AGREEMENT
AGREEMENT
THIS
AGREEMENT (this “Agreement”)
is made as of June 1, 2010, by and among:
(a) GALLARUS
MEDIA HOLDINGS, INC., a Delaware corporation (“Holdings”);
(b) NETWORK
COMMUNICATIONS, INC., a Georgia corporation, in its capacities as “Borrower”
under the Senior Revolving Loan Agreement (as defined below) (in such capacity,
“Revolving
Borrower”) and “Borrower” under the Senior Term Loan Agreement (as
defined below) (in such capacity, “Term
Borrower”; each of Revolving Borrower and Term Borrower, “Borrower”;
each of Holdings and Borrower, a “Credit
Party” and, collectively, the “Credit
Parties”);
(c) TORONTO
DOMINION (TEXAS) LLC, in its capacities as “Administrative Agent” and
“Collateral Agent” under the Senior Revolving Loan Agreement and “Revolving Loan
Administrative Agent” under the Senior Guarantee, Collateral, and Intercreditor
Agreement (in such capacities, “Revolving
Agent”);
(d) TORONTO
DOMINION (TEXAS) LLC, in its capacities as “Administrative Agent” and
“Collateral Agent” under the Senior Term Loan Agreement and Term Loan
Administrative Agent under the Senior Guarantee, Collateral, and Intercreditor
Agreement (in such capacities, “Term
Agent”);
(e) TORONTO
DOMINION (TEXAS) LLC, in its capacity as “Collateral Agent,” under the Senior
Guarantee, Collateral, and Intercreditor Agreement (as defined below) (in such
capacity, “Collateral
Agent”);
(f) TORONTO
DOMINION (TEXAS LLC, in its capacity as “Swingline Lender” under the Senior
Revolving Loan Agreement (“Swingline
Lender”);
(g) THE
TORONTO DOMINION BANK, NEW YORK BRANCH, in its capacity as “Issuing Bank” under
the Senior Revolving Loan Agreement (“Issuing
Bank”);
(h) the
Persons party hereto as “Senior Revolving Lenders” (each, a “Senior Revolving
Lender” and, collectively, the “Senior Revolving
Lenders”);
(i) the
Persons party hereto as “Senior Term Lenders” (each, a “Senior Term
Lender” and, collectively, the “Senior Term
Lenders”; each of the Senior Revolving Lenders and the Senior Term
Lenders, a “Senior
Lender” and, collectively, the “Senior
Lenders”).
RECITALS:
WHEREAS,
Holdings, Revolving Borrower, Revolving Agent, the Senior Revolving Lenders,
Swingline Lender, and Issuing Bank are party to that certain Revolving Loan
Agreement dated as of July 20, 2007, as amended by that certain First Amendment
to Revolving Loan Credit Agreement dated as of June 10, 2008, that certain
Second Amendment to Revolving Loan Credit Agreement dated as of December 4,
2008, and that certain Third Amendment to Revolving Loan Credit Agreement dated
as of May 4, 2009 (as the same may have been
amended,
restated, supplemented, or otherwise modified from time to time, the “Senior Revolving
Loan Agreement”);
WHEREAS,
Holdings, Term Borrower, Term Agent, and the Senior Term Lenders are party to
that certain Term Loan Agreement dated as of July 20, 2007, (as the same may
have been amended, restated, supplemented, or otherwise modified from time to
time, the “Senior Term Loan
Agreement”; each of the Senior Revolving Loan Agreement and the Senior
Term Loan Agreement, a “Senior Loan
Agreement” and, collectively, the “Senior Loan
Agreements”);
WHEREAS,
Holdings, Borrower, Revolving Agent, Term Agent, and Collateral Agent are party
to that certain Guarantee, Collateral and Intercreditor Agreement dated as of
July 20, 2007 (as the same may have been amended, restated, supplemented, or
otherwise modified from time to time, the “Senior Guarantee,
Collateral, and Intercreditor Agreement”; each of the Senior Revolving
Loan Agreement, the Senior Guarantee, Collateral, and Intercreditor Agreement,
and the “Loan Documents” (as such term is defined and used in the Senior
Revolving Loan Agreement), a “Senior Revolving
Loan Document” and, collectively, the “Senior Revolving
Loan Documents”; each of the Senior Term Loan Agreement, the Senior
Guarantee, Collateral, and Intercreditor Agreement, and the “Loan Documents” (as
such term is defined and used in the Senior Term Loan Agreement), a “Senior Term Loan
Document” and, collectively, the “Senior Term Loan
Documents”; each of the Senior Revolving Loan Documents and the Senior
Term Loan Documents, a “Senior Loan
Document” and, collectively, the “Senior Loan
Documents”);
WHEREAS,
Borrower issued its 10-3/4% Senior Notes due 2013 in an initial aggregate
principal amount of $175,000,000 (the “Senior
Notes”), pursuant to that certain Indenture dated as of November 30,
2005, by and between Borrower and Xxxxx Fargo Bank N.A., in its capacity as
“Trustee” (“Trustee”);
such indenture, as the same may have been amended, restated, supplemented, or
otherwise modified from time to time, the “Senior Notes
Indenture”);
WHEREAS,
Borrower has notified Agent and the Senior Lenders that it is currently in
discussions with certain holders of the Senior Notes regarding a potential
restructuring of the Senior Notes and a deleveraging of the Borrower’s balance
sheet (the “Senior Notes
Restructuring”);
WHEREAS,
Borrower has notified Agent and the Senior Lenders that Borrower (a) believes it
