EXHIBIT 10.22
CREDIT AGREEMENT
dated as of
September 14, 2004
among
THE TOPPS COMPANY, INC.,
TOPPS ENTERPRISES, INC.,
TOPPS FINANCE, INC.
WIZKIDS, INC.
The Lenders Party Hereto
and
JPMORGAN CHASE BANK (f/k/a THE CHASE
MANHATTAN BANK),
as Agent
CREDIT AGREEMENT dated as of September 14, 2004, among THE TOPPS COMPANY,
INC., a Delaware corporation (the "Borrower"), TOPPS ENTERPRISES INC., a
Delaware corporation ("Topps Enterprises"), TOPPS FINANCE, INC., a Delaware
corporation ("Topps Finance"), WIZKIDS, INC., a Delaware limited liability
company ("WizKids"), the Lenders party hereto (the "Lenders"), and JPMORGAN
CHASE BANK (f/k/a The Chase Manhattan Bank), as Agent (in such capacity, the
"Agent").
WITNESSETH
----------
WHEREAS, on June 26, 2000, the Borrower, Topps Enterprises, the Lenders and
the Agent entered into a Credit Agreement which provided the Borrower with a
revolving credit facility of up to $35,000,000, which Agreement was amended five
times (the "Existing Facility"; and the said Agreement as so amended being
hereinafter the "Existing Agreement");
WHEREAS, the Borrower has requested a new agreement which would continue to
make available to the Borrower a revolving credit facility in the reduced amount
of up to $30,000,000, the proceeds of which are to be used as set forth herein;
and
WHEREAS, JPMorgan Chase Bank is willing to continue as Agent and as a
Lender under the new facility, but LaSalle Bank National Association will cease
to be a lender to the Borrower upon the making of this Agreement, and JPMorgan
Chase Bank will initially be the only Lender hereunder; and
WHEREAS, the Lenders are willing to make such facility available to the
Borrower upon the terms and conditions set forth herein.
NOW, THEREFORE, the Borrower, Topps Enterprises, Topps Finance, WizKids,
the Lenders and the Agent hereby agree as follows:
ARTICLE I
Definitions
-----------
SECTION 1.01. Defined Terms. As used in this Agreement, the following terms
have the meanings specified below:
"ABR", when used in reference to any Loan or Borrowing, refers to whether
such Loan, or the Loans comprising such Borrowing, are bearing interest at the
Alternate Base Rate.
"Adjusted LIBO Rate" means, with respect to any Eurodollar Borrowing for
any Interest Period, an interest rate per annum. (rounded upwards, if necessary,
to the next 1/100 of 1%) equal to (a) the LIBO Rate for such Interest Period
multiplied by (b) the Statutory Reserve Rate.
"Administrative Questionnaire" means an Administrative Questionnaire in a
form supplied by the Agent.
1
"Affiliate" means, with respect to a specified Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.
"Agent" means JPMorgan Chase Bank, in its capacity as administrative agent
for the Lenders hereunder.
"Alternate Base Rate" means the greatest of (a) the Prime Rate in effect on
such day, (b) the Base CD Rate in effect on such day plus 1%, and (c) the
Federal Funds Effective Rate in effect on such day plus 1/2 of 1%. Any change in
the Alternate Base Rate due to a change in the Prime Rate, the Base CD Rate or
the Federal Funds Effective Rate shall be effective from and including the
effective date of such change in the Prime Rate, the Base CD Rate or the Federal
Funds Effective Rate, respectively.
"Applicable Percentage" means, with respect to any Lender, the percentage
of the total Revolving Commitments represented by such Lender's Revolving
Commitment. If the Revolving Commitments have terminated or expired, the
Applicable Percentages shall be determined based upon the Revolving Commitments
most recently in effect, giving effect to any assignments.
"Applicable Rate" means, for any day, with respect to any ABR Loan or
Eurodollar Loan, or with respect to the unused Commitment Fees payable
hereunder, as the case may be, the applicable rate per annum set forth below
under the caption "ABR Spread", "Eurodollar Spread" or "Commitment Fee Rate", as
the case may be:
------------------ --------------------- -------------- -----------------------
EBITDA Eurodollar Spread ABR Spread Commitment Fee Rate
------------------ --------------------- -------------- -----------------------
$75,000,000 100 bps 0 25 bps
------------------ --------------------- -------------- -----------------------
$50,000,000 125 bps 0 25 bps
but <$75,000,000
------------------ --------------------- -------------- -----------------------
$25,000,000 150 bps 0 25 bps
but <$50,000,000
------------------ --------------------- -------------- -----------------------
$15,000,000 175 bps 0 25 bps
but <$25,000,000
------------------ --------------------- -------------- -----------------------
$5,000,000 200 bps 0 37.5 bps
but <$15,000,000
------------------ --------------------- -------------- -----------------------
<$5,000,000 225 bps 0 37.5 bps
------------------ --------------------- -------------- -----------------------
For these purposes, "EBITDA" shall be measured on a rolling four quarters basis,
looking backward beginning with the last fiscal quarter as to which financial
reporting has been made pursuant to Section 3.04, 5.01(a) or Section 5.01(b).
2
"Assessment Rate" means, for any day, the annual assessment rate in effect
on such day that is payable by a member of the Bank Insurance Fund classified as
"well-capitalized" and within supervisory subgroup "B" (or a comparable
successor risk classification) within the meaning of 12 C.F.R. Part 327 (or any
successor provision) to the Federal Deposit Insurance Corporation for insurance
by such Corporation of time deposits made in dollars at the offices of such
member in the United States; provided that if, as a result of any change in any
law, rule or regulation, it is no longer possible to determine the Assessment
Rate as aforesaid, then the Assessment Rate shall be such annual rate as shall
be determined by the Agent to be representative of the cost of such insurance to
the Lenders.
"Assignment and Assumption" means an assignment and assumption entered into
by a Lender and an assignee (with the consent of any party whose consent is
required by Section 9.04), and accepted by the Agent, in the form of Exhibit A
or any other form approved by the Agent.
"Base CD Rate" means the sum of (a) the Three-Month Secondary CD Rate
multiplied by the Statutory Reserve Rate plus (b) the Assessment Rate.
"Board" means the Board of Governors of the Federal Reserve System of the
United States of America.
"Borrower" means The Topps Company, Inc., a Delaware corporation.
"Borrower Note" means any promissory note issued by the Borrower to Topps
Finance in payment of the purchase price of Topps Finance's issued and
outstanding preferred stock (including the promissory note in the principal
amount of $160,000,000 issued by the Borrower to Topps Finance in payment of the
purchase price for Topps Finance's issued and outstanding preferred stock having
an initial liquidation preference equal to $160,000,000 or alternatively the
promissory note for the difference between (i) the initial liquidation
preference of Topps Finance's preferred stock and (ii) the par value of Topps
Finance's preferred stock).
"Borrowing" means Loans of the same Type, made, converted or continued on
the same date and, in the case of Eurodollar Loans, as to which a single
Interest Period is in effect.
"Borrowing Request" means a request by the Borrower for a Borrowing in
accordance with Section 2.03.
"Business Day" means any day that is not a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law to
remain closed; provided that, when used in connection with a Eurodollar Loan,
the term "Business Day" shall also exclude any day on which banks are not open
for dealings in dollar deposits in the London interbank market.
"Capital Expenditures" means, for any period, without duplication (a) the
additions to property, plant and equipment and other capital expenditures of the
Borrower and its consolidated Subsidiaries that are (or would be) set forth in a
consolidated statement of cash flows of the Borrower for such period prepared in
accordance with GAAP and (b) Capital Lease Obligations incurred by the Borrower
and its consolidated Subsidiaries during such period, excluding, however, the
amount of any Capital Expenditures paid for with proceeds of casualty insurance
as evidenced in writing and submitted to the Agent.
3
"Capital Lease Obligations" of any Person means the obligations of such
Person to pay rent or other amounts under any lease of (or other arrangement
conveying the right to use) real or personal property, or a combination thereof,
which obligations are required to be classified and accounted for as capital
leases on a balance sheet of such Person under GAAP, and the amount of such
obligations shall be the capitalized amount thereof determined in accordance
with GAAP.
"Change in Control" means (a) the acquisition of ownership, directly or
indirectly, beneficially or of record, by any Person or group (within the
meaning of the Securities Exchange Act of 1934 and the rules of the Securities
and Exchange Commission thereunder as in effect on the date hereof) of shares
representing more than 35% of the aggregate ordinary voting power represented by
the issued and outstanding capital stock of the Borrower; or (b) occupation of a
majority of the seats (other than vacant seats) on the board of directors of the
Borrower by Persons who were neither (i) nominated by the board of directors of
the Borrower nor (ii) appointed by directors so nominated.
"Change in Law" means (a) the adoption of any law, rule or regulation after
the date of this Agreement, (b) any change in any law, rule or regulation or in
the interpretation or application thereof by any Governmental Authority after
the date of this Agreement, or (c) compliance by any Lender or the Issuing Bank
(or, for purposes of Section 2.15(b), by any lending office of such Lender or by
such Lender's or the Issuing Bank's holding company, if any) with any request
guideline or directive (whether or not having the force of law) of any
Governmental Authority made or issued after the date of this Agreement.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Commitment Fee" has the meaning set forth in Section 2.12(a).
"Consolidated Fixed Charge Ratio" means, on any date, the ratio of (i) the
sum of EBITDA minus unfinanced Capital Expenditures to (ii) current portion of
long term debt (as per GAAP but excluding any Indebtedness arising under this
Agreement) plus interest expense (as certified by a Financial Officer on a
quarterly basis). For purposes of calculating Consolidated Fixed Charge Ratio,
EBITDA, unfinanced Capital Expenditures and interest expense shall be measured
for the four fiscal quarter period ending on the date such ratio is being
tested.
"Consolidated Leverage Ratio" means, on any date, the ratio of Consolidated
Total Liabilities to Consolidated Net Worth.
"Consolidated Net Income" means, for any period of computation thereof, the
gross revenues from operations of the Borrower and its Subsidiaries less all
operating and non-operating expenses of the Borrower and its Subsidiaries
including taxes on income, all determined on a consolidated basis in accordance
with GAAP applied on a consistent basis.
"Consolidated Net Worth" means at any time as of which the amount thereof
is to be determined, the sum of the following in respect of the Borrower and its
Subsidiaries (determined on a consolidated basis): (i) the amount of issued and
outstanding share capital, plus (ii) the amount of additional paid-in capital
and retained income (or, in the case of a deficit minus the amount of such
deficit), plus (iii) the amount of any foreign currency translation adjustment
(if positive, or, if negative, minus the amount of such translation adjustment)
minus (iv) the amount of any treasury stock, all as determined in accordance
with GAAP applied on a consistent basis.
4
"Consolidated Tangible Net Worth" means, on any date, Consolidated Net
Worth less capitalized research and development costs, capitalized interest,
debt discount and expense, goodwill, trademarks, copyrights, franchises,
licenses and such other assets as are properly classified as "intangible
assets", all determined on a consolidated basis for the Borrower and its
Subsidiaries.
"Consolidated Total Assets" means, on any date, all amounts which would, in
conformity with GAAP, be included as assets on a balance sheet, all determined
on a consolidated basis for the Borrower and its Subsidiaries.
"Consolidated Total Liabilities" means, on any date, all amounts which
would, in conformity with GAAP, be included as liabilities on a balance sheet,
all determined on a consolidated basis for the Borrower and its Subsidiaries.
"Contract Notification Date" means the date which is 30 days prior to (x)
the date that any Material License will, by its own terms, expire, or (y) the
date the Borrower intends to terminate any Material License.
"Control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
"Controlling" and "Controlled" have meanings correlative thereto.
"Default" means any event or condition which constitutes an Event of
Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
"Disclosed Matters" means the actions, suits and proceedings and the
environmental matters disclosed in Schedule 3.06.
"Documentary Letter of Credit" means a documentary letter of credit in form
and substance customarily issued by the Issuing Bank from time to time.
"Domestic Investment" means an investment made in the United States of
America by the Borrower or a Subsidiary organized under the laws of the United
States of America or any State or political subdivision thereof.
"Dollars" or "$" refers to lawful money of the United States of America.
"EBITDA" means, for any period, Consolidated Net Income (or net loss) of
the Borrower and its Subsidiaries for such period plus the sum of (i)
depreciation expense, (ii) amortization expense, (iii) net total income tax
expense and interest expense (as certified by a Financial Officer on a quarterly
basis) for such period, all determined on a consolidated basis in accordance
with GAAP applied on a consistent basis.
5
"Effective Date" means the date on which the conditions specified in
Section 4.01 are satisfied (or waived in accordance with Section 9.02).
"Eligible Assignee" means (i) a commercial bank having total assets in
excess of $250,000,000 and being governed by the Board; (ii) a finance company,
insurance company or other financial institution or fund acceptable to the Agent
which in the ordinary course of business extends credit of the type evidenced by
this Agreement and has total assets in excess of $100,000,000 and being governed
by the Board, and if not so governed, acceptable to the Borrower, whose consent
shall not be unreasonably withheld; and (iii) any other financial institution
satisfactory to both the Borrower and the Agent; provided that no such entity
that is organized under the laws of a jurisdiction outside the United States
shall be an Eligible Assignee unless such entity shall, if legally able to do
so, prior to the immediately following due date of any payment by the Borrower
hereunder, deliver to the Borrower such certificates, documents or other
evidence, as required by the Code or Treasury Regulations issued pursuant
thereto, including (A) Internal Revenue Service Form W-8 or W-9 and (B) Internal
Revenue Service Form 1001 or Form 4224 and any other certificate or statement of
exemption required by Treasury Regulation Section 1.1441-1, 1.1441-4 or
1.1441-6(c) or any subsequent version thereof or successors thereto, properly
completed and duly executed by such entity establishing that such payment is (i)
not subject to United States Federal withholding tax under the Code because such
payment is effectively connected with the conduct by such entity of a trade or
business in the United States, or (ii) totally exempt from the United States
Federal withholding tax.
"Environmental Laws" means all laws, rules, regulations, codes, ordinances,
orders, decrees, judgments, injunctions, notices or binding agreements issued,
promulgated or entered into by any Governmental Authority, relating in any way
to the environment, preservation or reclamation of natural resources, the
management, release or threatened release of any Hazardous Material or to health
and safety matters.
"Environmental Liability" means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities) of the Borrower or any Subsidiary, directly or
indirectly resulting from or based upon (a) violation of any Environmental Law,
(b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials,
(d) the release or threatened release of any Hazardous Materials into the
environment, or (e) any contract agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.
"Equity Interests" means shares of capital stock, partnership interests,
membership interests in a limited liability company, beneficial interests in a
trust or other equity ownership interests in a Person, and any warrants, options
or other rights entitling the holder thereof to purchase or acquire any such
equity interest.
6
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ERISA Affiliate" means any trade or business (whether or not incorporated)
that together with the Borrower, is treated as a single employer under Section
414(b) or (c) of the Code or, solely for purposes of Section 302 of ERISA and
Section 412 of the Code, is treated as a single employer under Section 414 of
the Code.
"ERISA Event" means (a) any "reportable event", as defined in Section 4043
of ERISA or the regulations issued thereunder with respect to a Plan (other than
an event for which the 30-day notice period is waived); (b) the existence with
respect to any Plan of an "accumulated funding deficiency" (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the
filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan; (d) the incurrence by the Borrower or any of its ERISA Affiliates of any
liability under Title IV of ERISA with respect to the termination of any Plan;
(e) the receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan
administrator of any notice relating to an intention to terminate any Plan or
Plans or to appoint a trustee to administer any Plan; (f) the incurrence by the
Borrower or any of its ERISA Affiliates of any liability with respect to the
withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (g) the
receipt by the Borrower or any ERISA Affiliate of any notice, or the receipt by
any Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice,
or the receipt by any Multiemployer Plan from the Borrower or any ERISA
Affiliate of any notice, concerning the imposition of Withdrawal Liability or a
determination that a Multiemployer Plan is, or is expected to be, insolvent or
in reorganization, within the meaning of Title IV of ERISA.
"Eurodollar", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined by reference to the Adjusted LIBO Rate.
"Event of Default" has the meaning assigned to such term in Article VII.
"Excluded Taxes" means, with respect to the Agent, any Lender, the Issuing
Bank or any other recipient of any payment to be made by or on account of any
obligation of the Borrower hereunder, (a) income or franchise taxes imposed on
(or measured by) its net income, by any Governmental Authority, or by the
jurisdiction under the laws of which such recipient is organized or in which its
principal office is located or, in the case of any Lender, in which its
applicable lending office is located, (b) any branch profits taxes imposed by
the United States of America or any similar tax imposed by any other
jurisdiction in which the Borrower is located and (c) in the case of a Foreign
Lender (other than an assignee pursuant to a request by the Borrower under
Section 2.19(b)), any withholding tax that is imposed on amounts payable to such
Foreign Lender at the time such Foreign Lender becomes a party to this Agreement
(or designates a new lending office) or is attributable to such Foreign Lender's
failure to comply with Section 2.17(e), except to the extent that such Foreign
Lender (or its assignor, if any) was entitled, at the time of designation of a
new lending office (or assignment), to receive additional amounts from the
Borrower with respect to such withholding tax pursuant to Section 2.17(a).
7
"Existing Agreement"- see recitals.
"Existing Facility"- see recitals.
"Federal Funds Effective Rate" means, for any day, the weighted average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by the Agent from three Federal funds brokers of
recognized standing selected by it.
"Finance Capitalization" means the contribution from time to time by the
Borrower to the capital of Topps Enterprises, followed by the contribution of an
equal amount by Topps Enterprises to the capital of Topps Finance in exchange
for Topps Finance's common stock.
"Financial Officer" means the chief financial officer, principal accounting
officer, treasurer or controller of the Borrower.
"Financing Transactions" means the execution, delivery and performance by
the Borrower of the Loan Documents, the borrowing of Loans, the use of the
proceeds thereof and the issuance of Letters of Credit hereunder.
"Fitch" means Fitch Investor Service (a/k/a/ Fitch Ratings).
"Foreign Investment" means an investment made outside the United States of
America by a Subsidiary not organized under the laws of the United States of
America or any State or political subdivision thereof.
"Foreign Lender" means any Lender that is organized under the laws of a
jurisdiction other than that in which the Borrower is located. For purposes of
this definition, the United States of America, each State thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.
"Foreign Subsidiary" means any Subsidiary that is organized under the laws
of a jurisdiction other than the United States of America or any State thereof
or the District of Columbia.
"GAAP" means generally accepted accounting principles in the United States
of America.
"Governmental Authority" means the government of the United States of
America, any other nation or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.
8
"Guarantee" of or by any Person (the "guarantor") means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation of any other Person
(the "primary obligor") in any manner, whether directly or indirectly, and
including any obligation of the guarantor, direct or indirect, (a) to purchase
or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation or to purchase (or to advance or supply funds
for the purchase of) any security for the payment thereof, (b) to purchase or
lease property, securities or services for the purpose of assuring the owner of
such Indebtedness or other obligation of the payment thereof, (c) to maintain
working capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation, or (d) as an account party in respect of any
letter of credit or letter of guaranty issued to support such Indebtedness or
obligation; provided that the term Guarantee shall not include endorsements for
collection or deposit in the ordinary course of business.
"Guarantor" means (i) Topps Enterprises, Topps Finance and WizKids and any
domestic Subsidiary organized or acquired after the date hereof, or (ii) any
other existing domestic Subsidiary which ceases to be inactive (in any material
respect) at any time after the Effective Date; all of whom shall jointly and
severally guaranty payment of the Borrower's Obligations.
"Hazardous Materials" means all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
"Hedging Agreement" means any interest rate protection agreement, foreign
currency exchange agreement, commodity price protection agreement or other
interest or currency exchange rate or commodity price hedging arrangement.
"Indebtedness" of any Person means, without duplication, (a) all
obligations of such Person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such Person
upon which interest charges are customarily paid, (d) all obligations of such
Person under conditional sale or other title retention agreements relating to
property acquired by such Person, (e) all obligations of such Person in respect
of the deferred purchase price of property or services (excluding current
accounts payable incurred in the ordinary course of business), (f) all
Indebtedness of others secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any Lien on
property owned or acquired by such Person, whether or not the Indebtedness
secured thereby has been assumed, (g) all Guarantees by such Person of
Indebtedness of others, (h) all Capital Lease Obligations of such Person, (i)
all obligations, contingent or otherwise, of such Person as an account party in
respect of letters of credit and letters of guaranty, and (j) all obligations,
contingent or otherwise, of such Person in respect of bankers acceptances. The
Indebtedness of any Person shall include the Indebtedness of any other entity
(including any partnership in which such Person is a general partner) to the
extent such Person is liable therefor as a result of such Person's ownership
interest in or other relationship with such entity, except to the extent the
terms of such Indebtedness provide that such Person is not liable therefor.
9
"Indemnified Taxes" means Taxes other than Excluded Taxes.
"Intercompany Debt" means loans, advances and any other extensions of
credit made by the Borrower and/or any Guarantor to any Subsidiary.
"Intercompany Note" means any promissory note, instrument or other written
indicia of an obligation by any Subsidiary to repay any Intercompany Debt.
"Interest Election Request" means a request by the Borrower to convert or
continue a Borrowing in accordance with Section 2.07.
"Interest Payment Date" means (a) with respect to any ABR Loan, the first
day of each month and (b) with respect to any Eurodollar Loan, the last day of
the Interest Period applicable to the Borrowing of which such Loan is a part
and, in the case of a Eurodollar Borrowing with an Interest Period of more than
three months' duration, each day prior to the last day of such Interest Period
that occurs at intervals of three months' duration after the first day of such
Interest Period.
"Interest Period" means with respect to any Eurodollar Borrowing, the
period commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is one, two, three or six months
(or, with the consent of each Lender, nine or twelve months) thereafter, as the
Borrower may elect; provided that (i) if any Interest Period would end on a day
other than a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless such next succeeding Business Day would fall in
the next calendar month, in which case such Interest Period shall end on the
next preceding Business Day, and (ii) any Interest Period that commences on the
last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the last calendar month of such Interest
Period) shall end on the last Business Day of the last calendar month of such
Interest Period. For purposes hereof, the date of a Borrowing initially shall be
the date on which such Borrowing is made and thereafter shall be the effective
date of the most recent conversion or continuation of such Borrowing.
"Issuing Bank" means JPMorgan Chase Bank, in its capacity as the issuer of
Letters of Credit hereunder, and its successors in such capacity as provided in
Section 2.05(i). The Issuing Bank may, in its discretion, arrange for one or
more Letters of Credit to be issued by Affiliates of the Issuing Bank, in which
case the term "Issuing Bank" shall include any such Affiliate with respect to
Letters of Credit issued by such Affiliate.
"LC Disbursement" means a payment made by the Issuing Bank pursuant to a
Letter of Credit.
"LC Exposure" means, at any time, the aggregate amount of all Documentary
Letter of Credit Outstandings and all Standby Letter of Credit Outstandings. The
LC Exposure of any Lender at any time shall be its Applicable Percentage of the
total LC Exposure at such time.
10
"Lenders" means the Persons listed on Schedule 2.01 and any other Person
that shall have become a party hereto pursuant to an Assignment and Assumption,
other than any such Person that ceases to be a party hereto pursuant to an
Assignment and Assumption.
"Letter of Credit" means any letter of credit issued pursuant to this
Agreement which Letter of Credit shall be a Documentary Letter of Credit
(including the Topps SA Letters of Credit) or a Standby Letter of Credit.
"Letter of Credit Outstandings" means, at any time, the sum of (i) the
aggregate undrawn stated amount of all Letters of Credit then outstanding plus
(ii) all amounts theretofore drawn under Letters of Credit and not then
reimbursed.
