EXHIBIT 4(i)
AMSCAN HOLDINGS, INC.
THIRD AMENDMENT TO AMENDED AND RESTATED
REVOLVING LOAN CREDIT AGREEMENT
This THIRD AMENDMENT TO AMENDED AND RESTATED REVOLVING LOAN CREDIT
AGREEMENT (this "Amendment") is dated as of July 3, 2002 and entered into by and
among AMSCAN HOLDINGS, INC., a Delaware corporation ("Company"), the financial
institutions listed on the signature pages hereof ("Lenders"), XXXXXXX XXXXX
CREDIT PARTNERS L.P., as arranger and syndication agent for Lenders
("Arranger"), FLEET NATIONAL BANK, as administrative agent for Lenders
("Administrative Agent"), and, for purposes of Section 4 hereof, the Subsidiary
Guarantors listed on the signature pages hereof, and is made with reference to
that certain Amended and Restated Revolving Loan Credit Agreement dated as of
September 17, 1998, as amended to the date hereof (as so amended, the "Credit
Agreement") by and among Company, Lenders, Arranger and Administrative Agent.
Capitalized terms used herein without definition shall have the same meanings
herein as set forth in the Credit Agreement as amended by this Amendment (the
"Amended Agreement").
RECITALS
WHEREAS, Company and Lenders desire to (a) amend certain provisions of
the Credit Agreement to (i) extend the Revolving Loan Commitment Termination
Date to December 31, 2003, (ii) adjust certain financial covenants contained
therein, and (iii) increase the interest rates applicable to Loans thereunder,
and (b) make certain other amendments to the Credit Agreement as set forth
below;
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the parties hereto agree as follows:
Section 1. AMENDMENTS TO THE CREDIT AGREEMENT
1.1 Amendments to Section 1: Provisions Relating to Defined Terms
A. Subsection 1.1 of the Credit Agreement is hereby amended by adding
thereto the following definitions, which shall be inserted in proper
alphabetical order:
"Third Amendment" means that certain Third Amendment to Amended
and Restated Revolving Loan Credit Agreement dated as of July 3, 2002
by and among Company, Lenders, Arranger and Administrative Agent.
"Third Amendment Effective Date" has the meaning assigned to that
term in the Third Amendment.
B. Subsection 1.1 of the Credit Agreement is hereby further amended by
inserting the following sentence at the end of each of the definitions of
"Applicable Revolving Base Rate Margin" and "Applicable Revolving Eurodollar
Rate Margin" contained therein:
"Anything in this definition to the contrary notwithstanding, (a) as
at any date of determination during the period commencing on the Third
Amendment Effective Date and ending on June 30, 2003, each percentage
set forth in the table above shall be increased by 1.00%, (b) as at
any date of determination during the period commencing on July 1, 2003
and ending on September 30, 2003, each percentage set forth in the
table above shall be increased by 1.50%, and (c) as at any date of
determination after September 30, 2003, each percentage set forth in
the table above shall be increased by 2.00%."
C. Subsection 1.1 of the Credit Agreement is hereby further amended by
restating the following definitions contained therein, in their entirety, as
follows:
"Applicable Revolving Commitment Fee Percentage" means (i) as at
any date of determination prior to the Third Amendment Effective Date,
a rate per annum equal to the percentage set forth in the table below
opposite the Applicable Leverage Ratio in effect as of such date of
determination, any change in the Applicable Revolving Commitment Fee
Percentage to be effective on the date of any corresponding change in
the Applicable Leverage Ratio:
========================= ===================================
Applicable Leverage Ratio Applicable Revolving Commitment Fee
Percentage
========================= ===================================
4.75:1.00 or greater 0.50%
3.75:1.00 or greater, but less
than 4.75:1.00 0.375%
less than 3.75:1.00 0.25%
========================= ===================================
; and (ii) as at any date of determination on or after the Third
Amendment Effective Date, a rate per annum equal to the percentage set
forth in the table below opposite the Applicable Leverage Ratio in
effect as of such date of determination, any change in the Applicable
Revolving Commitment Fee Percentage to be effective on the date of any
corresponding change in the Applicable Leverage Ratio:
========================= ===================================
Applicable Leverage Ratio Applicable Revolving Commitment Fee
Percentage
========================= ===================================
3.00:1.00 or greater 0.75%
less than 3.00:1.00 0.50%
========================= ===================================
"Consolidated Fixed Charges" means, for any period, the sum
(without duplication) of the amounts for such period of (i)
Consolidated Cash Interest Expense, (ii) provisions for taxes based on
income, (iii) scheduled repayments of principal on the Loans and other
Indebtedness, and (iv) Consolidated Capital Expenditures (other than
Consolidated Capital Expenditures permitted under
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clause (ii) of the last paragraph of subsection 7.8 for the
acquisition of land for, and the development and construction of, the
New Xxxxxxx Distribution Center and capitalized interest in respect
thereof) to the extent paid for in cash, all of the foregoing as
determined on a consolidated basis for Company and its Subsidiaries in
conformity with GAAP; provided that, for any period in which any
proceeds from Revolving Loans or Swing Line Loans are applied directly
or indirectly to repay principal on AXELs, the amount calculated
pursuant to clause (iii) above for the relevant period shall equal the
amount of scheduled repayments of principal on the Loans and other
Indebtedness for the 365-day period ending on the 92nd day after such
proceeds are so applied; provided further, however, that solely for
purposes of calculating Consolidated Fixed Charges for the period
ending June 30, 2003, if proceeds of Revolving Loans or Swing Line
Loans are applied to the scheduled repayment of AXELs due June 30,
2003, the 365-day period referred to in the preceding proviso shall
end on the 90th day after such proceeds are so applied (with the
effect that the scheduled repayment of AXELs due September 30, 2003
shall not be included for purposes of calculating Consolidated Fixed
Charges for the period ending June 30, 2003).