is not in Borrower’s best interests to make the payment of interest on the
Senior Notes due on June 1, 2010, as required by the terms of the Senior Notes
Indenture and (b) does not intend to make such payment (the failure to make such
payment, when and if it occurs, the “Senior Notes
Interest Payment Default”);
WHEREAS,
the Senior Notes Interest Payment Default will constitute an Event of Default
under clause (f) of Article VII of the Senior Revolving Loan Agreement (the
“Specified
Senior Revolving Loan Event of Default”);
WHEREAS,
the Senior Notes Interest Payment Default will constitute an Event of Default
under the clause (f) of Article VII of the Senior Term Loan Agreement (the
“Specified
Senior Term Loan Event of Default”);
WHEREAS,
the existence or occurrence of (i) the Specified Senior Revolving Loan Event of
Default, (ii) the Specified Senior Term Loan Event of Default, and (iii) other
Defaults and/or Events of Default and potential Defaults and/or Events of
Default as specified on Schedule A, attached
hereto and made a part hereof may, in turn, cause other “Events of Default”
under the Senior Loan Documents to occur on account of cross-defaults to other
agreements evidencing indebtedness of a Credit Party (each of such other “Events
of Default” under the Senior Loan Documents, solely to the extent occurring,
directly or indirectly, on account of the occurrence of the Senior Notes
Interest Payment Default, the Specified Senior Revolving Loan Event of Default,
the Specified Senior Term Loan Event of Default, or each Default or Event of
Default specified on Schedule A, a “Specified Senior
Event of Default” and, collectively, the “Specified Senior
Events of Default”);
WHEREAS,
to facilitate the Senior Notes Restructuring and any related restructuring of
any Credit Party’s balance sheet, each Credit Party has requested Revolving
Agent, Term Agent, Collateral Agent, the Senior Lenders, Swingline Lender, and
Issuing Bank to forbear certain rights they may have with respect to Controlled
Accounts (as defined below) in respect of the Specified Senior Events of
Default, and Revolving Agent, Term Agent, Collateral Agent, Senior Revolving
Lenders, Senior Term Lenders, Swingline Lender, and Issuing Bank are willing to
do so, but only strictly on the terms and conditions set forth
herein.
NOW,
THEREFORE, for and in consideration of the above premises and other good and
valuable consideration, the receipt and sufficiency of which hereby is
acknowledged by the parties hereto, each Credit Party, Revolving Agent, Term
Agent, and Collateral Agent, the Senior Revolving Lenders party hereto, the
Senior Term Lenders party hereto, Swingline Lender, and Issuing Bank hereby
covenant and agree as follows:
1. Definitions; Incorporation
of Recitals.
(a) Unless
otherwise specifically defined herein, each term used herein which is defined in
a Senior Loan Agreement shall have the meaning assigned to such term
therein. Each reference to “hereof,” “hereunder,” “herein,” and
“hereby” and each other similar reference and each reference to “this Agreement”
and each other similar reference contained in any Senior Loan Document shall
from and after the date hereof refer to such Senior Loan Document as
supplemented and modified hereby, to the extent applicable.
(b) Each of
the Recitals to this Agreement is incorporated herein by this
reference.
2. Specified Senior Events of
Default; Certain Acknowledgments by Credit Parties. Each
Credit Party hereby acknowledges and agrees with respect to each of the
Specified Senior Events of Default (when and if it occurs) that (a) such
Specified Senior Event of Default will constitute a continuing “Event of
Default” under each of the Senior Loan Agreements and that each Credit Party
hereby is deemed to have received adequate and sufficient notice thereof;
(b)
as a
result of and during the continuance of the Specified Senior Events of Default,
none of Revolving Agent, any Senior Revolving Lender, Swingline Lender, nor
Issuing Bank has any obligation to make or issue any advances, loans, financial
accommodations, or extensions of credit to any Credit Party under any Senior
Revolving Loan Document; (c) as a result of the Specified Senior Events of
Default, none of Revolving Agent, Term Agent, Collateral Agent, any Senior
Revolving Lender, any Senior Term Lender, Swingline Lender, or Issuing Bank will
have any obligation to forbear the exercise of any of its rights or remedies
under any Senior Loan Documents to which it is a party or applicable law; and
(d) as a result of the Specified Senior Events of Default, each of Revolving
Agent, Term Agent, and Collateral Agent, the Senior Revolving Lenders, any
Senior Term Lender, Swingline Lender, and Issuing Bank will have the right to
exercise each and every right and remedy afforded it under and in accordance
with the terms of the Senior Loan Documents to which it is a party and
applicable law.
3. No Exercise of Certain
Rights During Specified Period.