"LIBO Rate" means, with respect to any Eurodollar Borrowing for any
Interest Period, the rate appearing on Page 3750 of the Dow Xxxxx Market Service
(or on any successor or substitute page of such Service, or any successor to or
substitute for such Service, providing rate quotations comparable to those
currently provided on such page of such Service, as determined by the Agent from
time to time for purposes of providing quotations of interest rates applicable
to dollar deposits in the London interbank market) at approximately 11:00 a.m.,
London time, two Business Days prior to the commencement of such Interest
Period, as the rate for dollar deposits with a maturity comparable to such
Interest Period. In the event that such rate is not available at such time for
any reason, then the "LIBO Rate" with respect to such Eurodollar Borrowing for
such Interest Period shall be the rate at which dollar deposits of $5,000,000
and for a maturity comparable to such Interest Period are offered by the
principal London office of the Agent in immediately available funds in the
London interbank market at approximately 11:00 a.m., London time, two Business
Days prior to the commencement of such Interest Period.
"Lien" means, with respect to any asset, (a) any mortgage, deed of trust
lien, pledge, hypothecation, encumbrance, charge or security interest in, on or
of such asset, (b) the interest of a vendor or a lessor under any conditional
sale agreement, capital lease or title retention agreement (or any financing
lease having substantially the same economic effect as any of the foregoing)
relating to such asset, and (c) in the case of securities, any purchase option,
call or similar right of a third party with respect to such securities.
"Loan Documents" means this Agreement, the Subsidiary Guaranty, the Topps
SA Guaranty, any letter of credit application or any other agreement submitted
by the Borrower or Topps SA in connection with a Letter of Credit, and any
Guarantee or other instrument or agreement now existing or hereafter executed
and delivered in connection herewith or therewith.
"Loans" means the loans made by the Lenders to the Borrower pursuant to
this Agreement.
"LPT" means the incurrence or assumption of Indebtedness on account of any
buyout, acquisition or re-capitalization of the Borrower and/or any Subsidiary
(including any leveraged buyout, management buyout, merger, acquisition,
significant share repurchase or dividend payout) which causes either (i) (x) the
ratio of Consolidated Total Liabilities to Consolidated Total Assets to be
greater than .75 to 1.0 and (y) the total amount of all Indebtedness related to
11
the transaction in question or to any buyout or acquisition in the past, or to
any re-capitalization completed within one year prior to the date of the
transaction in question, to constitute 25% or more of Consolidated Total
Liabilities, or (ii) (x) a doubling of Consolidated Total Liabilities and (y) a
ratio of Consolidated Total Liabilities to Consolidated Total Assets of greater
than .50 to 1.0. For purposes of this definition only, the term Consolidated
Total Liabilities shall be deemed to include contingent liabilities on account
of non-perpetual preferred stock.
"Margin Stock" means "Margin Stock" as that term is defined in Regulation U
of the Board.
"Material Adverse Effect" means a material adverse effect on (a) the
business, assets, operations, or condition, financial or otherwise, of the
Borrower and the Subsidiaries taken as a whole, (b) the ability of the Borrower
to perform any of its obligations under any Loan Document or (c) the validity or
enforceability of any Loan Document or the rights of or benefits available to
the Lenders under this Agreement.
"Material Indebtedness" means Indebtedness (other than the Loans, Letters
of Credit and the Borrower Note), or obligations in respect of one or more
Hedging Agreements, of any one or more of the Borrower and its Subsidiaries, in
each case (including each individual Hedging Agreement) with a principal amount
outstanding of at least $1,000,000. For purposes of determining Material
Indebtedness, the "principal amount" of the obligations of the Borrower or any
Subsidiary in respect of any Hedging Agreement at any time shall be the maximum
aggregate amount (giving effect to any netting agreements) that the Borrower or
such Subsidiary would be required to pay if such Hedging Agreement were
terminated at such time.
"Material Licenses" means the licenses set forth on Schedule 5.04.
"Material Subsidiary" means any Subsidiary whose assets constituted 5% or
more of Consolidated Total Assets on the balance sheet submitted most recently
(to the date in question) to the Agent pursuant to Section 5.01(a) or Section
5.01(b).
"Maturity Date" means September 13, 2007.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Multiemployer Plan" means a multiemployer plan as defined in Section
4001(a)(3) of ERISA.
"Net Proceeds" means, with respect to any Permitted Asset Sale (a) the
gross sales price paid in any form in respect of such sale, net of (b) the sum
of (i) all reasonable fees and out-of-pocket expenses paid by the Borrower and
the Subsidiaries to third parties (other than Affiliates) in connection with
such sale, (ii) the amount of all payments required to be made by the Borrower
and the Subsidiaries as a result of such sale to repay Indebtedness (other than
Loans) secured by such asset or otherwise subject to mandatory prepayment as a
result of such sale (other than any such mandatory prepayment pursuant to this
Agreement), and (iii) the amount of all taxes paid (or reasonably estimated to
be payable) by the Borrower and the Subsidiaries, and the amount of any reserves
established by the Borrower and the Subsidiaries to fund contingent liabilities
12
reasonably estimated to be payable, in each case during the year that such sale
occurred or the next succeeding year and that are directly attributable to such
sale (as determined reasonably and in good faith by the chief financial officer
of the Borrower).
"Obligations" means the collective reference to (i) the unpaid principal of
and interest on the Loans and all other obligations and liabilities of the
Borrower to the Agent or any Lender (including, without limitation, interest
accruing at the then-applicable rate provided herein after the maturity of the
Loans and interest accruing at the then-applicable rate provided herein after
the filing of any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to the Borrower, whether or not a
claim for post-filing or post-petition interest is allowed in such proceeding),
whether direct or indirect, absolute or contingent, due or to become due, now
existing or hereafter incurred, that may arise under, out of, or in connection
with this Agreement, the other Loan Documents, the Letters of Credit (including,
without limitation, the Topps SA Letters of Credit) or any other documents made,
delivered or given in connection herewith or therewith, whether on account of
principal, interest reimbursement obligations, fees, indemnities, costs,
expenses or otherwise (including, without limitation, all fees and disbursements
of counsel to the Agent or the Lenders that are required to be paid by the
Borrower or any Subsidiary pursuant to the terms of this Agreement or any other
Loan Document), and (ii) all obligations and liabilities of the Borrower to any
Lender or any affiliate of a Lender, whether direct or indirect, absolute or
contingent, due or to become due, now existing or hereafter incurred, that may
arise under, out of, or in connection with any Hedging Agreement or any other
document made, delivered or given in connection therewith. "Other Taxes" means
any and all present or future stamp or documentary taxes or any other excise or
property taxes, charges or similar levies arising from any payment made under
any Loan Document or from the execution, delivery or enforcement of, or
otherwise with respect to, any Loan Document, but Other Taxes shall not include
Excluded Taxes.
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA and any successor entity performing similar functions.
"Permitted Acquisitions" means an acquisition of the stock (or another
investment in the equity) or assets of another Person who is not a Subsidiary
(an "Acquisition") which meets the following criteria: (i) the Acquisition in
question would not cause the aggregate gross purchase price paid to the
acquiree(s) (in cash, stock, assumption of Indebtedness and/or otherwise) on
account of (A) all Acquisitions since the Effective Date to exceed $50,000,000
or (B) all Foreign Acquisitions (defined below) since the Effective Date to
exceed $15,000,000, (ii) the proposed acquiree is in the same or related line of
business as the Borrower or any Subsidiary (or the assets to be acquired are
utilized in the same or related line of business as the Borrower or any
Subsidiary), (iii) the Acquisition is to be friendly in nature (e.g. approved
and recommended by the target's board of directors), (iv) prior to and
immediately following the Acquisition, and after giving effect thereto, there
shall not have occurred a Default or an Event of Default, (v) all material
third-party consents and approvals necessary in connection with the Acquisition
shall have been obtained and copies of thereof shall have been delivered to the
Agent, (vi) evidence (reasonably satisfactory to the Agent) shall have been
delivered to the Agent that such stock (or other equity) or assets are to be
purchased free and clear of any Liens other than Permitted Encumbrances and, in
the case of stock (or other equity) free of any restrictions other than those
13
reasonably acceptable to the Agent, (vii) if the proposed acquiree becomes a
Subsidiary of the Borrower or any Guarantor, such Subsidiary shall timely comply
with Section 5.14 (if required by the terms of Section 5.14), (viii) such
Acquisition shall not result in an LPT, (ix) in the case of an Acquisition of a
Person organized outside of the United States (a "Foreign Acquisition"), (A) the
acquirer shall also be organized outside of the United States, and (B) any cash
paid on account of such Acquisition shall originate from a source outside of the
United States. With regard to the foregoing clause (viii), the Agent shall have
received prior to the consummation of said Permitted Acquisition, copies of all
documentation (including financial information and other information with
respect to the Borrower, the Guarantors, the proposed acquiree and the proposed
transaction, in detail reasonably satisfactory to the Agent, including evidence
of existing and continuing compliance with this Agreement, based upon the
Borrower's own projections of the effect of the Acquisition in question) related
to the Permitted Acquisition as may be reasonably required by the Agent.
"Permitted Asset Sales" means "arm's length" sales of assets by the
Borrower or a Subsidiary which do not cause a Default, provided that if one or
more Loans are outstanding at the time, then in the case of any such sale having
a gross sale price of greater than $5,000,000 (aggregated in the case of a
series of contemporaneous asset sales to the same purchaser or to more than one
purchaser who are Affiliates of each other), not less than 25% of any Net
Proceeds that are paid in cash or cash equivalents (including any cash received
in respect of non-cash proceeds) is applied, on or before the fifth Business Day
following each date of receipt of any such Net Proceeds (whether received at
closing or thereafter), to pay down (or satisfy, if applicable) the principal
amount of all Loans then outstanding.
"Permitted Encumbrances" means the following:
(a) Liens imposed by law for taxes that are not yet due or are being
contested in compliance with Section 5.05;
(b) carriers', warehousemen's, mechanics', materialmen's, repairmen's and
other like Liens imposed by law, arising in the ordinary course of business and
securing obligations that are not overdue by more than 30 days or are being
contested in compliance with Section 5.05;
(c) pledges and deposits made in the ordinary course of business in
compliance with workers' compensation, unemployment insurance and other social
security laws or regulations;
(d) deposits to secure the performance of bids, trade contracts, leases,
statutory obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature, in each case in the ordinary course of business;
(e) judgment liens in respect of judgments that do not constitute an Event
of Default under clause (k) of Article VII; and
(f) easements, zoning restrictions, rights of way and similar encumbrances
on real property imposed by law or arising in the ordinary course of business
that do not secure any monetary obligations and do not materially detract from
the value of the affected property or interfere with the ordinary conduct of
business of the Borrower or any Subsidiary; provided that the term "Permitted
Encumbrances" shall not include any Lien securing Indebtedness.
14
"Permitted Investments" means the following:
(a) direct obligations of, or obligations the principal of and interest on
which are unconditionally guaranteed: (i) in the use of a Domestic Investment,
by the United States of America (or by any agency thereof to the extent such
obligations are backed by the full faith and credit of the United States of
America); or (ii) in the case of a Foreign Investment, by a member state of the
European Union (or by any agency thereof to the extent such obligations are
backed by the full faith and credit of such member state of the European Union
or by Norway or Switzerland), in each case (under (i) or (ii)) maturing within
three years from the date of acquisition thereof;
(b) investments in commercial paper maturing within 270 days from the date
of acquisition thereof and having, at such date of acquisition, (i) in the case
of a Domestic Investment, the highest credit rating obtainable from S&P or from
Moody's, or (ii) in the case of a Foreign Investment, the highest locally
available credit rating;
(c) investments in certificates of deposit, banker's acceptances and time
deposits maturing within 365 days from the date of acquisition thereof issued or
guaranteed by or placed with, and money market deposit accounts issued or
offered by, any domestic office of (i) in the case of a Domestic Investment, any
commercial bank organized under the laws of the United States of America or any
State thereof, or (ii) in the case of a Foreign Investment, any commercial bank
organized under the laws of a European Union member state, in any such case
(under (i) or (ii)) having a combined capital and surplus and undivided profits
of not less than $500,000,000 or a short-term credit rating equal to or above
S&P's A2, Moody's P2 or Fitch's F2;
(d) fully collateralized repurchase agreements with a term of not more than
30 days for securities (x) described in either clause (a) (i) above and entered
into with a commercial bank meeting all the criteria applicable under clause (c)
(i) above, or (y) described in clause (a) (ii) above and entered into with a
commercial bank meeting all the criteria applicable under clause (c) (ii) above;
(e) shares of mutual funds which invest in obligations described in
paragraphs (a) through (d) above, the shares of which mutual funds at all times
(i) are rated, in the case of a Domestic Investment, "AAA" by S&P, or (ii) have
in the case of a Foreign Investment, the highest local credit rating available;
(f) (i) shares of "money market funds" of financial institutions (x) rated,
in the case of a Domestic Investment, "A" or better by S&P or "A2" or better by
Moody's, or (y) having, in the case of a Foreign Investment, the highest local
credit rating available, and (ii) shares of the Strong Municipal Money Market
Fund, Black Rock Temporary Xxxx, Xxxxxxx Xxxxx Premier Fund and any other such
fund hereafter approved in writing by the Required Lenders;
15
(g) investments received in connection with the bankruptcy or
reorganization of, or settlement of delinquent accounts and disputes with,
customers and suppliers, in each case in the ordinary course of business;
(h) tax exempt variable rate commercial paper, tax exempt adjustable rate
option tender bonds and other tax exempt bonds or notes issued by municipalities
in the United States, having a short-term rating of "MIG-1" or "VMIG-1" or a
long-term rating of "A" from Moody's or a short-term rating of "A-1" or a
long-term rating of "A" from S&P;
(i) any other publically traded security, provided that the aggregate fair
market value of all investments of this type does not exceed 20% of all
Permitted Investments (including, for purposes of this calculation, the fair
market value of the investment(s) in question);
(j) auction rate securities/money market preferreds/remarketed shares
issued by a corporate entity or in a collateralized trust structure having a
credit rating of "A2" from Moody's or "A" from S&P; and
(k) corporate bonds or medium term notes issued by any company organized
and existing under the laws of the United States or any state or territory of
the United States, having a long-term rating of at xxxxx "X0" from Moody's or
"A" from S&P.
"Person" means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.
"Plan" means any employee pension benefit plan (other than a Multiemployer
Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code
or Section 302 of ERISA, and in respect of which the Borrower or any ERISA
Affiliate is (or, if such plan were terminated, would under Section 4069 of
ERISA be deemed to be) an "employer" as defined in Section 3(5) of ERISA.
"Prime Rate" means the rate of interest per annum publicly announced from
time to time by JPMorgan Chase Bank as its prime rate in effect at its principal
office in New York City; each change in the Prime Rate shall be effective from
and including the date such change is publicly announced as being effective.
"Register" has the meaning set forth in Section 9.04.
"Related Parties" means, with respect to any specified Person, such
Person's Affiliates and the respective directors, officers, employees, agents
and advisors of such Person and such Person's Affiliates.
"Required Lenders" means, at any time, Lenders having Revolving Credit
Exposures and unused Revolving Commitments representing at least 57% of the sum
of the total Revolving Credit Exposures and unused Revolving Commitments at such
time.
16
"Restricted Payment" means (i) any dividend or other distribution (whether
in cash, securities or other property) with respect to any Equity Interests in
the Borrower or any Subsidiary, or (ii) any payment (whether in cash, securities
or other property), including any sinking fund or similar deposit, on account of
the purchase, redemption, retirement, acquisition, cancellation or termination
of any such Equity Interests in the Borrower or any Subsidiary by the Borrower
or such Subsidiary, respectively (excluding any of the foregoing in respect of
common stock or preferred stock of Topps Finance and WizKids owned by the
Borrower or Topps Enterprises).
"Revolving Availability Period" means the period from and including the
Effective Date to but excluding the earlier of the Maturity Date and the date of
termination of the Revolving Commitments.
"Revolving Commitment" means, with respect to each Lender, the commitment,
of such Lender to make Loans and to acquire participations in Letters of Credit
hereunder, expressed as an amount representing the maximum aggregate amount of
such Lender's Revolving Credit Exposure hereunder, as such commitment may be (a)
reduced from time to time pursuant to Section 2.08 and (b) reduced or increased
from time to time pursuant to assignment by or to such Lender pursuant to
Section 9.04. The amount of each Lender's Revolving Commitment is set forth on
Schedule 2.01, or in the Assignment and Assumption pursuant to which such Lender
shall have assumed its Revolving Commitment, as applicable. The aggregate amount
of the Lenders' Revolving Commitments is $30,000,000.
"Revolving Credit Exposure" means, with respect to any Lender at any time,
the sum of the outstanding principal amount of such Lender's Loans and its LC
Exposure at such time.
"S&P" means Standard & Poor's.
"Standby Letter of Credit" means a standby letter of credit in form and
substance customarily issued by the Issuing Bank from time to time and in form
and substance acceptable to the Agent and the Issuing Bank, and issued for such
purposes for which the Borrower has historically obtained standby letters of
credit, or for such other purposes as are reasonably acceptable to the Agent and
the Issuing Bank.
"Statutory Reserve Rate" means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Agent is subject (a) with respect to the
Base CD Rate, for new negotiable nonpersonal time deposits in dollars of over
$100,000 with maturities approximately equal to three months and (b) with
respect to the Adjusted LIBO Rate, for eurocurrency funding (currently referred
to as "Eurocurrency Liabilities" in Regulation D of the Board). Such reserve
percentages shall include those imposed pursuant to such Regulation D.
Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be
subject to such reserve requirements without benefit of or credit for proration,
exemptions or offsets that may be available from time to time to any Lender
under such Regulation D or any comparable regulation. The Statutory Reserve Rate
shall be adjusted automatically on and as of the effective date of any change in
any reserve percentage.
17
"Subsidiary" means, with respect to any Person (the "parent") at any date,
any corporation, limited liability company, partnership, association or other
entity the accounts of which would be consolidated with those of the parent in
the parent's consolidated financial statements if such financial statements were
prepared in accordance with GAAP as of such date, as well as any other
corporation, limited liability company, partnership, association or other entity
(a) of which securities or other ownership interests representing more than 50%
of the equity or more than 50% of the ordinary voting power or, in the case of a
partnership, more than 50% of the general partnership interests are, as of such
date, owned, controlled or held, or (b) that is, as of such date, otherwise
Controlled, by the parent or one or more subsidiaries of the parent or by the
parent and one or more subsidiaries of the parent.
"Subsidiary" means any subsidiary of the Borrower.
"Subsidiary Guaranty" means the Joint and Several Guaranty of Payment of
even date herewith (in the form of Exhibit C hereto), made by Topps Enterprises,
Topps Finance and WizKids to the Agent with respect to the Obligations.
"Taxes" means any and all present or future taxes, levies, imposts, duties,
deductions, charges or withholdings imposed by any Governmental Authority.
"Three-Month Secondary CD Rate" means, for any day, the secondary market
rate for three-month certificates of deposit reported as being in effect on such
day (or, if such day is not a Business Day, the next preceding Business Day) by
the Board through the public information telephone line of the Federal Reserve
Bank of New York (which rate will, under the current practices of the Board, be
published in Federal Reserve Statistical Release H. 15(519) during the week
following such day) or, if such rate is not so reported on such day or such next
preceding Business Day, the average of the secondary market quotations for
three-month certificates of deposit of major money center banks in New York City
received at approximately 10:00 a.m., New York City time, on such day (or, if
such day is not a Business Day, on the next preceding Business Day) by the Agent
from three negotiable certificate of deposit dealers of recognized standing
selected by it.
"Topps Enterprises" means Topps Enterprises, Inc., a Delaware corporation.
"Topps Finance" means Topps Finance, Inc., a Delaware corporation.
"Topps SA" means Topps Latin America SA, a corporation organized under the
laws of Uruguay.
"Topps SA Guaranty" means the Guaranty, dated as of the Effective Date,
between the Borrower and the Agent.
"Topps SA Letters of Credit" means Documentary Letters of Credit issued for
the account of Topps SA for the benefit of its vendors, reimbursement
obligations in respect of which are guaranteed by the Borrower.
18
"Topps SA Letter of Credit Outstandings" means, at any time, the sum of (i)
the aggregate undrawn stated amount of all Topps SA Letters of Credit then
outstanding plus (ii) all amounts theretofore drawn under Topps SA Letters of
Credit and not then reimbursed.
"Travelers Letter of Credit" means a Standby Letter of Credit issued under
the Existing Agreement by JPMorgan Chase Bank (f/k/a The Chase Manhattan Bank).
"Type", when used in reference to any Loan or Borrowing, refers to whether
the rate of interest on such Loan, or on the Loans comprising such Borrowing, is
determined by reference to the Adjusted LIBO Rate or the Alternate Base Rate.
"Withdrawal Liability" means liability to a Multiemployer Plan as a result
of a complete or partial withdrawal from such Multiemployer Plan, as such terms
are defined in Part I of Subtitle E of Title IV of ERISA.
"WizKids" means WizKids, Inc., a Delaware corporation.
SECTION 1.02. Classification of Loans and Borrowings. For purposes of this
Agreement, Loans and Borrowings may be classified and referred to by Type (e.g.,
a "Eurodollar Loan" or an "ABR Borrowing").
SECTION 1.03. Terms Generally. The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The word "will"
shall be construed to have the same meaning and effect as the word "shall".
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement instrument or other document as from time to time amended,
restated, supplemented or otherwise modified (subject to any restrictions on
such amendments, restatements, supplements or modifications set forth herein),
(b) any reference herein to any Person shall be construed to include such
Person's successors and assigns, (c) the words "herein", "hereof" and
"hereunder", and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (d) all
references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement and (e) the words "asset" and "property" shall be construed to
have the same meaning and effect and to refer to any and all tangible and
intangible assets and properties, including cash, securities, accounts and
contract rights.
SECTION 1.04. Accounting Terms, GAAP. Except as otherwise expressly
provided herein, all terms of an accounting or financial nature shall be
construed in accordance with GAAP, as in effect from time to time; provided that
if the Borrower notifies the Agent that the Borrower requests an amendment to
any provision hereof to eliminate the effect of any change occurring after the
date hereof in GAAP or in the application thereof on the operation of such
provision (or if the Agent notifies the Borrower that the Required Lenders
request an amendment to any provision hereof for such purpose), regardless of
whether any such notice is given before or after such change in GAAP or in the
application thereof, then such provision shall be interpreted on the basis of
GAAP as in effect and applied immediately before such change shall have become
effective until such notice shall have been withdrawn or such provision amended
in accordance herewith.
19
ARTICLE II
The Credits
-----------
SECTION 2.01. Revolving Commitments. Subject to the terms and conditions
set forth herein, each Lender agrees to make Loans to the Borrower from time to
time during the Revolving Availability Period in an aggregate principal amount
that will not result in such Lender's Revolving Credit Exposure exceeding such
Lender's Revolving Commitment. Within the foregoing limits and subject to the
terms and conditions set forth herein, the Borrower may borrow, prepay and
reborrow Loans.
SECTION 2.02. Loans and Borrowings. (a) Each Loan shall be made as part of
a Borrowing consisting of Loans of the same Type made by the Lenders ratably in
accordance with their respective Revolving Commitments. The failure of any
Lender to make any Loan required to be made by it shall not relieve any other
Lender of its obligations hereunder; provided that the Revolving Commitments of
the Lenders are several and no Lender shall be responsible for any other
Lender's failure to make Loans as required.
(b) Subject to Section 2.14, each Revolving Borrowing shall be comprised
entirely of ABR Loans or Eurodollar Loans as the Borrower may request in
accordance herewith. Each Lender at its option may make any Eurodollar Loan by
causing any domestic or foreign branch or Affiliate of such Lender to make such
Loan; provided that any exercise of such option shall not affect the obligation
of the Borrower to repay such Loan in accordance with the terms of this
Agreement.