"Revolving Loan Commitment Termination Date" means December 31,
2003.
1.2 Amendments to Subsection 2.1A: Commitments
A. Subsection 2.1A(i) of the Credit Agreement is hereby amended by
restating the second sentence thereof in its entirety as follows:
"Company acknowledges and confirms that (i) each Existing Lender holds
Existing Revolving Loans in the respective principal amounts
outstanding prior to the Restatement Effective Date set forth opposite
its name on Schedule 2.1 annexed hereto, and (ii) on the Third
Amendment Effective Date, each Lender holds a Revolving Loan
Commitment in the amount outstanding set forth opposite its name on
Schedule 2.1B annexed hereto."
B. Subsection 2.1A(i) of the Credit Agreement is hereby further
amended by (i) deleting the word "and" appearing at the end of clause (a)
thereof, (ii) deleting the "." appearing at the end of clause (b) thereof and
substituting therefor "; and", and (iii) adding at the end of such subsection
2.1A(i) the following:
"(c) in no event shall Revolving Loans or Swing Line Loans be
requested if, at the time of the making of such Revolving Loans or
Swing Line Loans, the Loan Parties have Cash and Cash Equivalents
exceeding $5,000,000 (after giving effect to such Revolving Loans
and/or Swing Line Loans) or such other amount in excess of $5,000,000
as may be approved by Administrative Agent and Arranger in writing;
provided that the foregoing restriction shall not apply to requests
for Revolving Loans and Swing Line Loans the proceeds of which are
applied to make scheduled payments of principal on the AXELs on March
31, 2003 and June 30, 2003 in accordance with and to the extent
required under subsection
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2.4A of the AXEL Credit Agreement, in each case so long as Company is
in pro forma compliance with subsection 7.6A of this Agreement (as
calculated in accordance with the proviso contained in the definition
of "Consolidated Fixed Charges") on the date such repayment of
principal on AXELs is made)."
C. Subsection 2.1A(ii) of the Credit Agreement is hereby amended by
(i) deleting the word "and" appearing at the end of clause (a) thereof, (ii)
deleting the "." appearing at the end of clause (b) thereof and substituting
therefor "; and", and (iii) adding at the end of such subsection 2.1A(ii) the
following:
"(c) in no event shall Swing Line Loans or Revolving Loans be
requested if, at the time of the making of such Swing Line Loans or
Revolving Loans, the Loan Parties have Cash and Cash Equivalents
exceeding $5,000,000 (after giving effect to such Swing Line Loans
and/or Revolving Loans) or such other amount in excess of $5,000,000
as may be approved by Administrative Agent and Arranger in writing;
provided that the foregoing restriction shall not apply to requests
for Revolving Loans and Swing Line Loans the proceeds of which are
applied to make scheduled payments of principal on the AXELs on March
31, 2003 and June 30, 2003 in accordance with and to the extent
required under subsection 2.4A of the AXEL Credit Agreement, in each
case so long as Company is in pro forma compliance with subsection
7.6A of this Agreement (as calculated in accordance with the proviso
contained in the definition of "Consolidated Fixed Charges") on the
date such repayment of principal on AXELs is made)."
1.3 Amendments to Subsection 2.4A: Prepayments
A. Subsection 2.4A(iii) of the Credit Agreement is hereby amended by
adding the following clauses (h) and (i) at the end thereof:
"(h) Prepayments Due to Excess Cash and Cash Equivalents. In the event
that the Loan Parties have Cash and Cash Equivalents in an aggregate
amount exceeding $5,000,000 (or an amount greater than $5,000,000 as
may be approved by Administrative Agent and Arranger in writing) at
the end of any Business Day, then Company shall as promptly as
practicable on the next succeeding Business Day prepay the Loans in an
amount equal to such excess.
(i) Mandatory Reduction on the Third Amendment Effective Date.
Effective on and as of the Third Amendment Effective Date, the
Revolving Loan Commitments shall be permanently reduced from
$50,000,000 to $40,000,000, and such reduction shall be applied on a
pro rata basis to reduce each Lender's Revolving Loan Commitment as
specified in Schedule 2.1B annexed hereto."
B. Subsection 2.4A(iv)(b) of the Credit Agreement is hereby amended by
adding the following sentence at the end thereof:
"Any prepayments of Loans under subsection 2.4A(iii)(h) shall be
applied first to repay outstanding Swing Line Loans to the full extent
thereof and second to repay
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outstanding Revolving Loans to the full extent thereof (in each case,
without any reduction of the Commitments)."
1.4 Amendment to Subsection 2.5A: Use of Proceeds
Subsection 2.5A of the Credit Agreement is hereby amended by adding
the following sentence at the end thereof:
"Notwithstanding anything to the contrary contained herein, none of
the proceeds of any Revolving Loan or Swing Line Loan made on and
after the Third Amendment Effective Date shall be applied directly or
indirectly to repay principal on AXELs unless Company is in pro forma
compliance with subsection 7.6A of this Agreement (as calculated in
accordance with the proviso contained in the definition of
"Consolidated Fixed Charges") on the date such Loan is made and on the
date such repayment of principal on AXELs is made."
