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8-K - FORM 8-K - AMSCAN HOLDINGS INC | y92610e8vk.htm |
Exhibit
10.1
EXECUTION
AMENDMENT NO. 2 TO ABL CREDIT AGREEMENT
AMENDMENT NO. 2 TO ABL CREDIT AGREEMENT, dated as of September 8, 2011 (this Amendment No.
2), is by and among Wells Fargo Bank, National Association successor by merger to Wells Fargo
Retail Finance, LLC, in its capacity as administrative and collateral agent for the Lenders (as
hereinafter defined) pursuant to the Credit Agreement defined below (in such capacity,
Administrative Agent), the parties to the Credit Agreement as lenders (individually, each a
Lender and collectively, Lenders), Amscan Inc., a New York corporation (Amscan Inc.), Anagram
International, Inc., a Minnesota corporation (International), Am-Source, LLC, a Rhode Island
limited liability company (Am-Source), Factory Card Outlet of America Ltd., an Illinois
corporation (Factory), Gags and Games, Inc., a Michigan corporation (Gags and Games), PA
Acquisition Corp., a Delaware corporation (PA Acquisition), Party City Corporation, a Delaware
corporation (Party City), Party City Franchise Group, LLC, a Delaware limited liability company
(PCFG and together with Amscan Inc., International, Am-Source, Factory, Gags and Games, PA
Acquisition and Party City, each individually a Borrower and collectively, Borrowers), Party
City Holdings Inc., formerly known as AAH Holdings Corporation, a Delaware corporation
(Holdings), Amscan Holdings, Inc., a Delaware corporation (Amscan), JCS Packaging, Inc., a New
York corporation (JCS), M&D Industries, Inc., a Delaware corporation (M&D), SSY Realty Corp., a
New York corporation (SSY), Trisar, Inc., a California corporation (Trisar), Anagram Eden
Prairie Property Holdings LLC, a Delaware limited liability company (Eden Prairie), Anagram
International, LLC, a Nevada limited liability company (AIL), Anagram International Holdings,
Inc., a Minnesota corporation (AIHI), Factory Card & Party Outlet Corp., a Delaware corporation
(Outlet), Party America Franchising, Inc., a Minnesota corporation (Franchising), Party City
Franchise Group Holdings, LLC, a Delaware limited liability company (PCFG Holdings and, together
with Holdings, Amscan, JCS, M&D, SSY, Trisar, Eden Prairie, AIL, AIHI, Outlet and Franchising, each
individually a Guarantor and collectively, Guarantors).
W I T N E S S E T H:
WHEREAS, Administrative Agent, Lenders, Borrowers and Guarantors have entered into financing
arrangements pursuant to which Lenders (or Administrative Agent on behalf of Lenders) have made and
may make loans and advances and provide other financial accommodations to Borrowers as set forth in
the ABL Credit Agreement dated August 13, 2010, by and among Administrative Agent, Lenders,
Borrowers and Guarantors, as amended by Amendment No. 1 to ABL Credit Agreement dated December 2,
2010 (as from time to time amended, modified, supplemented, extended, renewed, restated or
replaced, the Credit Agreement, and together with all agreements, documents and instruments at
any time executed and/or delivered in connection therewith or related thereto, as from time to time
amended, modified, supplemented, extended, renewed, restated, or replaced, collectively, the Loan
Documents);
WHEREAS, Borrowers and Guarantors desire to amend certain provisions of the Credit Agreement
as set forth herein, and Administrative Agent and Lenders are willing to agree to such amendments
on the terms and subject to the conditions set forth herein;
WHEREAS, by this Amendment No. 2, Administrative Agent, Lenders, Borrowers and Guarantors
desire and intend to evidence such amendments;
NOW THEREFORE, in consideration of the foregoing and the mutual agreements and covenants
contained herein, and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
1. Definitions.
(a) Additional Definitions. As used herein or in the Credit Agreement or any of the
other Loan Documents, the following terms shall have the meanings given to them below and the
Credit Agreement and the other Loan Documents shall be deemed and are hereby amended to include, in
addition and not in limitation, the following definitions:
(i) Amendment No. 2 shall mean Amendment No. 2 to ABL Credit Agreement, dated as of
September 8, 2011 by and among Administrative Agent, Lenders, Borrowers and Guarantors, as the same
now exists or may hereafter be amended, modified, supplemented, extended, renewed, restated or
replaced.