(c) At the commencement of each Interest Period for any Eurodollar
Borrowing, such Borrowing shall be in an aggregate amount that is an integral
multiple of $100,000 and not less than $1,000,000. At the time that each ABR
Borrowing is made, such Borrowing shall be in an aggregate amount that is an
integral multiple of $100,000 and not less than $1,000,000; provided that an ABR
Borrowing may be in an aggregate amount that is equal to the entire unused
balance of the total Revolving Commitments or that is required to finance the
reimbursement of an LC Disbursement as contemplated by Section 2.05(e).
Borrowings of more than one Type may be outstanding at the same time.
(d) Notwithstanding any other provision of this Agreement, the Borrower
shall not be entitled to request, or to elect to convert or continue, any
Borrowing if the Interest Period requested with respect thereto would end after
the Maturity Date.
(e) Loans must be for general corporate purposes, including Permitted
Acquisitions, but only a total principal amount of $30,000,000 of money borrowed
hereunder for Permitted Acquisitions may be outstanding at any time during the
Revolving Availability Period.
20
SECTION 2.03. Requests for Borrowings. To request a Borrowing, the Borrower
shall notify the Agent of such request by telephone (a) in the case of a
Eurodollar Borrowing, not later than 11:00 a.m., New York City time, three
Business Days before the date of the proposed Borrowing or (b) in the case of an
ABR Borrowing, not later than 11:00 a.m., New York City time, one Business Day
before the date of the proposed Borrowing; provided that any such notice of an
ABR Borrowing to finance the reimbursement of an LC Disbursement as contemplated
by Section 2.05(e) may be given not later than 10:00 a.m., New York City time,
on the date of the proposed Borrowing. Each such telephonic Borrowing Request
shall be irrevocable and shall be confirmed promptly by hand delivery or
telecopy to the Agent of a written Borrowing Request in a form approved by the
Agent and signed by the Borrower. Each such telephonic and written Borrowing
Request shall specify the following information in compliance with Section 2.02:
(i) the aggregate amount of such Borrowing;
(ii) the date of such Borrowing, which shall be a Business Day;
(iii) whether such Borrowing is to be an ABR Borrowing or a Eurodollar
Borrowing;
(iv) in the case of a Eurodollar Borrowing, the initial Interest Period to
be applicable thereto, which shall be a period contemplated by the definition of
the term "Interest Period"; and
(v) the location and number of the Borrower's account to which funds are to
be disbursed, which shall comply with the requirements of Section 2.06.
If no election as to the Type of Borrowing is specified, then the requested
Borrowing shall be an ABR Borrowing. If no Interest Period is specified with
respect to any requested Eurodollar Borrowing, then the Borrower shall be deemed
to have selected an Interest Period of one month's duration. Promptly following
receipt of a Borrowing Request in accordance with this Section, the Agent shall
advise each Lender of the details thereof and of the amount of such Lender's
Loan to be made as part of the requested Borrowing.
SECTION 2.04. [Intentionally Omitted.]
SECTION 2.05. Letters of Credit. (a) General. Subject to the terms and
conditions set forth herein, the Borrower may request the issuance of
Documentary Letters of Credit (including Topps SA Letters of Credit) and Standby
Letters of Credit for its own account and for the account of Topps SA (in the
case of the Topps SA Letters of Credit), in a form reasonably acceptable to the
Agent and the Issuing Bank, at any time and from time to time during the
Revolving Availability Period. In the event of any inconsistency between the
terms and conditions of this Agreement and the terms and conditions of any form
of letter of credit application or other agreement submitted by the Borrower to,
or entered into by the Borrower with, the Issuing Bank relating to any Letter of
Credit, the terms and conditions of this Agreement shall control. The Borrower
shall not be obligated under any such letter of credit application or related
documents to provide collateral to the Issuing Bank other than a security
interest in the goods in respect of which such Letter of Credit is being issued,
in the case of a Documentary Letter of Credit, which security interest will
terminate upon reimbursement of a drawing under such Documentary Letter of
Credit. Standby Letters of Credit may only be issued as security for worker's
compensation insurance or for another purpose approved by the Agent, in its
reasonable discretion.
21
(b) Notice of Issuance, Amendment, Renewal, Extension, Certain Conditions.
To request the issuance of a Letter of Credit (or the amendment, renewal or
extension of an outstanding Letter of Credit), the Borrower shall hand deliver
or telecopy (or transmit by electronic communication, if arrangements for doing
so have been approved by the Issuing Bank) to the Issuing Bank and the Agent
(reasonably in advance of the requested date of issuance, amendment, renewal or
extension) a notice requesting the issuance of a Letter of Credit, or
identifying the Letter of Credit to be amended, renewed or extended, and
specifying the date of issuance, amendment renewal or extension (which shall be
a Business Day), the date on which such Letter of Credit is to expire (which
shall comply with paragraph (c) of this Section), the amount of such Letter of
Credit; the name and address of the beneficiary thereof and such other
information as shall be necessary to prepare, amend, renew or extend such Letter
of Credit. If requested by the Issuing Bank, the Borrower also shall submit a
letter of credit application on the Issuing Bank's standard form in connection
with any request for a Letter of Credit. A Letter of Credit shall be issued,
amended, renewed or extended only if (and upon issuance, amendment, renewal or
extension of each Letter of Credit) (x) in the case of a Standby Letter of
Credit, the same shall be for the purpose permitted in paragraph (a) above, and
(y) after giving effect to such issuance, amendment, renewal or extension (i)
the Letter of Credit Outstandings shall not exceed $15,000,000, (ii) the Topps
SA Letter of Credit Outstandings shall not exceed $15,000,000, and (iii) the
total Revolving Credit Exposures shall not exceed the total Revolving
Commitments.
(c) Expiration Date. Each Letter of Credit other than a Standby Letter of
Credit shall expire at or prior to the close of business on the earlier of (i)
the date one year after the date of the issuance of such Letter of Credit (or,
in the case of any renewal or extension thereof, one year after such renewal or
extension) and (ii) the date that is five Business Days prior to the Maturity
Date.
(d) Participations. By the issuance of a Letter of Credit (or an amendment
to a Letter of Credit increasing the amount thereof) and without any further
action on the part of the Issuing Bank or the Lenders, the Issuing Bank hereby
grants to each Lender, and each Lender hereby acquires from the Issuing Bank, a
participation in such Letter of Credit equal to such Lender's Applicable
Percentage of the aggregate amount available to be drawn under such Letter of
Credit. In consideration and in furtherance of the foregoing, each Lender hereby
absolutely and unconditionally agrees to pay to the Agent for the account of the
Issuing Bank, such Lender's Applicable Percentage of each LC Disbursement made
by the Issuing Bank and not reimbursed by the Borrower on the date due as
provided in paragraph (e) of this Section, or of any reimbursement payment
required to be refunded to the Borrower for any reason. Each Lender acknowledges
and agrees that its obligation to acquire participations pursuant to this
paragraph in respect of Letters of Credit is absolute and unconditional and
shall not be affected by any circumstance whatsoever, including any amendment
renewal or extension of any Letter of Credit or the occurrence and continuance
of a Default or reduction or termination of the Revolving Commitments, and that
each such payment shall be made without any offset abatement, withholding or
reduction whatsoever.
22
(e) Reimbursement. If the Issuing Bank shall make any LC Disbursement in
respect of a Letter of Credit, the Borrower shall reimburse such LC Disbursement
by paying to the Agent an amount equal to such LC Disbursement not later than
12:00 noon, New York City time, on the date that such LC Disbursement is made,
if the Borrower shall have received notice of such LC Disbursement prior to
10:00 a.m., New York City time, on such date, or, if such notice has not been
received by the Borrower prior to such time on such date, then not later than
12:00 noon, New York City time, on (i) the Business Day that the Borrower
receives such notice, if such notice is received prior to 10:00 a.m., New York
City time, on the day of receipt, or (ii) the Business Day immediately following
the day that the Borrower receives such notice, if such notice is not received
prior to such time on the day of receipt; provided that the Borrower may,
subject to the conditions to borrowing set forth herein, request in accordance
with Section 2.03 that such payment be financed with an ABR Borrowing in an
equivalent amount and, to the extent so financed, the Borrower's obligation to
make such payment shall be discharged and replaced by the resulting ABR
Borrowing. If the Borrower fails to make such payment when due, the Agent shall
notify each Lender of the applicable LC Disbursement, the payment then due from
the Borrower in respect thereof and such Lender's Applicable Percentage thereof.
Promptly following receipt of such notice, each Lender shall pay to the Agent
its Applicable Percentage of the payment then due from the Borrower, in the same
manner as provided in Section 2.06 with respect to Loans made by such Lender
(and Section 2.06 shall apply, mutatis mutandis, to the payment obligations of
the Lenders), and the Agent shall promptly pay to the Issuing Bank the amounts
so received by it from the Lenders. Promptly following receipt by the Agent of
any payment from the Borrower pursuant to this paragraph, the Agent shall
distribute such payment to the Issuing Bank or, to the extent that Lenders have
made payments pursuant to this paragraph to reimburse the Issuing Bank, then to
such Lenders and the Issuing Bank as their interests may appear. Any payment
made by a Lender pursuant to this paragraph to reimburse the Issuing Bank for
any LC Disbursement (other than the funding of ABR Loans as contemplated above)
shall not constitute a Loan and shall not relieve the Borrower of its obligation
to reimburse such LC Disbursement.
(f) Obligations Absolute. The Borrower's obligation to reimburse LC
Disbursements as provided in paragraph (e) of this Section shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement under any and all circumstances whatsoever and
irrespective of (i) any lack of validity or enforceability of any Letter of
Credit or this Agreement, or any term or provision therein, (ii) any draft or
other document presented under a Letter of Credit proving to be forged,
fraudulent or invalid in any respect or any statement therein being untrue or
inaccurate in any respect (iii) payment by the Issuing Bank under a Letter of
Credit against presentation of a draft or other document that does not comply
with the terms of such Letter of Credit, or (iv) any other event or circumstance
whatsoever, whether or not similar to any of the foregoing, that might, but for
the provisions of this Section, constitute a legal or equitable discharge of, or
provide a right of setoff against the Borrower's obligations hereunder. Neither
the Agent, the Lenders nor the Issuing Bank, nor any of their Related Parties,
shall have any liability or responsibility by reason of or in connection with
the issuance or transfer of any Letter of Credit or any payment or failure to
make any payment thereunder (irrespective of any of the circumstances referred
to in the preceding sentence), or any error, omission, interruption, loss or
delay in transmission or delivery of any draft, notice or other communication
under or relating to any Letter of Credit (including any document required to
make a drawing thereunder), any error in interpretation of technical terms or
23
any consequence arising from causes beyond the control of the Issuing Bank;
provided that the foregoing shall not be construed to excuse the Issuing Bank
from liability to the Borrower to the extent of any direct damages (as opposed
to consequential damages, claims in respect of which are hereby waived by the
Borrower to the extent permitted by applicable law) suffered by the Borrower
that are caused by the Issuing Bank's failure to exercise care when determining
whether drafts and other documents presented under a Letter of Credit comply
with the terms thereof. The parties hereto expressly agree that, in the absence
of gross negligence or wilful misconduct on the part of the Issuing Bank (as
finally determined by a court of competent jurisdiction), the Issuing Bank shall
be deemed to have exercised care in each such determination. In furtherance of
the foregoing and without limiting the generality thereof, the parties agree
that, with respect to documents presented which appear on their face to be in
substantial compliance with the terms of a Letter of Credit, the Issuing Bank
may, in its sole discretion, either accept and make payment upon such documents
without responsibility for further investigation, regardless of any notice or
information to the contrary, or refuse to accept and make payment upon such
documents if such documents are not in strict compliance with the terms of such
Letter of Credit.
(g) Disbursement Procedures. The Issuing Bank shall, promptly following its
receipt thereof, examine all documents purporting to represent a demand for
payment under a Letter of Credit. The Issuing Bank shall promptly notify the
Agent and the Borrower by telephone (confirmed by telecopy) of such demand for
payment and whether the Issuing Bank has made or will make an LC Disbursement
thereunder; provided that any failure to give or delay in giving such notice
shall not relieve the Borrower of its obligation to reimburse the Issuing Bank
and the Lenders with respect to any such LC Disbursement.
(h) Interim Interest. If the Issuing Bank shall make any LC Disbursement,
then, unless the Borrower shall reimburse such LC Disbursement in full on the
date such LC Disbursement is made, the unpaid amount thereof shall bear
interest, for each day from and including the date such LC Disbursement is made
to but excluding the date that the Borrower reimburses such LC Disbursement at
the rate per annum then applicable to ABR Loans; provided that, if the Borrower
fails to reimburse such LC Disbursement when due pursuant to paragraph (e) of
this Section, then Section 2.13(c) shall apply. Interest accrued pursuant to
this paragraph shall be for the account of the Issuing Bank, except that
interest accrued on and after the date of payment by any Lender pursuant to
paragraph (e) of this Section to reimburse the Issuing Bank shall be for the
account of such Lender to the extent of such payment.
(i) Replacement of the Issuing Bank. The Issuing Bank may be replaced at
any time by written agreement among the Borrower, the Agent, the replaced
Issuing Bank and the successor Issuing Bank. The Agent shall notify the Lenders
of any such replacement of the Issuing Bank. At the time any such replacement
shall become effective, the Borrower shall pay all unpaid fees accrued for the
account of the replaced Issuing Bank pursuant to Section 2.12(b). From and after
the effective date of any such replacement (i) the successor Issuing Bank shall
have all the rights and obligations of the Issuing Bank under this Agreement
with respect to Letters of Credit to be issued thereafter, and (ii) references
herein to the term "Issuing Bank" shall be deemed to refer to such successor or
to any previous Issuing Bank, or to such successor and all previous Issuing
Banks, as the context shall require. After the replacement of an Issuing Bank
hereunder, the replaced Issuing Bank shall remain a party hereto and shall
continue to have all the rights and obligations of an Issuing Bank under this
Agreement with respect to Letters of Credit issued by it prior to such
replacement, but shall not be required to issue additional Letters of Credit.
24
(j) Cash Collateralization. Subject to the provision of the following
sentence, the Borrower shall, on or before the Maturity Date, deposit in an
account with the Agent in the name of the Agent and for the benefit of the
Lenders, an amount in cash equal to 105% of the sum of (i) the aggregate undrawn
stated amount of any Standby Letter of Credit having an expiration date later
than the Maturity Date plus (ii) all amounts theretofore drawn under any such
Standby Letter of Credit and not then reimbursed plus (iii) any accrued and
unpaid interest thereon. If any Event of Default shall occur and be continuing,
on the Business Day that the Borrower receives notice from the Agent or the
Required Lenders (or, if the maturity of the Loans has been accelerated, Lenders
with LC Exposure representing greater than 662/3% of the total LC Exposure)
demanding the deposit of cash collateral pursuant to this paragraph, the
Borrower shall deposit in such cash collateral account with the Agent, in the
name of the Agent and for the benefit of the Lenders, an amount in cash equal to
105% of the LC Exposure as of such date plus any accrued and unpaid interest
thereon; provided that the obligation to deposit such cash collateral shall
become effective immediately, and such deposit shall become immediately due and
payable, without demand or other notice of any kind, upon the occurrence of any
Event of Default with respect to the Borrower described in clause (h) or (i) of
Section 7.01. Each such deposit shall be held by the Agent as collateral for the
payment and performance of the obligations of the Borrower under this Agreement.
The Agent shall have exclusive dominion and control, including the exclusive
right of withdrawal, over such account. Other than any interest earned on the
investment of such deposits, which investments shall be made at the option and
sole discretion of the Agent and at the Borrower's risk and expense, such
deposits shall not bear interest. Interest or profits, if any, on such
investments shall accumulate in such account. Moneys in such account shall be
applied by the Agent to reimburse the Issuing Bank for LC Disbursements for
which it has not been reimbursed and, to the extent not so applied, shall be
held for the satisfaction of the reimbursement obligations of the Borrower for
the LC Exposure at such time or, if the maturity of the Loans has been
accelerated (but subject to the consent of Lenders with LC Exposure representing
greater than 66-2/3% of the total LC Exposure), be applied to satisfy other
obligations of the Borrower under this Agreement. If the Borrower is required to
provide an amount of cash collateral hereunder as a result of the occurrence of
an Event of Default, such amount (to the extent not applied as aforesaid) shall
be returned to the Borrower within three Business Days after all Events of
Default have been cured or waived. It is expressly agreed that amounts deposited
into such account in respect of a Standby Letter of Credit shall remain on
deposit after the termination of this Agreement so long as such Letter of Credit
remains outstanding, and to the extent that such funds have not been applied to
the Obligations, shall be returned to the Borrower following the expiration of
such Letter of Credit or the return thereof, in each case without the same
having been drawn.
(k) Any Letter of Credit which has been issued under the Existing Agreement
(including the Travelers Letter of Credit) which remains outstanding as of the
Effective Date shall be deemed to have been issued as a Letter of Credit
pursuant to this Agreement except that no fronting fees (under Section 2.12(b))
shall be payable on account of such carried over Letters of Credit.
25
SECTION 2.06. Funding of Borrowings. (a) Each Lender shall make each Loan
to be made by it hereunder on the proposed date thereof by wire transfer of
immediately available funds by 12:00 noon, New York City time, to the account of
the Agent most recently designated by it for such purpose by notice to the
Lenders. The Agent will make such Loans available to the Borrower by promptly
crediting the amounts so received, in like funds, to an account of the Borrower
maintained with the Agent in New York City and designated by the Borrower in the
applicable Borrowing Request; provided that ABR Loans made to finance the
reimbursement of an LC Disbursement as provided in Section 2.05(e) shall be
remitted by the Agent to the Issuing Bank.
(b) Unless the Agent shall have received notice from a Lender prior to the
proposed date of any Borrowing that such Lender will not make available to the
Agent such Lender's share of such Borrowing, the Agent may assume that such
Lender has made such share available on such date in accordance with paragraph
(a) of this Section and may, in reliance upon such assumption, make available to
the Borrower a corresponding amount. In such event, if a Lender has not in fact
made its share of the applicable Borrowing available to the Agent, then the
applicable Lender and the Borrower severally agree to pay to the Agent forthwith
on demand such corresponding amount with interest thereon, for each day from and
including the date such amount is made available to the Borrower to but
excluding the date of payment to the Agent at (i) in the case of such Lender,
the greater of the Federal Funds Effective Rate and a rate determined by the
Agent in accordance with banking industry rules on interbank compensation, or
(ii) in the case of the Borrower, the interest rate applicable to the Loans so
funded by the Agent. If such Lender pays such amount to the Agent, then such
amount shall constitute such Lender's Loan included in such Borrowing.
SECTION 2.07. Interest Elections. (a) Each Borrowing initially shall be of
the Type specified in the applicable Borrowing Request and, in the case of a
Eurodollar Borrowing, shall have an initial Interest Period as specified in such
Borrowing Request. Thereafter, the Borrower may elect to convert such Borrowing
to a different Type or to continue such Borrowing and, in the case of a
Eurodollar Borrowing, may elect Interest Periods therefor, all as provided in
this Section. The Borrower may elect different options with respect to different
portions of the affected Borrowing, in which case each such portion shall be
allocated ratably among the Lenders holding the Loans comprising such Borrowing,
and the Loans comprising each such portion shall be considered a separate
Borrowing.
(b) To make an election pursuant to this Section, the Borrower shall notify
the Agent of such election by telephone by the time that a Borrowing Request
would be required under Section 2.03 if the Borrower were requesting a Borrowing
of the Type resulting from such election to be made on the effective date of
such election. Each such telephonic Interest Election Request shall be
irrevocable and shall be confirmed promptly by hand delivery or telecopy to the
Agent of a written Interest Election Request in a form approved by the Agent and
signed by the Borrower.
(c) Each telephonic and written Interest Election Request shall specify the
following information in compliance with Section 2.02:
26
(i) the Borrowing to which such Interest Election Request applies and, if
different options are being elected with respect to different portions thereof,
the portions thereof to be allocated to each resulting Borrowing (in which case
the information to be specified pursuant to clauses (iii) and (iv) below shall
be specified for each resulting Borrowing);
(ii) the effective date of the election made pursuant to such Interest
Election Request which shall be a Business Day;
(iii) whether the resulting Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing; and
(iv) if the resulting Borrowing is a Eurodollar Borrowing, the Interest
Period to be applicable thereto after giving effect to such election, which
shall be a period contemplated by the definition of the term "Interest Period".
If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then the Borrower shall be deemed to have
selected an Interest Period of one month's duration.
(d) Promptly following receipt of an Interest Election Request, the Agent
shall advise each Lender, in writing, of the details thereof and of such
Lender's portion of each resulting Borrowing.
(e) If the Borrower fails to deliver a timely Interest Election Request
with respect to a Eurodollar Borrowing prior to the end of the Interest Period
applicable thereto, then, unless such Borrowing is repaid as provided herein at
the end of such Interest Period, such Borrowing shall be converted to an ABR
Borrowing. Notwithstanding any contrary provision hereof, if an Event of Default
has occurred and is continuing and the Agent, at the request of the Required
Lenders, so notifies the Borrower, then, so long as an Event of Default is
continuing (i) no outstanding Borrowing may be converted to or continued as a
Eurodollar Borrowing and (ii) unless repaid, each Eurodollar Borrowing shall be
converted to an ABR Borrowing at the end of the Interest Period applicable
thereto.
SECTION 2.08. Termination and Reduction of Revolving Commitments.
---------------------------------------------------
(a) Unless previously terminated, the Revolving Commitments shall terminate
on the Maturity Date.
(b) The Borrower may at any time terminate, or from time to time reduce,
the Revolving Commitments; provided that (i) each reduction of the Revolving
Commitments shall be in an amount that is an integral multiple of $100,000 and
not less than $1,000,000, and (ii) the Borrower shall not terminate or reduce
the Revolving Commitments if, after giving effect to any concurrent prepayment
of the Loans in accordance with Section 2.11, the sum of the Revolving Credit
Exposures would exceed the total Revolving Commitments.
27
(c) The Borrower shall notify the Agent of any election to terminate or
reduce the Revolving Commitments under paragraph (b) of this Section at least
three Business Days prior to the effective date of such termination or
reduction, specifying such election and the effective date thereof. Promptly
following receipt of any notice, the Agent shall advise the Lenders, in writing,
of the contents thereof. Each notice delivered by the Borrower pursuant to this
Section shall be irrevocable; provided that a notice of termination of the
Revolving Commitments delivered by the Borrower may state that such notice is
conditioned upon the effectiveness of other credit facilities, in which case
such notice may be revoked by the Borrower (by notice to the Agent on or prior
to the specified effective date) if such condition is not satisfied. Any
termination or reduction of the Revolving Commitments shall be permanent. Each
reduction of the Revolving Commitments shall be made ratably among the Lenders
in accordance with their respective Revolving Commitments.
(d) The Lenders, at the option of the Required Lenders, shall have the
right upon notice to the Borrower, to permanently reduce (or terminate, if
applicable) the Revolving Commitments by an amount equal to each payment
required to be made to the Agent on account of any Permitted Asset Sale;
provided that such notice of such reduction shall be made within five Business
Days after the Agent has been notified of the receipt of a payment on account of
such a sale, during which period the Borrower may not borrow or cause the
issuance of any Letter of Credit hereunder if such borrowing or new Letter of
Credit would cause the total Revolving Credit Exposures to exceed the total
amount to which the Revolving Commitments may be reduced pursuant to this
paragraph (d). Notwithstanding the foregoing, the Revolving Commitments may not
be reduced so as to cause the total LC Exposures to exceed the resulting total
Revolving Commitments.
