NINTH AMENDMENT TO CREDIT AGREEMENT

 

 

Cash Interest Charges for such period (excluding, to the extent included therein, yield, discount or other financing costs pursuant to any Securitization Transaction) plus (b) the aggregate amount of scheduled principal payments (whether or not made) during such period in respect of Indebtedness (including, without limitation, the Attributable Indebtedness of Capital Leases) of GGC and its Subsidiaries (other than Attributable Indebtedness of Securitization Transactions permitted under Section 8.03(i) ) plus (c) the aggregate amount of Restricted Payments made by GGC and its Subsidiaries during such period.

 

“ Consolidated Fixed Charge Coverage Ratio ” means, as of any date of determination, the ratio of (a) the sum of (i) Consolidated EBITDA minus (ii) Consolidated Capital Expenditures (other than (x) Permitted Additional Consolidated Capital Expenditures and, without duplication, (y) Consolidated Capital Expenditures to the extent financed with Indebtedness (other than Loans or Letters of Credit)) minus (iii) Consolidated Cash Taxes to (b) Consolidated Fixed Charges, in each case for the period of the four prior fiscal quarters most recently ended.

 

“ Consolidated Senior Secured Indebtedness ” means Consolidated Funded Indebtedness other than any such Consolidated Funded Indebtedness that is (i) Attributable Indebtedness of Securitization Transactions, (ii) subordinated to the Obligations on Acceptable Subordination Terms or (iii) not secured by a Lien on the assets of any Loan Party or any Subsidiary of any Loan Party.

 

“ Consolidated Senior Secured Leverage Ratio ” means, as of any date of determination, the ratio of (a) Consolidated Senior Secured Indebtedness as of such date to (b) Consolidated EBITDA for the period of the four fiscal quarters most recently ended.

 

“ Domestic Obligations ” means all advances to, and debts, liabilities, obligations, covenants and duties of, any Domestic Loan Party arising under any Domestic Loan Document  or otherwise with respect to any Loan (other than a Canadian Revolving Loan or Canadian Swing Line Loan) or Domestic Letter of Credit, whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising and including interest and fees that accrue after the commencement by or against any Domestic Loan Party of any proceeding under any Debtor Relief Laws naming such Person as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding. The foregoing shall also include any Swap Contract between any Domestic Loan Party and any Domestic Lender or Affiliate of a Domestic Lender and all obligations under any Treasury Management Agreement between any Domestic Loan Party and any Domestic Lender or an Affiliate of a Domestic Lender.

 

“ EBITDA Cure Issuance ” has the meaning specified in the definition of “EBITDA Cure Proceeds”.

 

“ EBITDA Cure Issuance Expiration Date ” means the earlier of (x) the date on which the aggregate amount of EBITDA Cure Proceeds that shall have been applied to increase Consolidated EBITDA is equal to $10,000,000 and (y) the date that is the fifteenth day after the date on which the Compliance Certificate for the fiscal quarter ending March 31, 2010 is required to be delivered (or, if earlier, the date that is the fifteenth day after the date on which such Compliance Certificate is actually delivered).

 

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“ EBITDA Cure Proceeds ” means, with respect to any exercise of GGC’s rights under Section 9.05(a) , the Net Cash Proceeds received by the Domestic Loan Parties pursuant to an issuance of Permitted Cure Securities (an “ EBITDA Cure Issuance ”).  “EBITDA Cure Proceeds” shall not include any cash proceeds which exceed the amount permitted to be added to Consolidated EBITDA pursuant to the limitations set forth in Section 9.05(a)  and Section 9.05(d) .

 

“ Exchange Securities ” means Equity Interests (other than Disqualified Equity Interests) of GGC issued upon consummation of the 2009 Exchange Transaction.

 

“ Gallman Bond Repayment ” means the payment made to repay the entire principal amount of the industrial development bond Indebtedness secured by the Gallman Property, in an aggregate amount not to exceed $17,000,000.

 

“ Liquidation Proceeds ”, at any time, means the aggregate amount of cash proceeds received by GGC or any of its Domestic Subsidiaries on or after the Ninth Amendment Effective Date and prior to such time as result of the orderly liquidation or collection of working capital assets of any business or product line within GGC’s aromatics division, to the extent such liquidation or collection occurs after the discontinuance of such business or product line, and to the extent GGC has designated such cash proceeds as such by written notice to the Administrative Agent and the Lenders; provided , that the aggregate amount of such cash proceeds that may be Liquidation Proceeds shall not exceed $10,000,000.