1.5 Amendments to Section 7: Company's Negative Covenants
A. Subsection 7.6 - Financial Covenants
1. Subsection 7.6A of the Credit Agreement is hereby amended by adding
at the end of the table contained therein the following four rows:
==================== ========================
Minimum Fixed Charge
Period Ending Coverage Ratio
==================== ========================
March 31, 2003 1.00:1.00
June 30, 2003 1.00:1.00
September 30, 2003 1.00:1.00
December 31, 2003 1.00:1.00
==================== ========================
2. Subsection 7.6B of the Credit Agreement is hereby amended by
deleting it in its entirety and substituting therefor the following:
"B. [Intentionally Omitted]".
3. Subsection 7.6C of the Credit Agreement is hereby amended by adding
at the end of the table contained therein the following four rows:
==================== ============================
Period Ending Maximum Debt to EBITDA Ratio
==================== ============================
March 31, 2003 4.40:1.00
June 30, 2003 4.20:1.00
September 30, 2003 4.00:1.00
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December 31, 2003 3.80:1.00
==================== ============================
B. Subsection 7.8 - Consolidated Capital Expenditures
Subsection 7.8 of the Credit Agreement is hereby amended by adding at
the end of the table contained therein the following row:
==================== ============================
Period Ending Maximum Debt to EBITDA Ratio
==================== ============================
December 31, 2003 $15,000,000
==================== ============================
1.6 Amendment to Section 10.1B: Assignments
Subsection 10.1B(i) of the Credit Agreement is hereby amended by
deleting the reference to "$5,000,000" contained therein and substituting
therefor "$2,000,000".
1.7 Amendments to Exhibits; Addition of Schedules
A. The Credit Agreement is hereby amended by amending the Exhibits
thereto as follows:
1. Exhibit I to the Credit Agreement is amended by deleting
such Exhibit in its entirety and substituting therefor a new Exhibit I
in the form of Annex A to this Amendment.
2. Exhibit V-A to the Credit Agreement is amended by
deleting the phrase "PROMISSORY NOTE DUE ____________, 2002" and
substituting therefor the phrase ""PROMISSORY NOTE DUE DECEMBER 31,
2003".
3. Exhibit V-B to the Credit Agreement is amended by
deleting the phrase "PROMISSORY NOTE DUE ___________, 199__" and
substituting therefor the phrase ""PROMISSORY NOTE DUE DECEMBER 31,
2003".
4. Exhibit VI to the Credit Agreement is amended by deleting
Attachment No. 1 thereto in its entirety and substituting therefor a
new Attachment No. 1 in the form of Annex B to this Amendment.
B. The Credit Agreement is hereby amended by adding thereto a new
Schedule 2.1B in the form of Annex C to this Amendment.
Section 2. CONDITIONS TO EFFECTIVENESS
Section 1 of this Amendment shall become effective only upon the
satisfaction of all of the following conditions precedent (the date of
satisfaction of such conditions being referred to herein as the "Third Amendment
Effective Date"):
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A. On or before the Third Amendment Effective Date, Company shall
deliver to Lenders (or to Administrative Agent for Lenders with sufficient
originally executed copies, where appropriate, for each Lender and its counsel)
the following, each, unless otherwise noted, dated the Third Amendment Effective
Date:
1. A certificate of the corporate secretary of Company
certifying as of the Third Amendment Effective Date that its
Certificate of Incorporation attached thereto is in full force and
effect without modification or amendment, together with a good
standing certificate from the Secretary of State of the State of
Delaware dated a recent date prior to the Third Amendment Effective
Date;
2. A certificate of the corporate secretary of Company
certifying as of the Third Amendment Effective Date that its Bylaws
delivered on the Restatement Effective Date pursuant to subsection 4.1
of the Credit Agreement are in full force and effect without
modification or amendment;
3. Resolutions of its Board of Directors approving and
authorizing the execution, delivery, and performance of this
Amendment, certified as of the Third Amendment Effective Date by its
corporate secretary or an assistant secretary as being in full force
and effect without modification or amendment;
4. Signature and incumbency certificates of its officers
executing this Amendment; and
5. Executed copies of this Amendment.
B. On or before the Third Amendment Effective Date, Company shall have
paid to each Lender that delivers an executed counterpart of this Amendment to
Administrative Agent on or before such date a non-refundable fee equal to 0.50%
of the amount of such Lender's outstanding Revolving Loan Commitment on the
Third Amendment Effective Date after giving effect to this Amendment.
C. On or before the Third Amendment Effective Date, Company shall have
paid to Administrative Agent and Arranger all of their reasonable out-of-pocket
costs and expenses in connection with this Amendment and the transactions
related hereto (including, without limitation, reasonable fees and expenses of
their respective counsel).
D. On or before the Third Amendment Effective Date, Lenders shall have
received originally executed copies of one or more favorable written opinions of
counsel reasonably acceptable to Agents, dated the Third Amendment Effective
Date, regarding the (i) due incorporation and good standing of Company, (ii) due
authorization, execution and delivery of this Amendment and the New Notes (as
defined below), (iii) enforceability of this Amendment, the Amended Agreement
and the New Notes under New York law, and (iv) the absence of any violation or
conflicts with New York law, any charter documents or bylaws, the terms of any
material Indebtedness (including Indebtedness under the AXEL Credit Agreement,
Indebtedness under the Senior Subordinated Note Indenture and New Xxxxxxx
Distribution Center Permanent Financing), or any injunction, order or decrees,
resulting from the execution,
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delivery or performance of this Amendment or the Amended Agreement or the New
Notes, and otherwise in form and substance reasonably satisfactory to Agents.