(ii) Qualifying IPO means the issuance and sale by Holdings or any direct or indirect parent
of Holdings of its common Capital Stock in an underwritten primary public offering (other than a
public offering pursuant to a registration statement on Form S-4, S-8 or similar limited purpose
form) pursuant to an effective registration statement filed with the SEC in accordance with the
Securities Act (whether alone or in connection with a secondary public offering) for aggregate
gross proceeds of $150,000,000 or more.
(b) Amendments to Definitions.
(i) The definition of Change of Control set forth in Section 1.01 of the Credit Agreement is
hereby amended by deleting such definition in its entirety and replacing it with the following:
Change of Control means the earliest to occur of (a) at any time
prior to the consummation of a Qualifying IPO, the Sponsors ceasing
to be beneficial owners (as defined in Rules 13(d)-3 and 13(d)-5
under the Exchange Act), in the aggregate, directly or indirectly,
of at least fifty percent (50%) of the aggregate voting power
represented by the issued and outstanding Capital Stock of Holdings,
(b) at any time upon or after the consummation of a Qualifying IPO,
(i) (A) any Person (other than one or more
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Sponsors) or (B) Persons (other than one or more Sponsors)
constituting a group (as such term is used in Sections 13(d) and
14(d) of the Exchange Act, but excluding any employee benefit plan
of such person and its subsidiaries, and any person or entity acting
in its capacity as trustee, agent or other fiduciary or
administrator of any such plan), become the beneficial owner,
directly or indirectly, of Capital Stock representing more than
thirty-five percent (35%) of the aggregate voting power represented
by the issued and outstanding Capital Stock of Holdings and the
percentage of aggregate voting power so held is not less than the
percentage of the aggregate voting power represented by the Capital
Stock of Holdings beneficially owned, directly or indirectly, in the
aggregate by the Sponsors or (ii) during any period of twelve (12)
consecutive months, the majority of the board of directors of
Holdings shall cease to be Persons who either (A) were members of
the board of directors of Holdings on the Closing Date or (B) were
elected or nominated for election by a majority of the board of
directors of Holdings, who were either (1) directors on the Closing
Date or (2) whose election or nomination for election was approved
by a majority of such directors or by any Sponsor; (c) Holdings
shall cease to own 100% of the Capital Stock of Amscan or (d) there
shall occur any change of control or similar event under the
Senior Subordinated Note Indenture (or any agreement or instrument
evidencing or related to any Refinancing Indebtedness with respect
thereto with an outstanding aggregate principal amount in excess of
the Threshold Amount).
(ii) The definition of Fixed Charges set forth in Section 1.01 of the Credit Agreement is
hereby amended by deleting the period at the end of such definition and replacing it with the
following:
; provided, that, prepayments or refinancings of
Subordinated Indebtedness permitted by clauses (iv) or (vii) of
Section 6.05(b) shall not be Fixed Charges..
(iii) The definition of Prime Rate set forth in Section 1.01 of the Credit Agreement is
hereby amended by replacing each reference to Wells Fargo contained therein with Wells Fargo
Bank.
(iv) The definition of Sponsors set forth in Section 1.01 of the Credit Agreement is hereby
amended by deleting such definition in its entirety and replacing it with the following:
Sponsors means collectively Advent, Berkshire, Weston and any of
their respective individual or joint Affiliates and funds or
partnerships managed or advised by any of them or any of their
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respective Affiliates, but not including any of their respective
portfolio companies.
(c) Interpretation. For purposes of this Amendment No. 2, all terms used herein which
are not otherwise defined herein, including but not limited to, those terms used in the recitals
hereto, shall have the respective meanings assigned thereto in the Credit Agreement as amended by
this Amendment No. 2.
2. Refinancing Indebtedness. Section 6.01(p)(i) of the Credit Agreement is hereby
amended by deleting the comma at the end of such Section and replacing it with the following:
except (A) by an amount equal to unpaid accrued interest and
premium (including tender premiums) thereon plus other reasonable
and customary fees and expenses (including upfront fees and original
issue discount) reasonably incurred in connection with such
refinancing or replacement and (B) by an amount equal to any
existing commitments unutilized thereunder,.