(a) Notwithstanding
the acknowledgments contained in Section 2 hereof and notwithstanding any term
or provision of the Senior Guarantee, Collateral, and Intercreditor Agreement or
any deposit account control agreement or other Senior Loan Document, as long as
the Specified Period (as defined below) has not terminated or expired, each of
Revolving Agent, Collateral Agent, the Senior Revolving Lenders, the Senior Term
Lenders, Swingline Lender, and Issuing Bank agrees that, whether individually,
jointly, or severally, it shall not exercise, or direct the exercise of, vote to
exercise, or consent to or approve the exercise of, any right of any Revolving
Agent, Term Agent, Collateral Agent, Senior Revolving Lender, or Senior Term
Lender to (x) setoff against, (y) direct the disposition of, and/or (z) prevent
or otherwise limit any Credit Party’s access to (whether by delivery of any
notice to any depository bank or otherwise), funds on deposit in any deposit
account which is owned by any Credit Party and over which Collateral Agent has
control (as such term is defined and used in the Uniform Commercial Code as in
effect in any applicable jurisdiction; each such deposit account, a “Controlled
Account”), without first having given 72 hours written notice (a “72 Hour
Notice”) to the applicable Credit Party of its intention to exercise such
right (which 72-hour period shall be inclusive of, and not in addition to, any
notice period which may be required under any document or agreement relating to
the exercise of such rights). Any such 72 Hour Notice shall include a
copy of any proposed written notice to any depository bank (a “Depository
Notice”) regarding a Controlled Account it being agreed that in no event
will any of the Revolving Agent, Term Agent, Collateral Agent, the Senior
Revolving Lenders, the Senior Term Lenders, Swingline Lender or Issuing Bank
send a Depository Notice to any depository bank regarding a Controlled Account
which instructs such depository bank to restrict access to such Controlled
Account prior to the expiration of the 72-hour period contemplated by any such
72 Hour Notice. Each 72 Hour Notice and Depository Notice shall be
sent to the relevant Credit Parties in accordance with the Senior Loan
Agreements with email copies sent substantially simultaneously to each of Xxxxxx
XxXxxxxx, Xxxxxxxx Xxxxx and Xxxxxx Xxxxx Xxxxxx at the following email
addresses: xxxxxxxxx@xxx.xxx,
xxxxxxxx.xxxxx@xxxxxxxx.xxx,
xxxxxx.xxxxxxxxxxx@xxxxxxxx.xxx. .
(b) As used
in this Agreement, the term “Specified
Period” means the period commencing upon the Effective Date (as defined
in Section 17) and ending, automatically and without notice to any person or
entity, on the occurrence of a Termination Event (as defined
below).
(c) As used
in this Agreement, each of the following shall constitute a “Termination
Event”: (i) 5:00 p.m., New York time, on June 20, 2010, (ii)
the passage of 72 hours after delivery of a 72 Hour Notice to any Credit Party
under and in accordance with Section 3(a) above; (iii) the payment of any
amount, on or after the Effective Date, by or on behalf of any Credit Party to
or for the account or benefit of any holder of any Senior Note, whether as
principal, interest, fees, or otherwise (but excluding the payment of
professional advisor fees or attorney fees and expenses if otherwise permitted
pursuant to Section 6(c) below); or (iv) the commencement by or against any
Credit Party (or any of its respective subsidiaries) of a case under Title 11 of
the United States Code or the filing of any involuntary petition against any
Credit Party (or any of its respective subsidiaries), seeking the commence of
such case.
4. Reservation of
Rights.
(a) Each
Credit Party acknowledges and agrees that nothing in this Agreement constitutes
any waiver (whether expressed or implied or arising through course of conduct or
course of dealing) of any Specified Senior Event of Default or any other
“Default” or “Event of Default” which may be in existence under any Senior Loan
Document. Except as otherwise expressly stated herein (and, then,
only during the Specified Period), the agreements of Revolving Agent, Term
Agent, Collateral Agent, the Senior Revolving Lenders, the Senior Term Lenders,
Swingline Lender, and Issuing Bank hereunder are made without prejudice to any
rights, remedies, or powers which any of them may have, individually or
collectively, whether arising at law or in equity or under the terms of the
Senior Loan Documents to which it is a party, as a result of the Specified
Senior Events of Default or any other “Default” or “Event of Default” under any
Senior Loan Document to which it is a party, all of which are hereby expressly
reserved and retained in full.
(b) None of
Revolving Agent, Term Agent, Collateral Agent, the Senior Revolving Lenders, the
Senior Term Lenders, Swingline Lender, or Issuing Bank shall have any obligation
to forbear the exercise or enforcement of any of its respective rights,
remedies, or powers with respect to any Controlled Account after the termination
or expiration of the Specified Period. Immediately upon the
termination or expiration of the Specified Period, the agreements of Revolver
Agent, Term Agent, Collateral Agent, the Senior Revolving Lenders, the Senior
Term Lenders, Swingline Lender, and Issuing Bank set forth in Section 3 shall,
automatically and without notice to any Person, terminate and be of no further
force or effect, and each of them may take such actions and exercise such rights
and remedies as they may elect in accordance with and to the extent permitted by
the terms of the Senior Loan Documents to which they are a party and applicable
law.