E. On the Third Amendment Effective Date, Company shall have executed
and delivered (i) to each Lender (or to Administrative Agent for that Lender) a
Revolving Note to evidence the Revolving Loans and the Revolving Loan
Commitments of that Lender as in effect on the Third Amendment Effective Date
after giving effect to this Amendment, and (ii) to the Swing Line Lender (or to
Administrative Agent for the Swing Line Lender) a Swing Line Note to evidence
the Swing Line Loans and the Swing Line Loan Commitment of the Swing Line Lender
as in effect on the Third Amendment Effective Date after giving effect to this
Amendment (such Revolving Notes and Swing Line Note, collectively, the "New
Notes"). Each of the parties hereto hereby acknowledges and agrees that (x) each
such Revolving Note is a Revolving Note for all purposes under the Credit
Agreement and the other Loan Documents and that the loans and commitments
evidenced by such Revolving Notes shall constitute Revolving Loans and Revolving
Loan Commitments, respectively, for all purposes under the Credit Agreement and
the other Loan Documents, and (y) such Swing Line Note is the Swing Line Note
for all purposes under the Credit Agreement and the other Loan Documents and
that the loans and commitment evidenced by such Swing Line Note shall constitute
Swing Line Loans and the Swing Line Loan Commitment, respectively, for all
purposes under the Credit Agreement and the other Loan Documents.
F. On or before the Third Amendment Effective Date, all corporate and
other proceedings taken or to be taken in connection with the transactions
contemplated hereby and all documents incidental thereto not previously found
acceptable by Administrative Agent, acting on behalf of Lenders, and by Arranger
and its counsel shall be satisfactory in form and substance to Administrative
Agent and to Arranger and its counsel, and Administrative Agent and Arranger and
its counsel shall have received all such counterpart originals or certified
copies of such documents as Administrative Agent and Arranger may reasonably
request.
Section 3. COMPANY'S REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Amendment and to amend
the Credit Agreement in the manner provided herein, Company represents and
warrants to each Lender that the following statements are true, correct and
complete:
A. Corporate Power and Authority. Company has all requisite corporate
power and authority to enter into this Amendment and the New Notes and to carry
out the transactions contemplated by, and perform its obligations under, the
Amended Agreement and the New Notes.
B. Authorization of Agreements. The execution and delivery of this
Amendment and the New Notes and the performance of the Amended Agreement and the
New Notes have been duly authorized by all necessary corporate action on the
part of Company.
C. No Conflict. The execution and delivery by Company of this
Amendment and the New Notes and the performance by Company of the Amended
Agreement and the New Notes do not and will not (i) violate any provision of any
law or any governmental rule or
8
regulation applicable to Company or any of its Subsidiaries, the Certificate or
Articles of Incorporation or Bylaws of Company or any of its Subsidiaries or any
order, judgment or decree of any court or other agency of government binding on
Company or any of its Subsidiaries, (ii) 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 Company or any of its Subsidiaries, except for any
breach or default which could not reasonably be expected to have a Material
Adverse Effect, (iii) result in or require the creation or imposition of any
Lien upon any of the properties or assets of Company or any of its Subsidiaries
(other than Liens created under any of the Loan Documents in favor of
Administrative Agent on behalf of Lenders), or (iv) require any approval of
stockholders or any approval or consent of any Person under any Contractual
Obligation of Company or any of its Subsidiaries, except for such approvals or
consents which have been obtained on or before the Third Amendment Effective
Date and disclosed in writing to Lenders and such consents the failure of which
to receive could not reasonably be expected to have a Material Adverse Effect.
D. Governmental Consents. The execution and delivery by Company of
this Amendment and the New Notes and the performance by Company of the Amended
Agreement and the New Notes do not and will not require any registration with,
consent or approval of, or notice to, or other action to, with or by, any
federal, state or other governmental authority or regulatory body the failure of
which to receive could not reasonably be expected to cause a Material Adverse
Effect.
E. Binding Obligation. This Amendment, the Amended Agreement and the
New Notes have been duly executed and delivered by Company and are the legally
valid and binding obligations of Company, enforceable against Company in
accordance with their 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.
F. Incorporation of Representations and Warranties From Credit
Agreement. The representations and warranties contained in Section 4 of the
Credit Agreement are and will be true, correct and complete in all material
respects on and as of the Third Amendment Effective Date 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 they were
true, correct and complete in all material respects on and as of such earlier
date.
G. 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 an Event of Default or a Potential Event of Default.
Section 4. ACKNOWLEDGEMENT AND CONSENT
Company is a party to the Company Pledge Agreement, Company Security
Agreement and the Auxiliary Pledge Agreements, in each case as amended through
the Third Amendment Effective Date, pursuant to which Company has created Liens
in favor of Administrative Agent on certain Collateral to secure the
Obligations. Each Subsidiary Guarantor is a party to Subsidiary Guaranty,
Subsidiary Pledge Agreement, Subsidiary Security Agreement
9
and Subsidiary Patent and Trademark Security Agreement, in each case as amended
through the Third Amendment Effective Date, pursuant to which such Subsidiary
Guarantor has (i) guarantied the Obligations and (ii) created Liens in favor of
Administrative Agent on certain Collateral to secure the obligations of such
Subsidiary Guarantor under the Subsidiary Guaranty. Company and Subsidiary
Guarantors are collectively referred to herein as the "Credit Support Parties",
and the Subsidiary Guaranty and Collateral Documents referred to above are
collectively referred to herein as the "Credit Support Documents".