SECTION 2.09. Repayment of Loans, Evidence of Debt. (a) The Borrower hereby
unconditionally promises to pay to the Agent for the account of each Lender (i)
the then unpaid principal amount of each Loan of such Lender, on the Maturity
Date, and (ii) the amount of Net Proceeds required to be paid on account of a
Permitted Asset Sale, as and when required hereunder.
(b) Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the Indebtedness of the Borrower to such Lender
resulting from each Loan made by such Lender, including the amounts of principal
and interest payable and paid to such Lender from time to time hereunder.
(c) The Agent shall maintain accounts in which it shall record (i) the
amount of each Loan made hereunder, the Type thereof and the Interest Period
applicable thereto, (ii) the amount of any principal or interest due and payable
or to become due and payable from the Borrower to each Lender hereunder and
(iii) the amount of any sum received by the Agent hereunder for the account of
the Lenders and each Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to paragraph (b)
or (c) of this Section shall be prima facie evidence of the existence and
amounts of the obligations recorded therein; provided that the failure of any
Lender or the Agent to maintain such accounts or any error therein shall not in
any manner affect the obligation of the Borrower to repay the Loans in
accordance with the terms of this Agreement.
28
(e) Any Lender may request that Loans made by it be evidenced by a
promissory note (in the form of Exhibit D hereto). In such event the Borrower
shall prepare, execute and deliver to such Lender such promissory note payable
to the order of such Lender (or, if requested by such Lender, to such Lender and
its registered assigns). Thereafter, the Loans evidenced by such promissory note
and interest thereon shall at all times (including after assignment pursuant to
Section 9.04) be represented by one or more promissory notes in such form
payable to the order of the payee named therein (or, if such promissory note is
a registered note, to such payee and its registered assigns).
SECTION 2.10. [Intentionally Omitted.]
SECTION 2.11. Prepayment of Loans. (a) The Borrower shall have the right at
any time and from time to time to prepay any Borrowing in whole or in part,
subject to prior notice in accordance with this Section.
(b) In the event and on each occasion that Net Proceeds in the form of cash
or cash equivalents are received by or on behalf of the Borrower or any
Subsidiary (with respect to a Permitted Asset Sale), the Borrower shall make
payment to the Agent of the amount(s), required in order for the transaction in
question to comply with the definition of a "Permitted Asset Sale" in Section
1.01, as and when such payments are required in order to maintain such
compliance.
(c) Prior to any optional or mandatory prepayment of Borrowings hereunder,
the Borrower shall select the Borrowing or Borrowings to be prepaid and shall
specify such selection in the notice of such prepayment pursuant to paragraph
(d) of this Section; provided that each prepayment of Borrowings shall be
applied to prepay ABR Borrowings before any other Borrowings.
(d) The Borrower shall notify the Agent by telephone (confirmed by
telecopy) of any prepayment hereunder (i) in the case of prepayment of a
Eurodollar Borrowing, not later than 11:00 a.m., New York City time, three
Business Days before the date of prepayment or (ii) in the case of prepayment of
an ABR Borrowing, not later than 11:00 a.m., New York City time, one Business
Day before the date of prepayment. Each such notice shall be irrevocable and
shall specify the prepayment date, the principal amount of each Borrowing or
portion thereof to be prepaid; provided that, if a notice of optional prepayment
is given in connection with a conditional notice of termination of the Revolving
Commitments as contemplated by Section 2.08, then such notice of prepayment may
be revoked if such notice of termination is revoked in accordance with Section
2.08. Promptly following receipt of any such notice, the Agent shall advise the
Lenders, in writing, of the contents thereof. Each partial prepayment of any
Borrowing shall be in the minimum amount of $500,000 and (thereafter) in
$100,000 increments thereof (or such other amount as may be needed to satisfy a
mandatory repayment requirement under Section 2.11(b). Each prepayment of a
Borrowing shall be applied ratably to the Loans included in the prepaid
Borrowing. Prepayments shall be accompanied by accrued interest to the extent
required by Section 2.13.
29
SECTION 2.12. Fees. (a) In addition to any "up front" commitment fee paid
on the Effective Date, the Borrower agrees to pay to the Agent for the account
of each Lender a commitment fee (the "Commitment Fee"), which shall accrue at
the Applicable Rate on the average daily unused amount of the Revolving
Commitment of such Lender during the period from and including the Effective
Date to but excluding the date on which such Commitment terminates. Accrued
Commitment Fees shall be payable in arrears on the last day of May, August,
November and February of each year and on the date on which the Revolving
Commitments terminate, commencing on the first such date to occur after the date
hereof; provided that any Commitment Fee accruing after the date on which the
Commitments terminate shall be payable on demand. All Commitment Fees shall be
computed on the basis of a year of 360 days and shall be payable for the actual
number of days elapsed (including the first day but excluding the last day). For
purposes of computing Commitment Fees, a Revolving Commitment of a Lender shall
be deemed to be used to the extent of the outstanding Loans and LC Exposure of
such Lender.
(b) The Borrower agrees to pay (i) to the Agent for the account of each
Revolving Lender (on the basis of its Applicable Percentage) a participation fee
with respect to its participations in Letters of Credit, which shall be
calculated at the rate of 0.25% of the full amount of each draw under each
Documentary Letter of Credit, and shall accrue at a per annum rate of .75% of
the face amount of each Standby Letter of Credit, during the period from and
including the Effective Date to but excluding the later of the date on which
such Lender's Revolving Commitment terminates and the date on which such Lender
ceases to have any LC Exposure, and (ii) to the Issuing Bank a fronting fee
which shall be calculated and payable as set forth in a separate letter. In
addition to the fees in the nature of those referred to in the preceding
sentence (without duplication), the Borrower agrees to pay the Issuing Bank's
standard fees with respect to the issuance, amendment renewal or extension of
any Letter of Credit or processing of drawings thereunder. Participation fees
and fronting fees accrued through and including the last day of May, August,
November and February of each year shall be payable on the third Business Day
following such last day, commencing on the first such date to occur after the
Effective Date; provided that all such fees shall be payable on the date on
which the Revolving Commitments terminate and any such fees accruing after the
date on which the Revolving Commitments terminate shall be payable on demand.
Any other fees payable to the Issuing Bank pursuant to this paragraph shall be
payable within 10 days after demand. All participation fees and fronting fees
shall be computed on the basis of a year of 360 days and shall be payable for
the actual number of days elapsed (including the first day but excluding the
last day).
(c) The Borrower agrees to pay to the Agent, for its own account, fees
payable in the amounts and at the times separately agreed upon between the
Borrower and the Agent.
(d) All fees payable hereunder shall be paid on the dates due, in
immediately available funds, to the Agent (or to the Issuing Bank, in the case
of fees payable to it) for distribution, in the case of Commitment Fees and
participation fees, to the Lenders entitled thereto. Fees paid shall not be
refundable under any circumstances, absent arithmetic error.
SECTION 2.13. Interest. (a) The Loans comprising each ABR Borrowing shall
bear interest at the Alternate Base Rate plus the Applicable Rate.
(b) The Loans comprising each Eurodollar Borrowing shall bear interest at
the Adjusted LIBO Rate for the Interest Period in effect for such Borrowing plus
the Applicable Rate.
30
(c) Notwithstanding the foregoing, if any principal of or interest on any
Loan or any fee or other amount payable by the Borrower hereunder is not paid
when due, whether at stated maturity, upon acceleration or otherwise, such
overdue amount shall bear interest, after as well as before judgment, at a rate
per annum equal to (i) in the case of overdue principal of any Loan, 2% plus the
rate otherwise applicable to such Loan as provided in the preceding paragraphs
of this Section or (ii) in the case of any other amount, 2% plus the rate
applicable to ABR Loans as provided in paragraph (a) of this Section.
(d) Accrued interest on each Loan shall be payable in arrears on each
Interest Payment Date for such Loan and upon termination of the Revolving
Commitments; provided that (i) interest accrued pursuant to paragraph (c) of
this Section shall be payable on demand, (ii) in the event of any repayment or
prepayment of any Loan (other than a prepayment of an ABR Loan prior to the end
of the Revolving Availability Period), accrued interest on the principal amount
repaid or prepaid shall be payable on the date of such repayment or prepayment,
and (iii) in the event of any conversion of any Eurodollar Loan prior to the end
of the current Interest Period therefor, accrued interest on such Loan shall be
payable on the effective date of such conversion.
(e) All interest hereunder shall be computed on the basis of a year of 360
days, except that interest computed by reference to the Alternate Base Rate at
times when the Alternate Base Rate is based on the Prime Rate shall be computed
on the basis of a year of 365 days (or 366 days in a leap year), and in each
case shall be payable for the actual number of days elapsed (including the first
day but excluding the last day). The applicable Alternate Base Rate or Adjusted
LIB0 Rate shall be determined by the Agent, and such determination shall be
conclusive absent manifest error.
SECTION 2.14. Alternate Rate of Interest. If prior to the commencement of
any Interest Period for a Eurodollar Borrowing:
(a) the Agent determines (which determination shall be conclusive absent
manifest error) that adequate and reasonable means do not exist for ascertaining
the Adjusted LIBO Rate for such Interest Period;
(b) the Agent is advised by the Required Lenders that the Adjusted LIBO
Rate for such Interest Period will not adequately and fairly reflect the cost to
such Lenders of making or maintaining their Loans included in such Borrowing for
such Interest Period, to a degree which such Lenders have determined to be
material; or
(c) the Agent determines (which determination shall be conclusive absent
manifest error) that it would be illegal to conduct a Eurodollar Borrowing at
the time in question; then the Agent shall give notice thereof to the Borrower
and the Lenders by telephone or telecopy as promptly as practicable thereafter
and, until the Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as a Eurodollar Borrowing, shall be ineffective,
and (ii) if any Borrowing Request requests a Eurodollar Borrowing, such
Borrowing shall be made as an ABR Borrowing.
31
SECTION 2.15. Increased Costs. (a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special deposit or
similar requirement against assets of, deposits with or for the account of, or
credit extended by, any Lender (except any such reserve requirement reflected in
the Adjusted LIBO Rate) or the Issuing Bank; or
(ii) impose on any Lender or the Issuing Bank or the London interbank
market any other condition affecting this Agreement or Eurodollar Loans made by
such Lender or any Letter of Credit or participation therein; and the result of
any of the foregoing shall be to increase the cost to such Lender of making or
maintaining any Eurodollar Loan (or of maintaining its obligation to make any
such Loan), or to increase the cost to such Lender or the Issuing Bank of
participating in, issuing or maintaining any Letter of Credit, or to reduce the
amount of any sum received or receivable by such Lender or the Issuing Bank
hereunder (whether of principal, interest or otherwise), then the Borrower will
pay to such Lender or the Issuing Bank, as the case may be, such additional
amount or amounts as will compensate such Lender or the Issuing Bank, as the
case may be, for such additional costs incurred or reduction suffered.
(b) If any Lender or the Issuing Bank determines that any Change in Law
regarding capital requirements has or would have the effect of reducing the rate
of return on such Lender's or the Issuing Bank's capital or on the capital of
such Lender's or the Issuing Bank's holding company, if any, as a consequence of
this Agreement or the Loans made by, or participations in Letters of Credit held
by, such Lender, or the Letters of Credit issued by the Issuing Bank, to a level
below that which such Lender or the Issuing Bank or such Lender's or the Issuing
Bank's holding company could have achieved but for such Change in Law (taking
into consideration such Lender's or the Issuing Bank's policies and the policies
of such Lender's or the Issuing Bank's holding company with respect to capital
adequacy), then from time to time the Borrower will pay to such Lender or the
Issuing Bank, as the case may be, such additional amount or amounts as will
compensate such Lender or the Issuing Bank or such Lender's or the Issuing
Bank's holding company for any such reduction suffered.
(c) A certificate of a Lender or the Issuing Bank setting forth the amount
or amounts necessary to compensate such Lender or the Issuing Bank or its
holding company, as the case may be, as specified in paragraph (a) or (b) of
this Section shall be delivered to the Borrower and shall be conclusive absent
manifest error. The Borrower shall pay such Lender or the Issuing Bank, as the
case may be, the amount shown as due on any such certificate within 10 days
after receipt thereof
(d) Failure or delay on the part of any Lender or the Issuing Bank to
demand compensation pursuant to this Section shall not constitute a waiver of
such Lender's or the Issuing Bank's right to demand such compensation; provided
that the Borrower shall not be required to compensate a Lender or the Issuing
Bank pursuant to this Section for any increased costs or reductions incurred
more than 270 days prior to the date that such Lender or the Issuing Bank, as
the case may be, notifies the Borrower of the Change in Law giving rise to such
increased costs or reductions and of such Lender's or the Issuing Bank's
intention to claim compensation therefor; provided further that, if the Change
in Law giving rise to such increased costs or reductions is retroactive, then
the 270-day period referred to above shall be extended to include the period of
retroactive effect thereof.
32
SECTION 2.16. Break Funding Payments. In the event of (a) the payment of
any principal of any Eurodollar Loan other than on the last day of an Interest
Period applicable thereto (including as a result of an Event of Default), (b)
the Borrower's election to convert a Borrowing or continue a Borrowing as a
Eurodollar Borrowing which results in the Interest Period therefor commencing
before and ending after a date on which any principal of the Loans is to be
repaid and the payment of such principal during such Interest Period, (c) the
conversion of any Eurodollar Loan other than on the last day of the Interest
Period applicable thereto, (d) the failure to borrow, convert, continue or
prepay any Loan on the date specified in any notice delivered pursuant hereto
(regardless of whether such notice may be revoked under Section 2.11(d) and is
revoked in accordance therewith), or (e) the assignment of any Eurodollar Loan
other than on the last day of the Interest Period applicable thereto as a result
of a request by the Borrower pursuant to Section 2.19, then, in any such event,
the Borrower shall compensate each Lender for the loss, cost and expense
attributable to such event (and in the case of clause (b) above, the Borrower
will make such compensation on the applicable principal repayment date). In the
case of a Eurodollar Loan, such loss, cost or expense to any Lender shall be
deemed to include an amount determined by such Lender to be the excess, if any,
of (i) the amount of interest which would have accrued on the principal amount
of such Loan had such event not occurred, at the Adjusted LIBO Rate that would
have been applicable to such Loan, for the period from the date of such event to
the last day of the then current Interest Period therefor (or, in the case of a
failure to borrow, convert or continue, for the period that would have been the
Interest Period for such Loan), over (ii) the amount of interest which would
accrue on such principal amount for such period at the interest rate which such
Lender would bid were it to bid, at the commencement of such period, for dollar
deposits of a comparable amount and period from other banks in the Eurodollar
market. A certificate of any Lender setting forth any amount or amounts that
such Lender is entitled to receive pursuant to this Section shall be delivered
to the Borrower and shall be conclusive absent manifest error. The Borrower
shall pay such Lender the amount shown as due on any such certificate within 10
days after receipt thereof
SECTION 2.17. Taxes. (a) Any and all payments by or on account of any
obligation of the Borrower hereunder or under any other Loan Document shall be
made free and clear of and without deduction for any Indemnified Taxes or Other
Taxes; provided that if the Borrower shall be required to deduct any Indemnified
Taxes or Other Taxes from such payments, then (i) the sum payable shall be
increased as necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section) the Agent,
Lender or Issuing Bank (as the case may be) receives an amount equal to the sum
it would have received had no such deductions been made, (ii) the Borrower shall
make such deductions, and (iii) the Borrower shall pay the full amount deducted
to the relevant Governmental Authority in accordance with applicable law.
(b) In addition, the Borrower shall pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable law.
33
(c) The Borrower shall indemnify the Agent, each Lender and the Issuing
Bank, within 10 days after written demand therefor, for the full amount of any
Indemnified Taxes or Other Taxes paid by the Agent, such Lender or the Issuing
Bank, as the case may be, on or with respect to any payment by or on account of
any obligation of the Borrower hereunder or under any other Loan Document
(including Indemnified Taxes or Other Taxes imposed or asserted on or
attributable to amounts payable under this Section) and any penalties, interest
and reasonable expenses arising therefrom or with respect thereto, whether or
not such Indemnified Taxes or Other Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority. A certificate as to the amount
of such payment or liability delivered to the Borrower by a Lender or the
Issuing Bank, or by the Agent on its own behalf or on behalf of a Lender or the
Issuing Bank, shall be conclusive absent manifest error.
(d) As soon as practicable after any payment of Indemnified Taxes or Other
Taxes by the Borrower to a Governmental Authority, the Borrower shall deliver to
the Agent the original or a certified copy of a receipt issued by such
Governmental Authority evidencing such payment, a copy of the return reporting
such payment or other evidence of such payment reasonably satisfactory to the
Agent.
(e) Any Foreign Lender that is entitled to an exemption from or reduction
of withholding tax under the law of the jurisdiction in which the Borrower is
located, or any treaty to which such jurisdiction is a party, with respect to
payments under this Agreement shall deliver to the Borrower (with a copy to the
Agent), at the time or times prescribed by applicable law, such properly
completed and executed documentation prescribed by applicable law or reasonably
requested by the Borrower as will permit such payments to be made without
withholding or at a reduced rate.
(f) If the Agent or a Lender determines, in its sole discretion, that it
has received a refund of any Taxes or Other Taxes as to which it has been
indemnified by the Borrower or with respect to which the Borrower has paid
additional amounts pursuant to this Section 2.17, it shall pay over such refund
to the Borrower (but only to the extent of indemnity payments made, or
additional amounts paid, by the Borrower under this Section 2.17 with respect to
the Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket
expenses of the Agent or such Lender and without interest (other than any
interest paid by the relevant Governmental Authority with respect to such
refund); provided, that the Borrower, upon the request of the Agent or such
Lender, agrees to repay the amount paid over to the Borrower (plus any
penalties, interest or other charges imposed by the relevant Governmental
Authority) to the Agent or such Lender in the event the Agent or such Lender is
required to repay such refund to such Governmental Authority. This Section shall
not be construed to require the Agent or any Lender to make available its tax
returns (or any other information relating to its taxes which it deems
confidential) to the Borrower or any other Person.
SECTION 2.18. Payments Generally; Pro Rata Treatment, Sharing of Setoffs.
(a) The Borrower shall make each payment required to be made by it hereunder or
under any other Loan Document (whether of principal, interest, fees or
reimbursement of LC Disbursements, or of amounts payable under Section 2.15,
2.16 or 2.17, or otherwise) prior to 12:00 noon, New York City time, on the date
when due, in immediately available funds, without set-off or counterclaim. Any
amounts received after such time on any date may, in the discretion of the
34
Agent, be deemed to have been received on the next succeeding Business Day for
purposes of calculating interest thereon. All such payments shall be made to the
Agent at its offices at 0 Xxxxx XxxxxXxxx Xxxxxx, Xxxxxxxx, Xxx Xxxx 00000,
except payments to be made directly to the Issuing Bank as expressly provided
herein, and except that payments pursuant to Sections 2.15, 2.16, 2.17 and 9.03
shall be made directly to the Persons entitled thereto, and payments pursuant to
other Loan Documents shall be made to the Persons specified therein. The Agent
shall distribute any such payments received by it for the account of any other
Person to the appropriate recipient promptly following receipt thereof. If any
payment under any Loan Document shall be due on a day that is not a Business
Day, the date for payment shall be extended to the next succeeding Business Day,
and, in the case of any payment accruing interest, interest thereon shall be
payable for the period of such extension. All payments under each Loan Document
shall be made in dollars.
(b) If at any time insufficient funds are received by and available to the
Agent to pay fully all amounts of principal, unreimbursed LC Disbursements,
interest and fees then due hereunder, such funds shall be applied (i) first
towards payment of interest and fees then due hereunder, ratably among the
parties entitled thereto in accordance with the amounts of interest and fees
then due to such parties, and (ii) second, towards payment of principal and
unreimbursed LC Disbursements then due hereunder, ratably among the parties
entitled thereto in accordance with the amounts of principal and unreimbursed LC
Disbursements then due to such parties.
(c) If any Lender shall, by exercising any right of set-off or counterclaim
or otherwise, obtain payment in respect of any principal of or interest on any
of its Loans, or participations in LC Disbursements resulting in such Lender
receiving payment of a greater proportion of the aggregate amount of its Loans
and participations in LC Disbursements and accrued interest thereon than the
proportion received by any other Lender, then the Lender receiving such greater
proportion shall purchase (for cash at face value) participations in the Loans
and participations in LC Disbursements of other Lenders to the extent necessary
so that the benefit of all such payments shall be shared by the Lenders ratably
in accordance with the aggregate amount of principal of and accrued interest on
their respective Loans and participations in LC Disbursements; provided that (i)
if any such participations are purchased and all or any portion of the payment
giving rise thereto is recovered, such participations shall be rescinded and the
purchase price restored to the extent of such recovery, without interest, and
(ii) the provisions of this paragraph shall not be construed to apply to any
payment made by the Borrower pursuant to and in accordance with the express
terms of this Agreement or any payment obtained by a Lender as consideration for
the assignment of or sale of a participation in any of its Loans or
participations in LC Disbursements to any assignee or participant other than to
the Borrower or any Subsidiary or Affiliate thereof (as to which the provisions
of this paragraph shall apply). The Borrower consents to the foregoing and
agrees, to the extent it may effectively do so under applicable law, that any
Lender acquiring a participation pursuant to the foregoing arrangements may
exercise against the Borrower rights of set-off and counterclaim with respect to
such participation as fully as if such Lender were a direct creditor of the
Borrower in the amount of such participation.
35
(d) Unless the Agent shall have received notice from the Borrower prior to
the date on which any payment is due to the Agent for the account of the Lenders
or the Issuing Bank hereunder that the Borrower will not make such payment, the
Agent may assume that the Borrower has made such payment on such date in
accordance herewith and may, in reliance upon such assumption, distribute to the
Lenders or the Issuing Bank, as the case may be, the amount due. In such event,
if the Borrower has not in fact made such payment, then each of the Lenders or
the Issuing Bank, as the case may be, severally agrees to repay to the Agent
forthwith on demand the amount so distributed to such Lender or Issuing Bank
with interest thereon, for each day from and including the date such amount is
distributed to it to but excluding the date of payment to the Agent at the
greater of the Federal Funds Effective Rate and a rate determined by the Agent
in accordance with banking industry rules on interbank compensation.
(e) If any Lender shall fail to make any payment required to be made by it
pursuant to Section 2.05(d) or (e), 2.06(b), 2.18(d) or 9.03(c), then the Agent
may, its discretion (notwithstanding any contrary provision hereof), apply any
amounts thereafter received by the Agent for the account of such Lender to
satisfy such Lender's obligations under such Sections until all such unsatisfied
obligations are fully paid.
SECTION 2.19. Mitigation Obligations, Replacement of Lenders. (a) If any
Lender requests compensation under Section 2.15, or if the Borrower is required
to pay any additional amount to any Lender or any Governmental Authority for the
account of any Lender pursuant to Section 2.17, then such Lender shall use
reasonable efforts to designate a different lending office for funding or
booking its Loans hereunder or to assign its rights and obligations hereunder to
another of its offices, branches or affiliates, if, in the judgment of such
Lender, such designation or assignment (i) would eliminate or reduce amounts
payable pursuant to Section 2.15 or 2.17, as the case may be, in the future, and
(ii) would not subject such Lender to any unreimbursed cost or expense and would
not otherwise be disadvantageous to such Lender. The Borrower hereby agrees to
pay all reasonable costs and expenses incurred by any Lender in connection with
any such designation or assignment.