5. Representations and
Warranties. To induce each of Revolving Agent, Term Agent,
Collateral Agent, the Senior Revolving Lenders, the Senior Term Lenders,
Swingline Lender, and Issuing Bank to enter into this Agreement, each Credit
Party hereby represents and warrants to each of them on the Effective Date as
follows (with each of the following representations and warranties surviving the
effectiveness of this Agreement and the expiration or termination of the
Specified Period and this Agreement):
(a) Such
Credit Party has all requisite corporate power and authority to execute and
deliver this Agreement and to perform its obligations hereunder;
(b) Such
Credit Party’s execution and delivery of this Agreement and the performance of
its obligations hereunder have been duly authorized by all requisite corporate
and, if required, stockholder action;
(c) This
Agreement has been duly executed and delivered by such Credit Party and
constitutes a legal, valid, and binding obligation of such Credit Party,
enforceable against such Credit Party in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium, or other laws
affecting creditors’ rights generally and subject to general principles of
equity, regardless of whether considered in a proceeding in equity or at
law;
(d) As of the
Effective Date, no “Event of Default” under any Senior Loan Document exists and
no Credit Party anticipates as of the Effective Date any “Event of Default”
under any Senior Loan Document to occur before the termination or expiration of
the Specified Period (other than Specified Senior Events of
Default);
(e) As of May
28, 2010, (i) the aggregate outstanding principal amount of all “Loans” under
the Senior Revolving Loan Agreement is $6,000,000.00; (ii) the aggregate “L/C
Exposure” existing under the Senior Revolving Loan Agreement is $0.00; and (iii)
the aggregate outstanding principal amount of all “Loans” under the Senior Term
Loan Agreement is $68,174,992.40; and
(f) Schedule B, attached
hereto and made a part hereof, sets forth the account number of each Credit
Party’s deposit accounts, together with the name and address of the depository
institution at which each such deposit account is maintained, a brief
description of the purposes to which such Credit Party or subsidiary puts each
such deposit account (e.g., payroll, benefits, operating account, disbursement
account, etc.), and the account balance of each such deposit account as of May
28, 2010.
6. Certain Covenants and
Agreements.
(a) No Further Extensions of
Credit; Reduction of Revolving Credit Commitment.
(i) Each
Credit Party and each of Revolving Agent, Collateral Agent, the Senior Revolving
Lenders, Swingline Lender, and Issuing Bank agrees that, on and after the
Effective Date and continuing until each of the Specified Senior Revolving Loan
Events of Default have been cured or waived, none of Revolving Agent, Collateral
Agent, any Senior Revolving Lender, Swingline Lender, or Issuing Bank shall have
any obligation under any Senior Revolving Loan Document to make any loans or
advance, to issue any letter of credit, or otherwise to make or extend any
financial accommodation or extension of credit to any Credit Party under the
Senior Revolving Loan Documents unless the applicable party otherwise agrees to
do so in its sole and absolute discretion. In the event any such
loan, advance, letter of credit,
financial
accommodation, or extension of credit is made or issued, as applicable, the same
shall not constitute any waiver of the applicable entities’ rights under this
clause (a), under this Agreement, or under any Senior Revolving Loan Document
and shall not constitute grounds for any Credit Party to anticipate that any
further loan, advance, letter of credit, financial accommodation, or extension
of credit shall be made or issued in the future, except strictly in accordance
with the terms of the Senior Revolving Loan Documents.
(ii) Each
of the Credit Parties, Revolving Agent, Collateral Agent, the Senior Revolving
Lenders, Swingline Lender, and Issuing Bank acknowledges and agrees that, any
other term or provision of the Senior Revolving Loan Agreement or any other
Senior Revolving Loan Document to the contrary notwithstanding, the Revolving
Credit Commitment is reduced, effective upon the Effective Date, to $6,000,000,
such reduction to be applied to the Revolving Credit Commitment of each of the
Senior Revolving Lenders on a pro rata basis.