 

“ Ninth Amendment ” means the Ninth Amendment to Credit Agreement, dated as of the Ninth Amendment Effective Date, executed by the Borrowers, the Guarantors, the Domestic Administrative Agent, the Canadian Administrative Agent and the Lenders party thereto.

 

“ Ninth Amendment Effective Date ” means the date on which all of the conditions set forth in Section 5 of the Ninth Amendment are satisfied (such date to be communicated to the Lenders and the Borrowers by the Administrative Agents promptly upon its occurrence).

 

“ Non-Core Asset Disposition ” means a Disposition of any of the assets set forth on the Non-Core Asset Schedule.

 

“ Non-Core Asset Schedule ” means the schedule of non-core assets delivered by GGC to the Administrative Agent and the Lenders on July 14, 2009.

 

“ Other Cure Issuance ” means an issuance or incurrence of Permitted Junior Refinancing Indebtedness by any Domestic Loan Party pursuant to an exercise by GGC of its rights under Section 9.06(a) .

 

“ Permitted Additional Consolidated Capital Expenditures ” has the meaning specified in Section 8.15(b) .

 

“ Permitted Cure Securities ” means (x) Equity Interests (other than Disqualified Equity Interests) of GGC and (y) Permitted Junior Refinancing Indebtedness.

 

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“ Permitted Holdco Note Restructuring ” means the conversion of the Holdco Loan into Equity Interests of Holdco (or otherwise forgiving such Indebtedness and simultaneously cancelling the Holdco Note); provided that contemporaneously with such conversion or forgiveness and cancellation (collectively, the “ Note Restructuring ”) (i) each of the Canadian Loan Parties shall have executed and delivered to the Domestic Administrative Agent a guaranty agreement in form and substance reasonably satisfactory to the Administrative Agent pursuant to which the Canadian Loan Parties shall guarantee (the “ Canadian Loan Party Guaranty ”) the Domestic Obligations up to a maximum amount initially equal to the outstanding principal amount under the Holdco Note on the date of the Note Restructuring, with such maximum amount to be reduced on a dollar-for-dollar basis by any prepayments by GGC of the Term Loans and Domestic Revolving Loans from time to time pursuant to Section 2.05(b)(viii) , together with such collateral documents as the Domestic Collateral Agent may reasonably request pursuant to which the Canadian Loan Parties shall grant Liens on their assets to secure their respective obligations under the Canadian Loan Party Guaranty, such collateral documents to be in form and substance reasonably satisfactory to the Domestic Collateral Agent, and (ii) the Canadian Loan Parties shall have delivered to the Domestic Administrative Agent and Domestic Collateral Agent documents of the types referred to in Sections 5.01(e)  and (f)  and favorable opinions or other legal memoranda of counsel to the Canadian Loan Parties in form and substance satisfactory to the Domestic Collateral Agent acting with the consent of the Required Domestic Lenders and the Canadian Collateral Agent acting with the consent of the Required Canadian Lenders.

 

“ Permitted Junior Refinancing Indebtedness ”  means Indebtedness of GGC or any other Domestic Loan Party that (i) is unsecured, (ii) is subordinated to the Obligations on Acceptable Subordination Terms, (iii) does not provide for the payment of cash interest, (iv) bears interest at an effective interest rate (after giving effect to any original issue discount) that is not in excess of 15.0% per annum, (v) has a maturity date not earlier than October 1, 2015 and does not require any mandatory principal payments prior to such date (other than upon a change of control, but then only subject to prior payment in full of the Obligations) and (vi) contains no financial maintenance covenants or restrictions on the incurrence of Indebtedness or Liens (it being understood that an “equal and ratable” or like provision shall be deemed to be a restriction on the incurrence of Liens).

 

“ Royal Intercompany Note ” means that certain promissory note dated as of October 3, 2006 executed by the Canadian Borrower in favor of Holdco, attached as Exhibit II to the Ninth Amendment.

 

“ 2009 Exchange Offering Memorandum ” means the Amended and Restated Offering Memorandum and Consent Solicitation Statement, in the form provided by GGC to the Administrative Agent on July 2, 2009.

 

“ 2009 Exchange Transaction ” means the exchange offer transaction on substantially the terms set forth in 2009 Exchange Offering Memorandum.

 

(b)           The phrase “Exchange Obligations” is hereby replaced with the phrase “Exchange Securities” each time that it appears in the Credit Agreement.