Each Credit Support Party hereby acknowledges that it has reviewed the
terms and provisions of the Credit Agreement and this Amendment and consents to
the amendment of the Credit Agreement effected pursuant to this Amendment. Each
Credit Support Party hereby confirms that each Credit Support Document to which
it is a party or otherwise bound and all Collateral encumbered thereby will
continue to guaranty or secure, as the case may be, to the fullest extent
possible the payment and performance of all "Guarantied Obligations" and
"Secured Obligations," as the case may be (in each case as such terms are
defined in the applicable Credit Support Document), including without limitation
the payment and performance of all such "Guarantied Obligations" or "Secured
Obligations," as the case may be, in respect of the Obligations of Company now
or hereafter existing under or in respect of the Amended Agreement and the Notes
defined therein. Without limiting the generality of the foregoing, each Credit
Support Party hereby acknowledges and confirms the understanding and intent of
such party that, upon the effectiveness of this Amendment, and as a result
thereof, the definition of "Obligations" contained in the Amended Agreement
includes the obligations of Company under the New Notes.
Each Credit Support Party acknowledges and agrees that any of the
Credit Support 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 and shall not be impaired or limited by the
execution or effectiveness of this Amendment. Each Credit Support Party
represents and warrants that all representations and warranties contained in the
Amended Agreement and the Credit Support Documents to which it is a party or
otherwise bound are true, correct and complete in all material respects on and
as of the Third Amendment Effective Date 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 they were true, correct
and complete in all material respects on and as of such earlier date.
Each Credit Support Party acknowledges and agrees that (i)
notwithstanding the conditions to effectiveness set forth in this Amendment,
such Credit Support Party is not required by the terms of the Credit Agreement
or any other Loan Document to consent to the amendments to the Credit Agreement
effected pursuant to this Amendment and (ii) nothing in the Credit Agreement,
this Amendment or any other Loan Document shall be deemed to require the consent
of such Credit Support Party to any future amendments to the Credit Agreement.
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Section 5. MISCELLANEOUS
A. Reference to and Effect on the Credit Agreement and the Other Loan
Documents.
(i) On and after the Third Amendment Effective Date, each
reference in the Credit Agreement to "this Agreement", "hereunder",
"hereof", "herein" or words of like import referring to the Credit
Agreement, and each reference in the other Loan Documents to the
"Credit Agreement", "thereunder", "thereof" or words of like import
referring to the Credit Agreement shall mean and be a reference to the
Amended Agreement.
(ii) Except as specifically amended by this Amendment, the Credit
Agreement and the other Loan Documents shall remain in full force and
effect and are hereby ratified and confirmed.
(iii) The execution, delivery and performance of this Amendment
shall not constitute a waiver of any provision of, or operate as a
waiver of any right, power or remedy of Administrative Agent or any
Lender under, the Credit Agreement or any of the other Loan Documents.
B. Fees and Expenses. Company acknowledges that all costs, fees and
expenses as described in subsection 10.2 of the Credit Agreement incurred by
Administrative Agent, Arranger and their counsel with respect to this Amendment
and the documents and transactions contemplated hereby shall be for the account
of Company.
C. Headings. Section and subsection headings in this Amendment are
included herein for convenience of -------- reference only and shall not
constitute a part of this Amendment for any other purpose or be given any
substantive effect.
D. Applicable Law. 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 INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING
WITHOUT LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF
NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
E. Counterparts; Effectiveness. This Amendment may be executed in any
number of counterparts and by different parties hereto in separate 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;
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document. This Amendment (other than the provisions of Section 1
hereof, the effectiveness of which is governed by Section 2 hereof) shall become
effective upon the execution of a counterpart hereof by Company, Lenders and
each of the Credit Support Parties and receipt by Company and Administrative
Agent of written or telephonic notification of such execution and authorization
of delivery thereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
AMSCAN HOLDINGS, INC.
By: /s/Xxxxxxx X. Xxxxxxxx
-----------------------------------------
Title: Vice President
AMSCAN INC., (for purposes of Section 4
only) as a Credit Support Party
By: /s/Xxxxxxx X. Xxxxxxxx
-----------------------------------------
Title: Vice President
AM-SOURCE, LLC, (for purposes of Section 4
only) as a Credit Support Party
By: /s/Xxxxxxx X. Xxxxxxxx
-----------------------------------------
Title: Vice President of Amscan
Holdings, Inc., as Member
TRISAR, INC., (for purposes of Section 4
only) as a Credit Support Party
By: /s/Xxxxxxx X. Xxxxxxxx
-----------------------------------------
Title: Assistant Treasurer
M&D BALLOONS, INC., (for purposes of Section
4 only) as a Credit Support Party
By: /s/Xxxxxxx X. Xxxxxxxx
----------------------------------------
Title: Vice President
S-1
JCS REALTY CORP., (for purposes of Section
4 only) as a Credit Support Party
By: /s/Xxxxxxx X. Xxxxxxxx
----------------------------------------
Title: Assistant Treasurer
SSY REALTY CORP., (for purposes of Section
4 only) as a Credit Support Party
By: /s/Xxxxxxx X. Xxxxxxxx
----------------------------------------
Title: Assistant Treasurer
ANAGRAM INTERNATIONAL, INC., (for purposes
of Section 4 only) as a Credit Support Party
By: /s/Xxxxxxx X. Xxxxxxxx
----------------------------------------
Title: Vice President
ANAGRAM INTERNATIONAL HOLDINGS, INC., (for
purposes of Section 4 only) as a Credit
Support Party
By: /s/Xxxxxxx X. Xxxxxxxx
----------------------------------------
Title: Vice President
S-2
ANAGRAM INTERNATIONAL, LLC, (for purposes of
Section 4 only) as a Credit Support Party
By: Anagram International, Inc., Member
By: /s/Xxxxxxx X. Xxxxxxxx
----------------------------------------
Title: Manager
and
By: Anagram International Holdings, Inc.,
Member
By: /s/Xxxxxxx X. Xxxxxxxx
----------------------------------------
Title: Vice President
ANAGRAM EDEN PRAIRIE PROPERTY HOLDINGS
LLC, (for purposes of Section 4 only) as a
Credit Support Party
By: Anagram International, Inc., Sole Member
By: /s/Xxxxxxx X. Xxxxxxxx
----------------------------------------
Title: Vice President of Amscan
Holdings, Inc. as Member
S-3
XXXXXXX XXXXX CREDIT PARTNERS L.P.,
individually and as Arranger and Syndication
Agent
By: /s/Xxxxxxxxx Xxxxxxx
----------------------------------------
Title: Authorized Signatory
S-4
FLEET NATIONAL BANK, individually and as
Administrative Agent
By: /s/ Xxxxxxx Xxxxxx
----------------------------------------
Title: Director
S-5
GENERAL ELECTRIC CAPITAL CORPORATION,
as a Lender
By: /s/Xxxxxxx Xxxx
----------------------------------------
Title: Xxxxxxx Xxxx
Duly Authorized Signatory
S-6
TRANSAMERICA BUSINESS CAPITAL CORPORATION,
as a Lender By:
By: /s/ Xxxxxxx Xxxxxxxxxx
----------------------------------------
Title: Senior Vice President
S-7
ANNEX A
FORM OF NOTICE OF BORROWING
See attached.