(b) If any Lender requests compensation under Section 2.15, or if the
Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.17,
or if any Lender defaults in its obligation to fund Loans hereunder, then the
Borrower may, at its sole expense and effort, upon notice to such Lender and the
Agent require such Lender to assign and delegate, without recourse (in
accordance with and subject to the restrictions contained in Section 9.04), all
its interests, rights and obligations under this Agreement to an assignee that
shall assume such obligations (which assignee may be another Lender, if a Lender
accepts such assignment); provided that (i) the Borrower shall have received the
prior written consent of the Agent (and, if a Revolving Commitment is being
assigned, the Issuing Bank), which consent shall not unreasonably be withheld,
(ii) such Lender shall have received payment of an amount equal to the
outstanding principal of its Loans and participations in LC Disbursements,
accrued interest thereon, accrued fees and all other amounts payable to it
hereunder, from the assignee (to the extent of such outstanding principal and
accrued interest and fees) or the Borrower (in the case of all other amounts),
and (iii) in the case of any such assignment resulting from a claim for
compensation under Section 2.15 or payments required to be made pursuant to
Section 2.17, such assignment will result in a reduction in such compensation or
payments. A Lender shall not be required to make any such assignment and
delegation if, prior thereto, as a result of a waiver by such Lender or
otherwise, the circumstances entitling the Borrower to require such assignment
and delegation cease to apply.
36
SECTION 2.20. Existing Credit Agreement. Any letter of credit which has
been issued under the Existing Agreement which remains outstanding as of the
Effective Date shall be deemed to have been issued as a Letter of Credit
pursuant to this Agreement; however, the Borrower will not be required to pay
any fees hereunder that would be duplicative of fees already paid on account of
such letters of credit issued under the Existing Agreement.
ARTICLE III
Representations and Warranties
------------------------------
The Borrower represents and warrants to the Lenders that:
SECTION 3.01. Organization; Powers. Each of the Borrower and its
Subsidiaries is duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization, has all requisite power and
authority to carry on its business as now conducted and, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, is qualified to do business in,
and is in good standing in, every jurisdiction where such qualification is
required.
SECTION 3.02. Authorization, Enforceability. The Financing Transactions to
be entered into by each of the Borrower, Topps Enterprises, Topps Finance and
WizKids are within their respective corporate powers and have been duly
authorized by all necessary corporate and, if required, stockholder (or member)
action. This Agreement has been duly executed and delivered by each of the
Borrower, Topps Enterprises, Topps Finance and WizKids and constitutes, and each
other Loan Document to which each of the Borrower, Topps Enterprises, Topps
Finance and WizKids (as applicable) is to be a party, when executed and
delivered by each of the Borrower, Topps Enterprises, Topps Finance and WizKids
(as applicable) will constitute, a legal, valid and binding obligation of each
of the Borrower, Topps Enterprises, Topps Finance and WizKids (as applicable),
enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other laws affecting creditors' rights
generally and subject to general principles of equity, regardless of whether
considered in a proceeding in equity or at law.
SECTION 3.03. Governmental Approvals, No Conflicts. The Financing
Transactions (a) do not require any consent or approval of, registration or
filing with, or any other action by, any Governmental Authority, except such as
have been obtained or made and are in full force and effect, (b) will not
violate any applicable law or regulation or the charter, bylaws or other
organizational documents of the Borrower or any of its Subsidiaries or any order
of any Governmental Authority, (c) will not violate or result in a default under
any indenture, agreement or other instrument binding upon the Borrower or any of
its Subsidiaries or its assets, or give rise to a right thereunder to require
any payment to be made by the Borrower or any of its Subsidiaries, and (d) will
not result in the creation or imposition of any Lien on any asset of the
Borrower or any of its Subsidiaries.
37
SECTION 3.04. Financial Condition; No Material Adverse Change. (a) The
Borrower has heretofore furnished to the Lenders its consolidated and
consolidating balance sheet and statements of income, stockholders equity and
cash flows (i) as of and for the fiscal year ended February 28, 2004, (A) in the
case of the consolidated financials, reported on by Deloitte & Touche, L.L.P.,
independent public accountants, and (B) in the case of the consolidating
financials, certified by the Borrower's chief financial officer, and (ii) as of
and for the fiscal quarter ended May 29, 2004 (A) in the case of the
consolidated financials, reviewed by Deloitte & Touche, L.L.P., independent
public accountants, and (B) in the case of consolidating financials, certified
by the Borrower's chief financial officer. Such financial statements present
fairly, in all material respects, the financial position and results of
operations and cash flows of the Borrower and its consolidated Subsidiaries as
of such dates and for such periods in accordance with GAAP, subject to year-end
audit adjustments and the absence of footnotes in the case of the statements
referred to in clause (ii) above.
(b) Except as disclosed in the financial statements referred to above or
the notes thereto and except for the Disclosed Matters, after giving effect to
the Financing Transactions, none of the Borrower or its Subsidiaries has, as of
the Effective Date, any Material Indebtedness (except as set forth on Schedule
3.04) or contingent liabilities, unusual long-term commitments or unrealized
losses.
(c) Since May 29, 2004 there has been no material adverse change in the
business, assets, operations, prospects or condition, financial or otherwise, of
the Borrower and its Subsidiaries, taken as a whole.
SECTION 3.05. Properties. (a) Each of the Borrower and its Subsidiaries has
good title to, or valid leasehold interests in, all the real and personal
property material to its business, subject to no transfer restrictions or Liens
of any kind (other than as set forth on Schedule 6.02), except for minor defects
in title that do not interfere with its ability to conduct its business as
currently conducted or to utilize such properties for their intended purposes.
(b) Each of the Borrower and its Subsidiaries owns, or is licensed to use,
all trademarks, tradenames, copyrights, patents and other intellectual property
material to its business, and the use thereof by the Borrower and its
Subsidiaries does not infringe upon the rights of any other Person, except for
any such infringements that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.
(c) Schedule 3.05 sets forth the address of each real property that is
owned or leased by the Borrower or any of its Subsidiaries as of the Effective
Date after giving effect to the Financing Transactions.
(d) Neither the Borrower nor any of its Subsidiaries is a party to any
contract, agreement, lease or instrument, the performance of which, either
unconditionally or upon the happening of an event, will result in or require the
creation of a Lien on any assets of the Borrower or its Subsidiaries, or
otherwise result in a violation of this Agreement, other than Liens arising
under documentation with respect to Documentary Letters of Credit.
38
SECTION 3.06. Litigation and Environmental Matters. (a) There are no
actions, suits or proceedings by or before any arbitrator or Governmental
Authority pending against or, to the knowledge of the Borrower, threatened
against or affecting the Borrower or any of its Subsidiaries (i) as to which
there is a reasonable likelihood of an adverse determination and that if
adversely determined, could reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect (other than the Disclosed
Matters), or (ii) that involve any of the Loan Documents or the Financing
Transactions.
(b) Except for the Disclosed Matters and except with respect to any other
matters that, individually or in the aggregate, could not reasonably be expected
to result in a Material Adverse Effect, neither the Borrower nor any of its
Subsidiaries (i) has failed to comply with any Environmental Law or to obtain,
maintain or comply with any permit, license or other approval required under any
Environmental Law, (ii) has become subject to any Environmental Liability, (iii)
has received notice of any claim with respect to any Environmental Liability or
(iv) knows of any basis for any Environmental Liability.
(c) Since the date of this Agreement, there has been no change in the
status of the Disclosed Matters that, individually or in the aggregate, has
resulted in, or materially increased the likelihood of, a Material Adverse
Effect.
SECTION 3.07. Compliance with Laws and Agreements. Each of the Borrower and
its Subsidiaries is in compliance with all laws, regulations and orders of any
Governmental Authority applicable to it or its property and all indentures,
agreements and other instruments binding upon it or its property, except where
the failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect. Neither the Borrower nor any
Subsidiary is (a) a party to any judgment, order, decree or any agreement or
instrument or subject to restrictions which could reasonably be likely to have a
Material Adverse Effect or to materially adversely affect the ability of the
Borrower to observe the covenants and agreements contained herein or with
respect to any other Indebtedness, or (b) in default in the performance,
observance or fulfillment of any of the obligations, covenants or conditions
contained in any agreement or instrument to which it is a party, which default
has, or if not remedied within any applicable grace period could reasonably be
likely to have, a Material Adverse Effect or to materially adversely affect the
ability of the Borrower, Topps Enterprises, Topps Finance or WizKids to observe
the covenants and agreements contained herein or any other Loan Document.
SECTION 3.08. Investment and Holding Company Status. Neither the Borrower
nor any of its Subsidiaries is (a) an "investment company" or an "affiliated
Person" of, or "promoter" or "principal underwriter" for, an "investment
company," as defined in, or subject to regulation under, the Investment Company
Act of 1940, or (b) a "holding company" as defined in, or subject to regulation
under, the Public Utility Holding Company Act of 1935.
SECTION 3.09. Taxes. Each of the Borrower and its Subsidiaries has timely
filed or caused to be filed all tax returns and reports required to have been
filed and has paid or caused to be paid all Taxes required to have been paid by
it, except (a) Taxes that are being contested in good faith by appropriate
proceedings and for which the Borrower or such Subsidiary, as applicable, has
set aside on its books adequate reserve, or (b) to the extent that the failure
to do so could not reasonably be expected to result in a Material Adverse
Effect. Each of the Borrower and its Subsidiaries has paid, or has provided
adequate reserves for the payment of, all material Federal, state and foreign
income taxes applicable for all prior fiscal years and for the current fiscal
year to the date hereof.
39
SECTION 3.10. ERISA. No ERISA Event has occurred or is reasonably expected
to occur that, when taken together with all other such ERISA Events for which
liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect. The present value of all accumulated
benefit obligations under each Plan (based on the assumptions used for purposes
of Statement of Financial Accounting Standards No. 87) did not, as of February
28, 2004, exceed by more than $9,000,000 the fair market value of the assets of
such Plan, and the present value of all accumulated benefit obligations of all
underfunded Plans (based on the assumptions used for purposes of Statement of
Financial Accounting Standards No. 87) did not, as of February 28, 2004, exceed
by more than $9,000,000 the fair market value of the assets of all such
underfunded Plans.
SECTION 3.11. Disclosure. The Borrower has disclosed to the Lenders all
agreements, instruments and corporate or other restrictions to which the
Borrower or any of its Subsidiaries is subject, and all other matters known to
any of them, that, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect. None of the reports, financial
statements, certificates or other information furnished by or on behalf of the
Borrower to the Agent or any Lender in connection with the negotiation of this
Agreement or any other Loan Document, or delivered hereunder or thereunder (as
modified or supplemented by other information so furnished) contains any
material misstatement of fact or omits to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading; provided that with respect to projected financial
information, the Borrower represents only that such information was prepared in
good faith based upon assumptions believed to be reasonable at the time.
SECTION 3.12. Subsidiaries and Affiliates. Schedule 3.12 sets forth as of
the Effective Date the name of, and the ownership interest of the Borrower in,
each Subsidiary and each Affiliate of the Borrower. The outstanding shares or
other equity interests of each such Subsidiary and each Affiliate have been duly
authorized and validly issued and are fully paid and nonassessable; and the
Borrower and each such Subsidiary owns beneficially and of record all the shares
and other interests it is listed as owning in Schedule 3.12, free and clear of
any Lien. Schedule 3.12 also sets forth as of the Effective Date a complete
description of all Intercompany Notes and Intercompany Debt held by the
Borrower. The Borrower owns beneficially and legally all such Intercompany Notes
and Intercompany Debt, free and clear of any Lien.
SECTION 3.13. Insurance. Schedule 3.13 sets forth a description of all
insurance maintained by or on behalf of the Borrower and its Subsidiaries as of
the Effective Date. As of the Effective Date, all premiums in respect of such
insurance have been paid.
SECTION 3.14. Labor Matters. As of the Effective Date, except for the
Disclosed Matters, none of the employees of the Borrower or any Subsidiary is
subject to any collective bargaining agreement and there are no strikes,
lockouts or slowdowns against the Borrower or any Subsidiary pending or, to the
knowledge of the Borrower, threatened, that are reasonably likely to have a
40
Material Adverse Effect. The hours worked by and payments made to employees of
the Borrower and the Subsidiaries have not been in material violation of the
Fair Labor Standards Act or any other applicable Federal, state, local or
foreign law dealing with such matters except to the extent that any such
violation could not reasonably be expected to result in a Material Adverse
Effect. All payments due from the Borrower or any Subsidiary, or for which any
claim may be made against the Borrower or any Subsidiary, on account of wages
and employee health and welfare insurance and other benefits, have been paid or
accrued as a liability on the books of the Borrower or such Subsidiary. The
consummation of the Financing Transactions will not give rise to any right of
termination or right of renegotiation on the part of any union under any
collective bargaining agreement to which the Borrower or any Subsidiary is bound
that is reasonably likely to have a Material Adverse Effect.
SECTION 3.15. Solvency. Immediately after the consummation of the Financing
Transactions to occur on the Effective Date and immediately following the making
of any Loan made on the Effective Date, and after giving effect to the
application of the proceeds of such Loans, (a) the fair value of the respective
assets of the Borrower at a fair valuation, will exceed its debts and
liabilities, subordinated, contingent or otherwise; (b) the present fair
saleable value of the respective property of the Borrower will be greater than
the amount that will be required to pay the probable liability of its debts and
other liabilities, subordinated, contingent or otherwise, as such debts and
other liabilities become absolute and matured; (c) the Borrower will be able to
pay its debts and liabilities, subordinated, contingent or otherwise, as such
debts and liabilities become absolute and matured; and (d) the Borrower will not
have unreasonably small capital with which to conduct the business in which it
is engaged as such business is now conducted and is proposed to be conducted
following the Effective Date.
SECTION 3.16. No Default. As of the date hereof, there does not exist any
Default or Event of Default hereunder.
SECTION 3.17. Place of Business. As of the date hereof, the Borrower has no
office, mailing address or other place of business in the United Kingdom.
SECTION 3.18. [Intentionally Omitted.]
SECTION 3.19. Federal Reserve Regulations. The Borrower is not engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying Margin Stock.
ARTICLE IV
Conditions
----------
SECTION 4.01. Effective Date. The obligations of the Lenders to make Loans
and of the Issuing Bank to issue Letters of Credit hereunder shall not become
effective until the date on which each of the following conditions is satisfied
(or waived in accordance with Section 9.02):
(a) The Agent (or its counsel) shall have received from each party hereto
either (i) a counterpart of this Agreement signed on behalf of such party, or
(ii) written evidence satisfactory to the Agent (which may include telecopy
transmission of a signed signature page of this Agreement) that such party has
signed a counterpart of this Agreement.
41
(b) The Agent shall have received a favorable written opinion (addressed to
the Agent and the Lenders and dated the Effective Date) of Xxxxxxx Xxxx &
Xxxxxxxxx, counsel for the Borrower covering such matters relating to the
Borrower, Topps Enterprises, Topps Finance, WizKids, the Loan Documents or the
Financing Transactions as the Required Lenders shall reasonably request. The
Borrower hereby requests such counsel to deliver such opinion.
(c) The Agent shall have received lien and litigation searches against the
Borrower and each Guarantor in such jurisdictions as the Agent shall specify,
such documents and certificates as the Agent or its counsel may reasonably
request relating to the organization, existence and good standing of the
Borrower, Topps Enterprises, Topps Finance, and WizKids, the authorization of
the Financing Transactions and any other legal matters relating to the Borrower,
Topps Enterprises, Topps Finance, WizKids, the Loan Documents or the Financing
Transactions, including certificates of resolutions, incumbency and corporate
documents for the Borrower and the Guarantors, all in form and substance
satisfactory to the Agent and its counsel.
(d) The Agent shall have received a certificate, dated the Effective Date
and signed by the President, a Vice President or a Financial Officer of the
Borrower, confirming compliance with the conditions set forth in paragraphs (a)
and (b) of Section 4.02.
(e) The Agent shall have received all fees and other amounts due and
payable on to the Agent or prior to the Effective Date, including, to the extent
invoiced, reimbursement or payment of all out-of-pocket expenses required to be
reimbursed or paid by the Borrower hereunder or under any other Loan Document.
(f) All amounts owing by the Borrower under the Existing Agreement shall
have been paid or disposed of at the satisfaction of the Agent.
(g) The Agent shall have received an "upfront" fee equal to $43,750, for
ratable distribution to the Lenders.
(h) The Borrower and the Subsidiaries shall have granted the Agent access
to and the right to inspect all reports, audits and other internal information
of the Borrower and the Subsidiaries relating to environmental matters, and any
third-party verification of certain matters relating to compliance with
Environmental Laws requested by the Agent, and the Agent shall be satisfied that
the Borrower and the Subsidiaries are in compliance in all material respects
with all applicable Environmental Laws and be satisfied with the costs of
maintaining such compliance.
(i) All consents and approvals required to be obtained from any
Governmental Authority or other Person as shall be required to consummate the
transactions contemplated hereby shall have been obtained, and all applicable
waiting periods and appeal periods shall have expired, in each case without the
imposition of any burdensome conditions.
(j) The Agreement shall have received a duly executed copy of a letter
agreement among LaSalle National Bank, the Borrower and Agent regarding
termination of the Existing Facility.
42
(k) The Agent shall have received the Topps SA Guaranty and the Subsidiary
Guaranty, duly executed by the Borrower and by Topps Enterprises, Topps Finance
and WizKids, respectively.
(l) The Agent and the Lenders shall have received such other search
requests, documents, instruments, certificates and opinions as are customary for
transactions of this type or as the Agent or any Lender may reasonably request,
and shall be satisfied with such other conditions as it may reasonably require.
Any documents or other written material set forth above must be
satisfactory to the Lenders. The Agent shall notify the Borrower and the Lenders
of the Effective Date, and such notice shall be conclusive and binding.
Notwithstanding the foregoing, the obligations of the Lenders to make Loans, and
of the Issuing Bank to issue Letters of Credit hereunder, shall not become
effective unless each of the foregoing conditions is satisfied (or waived
pursuant to Section 9.02) at or prior to 3:00 p.m., New York City time, on
September 17, 2004 (and, in the event such conditions are not so satisfied or
waived, the Revolving Commitments shall terminate at such time). The delivery to
the Borrower of a fully executed original of this Agreement shall constitute the
Agent's confirmation that this Agreement has become effective.
SECTION 4.02. Each Credit Event. The obligation of each Lender to make a
Loan on the occasion of any Borrowing, and of the Issuing Bank to issue, amend,
renew or extend any Letter of Credit, is subject to the satisfaction of the
following conditions:
(a) The representations and warranties of the Borrower set forth in the
Loan Documents shall be true and correct on and as of the date of such Borrowing
or the date of issuance, amendment, renewal or extension of such Letter of
Credit, as applicable, except to the extent they expressly relate to a specific
earlier date (it being understood that references to a specific date, to "the
date hereof" and to "the Effective Date" are not repeated as of the date of such
Borrowing).
(b) At the time of and immediately after giving effect to such Borrowing or
the issuance, amendment, renewal or extension of such Letter of Credit, as
applicable, no Default shall have (or would have) occurred and be continuing.
(c) Each condition to the making of a Loan, or the issuance, amendment,
renewal or extension of a Letter of Credit, as applicable, under Article II,
shall have been satisfied .
(d) If a certification is required under Section 5.04(c), the Agent shall
have received such certificate which must state that the Borrower has determined
that the termination or lapse of the Material License in question will not have
a Material Adverse Effect.
(e) If as of the close of the most recent reporting period under Section
5.01(a) or (b), the Borrower was not required to provide the certification
required under Section 5.01(c) with respect to Sections 6.04, 6.07, 6.13 and
6.14, such a certificate must be provided (based upon the data from the most
recent reporting period) prior to the making of any Loan, together with the
Borrowing Request for such Loan.
43
Each Borrowing Request shall be accompanied by a certificate, dated the
date of the Borrowing Request, signed by the President, a Vice President or a
Financial Officer of the Borrower as to the matters specified in paragraphs (a),
(b) and (c) of this Section.
SECTION 4.03. Additional Condition For Each Loan. If at any time prior to a
Borrowing Request an LPT shall have occurred, the obligation of the Lenders to
make any Loan which is requested by such Borrowing Request is further subject to
the condition that the Agent shall have determined, in its reasonable judgment,
that the effect of the transaction which gave rise to such LPT is no longer
continuing (i.e., the Borrower and its Subsidiaries do not remain leveraged by
reason of such transaction to the extent required to constitute an LPT).
ARTICLE V
Affirmative Covenants
---------------------
Until the Revolving Commitments have expired or been terminated and the
principal of and interest on each Loan and all fees payable hereunder shall have
been paid in full, and all Letters of Credit shall have expired or terminated,
and all LC Disbursements shall have been reimbursed, the Borrower covenants and
agrees with the Lenders that:
SECTION 5.01. Financial Statements and Other Information. The Borrower will
furnish to the Agent and each Lender:
(a) Within 90 days after the end of each fiscal year of the Borrower, its
audited consolidated and unaudited consolidating balance sheet and related
statements of operations, stockholders equity and cash flows as of the end of
and for such year, setting forth in each case in comparative form the figures
for the previous fiscal year, (i) in the case of the audited consolidated
financial statements, reported on by Deloitte & Touche, L.L.P. or other
independent public accountants of recognized national standing (without a "going
concern" or like qualification or exception and without any qualification or
exception as to the scope of such audit), and (ii) in the case of the unaudited
consolidating financial statements, certified by the Borrower's chief financial
officer, to the effect that such consolidated financial statements present
fairly in all material respects the financial condition and results of
operations of the Borrower and its consolidated Subsidiaries on a consolidated
basis in accordance with GAAP consistently applied;
(b) Within 45 days after the end of each of the first three fiscal quarters
of each fiscal year of the Borrower, its consolidated and consolidating balance
sheet and related statements of operations (including a schedule setting forth
the results of operations by business segment), stockholders' equity and cash
flows as of the end of and for such fiscal quarter and the then elapsed portion
of the fiscal year, setting forth in each case in comparative form the figures
for the corresponding period or periods of (or, in the case of the balance sheet
as of the end of) the previous fiscal year, (i) in the case of the consolidated
financial statements, reviewed by Deloitte & Touche, L.L.P. or other independent
public accountants of recognized national standing, and (ii) in the case of the
unaudited consolidating financial statements, certified by the Borrower's chief
financial officer as presenting fairly in all material respects the financial
condition and results of operations of the Borrower and its consolidated
Subsidiaries on a consolidated basis in accordance with GAAP consistently
applied, subject to normal year-end audit adjustments;
44
(c) Concurrently with any delivery of financial statements under clause (a)
or (b) above, a certificate of a Financial Officer, substantially in the form of
Exhibit B (or such other form reasonably satisfactory to the Agent) (i)
certifying as to whether a Default has occurred and, if a Default has occurred,
specifying the details thereof and any action taken or proposed to be taken with
respect thereto, (ii) setting forth reasonably detailed calculations showing
performance in respect of Sections 6.06, 6.16 and 6.17 (and Section 6.04, 6.07,
6.13 and 6.14 if any Loan is outstanding at the time of the making of such
certificate or was outstanding as of the close of the reporting period in
question), and (iii) stating whether any change in GAAP or in the application
thereof has occurred since the date of the Borrower's audited financial
statements referred to in Section 3.04 and, if any such change has occurred,
specifying the effect of such change on the financial statements accompanying
such certificate;
(d) Concurrently with any delivery of financial statements under clause (a)
above, a certificate of the accounting firm that reported on such financial
statements stating whether they obtained knowledge during the course of their
examination of such financial statements of any Default (which certificate may
be limited to the extent required by accounting rules or guidelines);
(e) Within 45 days after the end of each fiscal quarter, a list of any
Intercompany Debt (whether or not evidenced by an Intercompany Note) outstanding
as of the end of such fiscal quarter;
(f) [Intentionally Omitted];
(g) by May 1 of each calendar year, financial projections for the current
fiscal year on a quarterly basis, in each case setting forth among other things,
the Borrower's projected gross sales, projected net sales and projected results
of operations of each business segment (domestic and foreign), for the Borrower
and its Subsidiaries in form and content consistent with Borrower's official
plan as presented to its Board of Directors;
(h) within 45 days after the end of each fiscal quarter, any revision of
projections previously delivered to the Agent or the projections referred to in
clause (g) above, such revised projected balance sheets, projected statements of
operations and projected statements of cash flows with an explanation of all
material variances to the profit and loss statement from the projections as they
existed prior to such revision;
(i) promptly after the same become publicly available, copies of all
periodic and other reports, proxy statements and other materials filed by the
Borrower or any Subsidiary with the Securities and Exchange Commission, or any
Governmental Authority succeeding to any or all of the functions of said
Commission, or with any national securities exchange, or distributed by the
Borrower to its shareholders generally, as the case may be; and
(j) promptly following any request therefor, such other information
regarding the operations, business affairs and financial condition of the
Borrower or any Subsidiary, or compliance with the terms of any Loan Document,
as the Agent or any Lender may reasonably request.
