THIRD AMENDMENT TO
CREDIT AGREEMENT
THIS THIRD AMENDMENT TO CREDIT AGREEMENT ("Third Amendment")
dated as of September 1, 1998, by and among SUCCESSORIES, INC., an
Illinois corporation, CELEBRATING EXCELLENCE, INC., an Illinois
corporation, SUCCESSORIES OF ILLINOIS, INC., an Illinois
corporation, CELEX SUCCESSORIES, INC., a Canadian corporation,
BRITISH LINKS ACQUISITION CORP., an Illinois corporation, and
B.L.G.C., INC., a Texas corporation (hereinafter, together with
their successors in title and assigns, called the "Borrowers" and
each of which individually is a "Borrower"), THE PROVIDENT BANK, as
Agent, an Ohio banking corporation ("Agent"), and various Lenders as
set forth in the Credit Agreement.
PRELIMINARY STATEMENT
WHEREAS, Borrowers, Agent and Lenders have entered into a
Credit Agreement dated as June 20, 1997, as amended by a First
Amendment dated as of July 16, 1997, and a Second Amendment dated as
of May 14, 1998 (the "Credit Agreement"); and
WHEREAS, Borrowers have requested Agent and Lenders to adjust
various of the financial covenants set forth in the Credit
Agreement; and
WHEREAS, Borrowers, Agent and Lenders now wish to amend the
Credit Agreement in accordance with the terms and provisions hereof.
NOW, THEREFORE, the parties hereto agree to supplement and
amend the Credit Agreement upon such terms and conditions as
follows:
1. Capitalized Terms. All capitalized terms used herein
shall have the meanings assigned to them in the Credit Agreement
unless the context hereof requires otherwise. Any definitions as
capitalized terms set forth herein shall be deemed incorporated into
the Credit Agreement as amended by this Third Amendment.
2. Definitions. The following definitions contained in
Section 1.2 of the Credit Agreement are hereby amended as follows:
(a) The definition of "EBITDA" shall be amended in its
entirety to read as follows:
"EBITDA" for any period shall mean, without duplication (i) Net
Income; plus (ii) for such period any interest Expense deducted in
the determination of Net Income; plus (iii) any income and franchise
taxes deducted in the determination of Net Income; plus (iv)
amortization and depreciation deducted in determining Net Income for
such period; plus (v) extraordinary losses and losses on sales of
assets (other than sales of inventory in the ordinary course of
business); minus (vi) the sum for such period of interest income,
extraordinary gains and gains from sales of assets (other than sales
of inventory in the ordinary course of business).
(b) The definition of "Indebtedness" shall be amended
by the addition of the following subparagraph (f) to the end of the
existing definition:
"(f) any sum or thing of value, no matter what the form, paid or
given by Borrowers as consideration in connection with the issuance
of Indebtedness, which could be characterized as original issue
discount in accordance with GAAP, shall be included within the term
'Indebtedness' hereunder regardless of how Borrowers may
characterize such consideration on their financial statements."
3. Waiver of Certain Covenants. The Lenders hereby agree
to waive (a) the application of Sections 7.1, 7.3 and 7.5 of the
Credit Agreement as they relate to the Reference Period ending
closest to July 31, 1998 and October 31, 1998, and (b) the
application of Section 7.2 of the Credit Agreement as it relates to
the Reference Period ending closest to July 31, 1998; provided,
however, that the foregoing waivers are conditioned upon (a) EBITDA
for the Reference Period ending closest to July 31, 1998 being at
least One Million Three Hundred Forty-One Thousand and 00/100
Dollars ($1,341,000.00); and (b) EBITDA for the quarter ending on
the Computation Date ending closest to October 31, 1998 being at
least One Million Six Hundred Thousand and 00/100 Dollars
($1,600,000.00); provided, however, when calculating EBITDA for such
quarter, Borrower shall be allowed a credit against expenses in an
amount not to exceed the lesser of (i) $400,000 and (ii) the amount
of any payment, if any, made by Borrower to Xxxxx X. Xxxxxxxx, the
former President and Chief Executive Office of Borrower, to settle
any claims which may exist between them.
4. Reaffirmation of Covenants, Warranties and
Representations. Borrowers hereby agree and covenant that all
representations and warranties set forth in the Credit Agreement
including, without limitation, all of those representations and
warranties set forth in Article 5 thereof, are true and accurate as
of the date hereof. Borrowers further reaffirm all covenants set
forth in the Credit Agreement, and reaffirm each of the affirmative
covenants set forth in Article 6, all financial covenants set forth
in Article 7, and all negative covenants set forth in Article 8
thereof, as if fully set forth herein, except to the extent modified
by this Third Amendment.
