SEVENTH AMENDMENT TO CREDIT AGREEMENT AND CONSENT
EXHIBIT 10.4
SEVENTH AMENDMENT TO CREDIT AGREEMENT AND CONSENT
This SEVENTH AMENDMENT TO CREDIT AGREEMENT AND CONSENT, dated as of May 30, 2008 (this
“Amendment”), by and among Xxxxxxxxx Company, a Michigan corporation (“Holdings”),
Xxxxxxxxx Services Company, a Michigan corporation (“Xxxxxxxxx Services”), the other
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 “Credit Parties” (“Credit Parties”), the Lenders
(as defined below) party hereto, and General Electric Capital Corporation (“GE Capital”),
as administrative agent for the Lenders (in such capacity, together with its successors and assigns
in such capacity, “Agent”).
WHEREAS, Holdings, Borrowers, Credit Parties, the lenders party thereto from time to time
(“Lenders”) and Agent are parties to that certain Credit Agreement, dated April 30, 2007
(as amended, restated, supplemented or modified from time to time, the “Credit Agreement”),
pursuant to which Lenders have agreed to make, and have made, certain loans and other financial
accommodations to Borrowers;
WHEREAS, Borrowers and Guarantors have requested that Agent and Lenders consent to the sale of
certain assets and amend certain terms and conditions of the Credit Agreement, in each case, as
more fully set forth herein; and
WHEREAS, Agent and Lenders have agreed to consent to the sale of certain assets and 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 1.3(b) of the Credit Agreement, Mandatory Prepayments, is hereby amended
and modified by adding the following new clause (ix) at the end of such subsection:
“(ix) Wal-Mart Receipts. For the period from the Initial Xxxxxxxx
Closing Date through the date on which the amendment to this Agreement
described in Section 6.25 becomes effective, no later than the first
Business Day following each date on which Holdings or any of its
Subsidiaries receives any proceeds of any Accounts owing to Holdings or any
of its Subsidiaries from Wal-Mart Stores, Inc. or any of its Affiliates in
respect of U.S. music sales, the Borrowers shall prepay the outstanding
Loans and a permanent Reserve shall be imposed against the Borrowing Base in
an aggregate amount equal to seventy-five percent (75%) of such proceeds,
to the extent used to prepay the Loans.”
(b) Section 1.3(c) of the Credit Agreement, Application of Certain Mandatory
Prepayments, is hereby amended and modified by deleting such subsection in its entirety and
inserting the following in lieu thereof:
“(c) Application of Certain Mandatory Prepayments. Any prepayments
made by any Borrower pursuant to Sections 1.3(b)(ii) through
(b)(vii) and Section 1.3(b)(ix) above shall be applied as
follows: first, to the principal balance of the Swing Line Loan
outstanding until the same has been repaid in full; second, to the
principal balance of Revolving Credit Advances outstanding until the same
has been paid in full; and third, to any Letter of Credit
Obligations to provide cash collateral therefore in the manner set forth in
Annex B, until all such Letter of Credit Obligations have been fully
cash collateralized in the manner set forth in Annex B.”
(c) Article 6 of the Credit Agreement, Negative Covenants, is hereby amended and
modified by inserting the following new Section at the end of such Article:
“6.25 Minimum Asset Coverage Covenants. By not later than June 20,
2008, the Credit Parties shall not fail to execute and deliver to Agent an
amendment to this Agreement amending subsection (e) of Annex G to provide
Minimum Asset Coverage and Maximum Coverage Percentage levels for the period
from June 21, 2008 through April 30, 2012 that are satisfactory to Agent in
its sole discretion (it being understood that to the extent no such
amendment is executed, no changes will be made to the covenant levels set
forth in subsection (e) of Annex G as in effect on the Seventh Amendment
Effective Date).”
(d) Annex A of the Credit Agreement, Definitions, is hereby amended and modified by
adding the following new definitions thereto, in appropriate alphabetical order, to read in its
entirety as follows:
“Xxxxxxxx Purchase Agreement” means the Asset Purchase Agreement
dated as of June 2, 2008, by and between Holdings and Xxxxxxxx
Merchandisers, L.P., a Texas limited partnership.
