LIMITED WAIVER AND SEVENTH AMENDMENT TO FIRST LIEN CREDIT AGREEMENT

 

 

W I T N E S S E T H:

 

 

WHEREAS, Borrower has requested that Agent and Lenders (i) waive certain potential Events of Default under the Credit Agreement and (ii) amend certain provisions of the Credit Agreement; and

 

WHEREAS, subject to the satisfaction (or waiver by the Lenders) of the conditions set forth herein, Agent and the Lenders signatory hereto constituting the Required Lenders and Required Revolving Lenders are willing to waive such Events of Default and to amend the Credit Agreement in certain respects, in each case, on the terms set forth herein.

 

NOW, THEREFORE, in consideration of the mutual agreements, provisions and covenants contained herein, the parties agree as follows:

 

1. Defined Terms.  Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Credit Agreement.

 

 

The  waiver contained in this Section 2 is a limited waiver and (i) shall only be relied upon and used for the specific purposes expressly set forth herein, (ii) shall not constitute nor be deemed to constitute a waiver, except as otherwise expressly set forth herein, of (a) any Default or Event of Default (other than the Designated Potential Defaults) or (b) any term or condition of the Credit Agreement and the other Loan Documents (including, but not limited to, the obligations to deliver a Compliance Certificate as required by Section 4.2(b)), (iii) shall not constitute nor be deemed to constitute a consent by the Agent or any Lender to anything other than the specific purpose set forth herein and (iv) shall not constitute a custom or course of dealing among the parties hereto.

 

3. Amendments to Credit Agreement.  Upon satisfaction (or waiver by the Lenders) of the conditions set forth in Section 4 hereof, the Credit Agreement is hereby amended as follows:

 

(a) Subsection 1.1(b) of the Credit Agreement is hereby amended by deleting such subsection in its entirety and substituting the following therefor:

 

“(b) The Revolving Credit.  Subject to the terms and conditions of this Agreement and in reliance upon the representations and warranties of the Credit Parties contained herein, each Revolving Lender severally and not jointly agrees to make Loans to the Borrower (each such Loan, a “Revolving Loan”) from time to time on any Business Day during the period from the Closing Date through the Final Availability Date, in an aggregate amount not to exceed at any time outstanding the amount set forth opposite such Lender’s name in Schedule 1.1(b) under the heading “Revolving Loan Commitments” (such amount, as the same may be reduced or increased from time to time in accordance with this Agreement (including pursuant to Section 1.12), being referred to herein as such Revolving Lender’s “Revolving Loan Commitment”); provided, however, that, after giving effect to any Borrowing of Revolving Loans, the aggregate principal amount of all outstanding Revolving Loans shall not exceed the Maximum Revolving Loan Balance.  Subject to the other terms and conditions hereof, amounts borrowed under this subsection 1.1(b) may be repaid (without premium or penalty except as, and to the extent, set forth in Section 10.4) and reborrowed from time to time.  The “Maximum Revolving Loan Balance” from time to time will equal (i) the Aggregate Revolving Loan Commitment then in effect less (ii) the sum of (I) the aggregate amount of Letter of Credit Obligations plus (II) the aggregate principal amount of outstanding Swing Loans plus (III) the Interest Reserve (after giving effect to any reduction thereof to the extent a requested Revolving Loan shall be utilized to pay interest for which the Interest Reserve has been established).  If at any time the then outstanding principal balance of Revolving Loans exceeds the Maximum Revolving Loan Balance, then the Borrower shall immediately prepay outstanding Revolving Loans in an amount sufficient to eliminate such excess.