 

(c)           The definition of “Applicable Rate” in Section 1.01 of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

 

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“ Applicable Rate ” means with respect to all Loans (including, for the avoidance of doubt, Revolving Loans and the Term Loan), Bankers’ Acceptance Advances and Letters of Credit and Commitment Fees, the following percentages per annum:

 

Commitment Fees		Eurodollar Rate Loans and Letter of Credit Fee		Bankers Acceptance Advances		Base Rate Loans
1.00	%	7.00	%	7.00	%	6.00	%

 

(d)           The definition of “Base Rate” in Section 1.01 of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

 

“ Base Rate ” means

 

(a)           in the case of Domestic Revolving Loans and the Term Loan, for any day a fluctuating rate per annum equal to the highest of (i) the Federal Funds Rate plus ½ of 1%, (ii) the Domestic Prime Rate and (iii) the Eurodollar Rate for an Interest Period of one month plus 1%;

 

(b)           in the case of Loans denominated in Canadian Dollars, for any day a fluctuating rate per annum equal to the highest of (i) the CDOR Rate plus ½ of 1%, (ii) the Canadian Prime Rate and (iii) the Eurodollar Rate for an Interest Period of one month plus 1%; and

 

(c)           in the case of Canadian Revolving Loans or Canadian Swing Line Loans denominated in U.S. Dollars, for any day a fluctuating rate per annum equal to the highest of (i) the rate which the Canadian Administrative Agent in Toronto, Ontario announces from time to time as the reference rate of interest for loans in U.S. Dollars to its Canadian borrower, (ii) the Federal Funds Rate plus ½ of 1% and (iii) the Eurodollar Rate for an Interest Period of one month plus 1%.

 

(e)           Clause (a) of the definition of “CDOR Rate” in Section 1.01 of the Credit Agreement is hereby amended by inserting “or Canadian Swing Line Loans” immediately after “Canadian Revolving Loans”.

 

(f)            Clause (a) of the definition of “Change of Control” in Section 1.01 of the Credit Agreement is hereby amended by inserting “except to the extent resulting from the consummation of the 2009 Exchange Transaction,” at the beginning thereof.

 

(g)           Clause (b) of the definition of “Change of Control” in Section 1.01 of the Credit Agreement is hereby amended by inserting the following proviso at the end thereof:

 

; provided , that none of the foregoing shall constitute a “Change of Control” to the extent directly attributable to the reconstitution of the board of directors of GGC contemplated under the terms of the 2009 Exchange Transaction;

 

(h)           Clause (e) of the definition of “Change of Control” in Section 1.01 of the Credit Agreement is hereby amended and restated to read in its entirety as follows:

 

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(e)           the occurrence of a “Change of Control” (or any comparable term) under, and as defined in, the documents governing any Exchange Securities or Permitted Junior Refinancing Indebtedness.

 

(i)            The definition of “Consolidated Capital Expenditures” in Section 1.01 of the Credit Agreement is hereby amended and restated to read in its entirety as follows:

 

“ Consolidated Capital Expenditures ” means, for any period, for GGC and its Subsidiaries on a consolidated basis, all capital expenditures, as determined in accordance with GAAP; provided , however , that Consolidated Capital Expenditures shall not include expenditures made with proceeds of any Involuntary Disposition to the extent such expenditures are used to purchase property that is the same as or similar to the property subject to such Involuntary Disposition.

 

(j)            The definition of “Consolidated EBITDA” in Section 1.01 of the Credit Agreement is hereby amended and restated to read in its entirety as follows:

 