5. Conditions Precedent to Closing of Third Amendment. On
or prior to the closing of this Third Amendment (hereinafter the
"Third Amendment Closing Date"), each of the following conditions
precedent shall have been satisfied:
(a) Documents. Each of the documents to be executed
and delivered at the Third Amendment Closing and all other
certificates, documents and instruments to be executed in connection
herewith shall have been duly and properly authorized, executed and
delivered by Borrowers and shall be in full force and effect on and
as of the Third Amendment Closing Date.
(b) Legality of Transactions. No change in
applicable law shall have occurred as a consequence of which it
shall have become and continue to be unlawful (i) for Agent and each
Lender to perform any of their agreements or obligations under any
of the Loan Documents, or (ii) for Borrowers to perform any of their
agreements or obligations under any of the Loan Documents.
(c) Performance. Except as set forth herein,
Borrowers shall have duly and properly performed, complied with and
observed each of their covenants, agreements and obligations
contained in each of the Loan Documents. Except as set forth
herein, no event shall have occurred on or prior to the Third
Amendment Closing Date, and no condition shall exist on the Third
Amendment Closing Date which constitutes a Default or an Event of
Default.
(d) Amendments to Warrants. Successories, Inc. shall
have issued to Agent amendments to the four existing Warrants issued
to Provident Financial Group, Inc. amending the Purchase Price to
Three and 00/100 Dollars ($3.00) per share and extending the
expiration date of each Warrant by one (1) year.
(e) Proceedings and Documents. All corporate,
governmental and other proceedings in connection with the
transactions contemplated on the Third Amendment Closing Date, each
of the other Loan Documents and all instruments and documents
incidental thereto, shall be in form and substance reasonably
satisfactory to Agent.
(f) No changes. Since the date of the most recent
balance sheets of Borrowers delivered to Agent, no changes shall
have occurred in the assets, liabilities, financial condition,
business, operations or prospects of Borrowers which, individually
or in the aggregate, are material to Borrowers, and Agent shall have
completed such review of the status of all current and pending legal
issues as Agent shall deem necessary or appropriate.
6. Miscellaneous.
(a) Borrowers shall reimburse Agent for all fees and
disbursements of legal counsel to Agent which shall have been
incurred by Agent in connection with the preparation, negotiation,
review, execution and delivery of this Third Amendment and the
handling of any other matters incidental hereto.
(b) All of the terms, conditions and provisions of the
Credit Agreement not herein modified shall remain in full force and
effect. In the event a term, condition or provision of the Credit
Agreement conflicts with a term, condition or provision of this
Third Amendment, the latter shall govern.
(c) This Third Amendment shall be governed by and
shall be construed and interpreted in accordance with the laws of
the State of Ohio.
(d) This Third Amendment shall be binding upon and
shall inure to the benefit of the parties hereto and their
respective heirs, successors and assigns.
(e) this Third Amendment may be executed in several
counterparts, each of which shall constitute an original, but all
which together shall constitute one and the same agreement.
Remainder of page intentionally left blank. Signature pages follow.
IN WITNESS WHEREOF, this Third Amendment has been duly executed
and delivered by or on behalf of each of the parties as of the day and
year first above written.
BORROWERS:
SUCCESSORIES, INC., an Illinois corporation
By: /s/ Xxxxxx X. Xxxxxxxx
Name: Xxxxxx X. Xxxxxxxx
Title: Chairman and Chief Executive Officer
CELEBRATING EXCELLENCE, INC., an Illinois corporation
By: /s/ Xxxxxx X. Xxxxxxxx
Name: Xxxxxx X. Xxxxxxxx
Title: Chairman and Chief Executive Officer
SUCCESSORIES OF ILLINOIS, INC., an Illinois corporation
By: /s/ Xxxxxx X. Xxxxxxxx
Name: Xxxxxx X. Xxxxxxxx
Title: Chairman and Chief Executive Officer
CELEX SUCCESSORIES, INC., a Canadian corporation
By: /s/ Xxxxxx X. Xxxxxxxx
Name: Xxxxxx X. Xxxxxxxx
Title: Chairman and Chief Executive Officer
BRITISH LINKS ACQUISITION CORP., an Illinois corporation
By: /s/ Xxxxxx X. Xxxxxxxx
Name: Xxxxxx X. Xxxxxxxx
Title: Chairman and Chief Executive Officer
B.L.G.C., INC., a Texas corporation
By: /s/Xxxxxx X. Xxxxxxxx
Name: Xxxxxx X. Xxxxxxxx
Title: Chairman and Chief Executive Officer
AGENT:
THE PROVIDENT BANK, as Agent, an Ohio banking corporation
By: /s/ Xxxx Xxxxx
Name: Xxxx Xxxxx
Title: Vice President
LENDERS:
THE PROVIDENT BANK, an Ohio banking corporation
By: /s/ Xxxx Xxxxx
Name: Xxxx Xxxxx
Title: Vice President
Second Amendment to Warrant Certificate No. 1 Warrants
for 75,000 Shares
Original Issue Date: June 20, 1997
SECOND AMENDMENT TO
WARRANT TO PURCHASE COMMON STOCK
OF
SUCCESSORIES, INC.