As of the Seventh Amendment Effective Date, the aggregate outstanding principal amount of Revolving Loans (such outstanding Revolving Loans, the “Seventh Amendment Revolving Loans”) is $18,815,125.99 (as such amount may be reduced by any payments in respect thereof, the “Revolving Loan Cap”) and the aggregate face value of all Letters of Credit (such outstanding Letters of Credit, the “Seventh Amendment LCs”) Issued and outstanding under this Agreement is $1,988,026.03 (as such amount may be reduced by the cancellation or termination of any Letter of Credit Existing as of the Seventh Amendment Effective Date, the “LC Facility Cap”; the LC Facility Cap together with the Revolving Loan Cap are sometimes referred to herein collectively as the “Revolving Facility Cap”), in each case, as set forth on Schedule 1.1(b).  Notwithstanding anything to the contrary set forth in this Section 1.1(b) or anywhere else in the Credit Agreement or any other Loan Document, from and after the Seventh Amendment Effective Date (a) prior to the repayment in full of all revolving loans and other obligations under (including the cash collateralization of all letters of credit issued thereunder) and the termination of, the First Lien Revolving Facility, no further Revolving Loans shall be made or funded or Letters of Credit Issued hereunder (provided, Revolving Loans may be funded solely to pay any L/C Reimbursement Obligations that may arise in respect of Seventh Amendment LCs, whereupon the Revolving Loan Cap shall be deemed to have increased, and the LC Facility Cap reduced, by such amount) and (b) until the Required Leverage Date shall occur, no (i) Letters of Credit shall be Issued if, after giving effect to such Issuance, the aggregate face amount of all Issued and outstanding Letters of Credit shall exceed the LC Facility Cap, (ii) Revolving Loans shall be made or funded if, after giving effect to such making or funding, the aggregate outstanding principal amount of Revolving Loans shall exceed the Revolving Loan Cap (except in respect of Revolving Loans funded solely to pay L/C Reimbursement Obligation arising in respect of a Letter of Credit Issued in accordance herewith, whereupon the Revolving Loan Cap shall be deemed to have increased, and the LC Facility Cap reduced, by such amount) and (iii) Revolving Loans shall be made or funded and no Letters of Credit shall be Issued if, after giving effect to such making, funding or Issuance, the sum of (y) aggregate outstanding principal amount of Revolving Loans and (z) all Issued and outstanding Letters of Credit, shall exceed the Revolving Facility Cap.”

(b) Section 1.8 of the Credit Agreement is hereby amended by deleting each reference to “three hundred sixty-five (365)” set forth in subsection (c) thereof and substituting “ninety (90)” therefor.

 

(c) Section 4.2 of the Credit Agreement is hereby amended by deleting clause (g) thereof in its entirety and substituting the following therefor:

 

 

(5)  on or prior to January 17, 2014;

 

(w) the Credit Parties shall cause prospective buyers to submit indications of interest in respect of a transaction and provide full and complete copies thereof to Agent and the Lenders, in each case, no later than February 7, 2014;

 

 

(n) Section 7.5 of the Credit Agreement is hereby amended by deleting such section in its entirety and substituting “[Reserved]” therefor.

 

(o) Section 9.10 of the Credit Agreement is hereby amended by deleting subsection (b) thereof in its entirety and substituting the following therefor:

 

“(b) Confidential Information.  Each Lender, each L/C Issuer and Agent agrees to maintain, in accordance with its customary practices, the confidentiality of information obtained by it pursuant to any Loan Document and designated by any Credit Party as confidential (and use only with respect to obligations under the Loan Documents), except that such information may be disclosed (i) with the Borrower’s consent, (ii) to Related Persons of such Lender, L/C Issuer or Agent, as the case may be, or to any Person that any L/C Issuer causes to issue Letters of Credit hereunder, that are advised of the confidential nature of such information and are instructed to keep such information confidential in accordance with the terms hereof, (iii) to the extent such information presently is or hereafter becomes (A) publicly available other than as a result of a breach of this Section 9.10 or (B) available to such Lender, L/C Issuer or Agent or any of their Related Persons, as the case may be, on a non-confidential basis from a source (other than any Credit Party) not known by them to be subject to disclosure restrictions, (iv) to the extent disclosure is required by applicable Requirements of Law or other legal process or requested or demanded by any Governmental Authority (and, in any such case, the Person disclosing such information shall use commercially reasonable efforts to promptly notify the Borrower prior to any disclosure, to the extent same would not be prohibited by applicable law or order), (v) to the extent necessary or customary for inclusion in league table measurements (but limited to only such customary information as required for such league tables), (vi) (A) to the National Association of Insurance Commissioners or any similar organization, any examiner or any nationally recognized rating agency or (B) otherwise to the extent consisting of general portfolio information that does not identify Credit Parties, (vii) to current or prospective assignees, other than any Person on the List of Indentified Disqualified Financial Institutions, SPVs (including the investors or prospective investors therein) or participants, direct or contractual counterparties to any Secured Rate Contracts and to their respective Related Persons, in each case to the extent such assignees, investors, participants, counterparties or Related Persons agree to be bound by provisions substantially similar to the provisions of this Section 9.10 (and such Person may disclose information to their respective Related Persons in accordance with clause (ii) above), (viii) to any other party hereto, and (ix) in connection with the exercise or enforcement of any right or remedy under any Loan Document, in connection with any litigation or other proceeding to which such Lender, L/C Issuer or Agent or any of their Related Persons is a party or bound, or to the extent necessary to respond to public statements or disclosures by Credit Parties or their Related Persons referring to a Lender, L/C Issuer or Agent or any of their Related Persons.  Without limiting any of the foregoing, each Lender, each L/C Issuer and Agent hereby acknowledge and agree that all confidential information provided to such Person pursuant to the Credit Agreement, including, but not limited to, all information regarding the sale process described in Section 4.19 or delivered pursuant to the requirements of Section