“ Consolidated EBITDA ” means, for any period, for GGC and its Subsidiaries on a consolidated basis, the sum of (a) Consolidated Net Income for such period, plus (b) to the extent deducted in determining such Consolidated Net Income for such period, the aggregate amount, without duplication, of (i) interest expense, (ii) income tax expense, (iii) depreciation and amortization (including without limitation amortization of debt issuance costs), (iv) non-cash charges which do not represent a cash item in such period or any future period, (v) for the fiscal quarters ended September 30, 2008 and December 31, 2008 only, cash restructuring charges and expenses in an aggregate amount not to exceed $12,000,000, (vi) for the fiscal quarter ended March 31, 2009 only, cash restructuring charges and expenses in an aggregate amount not to exceed $8,100,000, (vii) for the fiscal quarters ended June 30, 2009, September 30, 2009, December 31, 2009, March 31, 2010, and June 30, 2010 only, cash restructuring charges and expenses in an aggregate amount not to exceed $24,200,000, (viii) the fees and expenses of (x) Alvarez & Marsal Holdings, LLC incurred since April 1, 2009 in respect of services relating to GGC’s financial restructuring and operational review and performance improvement initiatives) and (y) the financial advisory firm retained by the Administrative Agents pursuant to Section 7.10(e) , (ix) the fees and expenses incurred in connection with obtaining the real estate appraisals pursuant to Section 7.10(d)  and the evaluations and appraisals of accounts receivable and inventory pursuant to Section 7.20 , (x) legal and financial advisory fees and expenses of third party professionals (other than Alvarez & Marsal Holdings, LLC and the financial advisory firm retained by the Administrative Agents) incurred in connection with the negotiation, documentation and closing of the 2009 Exchange Transaction, (xi) legal, financial advisory and other fees and expenses (other than of Alvarez & Marsal Holdings, LLC and the financial advisory firm retained by the Administrative Agents) incurred since April 1, 2009 in connection with the negotiation, documentation and closing of the sixth, seventh, eighth, and ninth amendments to the Credit Agreement and (xii) fees and expenses of third party professionals (other than Alvarez & Marsal Holdings, LLC and the financial advisory firm retained by the Administrative Agents) incurred since April 1, 2009 in respect of financial contingency planning, in an aggregate amount for this clause (xii) not to exceed $3,400,000.  For purposes of this definition, “interest” shall exclude yield, discount or other similar financing costs pursuant to any Securitization Transaction.

 

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(k)           The definition of “Consolidated Interest Coverage Ratio” in Section 1.01 of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

 

“ Consolidated Interest Coverage Ratio ” means, as of any date of determination, the ratio of (a) Consolidated EBITDA for the period of the four prior fiscal quarters ending on such date to (b) the sum of (i) Consolidated Cash Interest Charges for such period minus (ii) to the extent included in Consolidated Cash Interest Charges for such period, yield, discount or other financing cost pursuant to any Securitization Transaction, each as determined on a consolidated basis in accordance with GAAP.

 

(l)            The definition of “Consolidated Leverage Ratio” in Section 1.01 of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

 

“ Consolidated Leverage Ratio ” means, as of any date of determination, the ratio of (a) the sum of (i) Consolidated Funded Indebtedness as of such date minus (ii) in each case to the extent included in Consolidated Funded Indebtedness as of such date, (x) the Attributable Indebtedness of Securitization Transactions and (y) Permitted Junior Refinancing Indebtedness to (b) Consolidated EBITDA for the period of the four fiscal quarters most recently ended.

 

(m)          The definition of “Consolidated Net Income” in Section 1.01 of the Credit Agreement is hereby amended by (i) replacing “an Exchange Offer” with “the 2009 Exchange Transaction” in clause (x)(3), (ii) replacing “and” with “,” at the end of clause (x)(4), (iii) inserting “and” at the end of clause (x)(5) and (iv) inserting a new clause (x)(6) immediately after clause (x)(5) as follows:

 

(6)           any gain or loss arising from any Non-Core Asset Disposition

 

(n)           The definition of “Domestic Collateral Documents” in Section 1.01 of the Credit Agreement is hereby amended by deleting “, the Intercreditor Agreement”.

 

(o)           Clause (d) of the definition of “Equity Issuance” in Section 1.01 of the Credit Agreement is hereby amended and restated to read in its entirety as follows:

 

(d)           [reserved] and

 

(p)           Clause (d) of the definition of “Funded Indebtedness” in Section 1.01 of the Credit Agreement is hereby amended by deleting “and standby letters of credit that support performance obligations”.

 

(q)           The definition of “Net Cash Proceeds” in Section 1.01 of the Credit Agreement is hereby amended by inserting “, issuance or incurrence of Permitted Junior Refinancing Indebtedness” immediately following “Equity Issuance” each time it appears therein.

 

(r)            The definitions of “Consolidated Adjusted Leverage Ratio”, “Consolidated Interest Charges”, “Excess Amount”, “Exchange Obligations”, “Exchange Offer”, “Intercreditor Agreement”, “Minimum Excess Amount”, “Permitted Acquisitions” and “Pro Forma Basis” in Section 1.01 of the Credit Agreement are hereby deleted.

 

(s)           Section 1.03(b) of the Credit Agreement is hereby amended by inserting the following new sentence at the end thereof:

 

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If any change in GAAP occurs on or after the Ninth Amendment Effective Date that results in operating leases (as characterized under GAAP prior to giving effect to any such changes) being treated as Capital Leases after giving effect to such changes, such leases shall continue to be treated as operating leases for all purposes under the Loan Documents notwithstanding such change in GAAP.