(b) Delivery of Weekly Cash Flow
Budget. During the Specified Period, Holdings agrees to
deliver to Revolving Agent and Term Agent by 12:00 p.m. (noon), New York, time,
on Friday of each calendar week (or if any such Friday is not a business day,
the immediately following business day), commencing on June 4, 2010, a written
cash flow budget for Holdings and its subsidiaries for the 13-week period
commencing on the immediately following Monday (each, a “Cash Flow
Budget”), which Cash Flow Budget shall (i) be presented in a form
substantially similar to the form previously delivered to Revolving Agent, Term
Agent, and Collateral Agent, (ii) include such detail as reasonably required
from time to time by Revolving Agent or Term Agent but which shall contain, at a
minimum, budgeted weekly cash flow from operations, budgeted weekly cash
receipts, budgeted weekly cash disbursements, weekly capital expenditures, and
budgeted cash balance for each of such weeks, (iii) commencing with the cash
flow forecast delivered on June 4, 2010, and continuing thereafter, set forth in
comparative form the figures for the actual cash flow results (which shall
include a detailed listing of all material disbursements made, each, a “Disbursement
Schedule”) for Holdings and its consolidated subsidiaries for the
immediately preceding week and the budget for such week in the preceding Cash
Flow Budget delivered pursuant to this Section 6(b), and (iv) set forth and
account for any material deviations from the immediately preceding Cash Flow
Budget and Disbursement Schedule delivered to Revolving Agent and Term Agent in
such detail as they may reasonably require. The delivery of each Cash
Flow Budget to Revolving Lender and Term Lender shall constitute each Credit
Party’s representation and warranty that each such Cash Flow Budget, when and as
delivered to Revolving Agent and Term Agent, represents, based on information
then available to Holders, Holdings’ reasonable best estimate of the future
financial performance of Holdings and its consolidated subsidiaries for the
periods set forth therein and that such Cash Flow Budget has been prepared on
the basis of assumptions set forth therein which Holdings believes are
reasonable as of the date of preparation in light of current and reasonably
foreseeable business conditions. The delivery of each Disbursement
Schedule to Revolving Lender and Term Lender shall constitute each Credit
Party’s representation and warranty that each such Disbursement Schedule, when
and as delivered to Revolving Agent and Term Agent, represents all material
disbursements actually made by Holdings and its consolidated subsidiaries for
the week for which such Disbursement Schedule was delivered.
(c) Maintenance of Cash Flow
Budget. During the Specified Period, no Credit Party shall
permit (i) for any calendar week, commencing with the calendar week ending June
4, 2010, (x) the aggregate amount of cash disbursements (excluding any
retainers, retainer replenishments or similar one time fees for financial
advisors and other professionals and other non-ordinary course one time expenses
which were not contemplated at the time the cash budget for such week was
prepared so long as any such disbursements exceeding $500,000 individually or
$1,000,000 in the aggregate have been approved in writing by the Collateral
Agent) actually made for such week to be greater than 115% of cash disbursements
projected for such week (any such cash disbursement in excess of cash
disbursements projected for such week, an “Excess
Disbursement”), as determined on a consolidated basis for Holdings and
its consolidated subsidiaries as set forth in the most recently delivered Cash
Flow Budget covering such week and delivered in accordance with Section 6(b) or
(y) any Excess Disbursements exceeding $500,000 individually or $1,000,000 in
the aggregate to be made without the prior written consent of the Collateral
Agent or (ii) at any time the minimum balance in all Collateral Accounts,
collectively, to be less than $4,000,000.
(d) Financial
Advisor. Each Credit Party agrees that Revolving Agent, Term
Agent, and Collateral Agent, together (the “Applicable
Agents”), in connection the Senior Notes Restructuring, together may
engage the services of one financial advisor to conduct reviews of the Credit
Party’s financial and business matters of such scope as the Applicable Agents
may determine from time to time. The financial advisor shall provide
services for such duration as the Applicable Agents shall
require. Such financial advisor shall be the Applicable Agent’s agent
and shall owe its duties solely to the Applicable Agents, for and on behalf of
the Applicable Agents, the Senior Revolving Lenders, the Senior Term Lenders,
Swingline Lender, and Issuing Bank. Each Credit Party hereby agrees
to grant the financial advisor commercially reasonable access to all of its and
its subsidiaries’ books and records, properties, locations, financial
consultants, and officers for purposes of conducting its analysis and
examination with reasonable prior notice (which need not be in
writing). The Credit Parties shall bear all fees, costs, and expenses
of such financial advisor and its activities, and all of such fees, costs, and
expenses, if not sooner paid by the Credit Parties, shall be due and payable on
demand (but with the presentment of a written invoice of reasonable
detail). The Credit Parties agree to pay over to the Applicable
Agents on demand any customary amount which may be requested by the Applicable
Agents for purposes of providing a retainer to the financial
advisor. All reasonable fees, costs, and expenses of the financial
advisor shall constitute part of the obligations owing under the Senior
Revolving Loan Documents and the Senior Term Loan Documents, on a pro rata basis
as applicable, and shall, in each case, be secured by all “Collateral” under the
Senior Guarantee, Collateral, and Intercreditor Agreement.