45
SECTION 5.02. Notices of Material Events. The Borrower will furnish to the
Agent and each Lender prompt written notice of the following:
(a) the occurrence of any Default;
(b) the filing or commencement of any action, suit or proceeding by or
before any arbitrator or Governmental Authority against or affecting the
Borrower or any Affiliate thereof that, if adversely determined, could
reasonably be expected to result in a Material Adverse Effect;
(c) the occurrence of any ERISA Event that alone or together with any other
ERISA Events that have occurred, could reasonably be expected to result in
liability of the Borrower and its Subsidiaries in an aggregate amount that would
be reasonably likely to have a Material Adverse Effect; and
(d) any other development that results in, or could reasonably be expected
to result in, a Material Adverse Effect.
Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the Borrower setting forth the
details of the event or development requiring such notice and any action taken
or proposed to be taken with respect thereto.
SECTION 5.03. [Intentionally Omitted.]
SECTION 5.04. Existence, Conduct of Business. The Borrower will, and will
cause each of its Subsidiaries to, do or cause to be done all things necessary
to preserve, renew and keep in full force and effect (a) its legal existence and
(b) the rights, licenses, permits, privileges, franchises, patents, copyrights,
trademarks and trade names which are material to the conduct of its business
taken, in case of the Borrower, individually and in the case of any Subsidiary,
as a whole with the other Subsidiaries; provided that the foregoing shall not
prohibit any merger, consolidation, liquidation or dissolution to the extent the
same is permitted under Section 6.03 and, if applicable, 6.04 (i); provided,
further, that the Borrower shall be permitted to terminate, or allow to lapse,
any Material License in the exercise of its reasonable business judgment to the
extent that the Borrower (a) provides written notice on the Contract
Notification Date that such Material License will terminate or may be
terminated, or allowed to lapse without renewal, (b) if requested by the Agent,
advises the Agent of the status of any negotiations which may be transpiring in
respect of such Material License, and (c) furnishes to the Agent a certificate
stating the determination by the Borrower of whether such lapse or termination
will or will not have a Material Adverse Effect, by the sooner of (x) the date
of the first Borrowing Request or request for the issuance, amendment, renewal
or extension of a Letter of Credit under Section 2.05 following the date that
such Material License terminates or is allowed to lapse, or (y) 30 days
following the date that such Material License terminates or is allowed to lapse.
46
SECTION 5.05. Payment of Obligations. The Borrower will, and will cause
each of its Subsidiaries to, pay its Indebtedness and other obligations (for
which the failure to pay would constitute an Event of Default under Section
7.01(f)), including Tax liabilities, before the same shall become delinquent or
in default, except where (a) the validity or amount thereof is being contested
in good faith by appropriate proceedings, (b) the Borrower or such Subsidiary
has set aside on its books adequate reserves with respect thereto in accordance
with GAAP, (c) such contest effectively suspends collection of the contested
obligation and the enforcement of any Lien securing such obligation, and (d) the
failure to make payment pending such contest could not reasonably be expected to
result in a Material Adverse Effect.
SECTION 5.06. Maintenance of Properties. The Borrower will, and will cause
each of its Subsidiaries to, keep and maintain or replace all property material
to the conduct of its (respective) business in good working order and condition,
ordinary wear and tear excepted.
SECTION 5.07. Insurance. (a) The Borrower will, and will cause each of its
Subsidiaries to, maintain, with financially sound and reputable insurance
companies:
(i) fire and extended coverage insurance, on a replacement cost basis, with
respect to all personal property and improvements to real property, in such
amounts as are customarily maintained by companies in the same or similar
business operating in the same or similar locations;
(ii) commercial general liability insurance against claims for bodily
injury, death or property damage occurring upon, about or in connection with the
use of any properties owned, occupied or controlled by it providing coverage on
an occurrence basis with a combined single limit of not less than $10,000,000
and including the broad form CGL endorsement;
(iii) business interruption insurance, insuring against loss of gross
earnings for a period of not less than 12 months arising from any risks or
occurrences required to be covered by insurance pursuant to clause (i) above;
and
(iv) such other insurance as may be required by law.
Deductibles or self-insured retention shall not exceed $500,000 for fire
and extended coverage policies, $1,000,000 for commercial general liability
policies or 30 days for business interruption policies.
(b) Each such policy referred to in this paragraph also shall provide that
it shall not be canceled, materially modified or not renewed (i) by reason of
nonpayment of premium except upon not less than 10 days' prior written notice
thereof by the insurer to the Agent (giving the Agent the right to cure defaults
in the payment of premiums), or (ii) for any other reason except upon not less
than 30 days' prior written notice thereof by the insurer to the Agent. The
Borrower shall deliver to the Agent, prior to the cancellation, modification or
non-renewal of any such policy of insurance, a copy of a renewal or replacement
policy (or other evidence of renewal of a policy previously delivered to the
Agent) together with evidence satisfactory to the Agent of payment of the
premium therefor.
47
SECTION 5.08. Notice of Asset Sale; LPT; and Foreign Investment.
(a) The Borrower will, and will cause each of its Subsidiaries to, notify
the Agent (i) of the Borrower's or any such Subsidiary's having entered into any
agreement for the sale of any asset which sale could trigger a reduction of the
Revolving Commitments under Section 2.08(d), promptly upon entering into any
such agreement, (ii) of the closing of any such sale, immediately upon such
closing, and (iii) of the receipt of any payment of any kind on account of such
asset.
(b) The Borrower will notify the Agent of the consummation of any
transaction giving rise to an LPT, promptly upon the consummation thereof,
whether or not the same constitutes a Default at the time in question.
(c) [Intentionally Omitted].
(d) The Borrower will notify the Agent of any Permitted Acquisition of the
type defined as a "Foreign Acquisition" (within the definition of Permitted
Acquisition in Section 1.01), and shall simultaneously certify to the Agent that
the cash paid on account of such Foreign Acquisition originates from a source
outside the United States.
SECTION 5.09. Books and Records, Inspection and Audit Rights. The Borrower
will, and will cause each of its Subsidiaries to, keep proper books of record
and account in which full, true and correct entries are made of all dealings and
transactions in relation to its business and activities. The Borrower will, and
will cause each of its Subsidiaries to, permit any representatives designated by
the Agent or any Lender, upon reasonable prior notice, to visit and inspect its
properties, to examine and make extracts from its books and records, and to
discuss its affairs, finances and condition with its officers and independent
accountants, all at such reasonable times and as often as reasonably requested.
SECTION 5.10. Compliance with Laws. The Borrower will, and will cause each
of its Subsidiaries to, comply with all laws, rules, regulations and orders of
any Governmental Authority applicable to it or its property, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.
SECTION 5.11. Notice of Discharge of Hazardous Material or Environmental
Complaint. The Borrower will, and will cause each of its Subsidiaries to,
promptly provide to the Agent true, accurate and complete copies of any and all
notices, complaints, orders, directives, claims or citations received by the
Borrower or any Subsidiary relating to any (a) violation or alleged violation by
the Borrower or any Subsidiary of any applicable Environmental Law; (b) release
or threatened release by the Borrower or any Subsidiary, or at any facility or
property owned or operated by the Borrower or any Subsidiary, of any Hazardous
Material, except where occurring legally; or (c) liability or alleged liability
of the Borrower or any Subsidiary for the costs of cleaning up, removing,
remediating or responding to a release of Hazardous Materials.
48
SECTION 5.12. Environmental Compliance. If the Borrower or any Subsidiary
shall receive letter, notice, complaint, order, directive, claim or citation
alleging that the Borrower or any Subsidiary has violated any Environmental Law
or is liable for the costs of cleaning up, removing, remediating or responding
to a release of Hazardous Materials, the Borrower shall, within the time period
permitted by the applicable Environmental Law or the Governmental Authority
responsible for enforcing such Environmental Law, remove or remedy, or cause the
applicable Subsidiary to remove or remedy, such violation or release or satisfy
such liability, except where the failure to do so is not reasonably likely to
result in a Material Adverse Effect or unless the applicability of the
Environmental Law, the fact of such violation or liability, or what is required
to remove or remedy such violation, is being contested by the Borrower or the
applicable Subsidiary by appropriate proceedings diligently conducted and all
reserves with respect thereto as may be required under GAAP, if any, have been
made.
SECTION 5.13. Use of Proceeds and Letters of Credit. The proceeds of the
Loans and Letters of Credit will be used for general working capital needs of
the Borrower and (in the case of Standby Letters of Credit) to guaranty the
payment of workers' compensation insurance in the ordinary course of business or
for another purpose approved by the Agent in its reasonable discretion. No part
of the proceeds of any Loan will be used, whether directly or indirectly, (i) to
purchase or carry Margin Stock or to extend credit to others for the purpose of
purchasing or carrying Margin Stock or to refund Indebtedness originally
incurred for such purpose, or (ii) for any purpose that entails a violation of
any of the Regulations of the Board, including Regulations T, U and X.
SECTION 5.14. Additional Subsidiaries. If any additional Subsidiary is
formed or acquired or if any inactive existing Subsidiary shall become active in
any material respect, after the Effective Date, the Borrower will notify the
Agent and the Lenders thereof, and the Borrower will, if such Subsidiary is
formed in the United States (or organized under the laws of the United States or
any State or subdivision thereof), cause such Subsidiary to become a guarantor
of the Obligations, jointly and severally with all other Guarantors, within 10
Business Days after such Subsidiary is formed, acquired or activated (as
applicable), pursuant to documentation reasonably satisfactory to the Agent.
SECTION 5.15. Further Assurances. The Borrower will execute any and all
further documents, agreements and instruments, and take all such further actions
which may be required under any applicable law, or which the Agent or the
Required Lenders may reasonably request, to effectuate the transactions
contemplated by the Loan Documents, all at the expense of the Borrower.
SECTION 5.16. Changes to Loan Documents. The Borrower will, and will cause
its Subsidiaries to: (i) provide further assurances of any kind reasonably
requested by any Lender purchasing an interest in the Letters of Credit, the
Loans and/or Revolving Commitments after the Effective Date; and (ii) make
amendments, if reasonably required by any Lender purchasing any such interest
after the Effective Date; provided, however, that no such amendment (which the
Borrower or any Subsidiary is required to make) shall: (A) increase any interest
rate or fees for which any of them is responsible hereunder; (B) reduce any of
the Revolving Commitments or shorten the Maturity Date; (C) require the Borrower
or any Subsidiary to obtain any consent or estoppel certificate from a Person
not Controlled by any of them and having no legal obligation to provide the
same; (D) provide any collateral; (E) add any new and burdensome covenant or
increase more than nominally any obligation of any of them under any affirmative
or negative covenant hereunder; (F) require the Borrower or any Subsidiary to
make any representation or warranty which it cannot in good faith make; (G)
shorten any cure period with respect to any Default or create any new Event of
Default; or (H) add any new and burdensome conditions of lending or issuance.
49
ARTICLE VI
Negative Covenants
------------------
Topps Finance covenants and agrees with the Lenders as set forth in Section
6.01. The Borrower covenants and agrees with the Lenders that (i) at the times
indicated in Sections 6.04(a), 6,05, 6.07(b), 6.13, 6.14, 6.16 and 6.17, and
(ii) otherwise at all times from (and including) the Effective Date until the
Revolving Commitments have expired or terminated, the principal of and interest
on each Loan and all fees payable hereunder have been paid in full, all Letters
of Credit have expired or terminated, all LC Disbursements shall have been
reimbursed and all other Obligations satisfied in full:
SECTION 6.01. Indebtedness. Topps Finance will not incur, create, assume or
permit to exist any Indebtedness, other than unsecured Indebtedness owing to the
Borrower or to another Guarantor.
SECTION 6.02. Liens. The Borrower will not, and will not permit any
Subsidiary to, create, incur, assume or permit to exist (A) any Lien on any
property or asset now owned or hereafter acquired by it, or (B) assign or sell
any income or revenues (including accounts receivable) or rights in respect of
any portion thereof as part of a factoring or other type of "off balance sheet"
financing arrangement, except:
(i) Liens or assets of, or assignments or sales of assets by, a Subsidiary
which is not required to be a Guarantor under the terms of this Agreement;
(ii) Permitted Encumbrances;
(iii) any Lien on any property or asset of the Borrower or any Subsidiary
existing on the date hereof and set forth in Schedule 6.02; provided that (i)
such Lien shall not apply to any other property or asset of the Borrower or any
Subsidiary and (ii) such Lien shall secure only those obligations which it
secures on the date hereof;
(iv) Liens on fixed or capital assets acquired, constructed or improved by
the Borrower or any Subsidiary; provided that (A) such security interests and
the Indebtedness secured thereby are incurred prior to or within 90 days after
such acquisition or the completion of such construction or improvement, (B) the
Indebtedness secured thereby does not exceed 95% of the cost of acquiring,
constructing or improving such fixed or capital assets, and (C) such security
interests shall not apply to any other property or assets of the Borrower or any
Subsidiary; and
50
(v) Liens on property of the Borrower shipped under or in connection with
Documentary Letters of Credit permitted under this Agreement (if such Liens are
in favor of the issuer of such Documentary Letters of Credit) and all property
of the Borrower in the actual or constructive possession of the Issuing Bank
with respect to Documentary Letters of Credit, other than property held in a
fiduciary capacity of such Issuing Bank.
SECTION 6.03. Fundamental Changes. (a) The Borrower will not, and will not
permit any Subsidiary to, merge into or consolidate with any other Person, or
permit any other Person to merge into or consolidate with it, or sell, transfer,
lease or otherwise dispose of (in one transaction or in a series of
transactions) all or substantially all of its assets, or all or substantially
all of the stock of any of its Subsidiaries (in each case, whether now owned or
hereafter acquired), or liquidate or dissolve, except that, if at the time
thereof and immediately after giving effect thereto no Default shall have
occurred and be continuing (i) any Subsidiary may merge into the Borrower in a
transaction in which the Borrower is the surviving corporation, (ii) any
Subsidiary may merge into any Subsidiary in a transaction in which the surviving
entity is a Guarantor, (iii) any Subsidiary that is not a Guarantor may merge
into another Subsidiary in a transaction in which a Subsidiary is the surviving
entity, (iv) any Subsidiary that is not a Guarantor may sell, transfer, lease or
otherwise dispose of its assets to another Subsidiary that is not a Guarantor,
(v) any Subsidiary may sell, transfer, lease or otherwise dispose of its assets
to the Borrower or to a Guarantor, and (vi) any Subsidiary that is not a
Guarantor may liquidate or dissolve if the Borrower determines in good faith
that such liquidation or dissolution is in the best interests of the Borrower
and is not materially disadvantageous to the Lenders; provided that any such
merger involving a Person that is not a wholly owned Subsidiary immediately
prior to such merger shall not be permitted unless also permitted by Section
6.04.
(b) The Borrower will not, and will not permit any of its Subsidiaries to
engage to any material extent in any business other than businesses of the type
conducted by the Borrower and its Subsidiaries on the date of execution of this
Agreement and businesses reasonably related thereto. For purposes of this
Agreement, Topps Finance is engaged in a business reasonably related to the
business of the Borrower.
SECTION 6.04. Investments, Loans, Advances, Guarantees and Acquisitions.
(a) At any time when any principal or interest on account of any Loan is
outstanding in whole or in part: (A) the Borrower will not and will not permit
any Guarantor to make or permit to exist any investment in the equity of any
Subsidiary which was a Subsidiary prior to such investment but which is not a
Guarantor (or which is not required to be a Guarantor), unless the aggregate
amount of such investments at the time in question shall not exceed $12,000,000
(amounts subject to such calculation are to be determined by reference to the
Borrower's balance sheet); (B) the Borrower will not and will not permit any
Guarantor to incur or permit to exist any Intercompany Debt (whether or not
evidenced by an Intercompany Note), or Guarantee any obligation of any
Subsidiary which is not a Guarantor (or which is not required to be a
Guarantor), unless the aggregate principal amount of all such items at the time
in question shall not exceed $40,000,000 plus any amount guaranteed pursuant to
the Topps SA Guaranty (amounts subject to such calculation shall be determined
by reference to the principal amount actually owing or for which the Borrower or
a Guarantor is contingently liable (as applicable) at the time of calculation,
and not to the original principal amount thereof if different); (C) the Borrower
will not and will not permit any Guarantor to make any loan or advance to, or
51
Guarantee any obligation of, any officer, employee or director of the Borrower
or any Subsidiary, except for loans, advances to (or Guarantees for the benefit
of) such officers, directors and employees made in the ordinary course of
business (including to finance relocation expenses) not exceeding an aggregate
principal amount of $1,000,000 at any time outstanding; and (D) the Borrower
will not and will not permit any Subsidiary to purchase, hold or acquire
(including pursuant to any merger with any Person that was not a wholly-owned
Subsidiary prior to such merger) any capital stock, evidence of Indebtedness or
other equity or securities (including any option, warrant or other right to
acquire any of the foregoing) of any Person other than Topps Finance or a
Subsidiary which was a Subsidiary prior to such event, or make or permit to
exist any investment or any other interest in any Person other than a Subsidiary
which was a Subsidiary prior to such event, or purchase or otherwise acquire
(in, one transaction or a series of transactions) any assets of any other Person
constituting a business unit, except (in any case contemplated by this clause
(D) Permitted Investments, Permitted Acquisitions, and investments by Topps
Finance in Indebtedness of the Borrower (including any Borrower Note).
(b) [Intentionally Omitted].
(c) The Borrower will not and will not permit any Guarantor to (i)
purchase, hold or acquire (including pursuant to any merger with any Person that
was not a wholly-owned Subsidiary prior to such merger) any capital stock,
evidence of Indebtedness or other equity or securities (including any option,
warrant or other right to acquire any of the foregoing) of any Person (other
than a Subsidiary which was a Subsidiary prior to such event) which is either
not organized in the United States or not in the same or a related line of
business as the Borrower (or a business related or incidental to the business of
the Borrower), or (ii) make or permit to exist any investment or any other
interest in any such Person, or (iii) purchase or otherwise acquire (in one
transaction or a series of transactions) any assets of any such Person
constituting a business unit unless the assets to be acquired are intended to be
utilized in the same or a related line of business as the Borrower (or a
business related or incidental to the business of the Borrower).
SECTION 6.05. Asset Sales. At any time when any principal or interest on
account of any Loan is outstanding in whole or in part, the Borrower will not,
and will not permit any of its Subsidiaries to, sell, transfer, lease or
otherwise dispose of any asset, including any capital stock, nor will the
Borrower permit any of its Subsidiaries to issue any additional shares of its
capital stock or other ownership interest in such Subsidiary, except:
(a) sales of inventory, used, surplus or obsolete equipment and Permitted
Investments in the ordinary course of business;
(b) the granting of licenses in trademarks or other intellectual property
owned by the Borrower or any of its Subsidiaries;
(c) sales, transfers and dispositions to the Borrower or a Subsidiary;
provided that any such sales, transfers or dispositions made in compliance with
Section 6.08 (other than Section 6.08(d));
(d) Permitted Asset Sales; and
52
(e) issuance of capital stock by Topps Finance to either Topps Enterprises
or the Borrower; provided that all sales, transfers, leases and other
dispositions permitted by clauses (a) through (d) above shall be made for fair
value."
SECTION 6.06. Hedging Agreements. The Borrower will not and will not permit
any of its Subsidiaries to, enter into any Hedging Agreements, other than
Hedging Agreements entered into in the ordinary course of business to hedge or
mitigate risks to which the Borrower or any Subsidiary is exposed in the conduct
of its business or the management of its liabilities in an aggregate notional
amount not to exceed $75,000,000.
SECTION 6.07. Restricted Payments, Certain Payments of Indebtedness. (a)
The Borrower will not, and will not permit any Subsidiary to, declare or make,
or agree to pay or make, directly or indirectly, any Restricted Payment of the
type described in clause (i) of the definition of "Restricted Payments" in
Section 1.01, except that (i) the Borrower may declare and pay dividends with
respect to its capital stock payable in cash or in additional shares of its
common stock, or other equity securities not redeemable at the option of a
holder thereof, provided that immediately after making any such cash dividend
Restricted Payment (x) the aggregate amount of all such cash dividend Restricted
Payments made during (A) the two fiscal quarters ending prior to the quarter in
which the cash dividend Restricted Payment in question is to be made, and (B)
such current fiscal quarter (in which the cash dividend Restricted Payment in
question is being made), will, when added together with all Restricted Payments
of the type described in clause (ii) of the definition of "Restricted Payments"
in Section 1.01 during the same periods of time, be less than or equal to
$30,000,000 for each such period of time; (y) the aggregate amount of such cash
dividend Restricted Payments made from (and including) August 29, 2004 to (and
including) the date of the Restricted Payment in question will, when added
together with all Restricted Payment of the type described in clause (ii) of the
definition of "Restricted Payments" in Section 1.01 for the same period of time,
be less than or equal to $50,000,000; and (z) the cash dividend Restricted
Payment in question will not result in an LPT; (ii) Subsidiaries may declare and
pay cash or other kinds of dividends ratably with respect to their capital stock
(or equivalent); and (iii) the Borrower may make Restricted Payments of the type
described in clause (i) of the definition of "Restricted Payments" as aforesaid
pursuant to and in accordance with stock option plans or other benefit plans for
management or employees or consultants of the Borrower and its Subsidiaries, and
the issuance of such options shall not be counted in determining the amount of
cash dividends for purposes of clause (i) of this Section 6.07 (although
payments made on account of the purchase, redemption, retirement, acquisition,
cancellation or termination of such options, as contemplated by clause (ii) of
the definition of "Restricted Payment" in Section 1.01, shall be counted where
applicable as items under clause (ii) of the definition of "Restricted Payment"
in subclauses (x) and (y) of clause (i) of this Section 6.07 and, if applicable
as an item under clause (ii) in the definition of "Restricted Payment" for
purposes of determining whether an LPT would result, subclause (z) of clause (i)
of this Section 6.07).
(b) At any time when any Obligation with respect to any Loan or Letter of
Credit shall be unsatisfied in whole or in part, or any Letter of Credit shall
not have terminated or expired, or shall otherwise be outstanding, the Borrower
will not make any Restricted Payment of the type described in clause (ii) of the
definition of "Restricted Payments" in Section 1.01, except that (i) the
Borrower may make such a Restricted Payment if immediately thereafter (x) the
53
aggregate amount of all such Restricted Payments made during (A) the two fiscal
quarters ending prior to the quarter in which the Restricted Payment in question
is to be made, and (B) such current fiscal quarter (in which the Restricted
Payment in question is being made) will, when added together with all cash
dividend Restricted Payments of the type described in (and counted for purposes
of) clause (i) of paragraph (a) of this Section 6.07 during the same periods of
time, be less than or equal to $30,000,000 for each such period of time; (y) the
aggregate amount of such Restricted Payments made from (and including) August
29, 2004 to (and including) the date of the Restricted Payment in question will,
when added together with all cash dividend Restricted Payments of the type
described in (and counted for purposes of) clause (i) of paragraph (a) of this
Section 6.07 for the same period of time, be less than or equal to $50,000,000;
and (z) the Restricted Payment in question will not result in an LPT.