3. Restricted Junior Payments. Section 6.05(a)(ii)(A) of the Credit Agreement is
hereby amended by deleting such Section in its entirety and replacing it with the following:
(X) at any time prior to the consummation of a Qualifying IPO, in
an aggregate amount not to exceed $500,000 in any Fiscal Year, to
the extent necessary to permit Holdings to pay general
administrative costs and expenses and (Y) at any time upon or after
the consummation of a Qualifying IPO, to the extent the proceeds of
which shall be used by Holdings (or any direct or indirect parent
thereof) to pay operating expenses in the ordinary course of
business and other corporate overhead costs and expenses (including
administrative, legal, accounting and similar expenses provided by
third parties) incurred by Amscan or any of the Loan Parties, which
are reasonable and customary and incurred in the ordinary course of
business, plus any reasonable and customary indemnification claims
made by directors or officers of Holdings (or any direct or indirect
parent thereof) attributable to the ownership or operations of
Holdings or any of the Loan Parties and
4. Restricted Junior Payments. Section 6.05(a) of the Credit Agreement is hereby
amended by deleting the and at the end of clause (v) of such Section and adding a new clause
(vii) immediately following clause (vi) of such Section to read as follows:
and (vii) Amscan may make Restricted Junior Payments (and Holdings may
itself make Restricted Junior Payments with any such Restricted Junior
Payments received by it from Amscan) that are Restricted Debt Payments (or
are in respect of Restricted Debt Payments) permitted pursuant to clauses
(iv) or (vii) of Section 6.05(b)..
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5. Restricted Debt Payments. Section 6.05(b)(vii) of the Credit Agreement is hereby
amended by deleting such Section in its entirety and replacing it with the following:
payments of Indebtedness in exchange for or with proceeds of any issuance
of Qualified Capital Stock or capital contribution in respect of Qualified
Capital Stock of Holdings, in each case made within forty-five (45) days of
the date of such issuance or capital contribution, and payments of
Indebtedness by the conversion of all or any portion thereof into Qualified
Capital Stock of Holdings, and payments of interest in respect of
Indebtedness in the form of payment-in-kind interest with respect to such
Indebtedness permitted under Section 6.01(y);.
6. Representations and Warranties. Borrowers and Guarantors, jointly and severally,
represent and warrant with and to Administrative Agent and Lenders as follows, which
representations and warranties shall survive the execution and delivery hereof:
(a) no Default or Event of Default has occurred and is continuing as of the date of this
Amendment No. 2;
(b) this Amendment No. 2 and each other agreement to be executed and delivered by Borrowers
and Guarantors in connection herewith (collectively, together with this Amendment No. 2, the
Amendment Documents) has been duly authorized, executed and delivered by all necessary action on
the part of each Borrower and Guarantor which is a party hereto and, if necessary, their respective
equity holders and is in full force and effect as of the date hereof, as the case may be, and the
agreements and obligations of each of the Borrowers and Guarantors, as the case may be, contained
herein and therein constitute legal, valid and binding obligations of each of the Borrowers and
Guarantors, enforceable against them in accordance with their terms, except as enforceability is
limited by bankruptcy, insolvency, reorganization, moratorium or other laws relating to or
affecting generally the enforcement of creditors rights and except to the extent that availability
of the remedy of specific performance or injunctive relief is subject to the discretion of the
court before which any proceeding therefor may be brought;
(c) the execution, delivery and performance of each Amendment Document (i) are all within each
Borrowers and Guarantors corporate or limited liability company powers and (ii) are not in
contravention of law or the terms of any Borrowers or Guarantors certificate or articles of
incorporation, by laws, or other organizational documentation, or any indenture, agreement or
undertaking to which any Borrower or Guarantor is a party or by which any Borrower or Guarantor or
its property are bound;
(d) the resolutions of the Board of Directors or Managers of each Borrower and Guarantor
delivered to Administrative Agent by such Borrower or Guarantor on the date of the effectiveness of
the Credit Agreement have not been revoked and are in full force and effect; and
(e) all of the representations and warranties set forth in the Credit Agreement
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and the other Loan Documents, each as amended hereby, are true and correct in all material
respects on and as of the date hereof, as if made on the date hereof; provided,
that, (i) to the extent that a representation and warranty specifically refers to an
earlier date, it shall be true and correct in all material respects as of such earlier date and
(ii) any representation and warranty that is qualified as to materiality, Material Adverse
Effect or similar language shall be true and correct (after giving effect to any qualification
therein) in all respects on such respective dates with such effect.