(e) Payment of Xxxxx Day
Fees. Without limiting the rights of Revolving Agent, Term
Agent, Collateral Agent, the Senior Revolving Lenders, the Senior Term Lenders,
Swingline Lender, or Issuing Bank under any of the Senior Loan Documents to
which it is a party, Borrower agrees that it shall pay directly to Xxxxx Day its
reasonable fees at Xxxxx Day's regular hourly rates (as they may be adjusted
from time to time in the ordinary course) for services rendered to Revolving
Agent, Term Agent, and Collateral Agent in connection with the Senior Loan
Documents (including, without limitation, this Agreement) upon the presentment
of
an
invoice prepared in a manner, and with such detail as is, consistent with
historical practices in matters relating to Xxxxx Day’s services relating to the
Senior Loan Documents. In addition, Borrower agrees that it shall
reimburse Xxxxx Day for its out-of-pocket costs and expenses incurred in
connection with such services. Invoices sent to Borrower from Xxxxx
Day shall be payable to Xxxxx Day by wire transfer as soon as practicable after
receipt, but in any event no later than five business days after
receipt. Borrower also agrees to provide Xxxxx Day with a $250,000
retainer (the "Retainer"),
to be held as security for the payment of Xxxxx Day’s fees and
expenses. The Retainer may be applied by Xxxxx Day against its unpaid
fees and expenses at any time. After the conclusion of Xxxxx Day's
representation of each of Revolving Agent, Term Agent, Collateral Agent and the
application of the Retainer to any of Xxxxx Day's unpaid fees or expenses
incurred in connection with such representations, any unused portion of the
Retainer will be returned by Xxxxx Day to Borrower. If any Credit
Party determines to commence a Chapter 11 case, then prior to the commencement
of such a Chapter 11 case, Borrower shall immediately pay all accrued and unpaid
fees and expenses of Xxxxx Day as provided herein or in the Senior Loan
Documents. Notwithstanding Borrower’s obligations hereunder or under
any of the Senior Loan Documents to pay the reasonable fees and expenses of
Xxxxx Day, Borrower acknowledges and agrees that Xxxxx Day’s sole and exclusive
clients in this matter are Revolving Agent, Term Agent, and Collateral Agent,
and Xxxxx Day shall in no way be deemed legal counsel in this matter for any
Credit Party or any of its respective affiliates. Borrower
acknowledges that nothing in this Agreement or the Senior Loan Documents, or the
transactions contemplated hereby and thereby (x) creates an express or implied
attorney-client relationship between Xxxxx Day and any Credit Party or any of
its respective affiliates or (y) otherwise imposes an obligation or duty upon
Xxxxx Day in favor of any Credit Party or any of its respective
affiliates.
(f) Notice of Senior Notes
Interest Payment Default. Holdings agrees to deliver to
Revolving Agent and Term Agent by 5:00 p.m., New York, time, on Tuesday, June 1,
2010, a notice specifying whether or not a Senior Notes Interest Payment Default
has occurred.
(g) Survival of
Termination. Each of the covenants and agreements set forth in
this Section 6 shall survive the termination or expiration of the Specified
Period and this Agreement and shall continue in full force and effect from the
Effective Date until otherwise agreed by Revolving Agent, Term Agent, Collateral
Agent, the Senior Revolving Lenders, the Senior Term Lenders, Swingline Lender,
and Issuing Bank.
7. Conduct of Agent and Others;
Absence and Waiver of Defenses; Release of Claims; Etc.
(a) Each
Credit Party acknowledges and agrees that (i) through the date hereof, each of
Revolving Agent, Term Agent, Collateral Agent, the Senior Revolving Lenders, the
Senior Term Lenders, Swingline Lender, and Issuing Bank has acted in good faith
and has conducted itself in a commercially reasonable manner in its
relationships with such Credit Party in connection with this Agreement and in
connection with the obligations under the Senior Revolving Loan Documents and
the Senior Term Loan Documents, as applicable; (ii) as of the date of this
Agreement, no Credit Party has any defenses, affirmative or otherwise, rights of
setoff, rights of recoupment, claims, counterclaims, actions or causes of action
of any kind or nature whatsoever against any of Revolving Agent, Term Agent,
Collateral Agent, the Senior
Revolving
Lenders, the Senior Term Lenders, Swingline Lender, or Issuing Bank or any of
its past or present agents, attorneys, legal representatives, predecessors in
interest, affiliates, successors, assigns, employees, directors or officers,
directly or indirectly arising out of, based upon, or in any manner connected
with, any of the Senior Revolving Loan Documents or the Senior Term Loan
Documents or any loans, advances, letters of credit, financial accommodations,
or other extensions of credit made to or for the benefit of Borrower or any
other Credit Party under any Senior Loan Document; (iii) none of Revolving
Agent, Term Agent Collateral Agent, the Senior Revolving Lenders, the Senior
Term Lenders, Swingline Lender, nor Issuing Bank is in any way responsible or
liable for the previous or current condition or any deterioration of the
business operations and/or financial condition of any Credit Party; and (iv)
none of Revolving Agent, Term Agent, Collateral Agent, the Senior Revolving
Lenders, the Senior Term Lenders, Swingline Lender, nor Issuing Bank has
breached any agreement or commitment to make loans or advances, issue letters of
credit, or make any financial accommodations or extensions of credit available
to any Credit Party through the date hereof.