 

(t)            Section 1.03(c) of the Credit Agreement is hereby deleted.

 

(u)           Section 2.05(b)(i)(C) of the Credit Agreement is hereby deleted.

 

(v)           The first sentence of Section 2.05(b)(ii)(A) of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

 

The applicable Borrower shall promptly prepay the Loans and/or Cash Collateralize the L/C Obligations as hereafter provided in an aggregate amount equal to: (i) 50% of the Net Cash Proceeds received by GGC and its Subsidiaries in respect of Dispositions after the Ninth Amendment Effective Date to the extent that the aggregate amount of such Net Cash Proceeds is less than or equal to $45,000,000 and (ii) 100% of the Net Cash Proceeds received by GGC and its Subsidiaries in respect of Dispositions after the Ninth Amendment Effective Date to the extent the aggregate amount of such Net Cash Proceeds exceeds $45,000,000; provided that if at any time the sum of (x) the cumulative amount of Net Cash Proceeds received by GGC and its Subsidiaries in respect of Dispositions after the Ninth Amendment Effective Date not prepaid pursuant to clause (i) or (ii) plus (y) the amount of Liquidation Proceeds minus (z) the cumulative amount of Incremental Prepayments previously made pursuant to this proviso exceeds $22,500,000, the applicable Borrower shall prepay additional Loans and/or Cash Collateralize additional L/C Obligations in an amount equal to such excess (each an “ Incremental Prepayment ”).

 

(w)          Section 2.05(b)(iv) of the Credit Agreement is hereby amended by inserting “(other than any such Net Cash Proceeds that are EBITDA Cure Proceeds)” immediately after “any Equity Issuance”.

 

(x)            The first sentence of Section 2.05(b)(v) of the Credit Agreement is hereby amended by deleting “(if the Consolidated Leverage Ratio as of the end of such fiscal year is greater than or equal to 3.5 to 1.0) or 50% (if the Consolidated Leverage Ratio as of the end of such fiscal year is less than 3.5 to 1.0)”.

 

(y)           Section 2.05(b)(vi)(A)(3) of the Credit Agreement is hereby amended and restated to read in its entirety as follows:

 

(3)           [reserved;] or

 

(z)            To correct a scrivener’s error, Section 2.05(b)(vi)(C) of the Credit Agreement is hereby amended by replacing “with respect to all amounts prepaid pursuant to Sections 2.06(b)(iii) and (iv) ” with “with respect to all amounts prepaid pursuant to Sections 2.05(b)(iii) and (iv) ”.

 

(aa)         Section 2.05(b)(vi)(E) of the Credit Agreement is hereby amended and restated to read in its entirety as follows:

 

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(E)           with respect to any Net Cash Proceeds received by the Canadian Borrower or any of its Canadian Subsidiaries from any Permitted Sale and Leaseback Transaction or any Permitted Canadian Disposition, the Canadian Borrower may elect to use such Net Cash Proceeds to prepay the Holdco Loan (or, on and after the date on which the Permitted Holdco Note Restructuring shall have been consummated, the Royal Intercompany Note) rather than prepay the Canadian Obligations in accordance with Section 2.05(b)(vi)(B)(2) ; provided , that, GGC immediately uses the proceeds received from such prepayment of the Holdco Loan to prepay the Term Loan (ratably to the remaining principal amortization payments thereof), or if the Term Loan has been paid in full, to the Domestic Revolving Loans and then to Cash Collateralize the Domestic L/C Obligations or, in the case of a prepayment of the Royal Intercompany Note on or after the date on which the Permitted Holdco Note Restructuring shall have been consummated, GGC immediately prepays (in an aggregate amount equal to the amount by which the Royal Intercompany Note shall have been prepaid) the Term Loan (ratably to the remaining principal amortization payments thereof), or if the Term Loan has been paid in full, to the Domestic Revolving Loans and then to Cash Collateralize the Domestic L/C Obligations.

 

(bb)         A new Section 2.05(b)(viii) is hereby added to the Credit Agreement as follows:

 

(viii)        Prepayment of Royal Intercompany Note .  On or after the consummation of the Permitted Holdco Note Restructuring, immediately upon receipt by Holdco of any payment in respect of principal on the Royal Intercompany Note (other than any such payment made on the Royal Intercompany Note pursuant to Section 2.05(b)(vi)(E), as to which the provisions of Section 2.05(b)(vi)(E) shall apply), GGC shall prepay the Term Loan and the Domestic Revolving Loans by the amount of such payment on a pro rata basis until such Loans have been prepaid in full, and shall then Cash Collateralize the Domestic L/C Obligations until the entire amount thereof shall have been Cash Collateralized.