A-1
ANNEX A
[FORM OF NOTICE OF BORROWING]
NOTICE OF BORROWING
Pursuant to that certain Amended and Restated Revolving Loan Credit
Agreement dated as of September 17, 1998, as amended, supplemented or otherwise
modified to the date hereof (said Credit Agreement, as so amended, supplemented
or otherwise modified, being the "Credit Agreement", the terms defined therein
and not otherwise defined herein being used herein as therein defined), by and
among AMSCAN HOLDINGS, INC., a Delaware corporation ("Company"), the financial
institutions listed therein as Lenders ("Lenders"), XXXXXXX XXXXX CREDIT
PARTNERS L.P., as Arranger and Syndication Agent, and FLEET NATIONAL BANK, as
administrative agent for Lenders ("Administrative Agent"), this represents
Company's request to borrow as follows:
1. Date of borrowing: ___________________, _________
-----------------
2. Amount of borrowing: $___________________
-------------------
3. Lender(s): a. Lenders, in accordance with their
---------- applicable Pro Rata Shares
b. Swing Line Lender
4. Type of Loans: a. Revolving Loans
------------- b. Swing Line Loan
5. Interest rate option: a. Base Rate Loan(s)
-------------------- b. Eurodollar Rate Loans with an
initial Interest Period of
____________ month(s)
The proceeds of such Loans are to be deposited in Company's account at
Administrative Agent.
The undersigned officer, to the best of his or her knowledge, and
Company certify that:
(i) The representations and warranties contained in the Credit
Agreement and the other Loan Documents are true, correct and complete
in all material respects on and as of the date hereof to the same
extent as though made on and as of the date hereof, except to the
extent such representations and warranties specifically relate to an
earlier date, in which case such representations and warranties were
true, correct and complete in all material respects on and as of such
earlier date;
(ii) No event has occurred and is continuing or would result from the
consummation of the borrowing contemplated hereby that would
constitute an Event of Default or a Potential Event of Default;
A-2
(iii) Company has performed in all material respects all agreements
and satisfied all conditions which the Credit Agreement provides shall
be performed or satisfied by it on or before the date hereof;
(iv) The Total Utilization of the Revolving Loan Commitments does not
exceed the Revolving Loan Commitments in effect as of the date of
borrowing;
(v) The Total Utilization of the Revolving Loan Commitments does not
exceed the sum of the Borrowing Base in effect as of the date of
borrowing plus (1) all amounts up to $23,500,000 spent on the Anagram
Acquisition and (2) all amounts spent on or before the date of
borrowing on Permitted Business Acquisitions (in each case other than
amounts funded through equity issuance or indebtedness other than
Loans);
(vi) [Company does not have more than $5,000,000 of Cash and Cash
Equivalents (both before and after giving effect to the requested
Loans)]1; and
(vii) None of the proceeds of the requested Loans shall be applied
directly or indirectly to repay principal on AXELs unless Company is
in pro forma compliance with subsection 7.6A of the Credit Agreement
(as calculated in accordance with the proviso contained in the
definition of "Consolidated Fixed Charges") on the date such repayment
of principal on AXELs is made).
DATED: ____________________ AMSCAN HOLDINGS, INC.
By: __________________________
Title: ________________________
1 The foregoing certification shall not be required for the requested Loans if
the proceeds of such requested Loans are applied to make scheduled payments
of principal on the AXELs on March 31, 2003 and June 30, 2003 in accordance
with and to the extent required under subsection 2.4A of the AXEL Credit
Agreement, in each case so long as Company is in pro forma compliance with
subsection 7.6A of the Credit Agreement (as calculated in accordance with the
proviso contained in the definition of "Consolidated Fixed Charges") on the
date such repayment of principal on AXELs is made.
X-0
XXXXX X
XXXXXXXXX XX. 0 TO THE FORM OF COMPLIANCE CERTIFICATE
See attached.