(b) In
addition to the foregoing, each Credit Party, together with its successors and
assigns (collectively referred to as the “Releasing
Parties”), for good and valuable consideration, including, without
limitation, the execution of this Agreement by each of Revolving Agent, Term
Agent, Collateral Agent, the Senior Revolving Lenders, the Senior Term Lenders,
Swingline Lender, and Issuing Bank, does hereby unconditionally remise, release,
acquit, and forever discharge each of Revolving Agent, Term Agent, Collateral
Agent, the Senior Revolving Lenders, the Senior Term Lenders, Swingline Lender,
and Issuing Bank, its past and present officers, directors, shareholders,
employees, agents, attorneys, parent corporations, subsidiaries, affiliates,
successors, and assigns, and the heirs, executors, trustees, administrators,
successors, and assigns of any such persons and entities (collectively referred
to as the “Released
Parties”), of and from any and all manner of actions, causes of action,
suits, claims, counterclaims, liabilities, obligations, defenses, and demands
whatsoever (if any), at law or in equity, or disputed or undisputed, which any
of the Releasing Parties ever had or now have, or may now claim to have against
any of the Released Parties for or by reason of any cause, matter, or thing
whatsoever, arising at any time prior to the Effective Date.
(c) Each
Credit Party hereby acknowledges and agrees that it has freely and voluntarily
entered into this Agreement after an adequate opportunity and sufficient period
of time to review, analyze, and discuss with counsel freely and independently
selected by such Credit Party (i) all terms and conditions of this Agreement,
(ii) all terms and conditions of any and all other documents executed and
delivered in connection with the transactions to which this Agreement makes
reference, and (iii) all factual and legal matters relevant to this Agreement
and such other documents. Each Credit Party further acknowledges and
agrees that (i) it has actively and with full understanding and in consultation
with its counsel participated in the negotiation of this Agreement and, after
review by its counsel of this Agreement and all other documents executed and
delivered in connection with the transactions to which this Agreement makes
reference, willingly and voluntarily executed and delivered this Agreement; (ii)
all of the terms and conditions of this Agreement have been negotiated at
arm’s-length; and (iii) this Agreement and such other documents have been
negotiated, prepared, and executed without fraud, duress, undue influence, or
coercion of any kind or nature whatsoever having been exerted by or imposed upon
any party to this Agreement upon any other party.
- -
ATI-2424437v12
NCI FORBEARANCE
AGREEMENT
8. No Novation or Mutual
Departure. Each Credit Party expressly acknowledges and agrees
that (a) there has not been, and this Agreement does not constitute or
establish, a novation with respect to any obligations owing by any Credit Party
under any Senior Revolving Loan Document or any Senior Term Loan Document and
(b) this Agreement does not constitute any departure (mutual or otherwise) from
the strict terms, provisions, and conditions of the Senior Revolving Loan
Documents and the Senior Term Loan Documents, other than with respect to the
Controlled Accounts as provided in Section 3 and, solely to the extent
applicable, the covenants and agreements contained or described in Section
6.
9. Ratification. Each
Credit Party hereby restates, ratifies, and reaffirms each and every term,
covenant, and condition set forth in each Senior Loan Document to which it is a
party effective as of the date hereof and in light of the agreements set forth
herein (including, without limitation, the guarantee of Holdings under the
Senior Guarantee, Collateral, and Intercreditor Agreement).
10. Counterparts. This
Agreement 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 to be an original and all of which counterparts, taken together,
shall constitute but one and the same instrument. This Agreement may
be executed by each party on separate copies, which copies, when combined so as
to include the signatures of all parties, shall constitute a single counterpart
of this Agreement.
11. Facsimile or Other
Transmission. Delivery by one or more parties hereto of an
executed counterpart of this Agreement via facsimile, telecopy, or other
electronic method of transmission pursuant to which the signature of such party
can be seen (including, without limitation, Adobe Corporation’s Portable
Document Format or PDF) shall have the same force and effect as the delivery of
an original executed counterpart of this Agreement. Any party
delivering an executed counterpart of this Agreement by facsimile or other
electronic method of transmission shall also deliver an original executed
counterpart, but the failure to do so shall not affect the validity,
enforceability, or binding effect of this Agreement.
12. Section
References. Section titles and references used in this
Agreement shall be without substantive meaning or content of any kind whatsoever
and are not a part of the agreements among the parties hereto evidenced
hereby.
13. No Third Party
Beneficiaries. Each party hereto acknowledges and agrees that
the agreements set forth herein are solely for the benefit of each of the
parties hereto and that there are no third-party beneficiaries to, and no person
or entity other than a party hereto is entitled to rely on, this Agreement or
any of terms or provisions set forth herein.
14. Governing
Law. This Agreement shall be governed by and construed and
interpreted in accordance with the internal laws of the State of New York, but
excluding any principles of conflicts of law or other rule of law that would
cause the application of the law of any jurisdiction other than the laws of the
State of New York.
15. Loan
Document. The parties hereto acknowledge and agree that
this Agreement constitutes a “Loan Document” under each of the Senior Loan
Agreements.
16. Construction. No
provision of this Agreement shall be construed against or interpreted to the
disadvantage of any party to this Agreement by any court, tribunal, or
arbitration panel by reason of such party’s having or been deemed to have
structured, dictated, or drafted such provision.