7. Conditions Precedent. The amendments contained herein shall only be effective upon
the satisfaction of each of the following conditions precedent in a manner satisfactory to
Administrative Agent:
(a) Administrative Agent shall have received counterparts of this Amendment No. 2, duly
authorized, executed and delivered by Borrowers, Guarantors and the Required Lenders;
(b) Administrative Agent shall have received a true and correct copy of each consent, waiver
or approval (if any) to or of this Amendment No. 2, which Borrowers and Guarantors are required to
obtain from any other Person, and such consent, approval or waiver (if any) shall be in form and
substance reasonably satisfactory to Administrative Agent; and
(c) No Default or Event of Default shall have occurred and be continuing.
8. Effect of Amendment No. 2. Except as expressly set forth herein, no other
amendments, changes or modifications to the Loan Documents are intended or implied, and in all
other respects the Loan Documents are hereby specifically ratified, restated and confirmed by all
parties hereto as of the effective date hereof and Borrowers and Guarantors shall not be entitled
to any other or further amendment by virtue of the provisions of this Amendment No. 2 or with
respect to the subject matter of this Amendment No. 2. To the extent of conflict between the terms
of this Amendment No. 2 and the other Loan Documents, the terms of this Amendment No. 2 shall
control. The Credit Agreement and this Amendment No. 2 shall be read and construed as one
agreement.
9. Governing Law. The validity, interpretation and enforcement of this Amendment No.
2 and any dispute arising out of the relationship between the parties hereto whether in contract,
tort, equity or otherwise, shall be governed by the internal laws of the State of New York.
10. Jury Trial Waiver. BORROWERS, GUARANTORS, ADMINISTRATIVE AGENT AND LENDERS EACH
HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING
UNDER THIS AMENDMENT NO. 2 OR ANY OF THE OTHER LOAN DOCUMENTS OR IN ANY WAY CONNECTED WITH OR
RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO IN RESPECT OF THIS AMENDMENT NO. 2 OR
ANY OF THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS RELATED HERETO OR THERETO IN EACH CASE WHETHER
NOW EXISTING OR HEREAFTER ARISING, AND WHETHER
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IN CONTRACT, TORT, EQUITY OR OTHERWISE. BORROWERS, GUARANTORS, ADMINISTRATIVE AGENT AND
LENDERS EACH HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION
SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT BORROWERS, GUARANTORS, ADMINISTRATIVE AGENT
OR ANY LENDER MAY FILE AN ORIGINAL COUNTERPART OF A COPY OF THIS AMENDMENT NO. 2 WITH ANY COURT AS
WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY
JURY.
11. Binding Effect. This Amendment No. 2 shall be binding upon and inure to the
benefit of each of the parties hereto and their respective successors and assigns.
12. Waiver, Modification, Etc. No provision or term of this Amendment No. 2 may be
modified, altered, waived, discharged or terminated orally, but only by an instrument in writing
executed by the party against whom such modification, alteration, waiver, discharge or termination
is sought to be enforced.
13. Further Assurances. Borrowers and Guarantors shall execute and deliver such
additional documents and take such additional action as may be reasonably requested by
Administrative Agent to effectuate the provisions and purposes of this Amendment No. 2.
14. Entire Agreement. This Amendment No. 2 represents the entire agreement and
understanding concerning the subject matter hereof among the parties hereto, and supersedes all
other prior agreements, understandings, negotiations and discussions, representations, warranties,
commitments, proposals, offers and contracts concerning the subject matter hereof, whether oral or
written.
15. Headings. The headings listed herein are for convenience only and do not
constitute matters to be construed in interpreting this Amendment No. 2.