SECTION 6.08. Transactions with Subsidiaries. The Borrower will not, and
will not permit any Subsidiary to, sell, lease or otherwise transfer any
property or assets to, or purchase, lease or otherwise acquire any property or
assets from, or otherwise engage in any other transactions with, any of its
Subsidiaries, except (a) transactions in the ordinary course of business that
are at prices and on terms and conditions not less favorable to the Borrower or
such Subsidiary than could be obtained on an arm's-length basis from unrelated
third parties, (b) any Restricted Payment not prohibited by Section 6.07, (c)
the transactions described in Section 6.04, when not prohibited under Section
6.04, (d) the transactions described in Section 6.05 when not prohibited under
Section 6.05, and (e) the transactions contemplated by the issuance of any
Borrower Note, Indebtedness incurred by the Borrower to Topps Finance and the
Finance Capitalization.
SECTION 6.09. Restrictive Agreements. The Borrower will not, and will not
permit any Subsidiary to, directly or indirectly, enter into, incur or permit to
exist any agreement or other arrangement that prohibits, restricts or imposes
any condition upon (a) the ability of the Borrower or any Subsidiary to create,
incur or permit to exist any Lien upon any of its property or assets, or (b) the
ability of any Subsidiary to pay dividends or other distributions with respect
to any shares of its capital stock, or to make or repay loans or advances to the
Borrower or any other Subsidiary or to Guarantee Indebtedness of the Borrower or
any other Subsidiary; provided that (i) the foregoing shall not apply to
restrictions and conditions imposed by law or by any Loan Document, (ii) the
foregoing shall not apply to restrictions and conditions (A) applying solely to
one or more Subsidiaries which are not (and are not required to be) Guarantors
or (B) existing on the date hereof and identified on Schedule 6.09 (but shall
apply to any extension or renewal of, or any amendment or modification expanding
the scope of, any such restriction or condition identified on Schedule 6.09),
(iii) the foregoing shall not apply to customary restrictions and conditions
contained in agreements relating to the sale of a Subsidiary pending such sale,
provided such restrictions and conditions apply only to the Subsidiary that is
to be sold and such sale is permitted hereunder, (iv) foregoing clause (a) shall
not apply to restrictions or conditions imposed by any agreement relating to
secured Indebtedness permitted by this Agreement if such restrictions or
conditions apply only to the property or assets securing such Indebtedness, and
(v) the foregoing clause (a) shall not apply to customary provisions in leases
restricting the assignment thereof
SECTION 6.10. Amendment of Material Documents. The Borrower will not, and
will not permit any Subsidiary to, amend, modify or waive any of its rights
under its certificate of incorporation, by-laws or other organizational
documents if the same is reasonably likely to have a Material Adverse Effect or
would result in an Event of Default under any of the Loan Documents.
54
SECTION 6.11. Limitations on Sales and Leasebacks. The Borrower will not,
and will not permit any Subsidiary to, enter into any arrangement with any
Person providing for the leasing by the Borrower or any Subsidiary of real or
personal property which has been or is to be sold or transferred by the Borrower
or any Subsidiary to such Person, or to any other Person to whom funds have been
or are to be advanced by such Person on the security of such property or rental
obligations of the Borrower or any Subsidiary, unless the transaction in
question is determined by the Agent, in its reasonable discretion, to constitute
(or to be tantamount to) a financing lease of the type permitted under Section
6.02(iv).
SECTION 6.12. Fiscal Year. The Borrower will not, and will not permit any
Subsidiary to, change its fiscal year.
SECTION 6.13. Consolidated Leverage Ratio. At any time when any principal
or interest with respect to any Loan shall be outstanding in whole or in part,
the Borrower will not permit the Consolidated Leverage Ratio to be greater than
1.6 to 1.0, determined on the basis of the then most recent financial statements
provided under Section 5.01(a) or Section 5.01(b).
SECTION 6.14. Consolidated Fixed Charge Ratio. At any time when any
principal or interest with respect to any Loan shall be outstanding in whole or
in part, the Borrower will not permit the Consolidated Fixed Charge Ratio to be
less than 2.5 to 1.0, determined on the basis of the then most recent financial
statements provided under Section 5.01(a) or Section 5.01(b).
SECTION 6.15. [Intentionally Omitted.]
SECTION 6.16. Consolidated Net Loss. At any time (from and including the
Effective Date) when any principal or interest with respect to any Loan or any
Obligation with respect to any Letter of Credit shall be unsatisfied in whole or
in part, or any Letter of Credit shall not have terminated or expired, or
otherwise be outstanding, the Borrower and its Subsidiaries will not incur (and
shall not have incurred since the Effective Date) a consolidated net loss (i) in
any amount for any three consecutive fiscal quarters, or (ii) for any two
consecutive fiscal quarters combined, in an amount greater than 8% of
Consolidated Net Worth as of the close of the fiscal quarter prior to the first
such quarter in which the consolidated net loss in question was incurred. For
purposes of the foregoing sentence, consolidated net losses shall be determined
as of the end of a fiscal quarter.
SECTION 6.17. Consolidated Tangible Net Worth. At any time (from and
including the Effective Date) when any principal or interest with respect to any
Loan or any Obligation with respect to any Letter of Credit shall be unsatisfied
in whole or in part, or any Letter of Credit shall not have terminated or
expired, or otherwise be outstanding, the Borrower and its Subsidiaries will not
permit Consolidated Tangible Net Worth, as at the end of any fiscal quarter or
year, as applicable, to be less than the greater of (i) $70,000,000 or (ii) (w)
$127,594,000 plus (x) 50% of aggregate Consolidated Net Income (as long as
Consolidated Net Income is greater than zero) from and including May 30, 2004
through the close of the last fiscal quarter or year (whichever is later) for
which the Borrower has reported pursuant to Section 5.01(a) or Section 5.01(b),
minus (y) the aggregate amount of Restricted Payments from and including the
Effective Date (to the extent the same were permitted under Section 6.07 at the
time they were made, and calculated in the manner prescribed by Section 6.07).
SECTION 6.18. [Intentionally Omitted.]
SECTION 6.19. [Intentionally Omitted.]
55
ARTICLE VII
Events of Default
-----------------
SECTION 7.01. Events of Default. If any of the following events ("Events of
Default") shall occur:
(a) the Borrower shall fail to pay any principal of any Loan or any
reimbursement obligation in respect of any LC Disbursement when and as the same
shall become due and payable, whether at the due date thereof or at a date fixed
for prepayment thereof or otherwise;
(b) the Borrower shall fail to pay any interest on any Loan or any fee or
any other amount (other than an amount referred to in clause (a) of this
Section) payable under this Agreement or any other Loan Document, within three
days after the same shall become due and payable;
(c) any representation or warranty made or deemed made by or on behalf of
the Borrower or any Subsidiary (including Topps Enterprises) in or in connection
with any Loan Document or any amendment or modification thereof or waiver
thereunder, or in any report, certificate, financial statement or other document
furnished pursuant to or in connection with any Loan Document, or any amendment
or modification thereof or waiver thereunder, shall prove to have been incorrect
when made or deemed made;
(d) the Borrower shall fail to observe or perform any covenant, condition
or agreement contained in Section 5.02, 5.04 (with respect to the existence of
the Borrower), 5.09, 5.13 or 5.14 or in Article VI;
(e) the Borrower shall fail to observe or perform any covenant, condition
or agreement contained in any Loan Document (other than those specified in
clause (a), (b) or (d) of this Section), and such failure shall continue
unremedied for a period of 30 days;
(f) Topps Enterprises, Topps Finance and/or WizKids shall default beyond
applicable periods of notice and grace, if any, under the Subsidiary Guaranty,
or any Person shall be in default under any other Guarantee with respect to any
of the Obligations, or the Borrower or any Subsidiary shall fail to make any
payment (whether of principal or interest and regardless of amount) in respect
of any Material Indebtedness, when and as the same shall become due and payable;
56
(g) any event or condition occurs that results in any Material Indebtedness
becoming due prior to its scheduled maturity or that enables or permits (with or
without the giving of notice, the lapse of time or both) the holder or holders
of any Material Indebtedness or any trustee or agent on its or their behalf to
cause any Material Indebtedness to become due, or to require the prepayment,
repurchase, redemption or defeasance thereof, prior to its scheduled maturity;
provided that this clause (g) shall not apply to (i) secured Indebtedness that
becomes due as a result of the voluntary sale or transfer of the property or
assets securing such Indebtedness or (ii) events or conditions cured within 30
days from occurrence unless the related Material Indebtedness has become due
within such 30 day period;
(h) an involuntary proceeding shall be commenced or an involuntary petition
shall be filed seeking (i) liquidation, reorganization or other relief in
respect of the Borrower or any Material Subsidiary or its debts, or of a
substantial part of its assets, under any Federal, state or foreign bankruptcy,
insolvency, receivership or similar law now or hereafter in effect, or (ii) the
appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for the Borrower or any Material Subsidiary or for a
substantial part of its assets, and, in any such case, such proceeding or
petition shall continue undismissed for 60 days or an order or decree approving
or ordering any of the foregoing shall be entered;
(i) the Borrower or any Material Subsidiary shall (A) voluntarily commence
any proceeding or file any petition seeking liquidation, reorganization or other
relief under any Federal, state or foreign bankruptcy, insolvency, receivership
or similar law now or hereafter in effect, (B) consent to the institution of, or
fail to contest in a timely and appropriate manner, any proceeding or petition
described in clause (h) of this Article, (C) apply for or consent to the
appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for the Borrower or any Material Subsidiary, or for a
substantial part of its assets, (D) file an answer admitting the material
allegations of a petition filed against it in any such proceeding, (E) make a
general as assignment for the benefit of creditors or (F) take any action for
the purpose of effecting any of the foregoing;
(j) the Borrower or any Material Subsidiary shall become unable, admit in
writing its inability or fall generally to pay its debts as they become due;
(k) one or more judgments for the payment of money in an aggregate amount
in excess of $2,000,000 shall be rendered against the Borrower, any Subsidiary
or any combination thereof and the same shall remain undischarged for a period
of 30 consecutive days during which execution shall not be effectively stayed,
or any action shall be legally taken by a judgment creditor to attach or levy
upon any assets of the Borrower or any Subsidiary to enforce any such judgment;
(l) an ERISA Event shall have occurred that in the opinion of the Required
Lenders, when taken together with all other ERISA Events that have occurred,
could reasonably be expected to result in a Material Adverse Effect;
(m) any Lien purported to be created under any documentation pertaining to
a Documentary Letter of Credit shall be asserted by the Borrower not to be a
valid Lien, except as a result of (i) the sale or other disposition of the
applicable assets in a transaction permitted under the Loan Documents or (ii)
the termination of the Lien in accordance with Section 2.05(a).
57
(n) a Change in Control shall occur; or
(o) if any Loan Document ceases to be in full force and effect (other than
by reason of any action by the Agent, including any release pursuant to Section
5.14(b)), or if without the written consent of the Lenders, this Agreement or
any other Loan Document shall be disaffirmed or shall terminate, be terminable
or be terminated or become void or unenforceable for any reason whatsoever
(other than in accordance with its terms in the absence of default or by reason
of any action by the Lenders or the Agent); then, and in every such event (other
than an event with respect to the Borrower described in clause (h) or (i) of
this Section ), and at any time thereafter during the continuance of such event,
the Agent may, and at the request of the Required Lenders or any single Lender
having a Revolving Commitment in excess of $10,000,000 shall, by notice to the
Borrower, take either or both of the following actions, at the same or different
times: (i) terminate the Revolving Commitments, and thereupon the Revolving
Commitments shall terminate immediately, and (ii) declare the Loans then
outstanding to be due and payable in whole (or in part, in which case any
principal not so declared to be due and payable may thereafter be declared to be
due and payable), and thereupon the principal of the Loans so declared to be due
and payable, together with accrued interest thereon and all fees and other
Obligations of the Borrower accrued hereunder, shall become due and payable
immediately, without presentment demand, protest or other notice of any kind,
all of which are hereby waived by the Borrower; and in case of any event with
respect to the Borrower described in clause (h) or (i) of this Section, the
Revolving Commitments shall automatically terminate and the principal of the
Loans then outstanding, together with accrued interest thereon and all fees and
other Obligations of the Borrower accrued hereunder, shall automatically become
due and payable, without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by the Borrower.
ARTICLE VIII
The Agent
---------
SECTION 8.01. Relationship with Lenders. (a) Each of the Lenders and the
Issuing Bank hereby irrevocably appoints the Agent as its agent and authorizes
the Agent to take such actions on its behalf and to exercise such powers as are
delegated to the Agent by the terms of the Loan Documents, together with such
actions and powers as are reasonably incidental thereto.
(b) The bank serving as the Agent hereunder shall have the same rights and
powers in its capacity as a Lender as any other Lender and may exercise the same
as though it were not the Agent, and such bank and its Affiliates may accept
deposits from, lend money to and generally engage in any kind of business with
the Borrower or any Subsidiary or other Affiliate thereof as if it were not the
Agent hereunder.
58
(c) The Agent shall not have any duties or obligations except those
expressly set forth in the Loan Documents. Without limiting the generality of
the foregoing, (a) the Agent shall not be subject to any fiduciary or other
implied duties, regardless of whether a Default has occurred and is continuing,
(b) the Agent shall not have any duty to take any discretionary action or
exercise any discretionary powers, except discretionary rights and powers
expressly contemplated by the Loan Documents that the Agent is required to
exercise in writing by the Required Lenders (or such other number or percentage
of the Lenders as shall be necessary under the circumstances as provided in
Section 9.02), and (c) except as expressly set forth in the Loan Documents, the
Agent shall not have any duty to disclose, and shall not be liable for the
failure to disclose, any information relating to the Borrower or any of its
Subsidiaries that is communicated to or obtained by the bank serving as Agent or
any of its Affiliates in any capacity. The Agent shall not be liable for any
action taken or not taken by it with the consent or at the request of the
Required Lenders (or such other number or percentage of the Lenders as shall be
necessary under the circumstances as provided in Section 9.02) except for its
own gross negligence or willful misconduct in the execution of any such action,
or otherwise in the absence of its own gross negligence or wilful misconduct.
The Agent shall not be deemed to have knowledge of any Default unless and until
written notice thereof is given to the Agent by the Borrower or a Lender, and
the Agent shall not be responsible for or have any duty to ascertain or inquire
into (i) any statement, warranty or representation made in or in connection with
any Loan Document, (ii) the contents of any certificate, report or other
document delivered thereunder or in connection therewith, (iii) the performance
or observance of any of the covenants, agreements or other terms or conditions
set forth in any Loan Document, (iv) the validity, enforceability, effectiveness
or genuineness of any Loan Document or any other agreement, instrument or
document, or (v) the satisfaction of any condition set forth in Article IV or
elsewhere in any Loan Document, other than to confirm receipt of items expressly
required to be delivered to the Agent.
(d) The Agent shall be entitled to rely upon, and shall not incur any
liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper Person. The Agent also may rely
upon any statement made to it orally or by telephone and believed by it to be
made by the proper Person, and shall not incur any liability for relying
thereon. The Agent may consult with legal counsel (who may be counsel for the
Borrower), independent accountants and other experts selected by it, and shall
not be liable for any action taken or not taken by it in accordance with the
advice of any such counsel, accountants or experts. The Agent shall be fully
justified in failing or refusing to take any action under this Agreement or any
other Loan Document unless it shall first receive such advice or concurrence of
the Required Lenders (or, if so specified by this Agreement, all the Lenders) as
it deems appropriate or it shall first be indemnified to its satisfaction by the
Lenders against any and all liability and expense which may be incurred by it by
reason of taking or continuing to take any such action (it being understood that
this provision shall not release the Agent from performing any action with
respect to the Borrower expressly required to be performed by it pursuant to the
terms hereof) under this Agreement. The Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement and the
other Loan Documents in accordance with a request of the Required Lenders (or,
if so specified by this Agreement, all the Lenders), and such request and any
action taken or failure to act pursuant thereto shall be binding upon all the
Lenders.
59
(e) The Agent may perform any and all of its duties and exercise its rights
and powers by or through any one or more sub-agents appointed by the Agent. The
Agent and any such sub-agent may perform any and all its duties and exercise its
rights and powers through their respective Related Parties. The exculpatory
provisions of the preceding paragraphs shall apply to any such sub-agent and to
the Related Parties of each Agent and any such sub-agent, and shall apply to
their respective activities in connection with the syndication of the credit
facility provided for herein as well as activities as Agent.
(f) Subject to the appointment and acceptance of a successor Agent as
provided in this paragraph, the Agent may resign at any time by notifying the
Lenders, the Issuing Bank and the Borrower. Upon any such resignation, the
Required Lenders shall have the right, in consultation with the Borrower, to
appoint a successor. If no successor shall have been so appointed by the
Required Lenders and shall have accepted such appointment within 30 days after
the retiring Agent gives notice of its resignation, then the retiring Agent may,
on behalf of the Lenders and the Issuing Bank, appoint a successor Agent, which
shall be a bank with an office in New York, New York, or an Affiliate of any
such bank. Upon the acceptance of its appointment as Agent hereunder by a
successor, such successor shall succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent and the retiring
Agent shall be discharged from its duties and obligations hereunder. The fees
payable by the Borrower to a successor Agent shall be the same as those payable
to its predecessor unless otherwise agreed between the Borrower and such
successor. After the Agent's resignation hereunder, the provisions of this
Article and Section 9.03 shall continue in effect for the benefit of such
retiring Agent, its sub-agents and their respective Related Parties in respect
of any actions taken or omitted to be taken by any of them while it was acting
as Agent.
(g) Each Lender acknowledges that it has, independently and without
reliance upon the Agent or any other Lender and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon the Agent or any other Lender and
based on such documents and information as it shall from time to time deem
appropriate, continue to make its own decisions in taking or not taking action
under or based upon this Agreement, any other Loan Document or related agreement
or any document furnished hereunder or thereunder.
SECTION 8.02. Indemnification. Each Lender agrees to indemnify and hold
harmless the Agent (to the extent not reimbursed under Section 9.03, but without
limiting the obligations of the Borrower under Section 9.03), ratably in
accordance with the aggregate principal amount of the respective Revolving
Commitments of and/or Loans and L/C Exposure held by the Lenders (or, if all of
the Revolving Commitments shall have been terminated or expired, ratably in
accordance with the aggregate outstanding amount of the Loans and L/C Exposure
held by the Lenders), for any and all liabilities (including, without
limitation, pursuant to any Environmental Law), obligations, losses, damages,
penalties, actions, judgments, deficiencies, suits, costs, expenses (including
reasonable attorneys' fees) or disbursements of any kind and nature whatsoever
that may be imposed on, incurred by or asserted against the Agent, the Issuing
Bank or any Lender arising out of or by reason of any investigation in or in any
way relating to or arising out of any Loan Document or any other documents
contemplated by or referred to therein, for any action taken or omitted to be
60
taken by the Agent, the Issuing Bank or any Lender under or in respect of any of
the Loan Documents or other such documents or the transactions contemplated
thereby (including, without limitation, the costs and expenses that the Borrower
is obligated to pay under Section 9.03, but excluding, unless an Event of
Default or Default has occurred and is continuing, normal administrative costs
and expenses incident to the performance of its agency duties hereunder) or the
enforcement of any of the terms hereof or thereof or of any such other
documents; provided, however, that no Lender shall be liable for any of the
foregoing to the extent they are determined by a court of competent jurisdiction
in a final and nonappealable judgment to have resulted from the gross negligence
or willful misconduct of the Agent. The agreements set forth in this Section
8.02 shall survive the payment of all Loans, expiration or termination of the
Revolving Commitments and all Letters of Credit, and the payment, satisfaction,
and performance of all other Obligations, and shall be in addition to and not in
lieu of any other indemnification agreements contained in this Agreement of any
other Loan Document.
ARTICLE IX
Miscellaneous
-------------
SECTION 9.01. Notices. Except in the case of notices and other
communications expressly permitted to be given by telephone (and subject to
paragraph (f) below), all notices and other communications provided for herein
shall be in writing and shall be delivered by hand or overnight courier service,
mailed by certified or registered mail, or sent by telecopy, as follows:
(a) if to the Borrower, to it at Xxx Xxxxxxxxx Xxxxxx Xxx Xxxx, Xxx Xxxx,
00000-0000, Attention of Xx. Xxxxxxxxx X. Xxxxxx (Telecopy No. 212-376-0621),
with a copy to Xxxxxxx Xxxx & Xxxxxxxxx, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000-0000 (Telecopy No. 212-728-8111), Attention of Xxxxxxx Xxxxxx, Esq.;
(b) if to the Agent, to JPMorgan Chase Bank, 0 XxxxxXxxx Xxxxxx, 00xx
Xxxxx, Xxxxxxxx, Xxx Xxxx 00000, Attention of Xxxxxx Xxxxxxxx and Regional
Manager (Telecopy No. 718-242-6736), with a copy to Xxxxxxx, Xxxxxxxxx LLP, 0
Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention of Xxxxxxx X. Xxxxxx, Esq.
(Telecopy No. 212-592-1500);
(c) if to the Issuing Bank, to it at the address provided in paragraph (b);
and
(d) if to any other Lender, to it at its address (or telecopy number) set
forth in its Administrative Questionnaire.
Notices and other communications to the Lenders hereunder may be delivered or
furnished by electronic communications pursuant to procedures approved by the
Agent; provided that the foregoing shall not apply to notices pursuant to
Article II unless otherwise agreed by the Agent and the applicable Lender. The
Agent or the Borrower may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to
procedures approved by it; provided that approval of such procedures may be
limited to particular notices or communications. Any party hereto may change its
address or telecopy number for notices and other communications hereunder by
notice to the other parties hereto. All notices and other communications given
to any party hereto in accordance with the provisions of this Agreement shall be
deemed to have been given on the date of receipt. The Agent agrees to forward to
each Lender copies of all material notices received by the Agent, including
notices pursuant to Section 5.08.
61
SECTION 9.02. Waivers, Amendments. (a) No failure or delay by the Agent the
Issuing Bank or any Lender in exercising any right or power hereunder or under
any other Loan Document shall operate as a waiver thereof, nor shall any single
or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The rights
and remedies of the Agent, the Issuing Bank and the Lenders hereunder and under
the other Loan Documents are cumulative and are not exclusive of any rights or
remedies that they would otherwise have. No waiver of any provision of any Loan
Document or consent to any departure by the Borrower therefrom, shall in any
event be effective unless the same shall be permitted by paragraph (b) of this
Section, and then such waiver or consent shall be effective only in the specific
instance and for the purpose for which given. Without limiting the generality of
the foregoing, the making of a Loan or issuance of a Letter of Credit shall not
be construed as a waiver of any Default, regardless of whether the Agent, any
Lender or the Issuing Bank may have had notice or knowledge of such Default at
the time.