 

 

(p) Section 11.1 of the Credit Agreement is hereby amended by deleting the definitions of “Aggregate Revolving Loan Commitment,” “Applicable Margin” and “Consolidated EBITDA” set forth therein in its entirety and substituting the following language therefor:

 

“Aggregate Revolving Loan Commitment” means the combined Revolving Loan Commitments of the Lenders, which shall, as of the Seventh Amendment Effective Date, be in the amount of $20,803,152.02, as such amount may be reduced or increased from time to time pursuant to this Agreement.

 

“Applicable Margin” means:

 

(a) with respect to Revolving Loans and Swing Loans:  (x) if a Base Rate Loan, six and one-half percent (6.50%) per annum and (y) if a LIBOR Rate Loan, seven and one-half percent (7.50%) per annum (as such percentages may be increased as, and to the extent, necessary to comply with Section 1.12);

 

(b) with respect to Initial Term Loans:  (x) if a Base Rate Loan, six and one-half percent (6.50%) per annum and (y) if a LIBOR Rate Loan, seven and one-half percent (7.50%) per annum (as such percentages may be increased as, and to the extent, necessary to comply with Section 1.12);

 

(c) with respect to Incremental Term Loans of any Tranche, that percentage per annum for Base Rate Loans and LIBOR Loans of such Tranche as specified pursuant to Section 1.12; and

 

(d) with respect to any Tranche of Extended Term Loans or Extended Revolving Loans, that percentage per annum for Base Rate Loans and LIBOR Loans for such Tranche as set forth in the relevant Extension Offer.

 

Notwithstanding anything to the contrary set forth above or elsewhere in this Agreement, each of the interest rate margins set forth in clauses (a) and (b) above shall, without any further action of, consent by or notice to Agent, any Lender, any Credit Party or any other Person, automatically increase by (i) 50 basis points effective as of November 1, 2013 and (ii) an additional 50 basis points for each subsequent period of three consecutive months, such increase being effective as of the first day immediately succeeding the last day of each such three month period (the increases to the Applicable Margin described in foregoing clauses (i) and (ii) being referred to herein as the “Pricing Increases”).

 