“Initial Xxxxxxxx Closing Date” means the date on which the WMS
Display Fixture Rights (as defined in the Xxxxxxxx Purchase Agreement as in
effect on the Seventh Amendment Effective Date) are sold pursuant to the
terms of the Xxxxxxxx Purchase Agreement as in effect on the Seventh
Amendment Effective Date, which date shall not be later than June 4, 2008.
“Seventh Amendment” means the Seventh Amendment to Credit Agreement
and Consent, dated as of May 30, 2008, by and among the Credit Parties, the
Lenders and Agent.
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“Seventh Amendment Effective Date” has the meaning ascribed to the
term “Amendment Effective Date” in the Seventh Amendment.
(e) Annex A of the Credit Agreement, Definitions, is hereby further amended and
modified by amending and restating the definitions of “Extraordinary Receipts” and “Material
Contract” to read in their entirety as follows:
““Extraordinary Receipts” means any cash received by or paid to or
for the account of Holdings or any of it Subsidiaries not in the ordinary
course of business, including any foreign, United States, state or local tax
refunds, pension plan reversions, judgments, proceeds of settlements or
other consideration of any kind in connection with any cause of action,
condemnation awards (and payments in lieu thereof), indemnity payments and
any purchase price adjustment received in connection with any purchase
agreement, proceeds of insurance (excluding, however, any Net
Insurance/Condemnation Proceeds which are subject to Section
1.3(b)(iii)), and including the Incentive Payment (as defined in the
Xxxxxxxx Purchase Agreement as in effect on the Seventh Amendment Effective
Date).
“Material Contract” means, collectively, any contract or other
arrangement to which Holdings or any of its Subsidiaries is a party (other
than the Loan 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 and all
documents executed or delivered in connection with any of the foregoing.”
(f) Annex G of the Credit Agreement, Financial Covenants, is hereby amended and
modified by deleting subsection (e) in its entirety and inserting the following in lieu thereof:
“(e) Minimum Asset Coverage. Credit Parties shall not
permit, at any time, (i) the positive difference between (A) the
Borrowing Base at such time (without taking into account the Term
Loan Reserve, the Minimum Availability Amount or any other Reserves
and (B) the principal amount of all Indebtedness outstanding
(including without limitation, all undrawn letters of credit) under
the Term Loan Agreement and this Agreement at such time (such
positive difference, the “Minimum Asset Coverage”) to be
less than the correlative amount indicated below under the heading
“Minimum Asset Coverage” for such period, or (ii) the percentage
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obtained by dividing (A) the amount specified in clause (i)(B) above
at such time by (B) the amount specified in clause (i)(A) above at
such time to be greater than the percentage specified below under
the heading “Maximum Coverage Percentage” for such period:
| Period | Minimum Asset Coverage | Maximum Coverage Percentage | ||
May 1, 2008 through
May 31, 2008
|
$25,000,000 | 74.1% | ||
June 1, 2008 through
(but not including)
the Initial Xxxxxxxx
Closing Date
|
$30,000,000 | 69.3% | ||
The Initial Xxxxxxxx
Closing Date through
(but not including)
June 8, 2008 (except
to the extent set
forth in the
immediately
succeeding row)
|
$41,000,000 (or, to the extent Holdings delivers a $3,000,000 letter of credit to Xxxxxxxx Merchandisers, L.P. pursuant to the Xxxxxxxx Purchase Agreement as in effect on the Seventh Amendment Effective Date, $38,000,000) | 57.0% (or, to the extent Holdings delivers a $3,000,000 letter of credit to Xxxxxxxx Merchandisers, L.P. pursuant to the Xxxxxxxx Purchase Agreement as in effect on the Seventh Amendment Effective Date, 60.0%) | ||
The earlier of (x)
the date of receipt
of all payments by or
on behalf of Holdings
in respect of all of
the Initial WMS
Inventory (as defined
in the Xxxxxxxx
Purchase Agreement as
in effect on the
Seventh Amendment
Effective Date) and
(y) June 9, 2008
through June 20, 2008
|
$43,000,000 (or, to the extent Holdings delivers a $3,000,000 letter of credit to Xxxxxxxx Merchandisers, L.P. pursuant to the Xxxxxxxx Purchase Agreement as in effect on the Seventh Amendment Effective Date, $40,000,000) | 54.0% (or, to the extent Holdings delivers a $3,000,000 letter of credit to Xxxxxxxx Merchandisers, L.P. pursuant to the Xxxxxxxx Purchase Agreement as in effect on the Seventh Amendment Effective Date, 57.0%) | ||