X-0
XXXXX X
XXXXXXXXXX XX. 0
TO COMPLIANCE CERTIFICATE
This Attachment No. 1 is attached to and made a part of a Compliance
Certificate dated as of ____________, 200_ and pertains to the period from
____________, 200_ to ____________, 200_. Subsection references herein relate to
subsections of the Credit Agreement.
A. INDEBTEDNESS
1.a. Indebtedness permitted under subsection
7.1(iii) of any Foreign Subsidiaries to
Company and its Domestic Subsidiaries: $_____________
b. Maximum Indebtedness under subsection
7.1(iii) of any Foreign Subsidiaries to
Company and its Domestic Subsidiaries: $ 2,000,000
2.a. Indebtedness permitted under subsection
7.1(v) evidenced by Senior Subordinated
Notes: $_____________
b. Maximum permitted under subsection 7.1(v): $ 110,000,000
3.a. Indebtedness permitted under subsection
7.1(vi) with respect to purchase money
Indebtedness incurred to finance the
purchase price of specific assets and
Capital Leases and non-recourse Indebtedness
in respect of new Subsidiaries: $______________
b. Maximum permitted under subsection 7.1(vi): $ 5,000,000
4.a. Indebtedness permitted under subsection
7.1(vii) of Foreign Subsidiaries with
respect to overdraft facilities with a
foreign bank used to fund working capital
obligations of such Foreign Subsidiary: $______________
b. Maximum permitted under subsection 7.1(vii): $ 2,000,000
5.a. Additional unsecured subordinated
Indebtedness permitted under subsection
7.1(viii): $______________
b. Maximum permitted under subsection 7.1(viii): $ 90,000,000
B-2
6. Indebtedness permitted under subsection
7.1(ix) with respect to Indebtedness
replacing of refinancing any Indebtedness
permitted under subsections 7.1(iv), (vi),
(vii) or (xi) (describe Indebtedness
refinanced and the maximum amount
permitted): $_______________
7.a. AXELs permitted under subsection 7.1(x) $_______________
b. Maximum AXELs permitted under subsection
7.1(x) $ 157,000,000
8.a. Other Indebtedness permitted under
subsection 7.1(xi): $_______________
b. Maximum permitted under subsection 7.1(xi): $ 5,000,000
B. LIENS
1.a. Indebtedness secured by Liens permitted
under subsection 7.2A(v): $_______________
b. Maximum amount of Indebtedness secured by
Liens under subsection 7.2A(v): $ 5,000,000
C. INVESTMENTS
1.a. Equity Investments in wholly-owned Foreign
Subsidiaries by Company and its wholly-owned
Domestic Subsidiaries: $_______________
b. Maximum equity investments permitted under
subsection 7.3(vii): $ 7,000,000
c. Investments in wholly-owned Foreign
Subsidiaries by Company and its wholly-owned
Domestic Subsidiaries by loan or advance: $_______________
d. Maximum loan or advances permitted under
subsection 7.3(vii): $_______________
2.a Other Investments permitted under subsection
7.3(viii): $_______________
b. Maximum permitted under subsection 7.3(viii): $ 7,000,000
3. Investment of proceeds of the issuance of
Company Common Stock in private issuances: $_______________
B-3
D. CONTINGENT OBLIGATIONS
1.a. Contingent Obligations of Company and its
Domestic Subsidiaries in respect of
Commercial Letters of Credit permitted under
subsection 7.4(iii): $_______________
b. Maximum permitted under subsection 7.4(iii): $ 3,000,000
2.a. Contingent Obligations of Company and its
Domestic Subsidiaries in respect of Standby
Letters of Credit permitted under subsection
7.4(iii): $_______________
b. Maximum permitted under subsection 7.4(iii): $ 2,000,000
3.a. Contingent Obligations of Foreign
Subsidiaries in respect of Commercial
Letters of Credit permitted under subsection
7.4(iii): $_______________
b. Maximum permitted under subsection 7.4(iii): $ 2,000,000
4.a. Contingent Obligations in respect of
customary purchase price adjustments and
contingent earnout obligations incurred in
connection with Asset Sales: $_______________
b. Maximum permitted for purchase price
adjustments and contingent earnouts under
subsection 7.4(iv): $ 5,000,000
5.a. Contingent Obligations under guarantees of
obligations of suppliers, customers,
franchisees and licensees permitted under
subsection 7.4(v): $_______________
b. Maximum permitted under subsection 7.4(v): $ 1,000,000
6.a. Other Contingent Obligations: $_______________
b. Maximum permitted under subsection 7.4(viii): $ 5,000,000
E. RESTRICTED JUNIOR PAYMENTS
1.a. Restricted Junior Payments in respect of
repurchases of stock and options from
officers, directors and employees (list
amounts for current year and title of person
to whom payment made and aggregate of all
payments since the Closing Date): $_______________
B-4
b. Maximum amount permitted under subsection
7.5 for current or former chief executive
officer: $5,000,000/year
c. for other officers, directors and employees
as a group: $2,500,000/year
d. aggregate for all such Persons from Closing
Date: $10,000,000
F. MINIMUM FIXED CHARGE COVERAGE RATIO (for the
four-Fiscal Quarter period ending _____________, 20__)
1. Consolidated Net Income: $_______________
2. Consolidated Interest Expense: $_______________
3. Provisions for taxes based on income: $_______________
4. Total depreciation expense: $_______________
5. Total amortization expense: $_______________
6. Non-recurring expenses and charges relating
to the transactions contemplated by the
Related Agreements, the Loan Documents and
the Anagram Acquisition Agreement, including
special bonuses payable in connection
therewith: $_______________