           “Consolidated EBITDA” means, for any period, Consolidated Net Income for such period, adjusted by (A) adding thereto (in each case to the extent deducted in determining Consolidated Net Income for such period), without duplication, the amount of (i) total interest expense (inclusive of amortization of deferred financing fees and other original issue discount and banking fees, charges and commissions (e.g., letter of credit fees and commitment fees)) of Holdings and its Subsidiaries determined on a consolidated basis for such period, (ii) provision for taxes based on income and foreign withholding taxes for Holdings and its Subsidiaries determined on a consolidated basis for such period, (iii) all depreciation and amortization expense of Holdings and its Subsidiaries determined on a consolidated basis for such period, (iv) the amount of all Transaction Expenses for such period that are approved by the Arrangers, (v) the amount of all non-cash deferred compensation expense of Holdings and its Subsidiaries determined on a consolidated basis for such period resulting from the issuance of Stock or Stock Equivalents to former or current directors, officers or employees of Holdings or any Subsidiary of Holdings, or the exercise of such Stock Equivalents, (vi) the amount of all non-cash charges of Holdings and its Subsidiaries relating to the impairment or write-down of fixed assets, intangible assets (other than Accounts) or goodwill for such period, excluding any non-cash charge that is an expense, loss, charge or accrual of a reserve for or in respect of a cash expenditure or payment to be made, or anticipated to be made, in a future period, (vii) the amount of all other non-cash charges of Holdings and its Subsidiaries determined on a consolidated basis for such period, excluding any non-cash charge (y) that is an expense, loss, charge or accrual of a reserve for or in respect of a cash expenditure or payment to be made, or anticipated to be made, in a future period or (z) relating to a write-down, write off or reserve with respect to Accounts and inventory, (viii) reserved, (ix) any losses from sales of assets for such period other than inventory sold in the Ordinary Course of Business, (x) any extraordinary cash losses for such period, (xi) currency translation non-cash losses for such period related to currency remeasurements (including any loss resulting from Rate Contracts for currency exchange

 

risk), (xii) any unrealized non-cash losses for such period in connection with any hedging agreements, (xiii) [reserved], (xiv) reserved, (xv) any fees and expenses incurred for such period in connection with the initial public offering of voting common Stock of Holdings (including fees and expenses incurred in connection with an unconsummated initial public offering of such Stock), including, without limitation, fees and expenses incurred in connection with the Second Amendment and the termination fee with respect to the Management Agreement paid in accordance with the Second Amendment, (xvi) costs and expenses actually incurred and paid in cash by Holdings or any Subsidiary of Holdings in connection with the restructuring efforts of Holdings and its Subsidiaries commenced during Fiscal Year 2013, together with severance expenses, in an aggregate amount for all such costs and expenses described in this clause (xvi) not to exceed (y) $4,500,000 during Fiscal Year 2013 and (z) $500,000 during Fiscal Year 2014, and (xvii) fees and expenses paid to Agent and/or the Lenders and legal expenses paid by the Borrower, in each case, pursuant to or in connection with the Sixth Amendment and, to the extent paid by the Borrower, the consulting fees and related expenses pursuant to the Consulting Agreement (as defined in the Sixth Amendment), and (B) subtracting therefrom (to the extent not otherwise deducted in determining Consolidated Net Income for such period) the amount of (i) all cash payments and cash charges made during such period relating to any non-cash charges taken in a previous period pursuant to preceding clauses (A)(vi) or (A)(vii), (ii) any gains from sales of assets for such period other than inventory sold in the Ordinary Course of Business, (iii) any extraordinary cash gains for such period, (iv) any non-cash income or gains for such period (including any non-cash from the cancellation of Indebtedness), (v) currency translation gains for such period related to currency remeasurements (including any net gain resulting from Rate Contracts for currency exchange risk), (vi) any unrealized gains for such period in connection with any hedging agreements and (vii) solely for purposes of calculating the Interest Coverage Ratio for such period, all cash interest income for such period. For the avoidance of doubt, it is understood and agreed that, to the extent any amounts are excluded from Consolidated Net Income by virtue of the proviso to the definition thereof contained herein, add backs to Consolidated Net Income in determining Consolidated EBITDA as provided above shall be limited (or denied) in a fashion consistent with the proviso to the definition of Consolidated Net Income contained herein. Notwithstanding anything to the contrary contained above, for purposes of determining Consolidated EBITDA for any Test Period which ends prior to the first anniversary of the Closing Date, Consolidated EBITDA for all portions of such period occurring prior to the Closing Date shall be calculated in accordance with the definition of Test Period contained herein.

 

(q) Section 11.1 of the Credit Agreement is hereby further amended by adding the following new definitions thereto in appropriate alphabetical order:

 

“Acceptable Sale” shall have the meaning ascribed thereto in Section 4.19(a)(i).

 

“CRO” shall have the meaning ascribed thereto in Section 4.20.