June 21, 2008 and all
times thereafter
|
$80,000,000 | 10.0%” |
3. Consent.
(a) Credit Parties have advised Agent and Lenders that Holdings is entering into the Asset
Purchase Agreement with Xxxxxxxx Merchandisers (“Purchaser”), dated as of June 2, 2008
attached hereto as Annex A (the “Purchase Agreement”), providing for the sale of
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certain assets related to the portion of Holdings’ business consisting of distribution of
certain music product to Wal-Mart stores in the United States, including (i) the Initial WMS
Inventory (as defined in the Purchase Agreement as in effect on the Seventh Amendment Effective
Date), (ii) the WMS Display Fixture Rights (as defined in the Purchase Agreement as in effect on
the Seventh Amendment Effective Date), and (iii) the Additional Inventory (as defined in the
Purchase Agreement as in effect on the Seventh Amendment Effective Date).
(b) Subject to the terms and conditions contained herein and notwithstanding anything to the
contrary set forth in the Credit Agreement or any other Loan Document, Agent and the Lenders hereby
consent to:
(i) the sale of the WMS Display Fixture Rights to Purchaser in accordance with the terms and
conditions of the Purchase Agreement as in effect on the Seventh Amendment Effective Date;
provided, that (A) the cash proceeds of such sale (including the Additional Closing
Payments (as defined in the Purchase Agreement as in effect on the Seventh Amendment Effective
Date)) are at least $8,803,545, (B) all of such cash proceeds are paid to the Term Loan Agent for
application to the Term Loans in accordance with Section 2.14(b)(ii)(2) of the Term Loan Agreement
(after payment of any Obligations then outstanding), (C) the Borrowers pay to the Term Loan Agent
the Make-Whole Amount (as defined in the Term Loan Agreement) and all accrued interest payable in
respect of the amount prepaid pursuant to clause (B) above, (D) such sale or disposition and
application of proceeds shall occur on or before June 4, 2008, (E) as of the date of such sale and
after giving effect thereto, no Default or Event of Default shall have occurred and be continuing,
and (F) Agent shall have received, in form and substance reasonably satisfactory to Agent, true,
correct and complete copies of the Purchase Agreement and each other document executed in
connection with any of the foregoing, together with all schedules and exhibits thereto, duly
authorized, executed and delivered by the parties thereto (such documents, collectively, the
“Purchase Documents”);
(ii) a series of sales of the Initial WMS Inventory to Purchaser in accordance with the terms
and conditions of the Purchase Agreement as in effect on the Seventh Amendment Effective Date;
provided, that (A) the cash proceeds of each such sale are equal to an amount not less than
the value of the Initial WMS Inventory sold in such sale (it being understood that (w) each
truckload of the Initial WMS Inventory shall constitute an individual sale, (x) the value of the
Initial WMS Inventory included in each such sale shall be determined in accordance with the terms
of the Purchase Agreement (as in effect on the Seventh Amendment Effective Date) on the date such
Initial WMS Inventory is packed onto the applicable delivery truck and such delivery truck is
sealed, (y) the contents of each such sale and the related dollar amount (determined in accordance
with clause (x)) shall be reflected in the applicable Release referred to below, and (z) the
aggregate cash consideration received in connection with the sale of all Initial WMS Inventory
shall not be less than $10,000,000), (B) all of such cash proceeds are paid to the Term Loan Agent
for application to the Term Loans in accordance with Section 2.14(b)(ii)(2) of the Term Loan
Agreement (after payment of any Obligations then outstanding), (C) the Borrowers pay to the Term
Loan Agent the Make-Whole Amount (as defined in the Term Loan Agreement) and all accrued interest
payable in respect of the amount prepaid pursuant to clause (B) above, (D) all such sales or
dispositions and application of proceeds shall occur on or before June 16, 2008, and (E) as of the
date of each such sale and after giving effect thereto, no Default or Event of Default shall have
occurred and be continuing;
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(c) Agent, with the consent of the Lenders, agrees to execute and deliver to Xxxxxxxx
Merchandisers L.P. a release of liens in the form attached hereto as Exhibit A (the
“Release”) on the date of each proposed sale described in Section 3(b) above, following the
satisfaction of the conditions described in sub-clauses (E) and (F) (in the case of clause (i)
thereof) and sub-clause (E) (in the case of clause (ii) above) (it being understood and agreed by
each Credit Party that the failure to satisfy any other condition specified in clause (i) or (ii)
on the date of any such sale shall result in an immediate Event of Default under the Credit
Agreement). The Credit Parties hereby acknowledge and consent to the Release.