 

(cc)         A new Section 2.06(d) of the Credit Agreement is added, as follows:

 

(d)           Mandatory Commitment Reductions. The applicable Commitments shall be automatically and permanently reduced on a dollar-for-dollar basis to the extent of all prepayments of Revolving Loans and Canadian Swing Line Loans, and all cash collateralization of Bankers’ Acceptance Advances and Cash Collateralization of L/C Obligations, made in accordance with Section 2.05(b)(vi)(B) , 2.05(b)(vi)(C) , 2.05(b)(vi)(D) , 2.05(b)(vi)(E) , 2.05(b)(viii) , 8.03(r)  or, prior to the date on which the Permitted Holdco Note Restructuring shall have been consummated, 8.12(c) .

 

(dd)         Section 5.02 of the Credit Agreement is hereby amended by (i) deleting clause (d) and  (ii) replacing “ Sections 5.02(a) , (b)  and (d) ” with “ Sections 5.02(a)  and (b) ” in the last sentence thereof.

 

(ee)         Section 6.22 of the Credit Agreement is hereby amended by inserting a new paragraph at the end thereof as follows:

 

The subordination provisions contained in the documents governing any Permitted Junior Refinancing Indebtedness are enforceable against GGC, the other Loan Parties and the holders of such Permitted Junior Refinancing Indebtedness, and all Obligations hereunder and under the Loan Documents constitute “Senior Indebtedness”

 

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and “Designated Senior Indebtedness” (or any comparable terms) under the terms of such documents.

 

(ff)           Section 7.02(k) of the Credit Agreement is hereby amended and restated to read in its entirety as follows:

 

(k)           (i) promptly, and in any event within two Business Days after receipt thereof by GGC, copies of each notice or other correspondence received from Holdco or any of its Subsidiaries, and any notice or other correspondence provided to Holdco, in connection with the Holdco Note or any other Intercompany Security Document and (ii) beginning on the date on which the Permitted Holdco Note Restructuring shall have been consummated, promptly, and in any event within two Business Days after receipt thereof by Holdco, copies of each notice or other correspondence received from the Canadian Borrower or any of its Subsidiaries, and any notice or other correspondence provided to the Canadian Borrower, in connection with the Royal Intercompany Note; and

 

(gg)         Section 7.12(c) of the Credit Agreement is hereby amended by deleting “the Exchange Securities” and replacing it with “any Permitted Junior Refinancing Indebtedness”.

 

(hh)         Section 7.21 of the Credit Agreement is hereby deleted.

 

(ii)           Section 8.01(p) of the Credit Agreement is hereby amended and restated to read in its entirety as follows:

 

(p)           (i) Liens in favor of GGC on the assets of Holdco and its Canadian Subsidiaries pursuant to any Intercompany Security Document and (ii) at all times on and after the date on which the Permitted Holdco Note Restructuring shall have been consummated, Liens in favor of Holdco on the assets of the Canadian Loan Parties (other than Holdco) to secure their obligations to Holdco in respect of the Royal Intercompany Note (including the Guarantee thereof); provided , that such Liens shall be subordinated, on terms and conditions satisfactory to the Domestic Collateral Agent and the Canadian Collateral Agent, to the Liens securing the Obligations granted by such Canadian Loan Parties under the Loan Documents.

 

(jj)           Section 8.02(f) of the Credit Agreement is hereby amended and restated to read in its entirety as follows:

 

(f)            [reserved];

 

(kk)         Section 8.02(g) of the Credit Agreement is hereby amended by inserting the following additional proviso at the end thereof:

 

and provided further , that, notwithstanding any other provision of this Agreement or of any other Loan Document to the contrary, the Holdco Loan may be converted in full into Equity Interests of Holdco (or otherwise forgiven in full, and the Holdco Note cancelled) pursuant to the Permitted Holdco Note Restructuring.

 

(ll)           Sections 8.03(f), 8.03(g) and 8.03(h) of the Credit Agreement are hereby each amended by replacing “that are exchanged for Exchange Securities” with “that are exchanged for Exchange Securities pursuant to the 2009 Exchange Transaction”.