 

“Designated Reporting Items” means the “Designated Reporting Items” as defined in that certain Notice of Reservation of Rights Letter dated as of November 25, 2013 delivered by Agent to the Borrower, including reporting with respect to same for the periods ending September 30, 2013, October 31, 2013 and November 30, 2013.

 

“First Lien Revolving Agent” means General Electric Capital Corporation, in its capacity as “Agent” under the First Lien Revolving Facility, together with its successors and assigns.

 

“First Lien Revolving Credit Agreement” means that certain First Lien Revolving Credit Agreement dated as of January 10, 2014 by and among the Borrower, the other Credit Parties party thereto, First Lien Revolving Agent and the financial institutions from time to time party thereto as lenders or letter of credit issuers thereunder

 

“First Lien Revolving Facility” means the revolving credit facility evidenced by the First Lien Revolving Credit Agreement.

 

“First Lien Revolving Facility Intercreditor Agreement” means that certain Intercreditor Agreement dated as of January 10, 2014 by and among First Lien Revolving Agent and Agent and acknowledged by the Credit Parties.

 

 

“Investment Banker” shall have the meaning ascribed thereto in Section 4.19(a)(ii)(u).

 

“Moelis” shall have the meaning ascribed thereto in Section 4.2(i)(i).

 

“Seventh Amendment” means that certain Limited Waiver and Seventh Amendment to First Lien Credit Agreement dated as of the Seventh Amendment Effective Date by and among Borrower, the other Credit Parties, Agent and the Lenders party thereto.

 

“Seventh Amendment Effective Date” means January 10, 2014.

 

(r) The Credit Agreement and the other Loan Documents hereby amended by deleting (i) the definition of “Permitted Acquisition” set forth in Section 11.1 of the Credit Agreement and (ii) all references to such term appearing elsewhere in the Credit Agreement and in any other Loan Documents (and the relevant provisions thereof adjusted accordingly to give

 

 

(s) Schedule 1.1(b) of the Credit Agreement maintained by the Agent is hereby amended to reflect the reduction in the Aggregate Revolving Loan Commitment effectuated hereby and that the Revolving Loan Commitment of each Revolving Lender shall equal the sum of such Lender’s pro rata share of all outstanding Revolving Loans and Letter of Credit Obligations.

 

4. Conditions.  The effectiveness of this Amendment is subject to the satisfaction of the following conditions precedent or concurrent:

 

(a) the execution and delivery to Agent of this Amendment by each Credit Party, Agent, Required Lenders and Required Revolving Lenders;

 

(b) the payment by Borrower to Agent of a fully-earned, non-refundable amendment fee for the ratable benefit of each applicable Lender that has delivered and released to Agent its executed signature page to this letter agreement by no later than 9:00 a.m. CST on January 10, 2014 (each such Lender, a “Consenting Lender”), equal to 0.50% of the sum of (y) the aggregate Revolving Loan Commitments of all Consenting Lenders and (z) the outstanding principal amount of the Initial Term Loan held by Consenting Lenders, in each case, as of the date hereof;

 

(c) the First Lien Revolving Facility shall have been consummated and the Borrower shall have obtained the benefits thereof and Agent shall have received copies of the principal documentation evidencing such facility, in each case, duly executed by all of the parties thereto;

 

(d) after giving effect to this Amendment and the waiver contained herein, the truth and accuracy in all material respects of the representations and warranties contained in Section 5 hereof; and

 

(e) no Default or Event of Default (other than the Designated Potential Defaults) shall have occurred and be continuing or arise as a direct result of the effectiveness of this Amendment.

 

5. Representations and Warranties.   Each Credit Party hereby represents and warrants to Agent and each Lender as follows:

 

(a) the representations and warranties made by such Credit Party contained in the Loan Documents are true and correct in all material respects (without duplication of any materiality qualifier contained therein) as of the date hereof, except to the extent such representation or warranty expressly relates to an earlier date (in which event such representations and warranties were true and correct in all material respects (without duplication of any materiality qualifier contained therein) as of such earlier date;

 

 

 

 

 

 

 

IN WITNESS WHEREOF, each of the undersigned has executed this Amendment as of the date set forth above.