This certifies that the Warrant to Purchase Common Stock No.
1, issued to PROVIDENT FINANCIAL GROUP, INC., an Ohio corporation,
or its registered assigns ("Holder"), on June 20, 1997 is hereby
amended as follows:
1. From and after the date hereof, the purchase price shall be
Three and 00/100 Dollars ($3.00) per share of Common Stock (the
"Purchase Price").
2. For purposes of this Warrant, the following capitalized
term shall have the meaning set forth below:
"Warrant Period" shall mean the period commencing
on June 20, 1997 and ending on June 20, 2003.
September 1, 1998 SUCCESSORIES, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
Name: Xxxxxx X. Xxxxxxxx
Title: Chairman and Chief Executive Officer
Second Amendment to Warrant Certificate No. 2 Warrants
for 50,000 Shares
Original Issue Date: June 20, 1997
SECOND AMENDMENT TO
WARRANT TO PURCHASE COMMON STOCK
OF
SUCCESSORIES, INC.
This certifies that the Warrant to Purchase Common Stock No.
2, issued to PROVIDENT FINANCIAL GROUP, INC., an Ohio corporation,
or its registered assigns ("Holder"), on June 20, 1997 is hereby
amended as follows:
1. From and after the date hereof, the purchase price shall be
Three and 00/100 Dollars ($3.00) per share of Common Stock (the
"Purchase Price").
2. For purposes of this Warrant, the following capitalized
term shall have the meaning set forth below:
"Warrant Period" shall mean the period commencing
on June 20, 1997 and ending on June 20, 2003.
September 1, 1998 SUCCESSORIES, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
Name: Xxxxxx X. Xxxxxxxx
Title: Chairman and Chief Executive Officer
Second Amendment to Warrant Certificate No. 3 Warrants
for 25,000 Shares
Original Issue Date: June 20, 1997
SECOND AMENDMENT TO
WARRANT TO PURCHASE COMMON STOCK
OF
SUCCESSORIES, INC.
This certifies that the Warrant to Purchase Common Stock No.
3, issued to PROVIDENT FINANCIAL GROUP, INC., an Ohio corporation,
or its registered assigns ("Holder"), on June 20, 1997 is hereby
amended as follows:
1. From and after the date hereof, the purchase price shall
be Three and 00/100 Dollars ($3.00) per share of Common Stock (the
"Purchase Price").
2. For purposes of this Warrant, the following capitalized
term shall have the meaning set forth below:
"Warrant Period" shall mean the period commencing
on June 20, 1997 and ending on June 20, 2003.
September 1, 1998 SUCCESSORIES, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
Name: Xxxxxx X. Xxxxxxxx
Title: Chairman and Chief Executive Officer
Second Amendment to Warrant Certificate No. 4 Warrants
for 72,464 Shares
Original Issue Date: July 16, 1997
SECOND AMENDMENT TO
WARRANT TO PURCHASE COMMON STOCK
OF
SUCCESSORIES, INC.
This certifies that the Warrant to Purchase Common Stock No.
4, issued to PROVIDENT FINANCIAL GROUP, INC., an Ohio corporation,
or its registered assigns ("Holder"), on July 16, 1997 is hereby
amended as follows:
1. From and after the date hereof, the purchase price shall
be Three and 00/100 Dollars ($3.00) per share of Common Stock (the
"Purchase Price").
2. For purposes of this Warrant, the following capitalized
term shall have the meaning set forth below:
"Warrant Period" shall mean the period commencing
on July 16, 1997 and ending on July 16, 2005.
September 1, 1998 SUCCESSORIES, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
Name: Xxxxxx X. Xxxxxxxx
Title: Chairman and Chief Executive Officer