17. Conditions
Precedent. This Agreement shall become effective on the “Effective
Date,” which means the first date on which each of the following
conditions precedent shall have been satisfied; provided, however, that no
provision of this Agreement shall become effective unless each of the following
conditions precedent is satisfied on or before 5:00 p.m., New York time, on June
1, 2010:
(a) the
execution and delivery of this Agreement by each Credit Party, Revolving Agent,
Term Agent, Collateral Agent, those Senior Revolving Lenders which constitute
“Required Lenders” under the Senior Revolving Loan Agreement, those Senior Term
Lenders which constitute “Required Lenders” under the Senior Term Loan
Agreement, Swingline Lender, and Issuing Bank;
(b) the
Borrower shall have instructed Wachovia Bank, National Association (“Bank”)
under that certain Deposit Account Control Agreement dated as of March 3, 2010
(the “Wachovia
DACA”) among Bank, Collateral Agent, and Borrower to automatically
provide to the Collateral Agent the opening and closing balances of the
Controlled Accounts governed by such Wachovia DACA during the Specified
Period;
(c) Xxxxx
Day’s receipt of the Retainer in immediately available funds delivered pursuant
to wire instructions provided by Xxxxx Day to Borrower; and
(d) Each
Credit Party shall have executed and delivered to Revolving Agent, Term Agent,
and Collateral Agent that certain fee letter dated the date hereof from
Revolving Agent, Term Agent and Collateral Agent to Holdings and Borrower, and
Collateral Agent shall have received the fee set forth therein.
[SIGNATURES
ON FOLLOWING PAGES.]
IN
WITNESS WHEREOF, each of the following have caused this Agreement to be duly
executed by its duly authorized officer as of the day and year first above
written.
HOLDINGS:
GALLARUS MEDIA HOLDINGS, INC.,
a
Delaware corporation
By: /s/ Xxxxxx
XxXxxxxx
Name: Xxxxxx
XxXxxxxx
Title: Chairman/CEO
TERM BORROWER AND
REVOLVING
BORROWER:
Georgia corporation
By: /s/ Xxxxxx
XxXxxxxx
Name: Xxxxxx
XxXxxxxx
Title: Chairman/CEO
NCI
AGREEMENT
[Signature
Page]
REVOLVING AGENT, TERM
AGENT,
COLLATERAL AGENT, A
SENIOR
REVOLVING LENDER, AND
SWINGLINE
LENDER:
TORONTO DOMINION (TEXAS)
LLC
By:
/s/ Xxxxx
Xxxxxx
Name: Xxxxx
Xxxxxx
Title: Vice
President
NCI
AGREEMENT
[Signature
Page]
ISSUING BANK:
THE TORONTO DOMINION BANK,
NEW
YORK BRANCH
By:
/s/ Xxxxx
Xxxxxx
Name: Xxxxx
Xxxxxx
Title: Vice
President
NCI
AGREEMENT
[Signature
Page]
SENIOR REVOLVING LENDER:
Xxxxx Fargo Capital Finance,
Inc.
[NAME OF SENIOR REVOLVING
LENDER]
By:
/s/ Geoff
Anfaso
Name: Geoff
Anfaso
Title: SVP
NCI
AGREEMENT
[Signature
Page]
SENIOR TERM LENDER:
Xxxxx Fargo Capital Finance,
Inc.
[NAME OF SENIOR TERM
LENDER]
By:
/s/ Geoff
Anfaso
Name: Geoff
Anfaso
Title: SVP
NCI
AGREEMENT
[Signature
Page]
SCHEDULE
A
DEFAULTS
AND EVENTS OF DEFAULT
1.
Defaults and Events of Default under clause (d) of Article VII of the Senior
Revolving Loan Agreement due to the Loan Parties’ failure to comply with (a)
Section 5.04(a) of the Senior Revolving Loan Agreement with respect to the
obligation to deliver an opinion with the Borrower’s audited financial
statements due on June 26, 2010 without a “going concern” or like qualification
or exception and without any qualification or exception as to the scope of the
audit, (b) Section 6.11 of the Senior Revolving Loan Agreement with respect to
the obligation to have an Interest Coverage Ratio of at least 1.10 to 1.00 as of
March 28, 2010, and (d) Section 6.12 of the Senior Revolving Loan Agreement with
respect to the obligation to have the Maximum Senior Leverage Ratio of no
greater than 3.00 to 1.00 as of March 28, 2010.
2. Defaults
and Events of Default under clause (e) of Article VII of the Senior Term Loan
Agreement due to the Loan Parties’ failure to comply with Section 5.04(a) of the
Senior Term Loan Agreement with respect to the obligation to deliver an opinion
with the Borrower’s audited financial statements due on June 26, 2010 without a
“going concern” or like qualification or exception and without any qualification
or exception as to the scope of the audit.
3. Any
failure to deliver any notice required by Section 5.05(a) of the Senior
Revolving Loan Agreement or Section 5.05(a) of the Senior Term Loan Agreement,
but only, in each case, to the extent such notice would have related solely to
the Defaults and/or Events of Default described in the foregoing clauses (1) and
(2).
SCHEDULE
B
DEPOSIT
ACCOUNTS
|
Owner
of Deposit Account
|
Deposit
Account Number
|
Depository
Institution
|
Primary
Purpose of Deposit Account
|
Current
Balance
|