7. Other non-cash items reducing Consolidated
Net Income (including provisions for
minority interests) but only to the extent
such items have been deducted from operating
income for such period in determining
Consolidated Net Income: $_______________
8. Other non-cash items increasing Consolidated
Net Income: $_______________
9. Consolidated Adjusted EBITDA (1+2+3+4+5+6
+7+8): $_______________
10. Consolidated Cash Interest Expense: $_______________
11. Provisions for taxes based on income: $_______________
B-5
12. Scheduled repayments of principal on the
Loans and other Indebtedness (for any period
in which any proceeds from Revolving Loans
or Swing Line Loans are applied directly or
indirectly to repay principal on AXELs,
insert the amount of scheduled repayments of
principal on the Loans and other
Indebtedness for the 365-day period ending
on the 92nd day after such proceeds are so
applied; provided that, solely for purposes
of calculating Consolidated Fixed Charges
for the period ending June 30, 2003, if
proceeds of Revolving Loans or Swing Line
Loans are applied to the scheduled repayment
of AXELs due June 30, 2003, the 365-day
period referred to above shall end on the
90th day after such proceeds are so applied
(with the effect that the scheduled
repayment of AXELs due September 30, 2003
shall not be included for purposes of
calculating Consolidated Fixed Charges for
the period ending June 30, 2003): $_______________
13. Consolidated Capital Expenditures (other
than Consolidated Capital Expenditures
permitted under clause (ii) of the last
paragraph of subsection 7.8 for the
acquisition of land for, and the development
and construction of, the New Xxxxxxx
Distribution Center and capitalized interest
in respect thereof) to the extent paid in
cash: $_______________
14. Consolidated Fixed Charges (10+11+12+13): $_______________
15. Fixed Charge Coverage Ratio (9):(14): ____:1.00
16. Minimum ratio required under subsection 7.6A: ____:1.00
G. MAXIMUM LEVERAGE RATIO (as of _____________, 20__)
1. Consolidated Total Debt: $_______________
2. Consolidated Adjusted EBITDA (F.9 above): $_______________
3. Leverage Ratio (1):(2): ____:1.00
4. Maximum ratio permitted under subsection 7.6C: ____:1.00
H. FUNDAMENTAL CHANGES
1.a. Aggregate fair market value of assets sold
in any one or more Asset Sales after Closing
Date in one or more transactions permitted
under subsection 7.7(v) excluding the sale
of the Xxxxxxx, New York, Melbourne,
Australia, and Montreal, Quebec properties: $_______________
B-6
b. Maximum permitted under subsection 7.7(v): $ 1,000,000
2.a. Aggregate expenditures on Permitted Business
Acquisitions made after the Closing Date in
one or more transactions permitted under
subsection 7.7(vi): $_______________
b. Maximum permitted under subsection 7.7(vi)
(other than from proceeds of additional
equity, additional AXELs or additional
Subordinated Indebtedness) (for such amounts
show pro forma compliance with the financial
covenants under subsection 7.6 and pro forma
Consolidated Senior Leverage Ratio
compliance): $_______________
I. CONSOLIDATED CAPITAL EXPENDITURES
1.a. Aggregate amount of Consolidated Capital
Expenditures for Fiscal Year-to-date: $_______________
b. Maximum amount of Consolidated Capital
Expenditures permitted under subsection 7.8
for Fiscal Year: $_______________
2. Aggregate amount of Consolidated Capital
Expenditures for Fiscal Year-to-date funded
from additional equity after the Restatement
Effective Date: $_______________
3.a Aggregate amount of Consolidated Capital
Expenditures used to purchase a fee simple
interest in the land for the New Xxxxxxx
Distribution Center and for the development
and construction of improvements thereon: $_______________
b. Maximum amount permitted under subsection 7.8: $ 27,000,000
4.a Aggregate amount of Consolidated Capital
Expenditures funded from the issuance of
additional Company common stock in a private
issuance after the Second Amendment
Effective Date: $_______________
b. Minimum amount permitted under subsection
7.8 $ 6,000,000
B-7
J. Maximum Senior Leverage Ratio
1. Consolidated Senior Total Debt: $_______________
2. Consolidated Adjusted EBITDA (F.9 above): $_______________
3. Senior Leverage Ratio (1):(2): ____:1.00
4. Maximum ratio permitted under subsection
7.7(vi): ____:1.00
B-8
ANNEX C
SCHEDULE 2.1B TO THE CREDIT AGREEMENT
Revolving Loan Commitments and Pro Rata Shares
----------------------------------------------
as of the Third Amendment Effective Date
----------------------------------------
A. Before giving effect to the $10,000,000 reduction of the Revolving Loan
Commitments pursuant to subsection 2.4A(iii)(i) of the Credit Agreement, as
amended by the Third Amendment:
Pro Rata
Lender Commitment Share
------ ---------- ---------
Fleet National Bank $14,000,000 28%
General Electric Capital Corp. $12,000,000 24%
Xxxxxxx Xxxxx $12,000,000 24%
Transamerica Business Capital Corp. $12,000,000 24%
Total Commitment: $50,000,000
B. After giving effect to the $10,000,000 reduction of the Revolving Loan
Commitments pursuant to subsection 2.4A(iii)(i) of the Credit Agreement, as
amended by the Third Amendment:
Pro Rata
Lender Commitment Share
------ ---------- ---------
Fleet National Bank $11,200,000 28%
General Electric Capital Corp. $ 9,600,000 24%
Xxxxxxx Sachs $ 9,600,000 24%
Transamerica Business Capital Corp. $ 9,600,000 24%
Total Commitment: $40,000,000
C-1
