii) no Default or Event of Default has
occurred and is continuing (or would result from this Amendment becoming effective in
accordance with its terms).
5. Continued Effectiveness of Credit Agreement. Each Credit Party hereby confirms and
agrees that (a) the Credit Agreement and each other Credit Document to which it is a party is, and
shall continue to be, in full force and effect and is hereby ratified and confirmed in all respects
except that on and after the Amendment Effective Date all references in any such Credit Document to
“the Credit Agreement”, “hereto”, “hereof”, “hereunder”, “thereto”, “thereof”, “thereunder” or
words of like import referring to the Credit Agreement shall mean the Credit Agreement as amended
by this Amendment, (b) to the extent that any such Credit Document purports to assign or pledge to
Collateral Agent, for the ratable benefit of Lenders, or to grant to Collateral Agent, for the
ratable benefit of Lenders a security interest in or Lien on, any Collateral as security for the
Obligations of the Credit Party, or any of their respective Subsidiaries from time to time existing
in respect of the Credit Agreement and the other Credit Documents, such pledge, assignment and/or
grant of the security interest or Lien is hereby ratified and confirmed in all respects, and (c) no
amendment or waiver of any terms or provisions of the Credit Agreement, or the amendments or
consents granted hereunder, shall relieve any Credit Party from complying with such terms and
provisions other than as expressly amended or consented to hereby or from complying with any other
term or provision thereof or herein.
6. Release. Each Credit Party hereby acknowledges and agrees that: (a) neither it nor
any of its Affiliates has any claim or cause of action against any Agent or any Lender (or any of
their respective Affiliates, officers, directors, employees, attorneys, consultants or agents) and
(b) each Agent and each Lender has heretofore properly performed and satisfied in a timely manner
all of its obligations to Credit Parties and their Affiliates under the Credit Agreement and the
other Credit Documents. Notwithstanding the foregoing, Credit Parties wish (and Agents and Lenders
agree) to eliminate any possibility that any past conditions, acts, omissions, events or
circumstances would impair or otherwise adversely affect any Agent’s or any Lenders’ rights,
interests, security and/or remedies under the Credit Agreement and the other Credit Documents.
Accordingly, for and in consideration of the agreements contained in this Amendment and other good
and valuable consideration, each Credit Party (for itself and its Affiliates and the successors,
assigns, heirs and representatives of each of the foregoing) (collectively, the
“Releasors”) does hereby fully, finally, unconditionally and irrevocably release and
forever discharge each Agent and each Lender and each of their respective Affiliates, officers,
directors, employees, attorneys, consultants and agents (collectively, the “Released
Parties”) from any and all debts, claims, obligations, damages, costs, attorneys’ fees, suits,
demands, liabilities, actions, proceedings and causes of action, in each case, whether known or
unknown, contingent or fixed, direct or indirect, and of whatever nature or description, and
whether in law or in equity, under contract, tort, statute or otherwise, which any Releasor has
heretofore had or now or hereafter can, shall or may have against any Released Party by reason of
any act, omission or thing whatsoever done or omitted to be done, arising out of, connected with or
related in any way to the Credit Agreement or any other Credit Document, or any act, event or
transaction related or attendant thereto, or the agreements of any Agent or any Lender contained
therein, or the possession, use, operation or control of any of the assets of any Credit Party, or
the making of any Loans or other advances, or the management of such Loans or advances or the
Collateral.
7. Miscellaneous.
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(a) This Amendment may be executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which shall be deemed to be an original but
all of which taken together shall constitute one and the same agreement. Delivery of an
executed counterpart of this Amendment by telefacsimile or electronic method shall be
equally as effective as delivery of an original executed counterpart of this Amendment.
(b) Section and paragraph headings herein are included for convenience of reference
only and shall not constitute a part of this Amendment for any other purpose.
(c) This Amendment shall be governed by, and construed in accordance with, the laws of
the State of New York. Each of the parties to this Amendment hereby irrevocably waives all
rights to trial by jury in any action, proceeding or counterclaim arising out of or relating
to this Amendment.
(d) Borrowers will pay on demand all reasonable fees, costs and expenses of Agents and
Lenders in connection with the preparation, execution and delivery of this Amendment or
otherwise payable under the Credit Agreement, including, without limitation, reasonable fees
disbursements and other charges of counsel to Agents and Lenders.
(e) This Amendment is a Credit Document executed pursuant to the Credit Agreement and
shall be construed, administered and interpreted in accordance with the terms thereof.
Accordingly, it shall be an Event of Default under the Credit Agreement if any
representation or warranty made or deemed made by any Credit Party under or in connection
with this Amendment shall have been incorrect when made or deemed made or if any Credit
Party fails to perform or comply with any covenant or agreement contained herein.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and
delivered by their respective officers thereunto duly authorized as of the date first written
above.
| BORROWERS: XXXXXXXXX CATEGORY MANAGEMENT COMPANY |
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| By: | ||||
| Name: | ||||
| Title: | ||||
XXXXXXXXX SERVICES COMPANY |
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| By: | ||||
| Name: | ||||
| Title: | ||||
XXXXXXXXX REAL ESTATE LLC |
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| By: | ||||
| Name: | ||||
| Title: | ||||
ARTIST TO MARKET DISTRIBUTION LLC |
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| By: | ||||
| Name: | ||||
| Title: | ||||
REPS, L.L.C. |
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| By: | ||||
| Name: | ||||
| Title: | ||||
Eleventh Amendment To Credit And Guaranty Agreement
| GUARANTORS: XXXXXXXXX COMPANY |
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| By: | ||||
| Name: | ||||
| Title: | ||||
| CRAVE ENTERTAINMENT GROUP, INC. |
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| By: | ||||
| Name: | ||||
| Title: | ||||
| XXXXXX ADVERTISING COMPANY |
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| By: | ||||
| Name: | ||||
| Title: | ||||
| XXXXXXXXX COMPANY OF CANADA LIMITED |
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| By: | ||||
| Name: | ||||
| Title: | ||||
| XXXXXXXXX UK LIMITED |
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| By: | ||||
| Name: | ||||
| Title: | ||||
Eleventh Amendment To Credit And Guaranty Agreement
| SVG DISTRIBUTION, INC. |
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| By: | ||||
| Name: | ||||
| Title: | ||||
CRAVE ENTERTAINMENT, INC. |
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| By: | ||||
| Name: | ||||
| Title: | ||||
Eleventh Amendment To Credit And Guaranty Agreement
| ADMINISTRATIVE AGENT AND COLLATERAL AGENT: SILVER POINT FINANCE, LLC, as Administrative Agent and Collateral Agent |
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| By: | ||||
| Name: | ||||
| Title: | ||||
Eleventh Amendment To Credit And Guaranty Agreement
| LENDERS: SPF CDO I, LTD. |
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| By: | ||||
| Name: | ||||
| Title: | ||||
| SPCP GROUP, LLC |
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| By: | ||||
| Name: | ||||
| Title: | ||||
| THERMOPYLAE FUNDING CORP. |
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| By: | ||||
| Name: | ||||
| Title: | ||||
| FIELD POINT I, LTD. |
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| By: | ||||
| Name: | ||||
| Title: | ||||
| FIELD POINT II, LTD. |
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| By: | ||||
| Name: | ||||
| Title: | ||||
Eleventh Amendment To Credit And Guaranty Agreement