(d) Except as provided in Section 3(b), the Credit Agreement and the other Loan
Documents shall remain in full force and effect, and the foregoing waivers and consents shall be
limited to the matters set forth herein and shall not extend to any other transaction. The
foregoing waivers and consents do not allow any other or further departure from the terms of the
Credit Agreement or any other Loan Document.
4. 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 Loan 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) Agent shall have received an amendment fee in the amount of $50,000, which such fee shall
be for the benefit of the Lenders and shall be fully earned on the Amendment Effective Date and
non-refundable once paid;
(c) Agent shall have received counterparts of this Amendment that bear the signatures of each
of Credit Parties, Agent and Lenders.
(d) Agent, on behalf of the lenders, shall have received a copy of an amendment (or similar
agreement), in form and substance reasonably satisfactory to Agent, duly executed by Credit
Parties, Term Loan Agent, and Term Loan Lenders amending and waiving the corresponding provisions
of the Term Loan Agreement.
5. Credit Parties’ Representations and Warranties. Each Credit Party represents and
warrants to Agent 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
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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 Loan 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.
(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).
6. Continued Effectiveness of Credit Agreement. Each Credit Party hereby (a) confirms
and agrees that the Credit Agreement and each other Loan 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 Loan Document to
(i) “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) confirms and agrees that to the extent that any such Loan Document purports
to assign or pledge to Agent, for the ratable benefit of Lenders, or to grant to 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 Loan Documents, such pledge, assignment and/or
grant of the security interest or Lien is hereby ratified and confirmed in all respects, (c) the
execution and delivery of this Amendment does not limit any other action that Agent is entitled to
take, or that the Credit Parties are required to perform, under the Fifth Amendment Fee Letter, and
(d) confirms and agrees that no amendment of any terms or provisions of the Credit Agreement, or
the amendments and 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.
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7. 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 Agent or any Lender (or any of their
respective Affiliates, officers, directors, employees, attorneys, consultants or agents) and (b)
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 Loan
Documents. Notwithstanding the foregoing, Credit Parties wish (and Agent and Lenders agree) to
eliminate any possibility that any past conditions, acts, omissions, events or circumstances would
impair or otherwise adversely affect Agent’s or any Lenders’ rights, interests, security and/or
remedies under the Credit Agreement and the other Loan 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 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 Loan
Document, or any act, event or transaction related or attendant thereto, or the agreements of 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.
8. Miscellaneous.
(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 Agent 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 Agent and Lenders.
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(e) This Amendment is a Loan 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.
[remainder of this page intentionally left blank]
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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 |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| XXXXXXXXX SERVICES COMPANY |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| XXXXXXXXX REAL ESTATE LLC |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| SVG DISTRIBUTION, INC. |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| CRAVE ENTERTAINMENT, INC. |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
Seventh Amendment
| ARTIST TO MARKET DISTRIBUTION LLC |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| REPS, L.L.C. |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
Seventh Amendment
| CREDIT PARTIES: XXXXXXXXX COMPANY |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| CRAVE ENTERTAINMENT GROUP, INC. |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| XXXXXX ADVERTISING COMPANY |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| XXXXXXXXX COMPANY OF CANADA LIMITED |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| XXXXXXXXX UK LIMITED |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
Seventh Amendment
| ADMINISTRATIVE AGENT AND LENDERS: GENERAL ELECTRIC CAPITAL CORPORATION, as Agent and Lender |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
Seventh Amendment
EXHIBIT A
General Electric Capital Corporation
000 X. Xxxxxx
Xxxxxxx, XX 00000
000 X. Xxxxxx
Xxxxxxx, XX 00000
Xxxxxxxx Merchandisers, L.P.