 

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8.11        Financial Covenants

 

(a)           Consolidated Interest Coverage Ratio .  Permit the Consolidated Interest Coverage Ratio as of the end of any fiscal quarter of GGC to be less than the ratio set forth opposite such fiscal quarter below:

 

Fiscal Quarter Ending		Consolidated Interest Coverage Ratio
June 30, 2009		1.00:1.0
September 30, 2009		2.00:1.0
December 31, 2009		1.65:1.0
March 31, 2010		1.50:1.0
June 30, 2010		1.65:1.0
September 30, 2010		1.70:1.0
December 31, 2010		1.75:1.0
March 31, 2011		1.85:1.0
June 30, 2011		1.90:1.0
September 30, 2011		2.00:1.0
December 31, 2011 and thereafter		3.00:1.0

 

(b)            Consolidated Leverage Ratio .  Permit the Consolidated Leverage Ratio as of the end of any fiscal quarter of GGC to be greater than the ratio set forth opposite such fiscal quarter below:

 

Fiscal Quarter Ending		Consolidated Leverage Ratio
June 30, 2009		10.30:1.0
September 30, 2009		4.80:1.0
December 31, 2009		5.55:1.0
March 31, 2010		6.45:1.0
June 30, 2010		5.55:1.0
September 30, 2010		5.10:1.0
December 31, 2010		4.75:1.0
March 31, 2011		5.15:1.0
June 30, 2011		4.85:1.0
September 30, 2011		4.60:1.0
December 31, 2011 and thereafter		3.50:1.0

 

(c)           Consolidated Fixed Charge Coverage Ratio .  Permit the Consolidated Fixed Charge Coverage Ratio as of the end of any fiscal quarter of GGC to be less than the ratio set forth opposite such fiscal quarter below:

 

Fiscal Quarter Ending		Consolidated Fixed Charge Coverage Ratio
September 30, 2009		1.20:1.0
December 31, 2009		1.10:1.0
March 31, 2010		0.90:1.0
June 30, 2010		1.00:1.0
September 30, 2010		1.00:1.0
December 31, 2010		1.00:1.0
March 31, 2011		1.05:1.0

 

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Fiscal Quarter Ending		Consolidated Fixed Charge Coverage Ratio
June 30, 2011		1.05:1.0
September 30, 2011		1.05:1.0
December 31, 2011 and thereafter		2.00:1.0

 

(d)            Consolidated Senior Secured Leverage Ratio .  Permit the Consolidated Senior Secured Leverage Ratio as of the end of any fiscal quarter of GGC to be greater than the ratio set forth opposite such fiscal quarter below:

 

Fiscal Quarter Ending		Consolidated Senior Secured Leverage Ratio
September 30, 2009		4.50:1.0
December 31, 2009		5.20:1.0
March 31, 2010		6.10:1.0
June 30, 2010		5.20:1.0
September 30, 2010		4.75:1.0
December 31, 2010		4.45:1.0
March 31, 2011		4.80:1.0
June 30, 2011		4.55:1.0
September 30, 2011		4.30:1.0
December 31, 2011 and thereafter		2.50:1.0

 

(e)            Pro Forma Impact of 2009 Exchange Transaction and Gallman Bond Repayment .  The parties hereto agree that, solely for purposes of determining compliance with the financial covenants set forth in Sections 8.11(a) , and 8.11(c)  as of the end of the fiscal quarters ending September 30, 2009, December 31, 2009 and March 31, 2010, Consolidated Cash Interest Charges and Consolidated Fixed Charges shall be calculated giving pro forma effect to (x) the 2009 Exchange Transaction as if it had occurred on October 1, 2008 and (y) the Gallman Bond Repayment as if it had occurred on June 30, 2008.

 

(tt)           Section 8.12(a) of the Credit Agreement is hereby amended by inserting “, documents governing Permitted Junior Refinancing Indebtedness, the Royal Intercompany Note” immediately after “Exchange Securities”.

 

(uu)         Section 8.12(b) of the Credit Agreement is hereby amended by (i) inserting “, Permitted Junior Refinancing Indebtedness” immediately after “Exchange Securities”, (ii) inserting “or the Royal Intercompany Note” immediately after “(other than Indebtedness arising under the Loan Documents” and (iii) replacing “issuing or incurring Exchange Securities” with “consummating the 2009 Exchange Transaction”.