16. Counterparts. This Amendment No. 2 may be executed in any number of counterparts,
each of which shall be an original, but all of which taken together shall constitute one and the
same agreement. Delivery of an executed counterpart of this Amendment No. 2 by telefacsimile or
other electronic method of transmission shall have the same force and effect as delivery of an
original executed counterpart of this Amendment No. 2. Any party delivering an executed
counterpart of this Amendment No. 2 by telefacsimile or other electronic method of transmission
shall also deliver an original executed counterpart of this Amendment No. 2, but the failure to do
so shall not affect the validity, enforceability, and binding effect of this Amendment No. 2.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 2 to be duly executed
and delivered by their authorized officers as of the day and year first above written.
AMSCAN HOLDINGS, INC. |
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By: | ||||
Name: | Michael A. Correale | |||
Title: | Chief Financial Officer | |||
PARTY CITY HOLDINGS INC., formerly known as AAH Holdings Corporation FACTORY CARD & PARTY OUTLET CORP. |
By: | ||||
Name: | Michael A. Correale | |||
Title: | Chief Financial Officer | |||
AMSCAN INC. GAGS AND GAMES, INC. PA ACQUISITION CORP. PARTY AMERICA FRANCHISING, INC. PARTY CITY CORPORATION |
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By: | ||||
Name: | Michael A. Correale | |||
Title: | Vice President and Treasurer | |||
ANAGRAM INTERNATIONAL HOLDINGS, INC. ANAGRAM INTERNATIONAL, INC. JCS PACKAGING, INC. M&D INDUSTRIES, INC. SSY REALTY CORP. TRISAR, INC. |
||||
By: | ||||
Name: | Michael A. Correale | |||
Title: | Assistant Treasurer | |||
[SIGNATURES CONTINUED ON NEXT PAGE]
[SIGNATURES CONTINUED FROM PREVIOUS PAGE]
AM-SOURCE, LLC
ANAGRAM EDEN PRAIRIE PROPERTY HOLDINGS LLC
By: Amscan Holdings, Inc., sole Member
ANAGRAM EDEN PRAIRIE PROPERTY HOLDINGS LLC
By: Amscan Holdings, Inc., sole Member
By: | ||||
Name: | Michael A. Correale | |||
Title: | Chief Financial Officer | |||
ANAGRAM INTERNATIONAL, LLC |
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By: | ||||
Name: | Michael A. Correale | |||
Title: | Manager | |||
FACTORY CARD OUTLET OF AMERICA
LTD. PARTY CITY FRANCHISE GROUP HOLDINGS, LLC PARTY CITY FRANCHISE GROUP, LLC |
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By: | ||||
Name: | Michael A. Correale | |||
Title: | Authorized Signatory | |||
[SIGNATURES CONTINUED ON NEXT PAGE]
[SIGNATURES CONTINUED FROM PREVIOUS PAGE]
WELLS FARGO BANK, NATIONAL ASSOCIATION, successor by merger to Wells Fargo Retail Finance, LLC, as Administrative Agent |
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By: | ||||
Name: | ||||
Title: |
WELLS FARGO BANK, NATIONAL ASSOCIATION, successor by merger to Wells Fargo Retail Finance, LLC |
By: | ||||
Name: | ||||
Title: |
BANK OF AMERICA, N.A. |
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By: | ||||
Name: | ||||
Title: |
RBS BUSINESS CAPITAL, a division of RBS Asset Finance, Inc., a subsidiary of RBS Citizens, NA |
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By: | ||||
Name: | ||||
Title: |
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TD BANK, N.A., individually, as a Co-Documentation Agent and as a Lender |
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By: | ||||
Name: | ||||
Title: |
SUNTRUST BANK, individually, as a Co-Documentation Agent and as a Lender |
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By: | ||||
Name: | ||||
Title: |
U.S. BANK NATIONAL ASSOCIATION, individually and as a Lender |
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By: | ||||
Name: | ||||
Title: |
CAPITAL ONE LEVERAGE FINANCE CORP., individually and as a Lender |
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By: | ||||
Name: | ||||
Title: |
CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH, individually and as a Lender |
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By: | ||||
Name: | ||||
Title: |
CIT BANK, individually and as a Lender |
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By: | ||||
Name: | ||||
Title: |