000 X.X. 00xx Xxxxxx
Xxxxxxxx, XX 00000
000 X.X. 00xx Xxxxxx
Xxxxxxxx, XX 00000
Re: RELEASE AND TERMINATION OF LIENS
Ladies and Gentlemen:
Reference is hereby made to the Credit 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”), the other subsidiaries of Holdings identified
on the signature page thereto 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 thereto as
“Credit Parties” (“Credit Parties”), the Lenders party thereto from time to time, and
General Electric Capital Corporation (“GE Capital”), as administrative agent for the
Lenders (in such capacity, together with its successors and assigns in such capacity,
“Agent”). Agent, on behalf of itself and the Lenders, holds a security interest in and
lien on the assets and property of Holdings. Agent and the Lenders have been advised that Holdings
is selling, conveying, transferring and assigning to Xxxxxxxx Merchandisers, L.P.
(“Purchaser”) certain assets consisting of the equipment and inventory listed on
Schedule I attached hereto (“Purchased Assets”). As a condition to such proposed
sale, Agent is required to release all of its liens on such Purchased Assets.
1. Release of Security Interest. Effective upon receipt by Agent of the payment set
forth in Section 2 hereof, Agent hereby releases, terminates and discharges, without recourse and
without any representation or warranty of any kind, express or implied, all security interests and
liens of any nature whatsoever in its favor in or on the Purchased Assets. Nothing contained
herein shall be deemed a release or termination by Agent of any security interests in and liens on
any assets of any Credit Party other than the Purchased Assets, all of which shall continue in full
force and effect. Except as specifically set forth herein, nothing contained herein shall be
construed in any manner to constitute a waiver, release or termination or to otherwise limit or
impair any of the obligations or indebtedness of any Credit Party or any other person or entity to
Agent and the Lenders, or any duties, obligations or responsibilities of the Credit Parties or any
other person or entity to Agent and the Lenders.
2. Effectiveness of Release. The release, termination and discharge of Agent’s
security interests in and liens on the Purchased Assets pursuant to Section 1 hereof shall be
effective, without further action by Agent, upon Term Loan Agent’s receipt, from or on behalf
of the Credit Parties (including by direct payment by the Purchaser), of an aggregate amount of not
less than $[___] in immediately available funds to the bank account specified on Schedule
II hereto by not later than noon (New York City time) on [___, 2008]. (To the extent
such payment is not received by such time, this Release and Termination of Liens shall terminate
and be of no further force or effect.)
3. Further Assurances. Agent hereby agrees that, after receipt of the payment set
forth in Section 2 hereof by Term Loan Agent, it will file, at the Borrowers’ sole cost and
expense, a UCC financing statement amendment in the form attached hereto as Annex A. Agent
will, at the reasonable request of the Borrowers or the Purchaser and after receipt of the payment
set forth in Section 2 hereof by Agent, execute and/or deliver such instruments and other writings
as may be necessary to effect or evidence the termination of the liens of Agent on the Purchased
Assets, but without representation, warranty or recourse to Agent or the Lenders and at the sole
cost and expense of the Borrowers.
4. Miscellaneous. Delivery of an executed counterpart of this Release and Termination
of Liens by facsimile or electronic mail shall be equally effective as delivery of a manually
executed counterpart. This Release and Termination of Liens shall be governed by and interpreted
and determined in accordance with the laws of the State of New York (without regard to principles
of conflict of laws).
| Very truly yours, GENERAL ELECTRIC CAPITAL CORPORATION, as Agent and on behalf of the Lenders |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
15
Schedule I
Purchased Assets
Purchased Assets
16
Schedule II
Bank Account Details
Bank Account Details
Citibank, NA
ABA # 000000000
A/C Name: Silver Point Finance, LLC
A/C # 48680439
RE: Xxxxxxxxx / Sweep Payment
ABA # 000000000
A/C Name: Silver Point Finance, LLC
A/C # 48680439
RE: Xxxxxxxxx / Sweep Payment
17
ANNEX A
PURCHASE AGREEMENT
See attached.
18