 

(vv)         Section 8.12(c) of the Credit Agreement is hereby amended by inserting the following additional proviso at the end thereof:

 

and provided further that, notwithstanding any other provision of this Agreement or of any other Loan Document to the contrary, the Holdco Loan may be converted into Equity Interests of Holdco (or otherwise forgiven, and the Holdco Note cancelled) pursuant to the Permitted Holdco Note Restructuring.

 

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(ww)       A new Section 8.12(e) of the Credit Agreement is hereby added, as follows:

 

“(e)         Make any payment in violation of the subordination terms of any  Permitted Junior Refinancing Indebtedness.”

 

(xx)          Section 8.15 of the Credit Agreement is hereby amended and restated to read in its entirety as follows:

 

8.15        Capital Expenditures

 

(a)           Base Capital Expenditures .  Except to the extent permitted under Section 8.15(b) , permit Consolidated Capital Expenditures during any fiscal year to exceed an amount equal to the amount set forth opposite such fiscal year below (the amount set forth in the table below with respect to each fiscal year, such fiscal year’s “ Base Capital Expenditures Basket Amount ”):

 

Fiscal Year		Base Capital Expenditures Basket Amount
2009		$	35,000,000
2010		$	45,000,000
2011		$	50,000,000
2012 and thereafter		$	50,000,000

 

; provided , however , that if the Base Capital Expenditures Basket Amount for any fiscal year exceeds the amount of Consolidated Capital Expenditures made in such fiscal year in reliance on the Base Capital Expenditures Basket Amount for such fiscal year (the amount of such Consolidated Capital Expenditures made in any fiscal year, such fiscal year’s “ Base Consolidated Capital Expenditures ”), the lesser of (x) the amount of such excess and (y) $10,000,000 (such lesser amount, the “ Base CapEx Carryover Amount ”) may be carried over to the following fiscal year and, so long as no Default has occurred and is continuing or would result from such expenditure, used to permit additional Base Consolidated Capital Expenditures in such following fiscal year; provided further that (i) such Base CapEx Carryover Amount shall be deemed used in such following fiscal year to permit Base Consolidated Capital Expenditures before the Base Capital Expenditures Basket Amount for such following fiscal year is used in such following fiscal year for such purpose and (ii) such Base CapEx Carryover Amount may not be carried over into any fiscal year other than such following fiscal year.

 

(b)           Permitted Additional Consolidated Capital Expenditures .  In addition to Consolidated Capital Expenditures permitted under Section 8.15(a) , the Loan Parties and their Subsidiaries shall be permitted to make additional Consolidated Capital Expenditures (“ Permitted Additional Consolidated Capital Expenditures ”) at any time (the “ Applicable Time ”) in an amount equal to the sum of (x) 50% of the aggregate Net Cash Proceeds received by the Loan Parties and their Subsidiaries in respect of Dispositions (other than Involuntary Dispositions) after the Ninth Amendment Effective Date and prior to the Applicable Time plus (y) to the extent not included in clause (x), the aggregate amount of Liquidation Proceeds received after the Ninth Amendment Effective Date and prior to the Applicable Time minus (z) the aggregate amount of Permitted Additional Consolidated Capital Expenditures made by the Loan Parties and their Subsidiaries prior to the Applicable Time; provided , that:

 

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(i)                                      Permitted Additional Consolidated Capital Expenditures may not be made at any time if any Default or Event of Default shall have occurred and be continuing at such time or would result therefrom;

 

(ii)                                   Permitted Additional Consolidated Capital Expenditures may not be made in any fiscal quarter of fiscal year 2010 or fiscal year 2011 unless Consolidated EBITDA for the two consecutive fiscal quarter period most recently completed prior to such fiscal quarter is greater than or equal to the Consolidated EBITDA threshold amount for such two consecutive fiscal quarter period set forth on Schedule 1 to the Ninth Amendment; provided that the Loan Parties and their Subsidiaries shall be permitted to make up to $5,000,000 of Permitted Additional Capital Expenditures on or after January 1, 2010 without regard to the foregoing restriction;

 

(iii)                                the amount of Permitted Additional Consolidated Capital Expenditures made in reliance on the receipt of Liquidation Proceeds shall not exceed (1) $5,000,000 during the period beginning on the Ninth Amendment Effective Date and ending on December 31, 2009, (2) $5,000,000 during the fiscal quarter ending March 31, 2010 and (3) $0 thereafter; and

 

(iv)                               the amount of Permitted Additional Consolidated Capital Expenditures that may be made by the Loan Parties and their Subsidiaries in any fiscal year shall not exceed the amount set forth opposite such fiscal year below (such amount with respect to any fiscal year