(b) Neither this Agreement nor any other Loan Document, nor any provision
hereof or thereof, may be waived, amended or modified except in the case of this
Agreement, pursuant to an agreement or agreements in writing entered into by the
Borrower and the Required Lenders or, in the case of any other Loan Document,
pursuant to an agreement or agreements in writing entered into by the Agent and
the Borrower, in each case with the consent of the Required Lenders; provided
that no such agreement, waiver, amendment or modification shall (i) increase the
Revolving Commitment of any Lender without the written consent of each Lender,
(ii) reduce the principal amount of any Loan or LC Disbursement or reduce the
rate of interest thereon, or reduce any fees payable hereunder (to any Lender as
a Lender), without the written consent of each Lender affected thereby, (iii)
postpone the Maturity Date, or reduce the amount of, waive or excuse any payment
of the principal amount of any Loan or LC Disbursement or any interest thereon,
or any fees payable hereunder to any Lender (as a Lender), without the written
consent of each Lender affected thereby, (iv) change Section 2.18(b) or (c) in a
manner that would alter the pro rata sharing of payments required thereby,
without the written consent of each Lender, (v) change any of the provisions of
this Section or the definition of "Required Lenders" or any other provision of
any Loan Document specifying the number or percentage of Lenders required to
waive, amend or modify any rights thereunder or make any determination or grant
any consent thereunder, without the written consent of each Lender, (vi) release
any Subsidiary (to the extent such Subsidiary is obligated under any Guarantee
of any Obligations) from any Guarantee, or limit its liability in respect of
such Guarantee, without the written consent of each Lender, or (vii) change any
provision of Article V or Article VI, without the written consent of each Lender
having a Revolving Commitment of $15,000,000 or more; and provided further that
no such agreement shall amend, modify or otherwise affect the rights or duties
of the Agent or the Issuing Bank, without the prior written consent of the Agent
or the Issuing Bank, as the case may be.
62
SECTION 9.03. Expenses, Indemnity, Damage Waiver. (a) The Borrower shall
pay (i) all reasonable out-of-pocket expenses incurred by the Agent and its
Affiliates, including the reasonable fees, charges and disbursements of counsel
for the Agent in connection with the syndication of the credit facility provided
for herein, the preparation and administration of the Loan Documents or any
amendments, modifications or waivers of the provisions thereof (whether or not
the transactions contemplated hereby or thereby shall be consummated), (ii) all
reasonable out-of-pocket expenses incurred by the Issuing Bank in connection
with the issuance, amendment, renewal or extension of any Letter of Credit or
any demand for payment thereunder, and (iii) all out-of-pocket expenses incurred
by the Agent, the Issuing Bank or any Lender, including the fees, charges and
disbursements of any counsel for the Agent, the Issuing Bank or any Lender, in
connection with the enforcement or protection of its rights in connection with
the Loan Documents, including its rights under this Section, or in connection
with the Loans made or Letters of Credit issued hereunder, including all such
out-of-pocket expenses incurred during any workout, restructuring or
negotiations in respect of such Loans or Letters of Credit.
(b) The Borrower shall indemnify the Agent, the Issuing Bank and each
Lender, and each Related Party of any of the foregoing Persons (each such Person
being called an "Indemnitee") against and hold each Indemnitee harmless from,
any and all losses, claims, damages, liabilities and related expenses, including
the fees, charges and disbursements of any counsel for any Indemnitee, incurred
by or asserted against any Indemnitee arising out of, in connection with, or as
a result of (i) the execution or delivery of any Loan Document or any other
agreement or instrument contemplated hereby, the performance by the parties to
the Loan Documents of their respective obligations thereunder or the
consummation of the Financing Transactions or any other transactions
contemplated hereby, (ii) any Loan or Letter of Credit or the use of the
proceeds therefrom (including any refusal by the Issuing Bank to honor a demand
for payment under a Letter of Credit if the documents presented in connection
with such demand do not strictly comply with the terms of such Letter of
Credit), (iii) any actual or alleged presence or release of Hazardous Materials
on or from any property owned or operated by the Borrower or any of its
Subsidiaries, or any Environmental Liability related in any way to the Borrower
or any of its Subsidiaries, or (iv) any actual or prospective claim, litigation,
investigation or proceeding relating to any of the foregoing, whether based on
contract, tort or any other theory and regardless of whether any Indemnitee is a
party thereto; provided that such indemnity shall not, as to any Indemnitee, be
available to the extent that such losses, claims, damages, liabilities or
related expenses are determined by a court of competent jurisdiction by final
and nonappealable judgment to have resulted from the gross negligence or wilful
misconduct of such Indemnitee.
(c) To the extent that the Borrower fails to pay any amount required to be
paid by it to the Agent or the Issuing Bank under paragraph (a) or (b) of this
Section, each Lender severally agrees to pay to the Agent or the Issuing Bank,
as the case may be, such Lender's pro rata share (determined as of the time that
the applicable unreimbursed expense or indemnity payment is sought) of such
unpaid amount; provided that the unreimbursed expense or indemnified loss,
claim, damage, liability or related expense, as the case may be, was incurred by
or asserted against the Agent or the Issuing Bank in its capacity as such. For
purposes hereof, a Lender's "pro rata share" shall be determined based upon its
share of the sum of the total Revolving Credit Exposures and unused Revolving
Commitments at the time.
63
(d) To the extent permitted by applicable law, the Borrower and Topps
Enterprises shall not assert, and each hereby waives, any claim against any
Indemnitee, on any theory of liability, for special, indirect, consequential or
punitive damages (as opposed to direct or actual damages) arising out of, in
connection with, or as a result of, this Agreement or any agreement or
instrument contemplated hereby, the Financing Transactions, any Loan or Letter
of Credit, or the use of the proceeds thereof.
(e) All amounts due under this Section shall be payable promptly after
written demand therefor.
SECTION 9.04. Successors and Assigns. (a) The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby (including any Affiliate of
the Issuing Bank that issues any Letter of Credit), except that the Borrower may
not assign or otherwise transfer any of its rights or obligations hereunder
without the prior written consent of each Lender (and any attempted assignment
or transfer by the Borrower without such consent shall be null and void).
Nothing in this Agreement, express or implied, shall be construed to confer upon
any Person (other than the parties hereto, their respective successors and
assigns permitted hereby (including any Affiliate of the Issuing Bank that
issues any Letter of Credit) and, to the extent expressly contemplated hereby,
the Related Parties of each of the Agent, the Issuing Bank and each Lender) any
legal or equitable right, remedy or claim under or by reason of this Agreement.
(b) Any Lender may assign to one or more Eligible Assignees all or a
portion of its rights and obligations under this Agreement (including all or a
portion of its Revolving Commitment and the Loans at the time owing to it);
provided that (i) except in the case of an assignment to a Lender or an
Affiliate of a Lender, the Agent (and, in the case of an assignment of all or a
portion of a Revolving Commitment or any Lender's obligations in respect of its
LC Exposure, the Issuing Bank) must give their prior written consent to such
assignment (which consent shall not be unreasonably withheld), (ii) except in
the case of an assignment to a Lender or an Affiliate of a Lender or an
assignment of the entire remaining amount of the assigning Lender's Revolving
Commitment or Loans, the amount of the Revolving Commitment or Loans of the
assigning Lender subject to each such assignment (determined as of the date the
Assignment and Assumption with respect to such assignment is delivered to the
Agent) shall not be less than $5,000,000 and, after giving effect thereto, the
assigning Lender shall retain a Revolving Commitment and Loans aggregating at
least $5,000,000, in each case unless the Agent and the Borrower otherwise
consent, (iii) each partial assignment shall be made as an assignment of a
proportionate part of all the assigning Lender's rights and obligations under
this Agreement, (iv) the parties to each assignment shall execute and deliver to
the Agent an Assignment and Assumption, together with a processing and
recordation fee of $3,500, and (v) the assignee, if it shall not be a Lender,
shall deliver to the Agent an Administrative Questionnaire. Subject to
acceptance and recording thereof pursuant to paragraph (d) of this Section, from
and after the effective date specified in each Assignment and Assumption the
assignee thereunder shall be a party hereto and, to the extent of the interest
assigned by such Assignment and Assumption, have the rights and obligations of a
Lender under this Agreement, and the assigning Lender thereunder shall, to the
extent of the interest assigned by such Assignment and Assumption, be released
from its obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lender's rights and obligations under
this Agreement, such Lender shall cease to be a party hereto but shall continue
to be entitled to the benefits of Sections 2.15, 2.16, 2.17 and 9.03). Any
assignment or transfer by a Lender of rights or obligations under this Agreement
that does not comply with this paragraph shall be treated for purposes of this
Agreement as a sale by such Lender of a participation in such rights and
obligations accordance with paragraph (e) of this Section.
64
(c) The Agent, acting for this purpose as an agent of the Borrower, shall
maintain at one of its offices in The City of New York a copy of each Assignment
and Assumption delivered to it and a register for the recordation of the names
and addresses of the Lenders, and the Revolving Commitment of, and principal
amount of the Loans and LC Disbursements owing to, each Lender pursuant to the
terms hereof from time to time (the "Register"). The entries in the Register
shall be conclusive, and the Borrower, the Agent, the Issuing Bank and the
Lenders may treat each Person whose name is recorded in the Register pursuant to
the terms hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary. The Register shall be available for
inspection by the Borrower, the Issuing Bank and any Lender, at any reasonable
time and from time to time upon reasonable prior notice.
(d) Upon its receipt of a duly completed Assignment and Assumption executed
by an assigning Lender and an assignee, the assignee's completed Administrative
Questionnaire (unless the assignee shall already be a Lender hereunder), the
processing and recordation fee referred to in paragraph (b) of this Section and
any written consent to such assignment required by paragraph (b) of this
Section, the Agent shall accept such Assignment and Assumption and record the
information contained therein in the Register. No assignment shall be effective
for purposes of this Agreement unless it has been recorded in the Register as
provided in this paragraph.
(e) Any Lender may, without the consent of the Borrower, the Agent or the
Issuing Bank, sell participations to one or more banks or other entities (a
"Participant") in all or a portion of such Lender's rights and obligations under
this Agreement (including all or a portion of its Revolving Commitment and the
Loans owing to it); provided that (i) such Lender's obligations under this
Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
and (iii) the Borrower, the Agent, the Issuing Bank and the other Lenders shall
continue to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement. Any agreement or
instrument pursuant to which a Lender sells such a participation shall provide
that such Lender shall retain the sole right to enforce the Loan Documents and
to approve any amendment, modification or waiver of any provision of the Loan
Documents; provided that such agreement or instrument may provide that such
Lender will not, without the consent of the Participant, agree to any amendment,
modification or waiver described in the first proviso to Section 9.02(b) that
affects such Participant. Subject to paragraph (f) of this Section, the Borrower
agrees that each Participant shall be entitled to the benefits of Sections 2.15,
2.16 and 2.17 to the same extent as if it were a Lender and had acquired its
interest by assignment pursuant to paragraph (b) of this Section, but the
aggregate amount payable by the Borrower to the Lender selling the participation
and the Participant shall not exceed the amount which would otherwise be payable
in the absence of the participation. To the extent permitted by law, each
Participant also shall be entitled to the benefits of Section 9.08 as though it
were a Lender, provided such Participant agrees to be subject to Section 2.18(c)
as though it were a Lender.
65
(f) A Participant shall not be entitled to receive any greater payment
under Section 2.15 or 2.17 than the applicable Lender would have been entitled
to receive with respect to the participation sold to such Participant, unless
the sale of the participation to such Participant is made with the Borrower's
prior written consent. A Participant that would be a Foreign Lender if it were a
Lender shall not be entitled to the benefits of Section 2.17, unless the
Borrower is notified of the participation sold to such Participant and such
Participant agrees, for the benefit of the Borrower, to comply with Section
2.17(e) as though it were a Lender.
(g) Any Lender may at any time pledge or assign a security interest in all
or any portion of its rights under this Agreement to secure obligations of such
Lender, including any pledge or assignment to secure obligations to a Federal
Reserve Bank, and this Section shall not apply to any such pledge or assignment
of a security interest; provided that no such pledge or assignment of a security
interest shall release a Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto.
SECTION 9.05. Survival. All covenants, agreements, representations and
warranties made by the Borrower and Topps Enterprises in the Loan Documents and
in the certificates or other instruments delivered in connection with or
pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the other parties hereto and shall survive the
execution and delivery of the Loan Documents and the making of any Loans and
issuance of any Letters of Credit, regardless of any investigation made by any
such other party or on its behalf, and notwithstanding that the Agent, the
Issuing Bank or any Lender may have had notice or knowledge of any Default or
incorrect representation or warranty at the time any credit is extended
hereunder, and shall continue in full force and effect as long as the principal
of or any accrued interest on any Loan or any fee or any other amount payable
under this Agreement is outstanding and unpaid, or any Letter of Credit is
outstanding and so long as the Revolving Commitments have not expired or
terminated. The provisions of Sections 2.15, 2.16, 2.17 and 9.03 and Article
VIII shall survive and remain in full force and effect regardless of the
consummation of the transactions contemplated hereby, the repayment of the
Loans, the expiration or termination of the Letters of Credit and the Revolving
Commitments, or the termination of this Agreement or any provision hereof.
SECTION 9.06. Counterparts, Integration, Effectiveness. This Agreement may
be executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Agreement, the other
Loan Documents and any separate letter agreements with respect to fees payable
to the Agent constitute the entire contract among the parties relating to the
subject matter hereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof. Except
as provided in Section 4.01, this Agreement shall become effective when it shall
have been executed by the Agent and when the Agent shall have received
counterparts hereof which, when taken together, bear the signatures of each of
the other parties hereto, and thereafter shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns.
Delivery of an executed counterpart of a signature page of this Agreement by
telecopy shall be effective as delivery of a manually executed counterpart of
this Agreement.
66
SECTION 9.07. Severability. Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof, and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 9.08. Right of Setoff. Subject to Section 2.18(c), if an Event of
Default shall have occurred and be continuing, each Lender and each of its
Affiliates is hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held and
other obligations at any time owing by such Lender or Affiliate to or for the
credit or the account of the Borrower against any of and all the obligations of
the Borrower now or hereafter existing under this Agreement held by such Lender,
irrespective of whether or not such Lender shall have made any demand under this
Agreement and although such obligations may be unmatured. The rights of each
Lender under this Section are in addition to other rights and remedies
(including other rights of setoff) which such Lender may have.
SECTION 9.09. Governing Law; Jurisdiction: Consent to Service of Process.
(a) This Agreement shall be construed in accordance with and governed by
the law of the State of New York.
(b) The Borrower hereby irrevocably and unconditionally submits, for itself
and its property, to the nonexclusive jurisdiction of the Supreme Court of the
State of New York sitting in New York County and of the United States District
Court of the Southern District of New York, and any appellate court from any
thereof, in any action or proceeding arising out of or relating to any Loan
Document, or for recognition or enforcement of any judgment, and each of the
parties hereto hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in such New
York State or, to the extent permitted by law, in such Federal court. Each of
the parties hereto agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement or
any other Loan Document shall affect any right that the Agent, the Issuing Bank
or any Lender may otherwise have to bring any action or proceeding relating to
this Agreement or any other Loan Document against the Borrower or its properties
in the courts of any jurisdiction.
(c) The Borrower hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement or any other Loan Document in any
court referred to in paragraph (b) of this Section. Each of the parties hereto
hereby irrevocably waives, to the fullest extent permitted by law, the defense
of an inconvenient forum to the maintenance of such action or proceeding in any
such court.
67
(d) Each party to this Agreement irrevocably consents to service of process
in the manner provided for notices in Section 9.01. Nothing in this Agreement or
any other Loan Document will affect the right of any party to this Agreement to
serve process in any other manner permitted by law.
SECTION 9.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE FINANCING TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.
SECTION 9.11. Headings. Article and Section headings and the Table of
Contents (if any) used herein are for convenience of reference only, are not
part of this Agreement and shall not affect the construction of, or be taken
into consideration in interpreting, this Agreement.
SECTION 9.12. Confidentiality. Each of the Agent, the Issuing Bank and the
Lenders agrees to maintain the confidentiality of the Information (as defined
below), except that Information may be disclosed (a) to its and its Affiliates,
directors, officers, employees and agents, including accountants, legal counsel
and other advisors (it being understood that the Persons to whom such disclosure
is made will be informed of the confidential nature of such Information and
instructed to keep such Information confidential), (b) to the extent requested
by any regulatory authority, (c) to the extent required by applicable laws or
regulations or by any subpoena or similar legal process, (d) to any other party
to this Agreement, (e) in connection with the exercise of any remedies hereunder
or any suit, action or proceeding relating to this Agreement or any other Loan
Document, or the enforcement of rights hereunder or thereunder, (f) subject to
an agreement containing provisions substantially the same as those of this
Section, to any assignee of or Participant in, or any prospective assignee of or
Participant in, any of its rights or obligations under this Agreement, (g) with
the consent of the Borrower, or (h) to the extent such Information (A) becomes
publicly available other than as a result of a breach of this Section or (B)
becomes available to the Agent, the Issuing Bank or any Lender on a
non-confidential basis from a source other than the Borrower provided the Agent,
the Issuing Bank or any Lender does not have actual knowledge that such other
source is in breach of any confidentiality agreement with the Borrower. For the
purposes of this Section, "Information" means all information received from the
Borrower or its agents relating to the Borrower or its business, other than any
such information that is available to the Agent, the Issuing Bank or any Lender
on a non-confidential basis prior to disclosure by the Borrower; provided the
Agent, the Issuing Bank or any Lender does not have actual knowledge that such
source is in breach of any confidentiality agreement with the Borrower. The
Agent, the Issuing Bank and each Lender each agrees that neither it nor its
Affiliates will use any Information in connection with the performance by it of
services for companies other than the Borrower and its Subsidiaries.
68
SECTION 9.13. Interest Rate Limitation. Notwithstanding anything herein to
the contrary, if at any time the interest rate applicable to any Loan, together
with all fees, charges and other amounts which are treated as interest on such
Loan under applicable law (collectively, the "Charges"), shall exceed the
maximum lawful rate (the "Maximum Rate") which may be contracted for, charged,
taken, received or reserved by the Lender holding such Loan in accordance with
applicable law, the rate of interest payable in respect of such Loan hereunder,
together with all Charges payable in respect thereof, shall be limited to the
Maximum Rate and, to the extent lawful, the interest and Charges that would have
been payable in respect of such Loan but were not payable as a result of the
operation of this Section shall be cumulated, and the interest and Charges
payable to such Lender in respect of other Loans or periods shall be increased
(but not above the Maximum Rate therefor) until such cumulated amount, together
with interest thereon at the Federal Funds Effective Rate to the date of
repayment, shall have been received by such Lender.
SECTION 9.14. Topps Enterprises, Topps Finance and WizKids. Topps
Enterprises, Topps Finance and WizKids have each joined in this Agreement, as a
Subsidiary and a Guarantor, in order to provide their confirmation of all
representations and warranties made herein by the Borrower with respect to Topps
Enterprises, Topps Finance and WizKids, respectively (in their capacities as
Subsidiaries, Guarantors or otherwise) and to set forth their agreement to
perform all of the things required herein to be "caused" by the Borrower with
respect to them. In addition, Topps Finance has joined in the covenant in
Section 6.01.
SECTION 9.15. [Intentionally Omitted.]
[Signatures appear on the following page.]
69
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
TOPPS ENTERPRISES, INC. THE TOPPS COMPANY, INC.
By:_____________________ By: ____________________________
Name: Name:
Title: Title:
TOPPS FINANCE, INC. JPMORGAN CHASE BANK, as a Lender
and as Agent
By:_____________________ By:_____________________________
Name: Name:
Title: Title:
WIZKIDS, INC.
By:_____________________
Name:
Title:
70
SCHEDULE 2.01
REVOLVING COMMITMENTS
---------------------
JPMorgan Chase Bank $30,000,000
EXHIBIT A
---------
ASSIGNMENT AND ASSUMPTION
-------------------------
Dated: __________, ______
Reference is made to the Credit Agreement, dated as of ______, 2004 (as amended,
amended and restated, supplemented, modified and in effect from time to time,
the "Credit Agreement"), among THE TOPPS COMPANY, INC., a Delaware corporation
(the "Borrower"), Topps Enterprises, Inc. ("Topps Enterprises"), TOPPS FINANCE,
INC. ("Topps Finance"), WIZKIDS, INC. ("WizKids"), the Lenders party thereto
(together with their successors and assigns, the "Lenders"), and JPMORGAN CHASE
BANK, (f/k/a The Chase Manhattan Bank), as agent (in such capacity, the "Agent")
for the Lenders. Capitalized terms used herein and not otherwise defined shall
have the meanings assigned to such terms in the Credit Agreement. This
Assignment and Assumption between the Assignor (as set forth on Schedule I
hereto and made a part hereof) and the Assignee (as set forth on the said
Schedule I ) is dated as of the Assignment Effective Date (as set forth on the
said Schedule I).
The Assignor hereby irrevocably sells and assigns to the Assignee without
recourse to the Assignor, and the Assignee hereby irrevocably purchases and
assumes from the Assignor without recourse to the Assignor, as of the Assignment
Effective Date, an undivided interest (the "Assigned Interest") in and to all
the Assignor's rights and obligations under the Credit Agreement as are set
forth on the said Schedule I (the "Assigned Facilities"), in a principal amount
for each Assigned Facility as set forth on the said Schedule I.
The Assignor (i) makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the Credit Agreement or any other of the Loan
Documents or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Credit Agreement, any other of the Loan Documents or
any other instrument or document furnished pursuant thereto, other than that it
is the legal and beneficial owner of the interest being assigned by it hereunder
and that such interest is free and clear of any adverse claim; [and] (ii) makes
no representation or warranty and assumes no responsibility with respect to the
financial condition of the Borrower, Topps Enterprises, any of the other
Subsidiaries of the Borrower or any other obligor of any of their respective
obligations under the Credit Agreement or the performance or observance by the
Borrower, Topps Enterprises, or any of the other Subsidiaries of the Borrower of
any of their respective obligations under the Credit Agreement, any of the other
Loan Documents or any other instrument or document furnished pursuant thereto;
[and (iii) attaches the Note held by it (the "Note") evidencing the Assigned
Facilities and requests that the Agent exchange the Note for a new note payable
to the Assignor (if the Assignor has retained any interest in the Assigned
Facilities) and [or] a new note payable to the Assignee in the [respective]
amount(s) which reflect the assignment being made hereby (and after giving
effect to any other assignments which have become effective on the Assignment
Effective Date)]
The Assignee (i) represents and warrants that it is legally authorized to enter
into this Assignment and Assumption and that it is an Eligible Assignee; (ii)
confirms that it has received a copy of the Credit Agreement, together with
copies of the most recent financial statements delivered pursuant to Section
5.01 thereof, and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Assumption; (iii) agrees that it will, independently and without
reliance upon the Agent, the Assignor, any other Lender or any other Person and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under the Credit Agreement, any of the other Loan Documents or any other
instrument or document furnished pursuant thereto; (iv) appoints and authorizes
the Agent to take such action as agent on its behalf and to exercise such powers
and discretion under the Credit Agreement, the other Loan Documents or any other
instrument or document furnished pursuant thereto as are delegated to the Agent
by the terms thereof, together with such powers as are reasonably incidental
thereto; (v) agrees that it will be bound by the provisions of the Credit
Agreement and will perform in accordance with its terms all of the obligations
which by the terms of the Credit Agreement are required to be performed by it as
a Lender; and (vi) if the Assignee is organized under the laws of a jurisdiction
outside the United States, attaches the forms prescribed by the Internal Revenue
Service of the United States certifying as to the Assignee's exemption from
United States withholding taxes with respect to all payments to be made to the
Assignee under the Credit Agreement or such other documents as are necessary to
indicate that all such payments are subject to such tax at a rate reduced by an
applicable tax treaty.
Following the execution of this Assignment and Assumption, it will be delivered
to the Agent, together with a processing and recordation fee of $3,500 for
acceptance by it and recording by the Agent pursuant to Section 9.04(b) of the
Credit Agreement, effective as of the Assignment Effective Date (which
Assignment Effective Date shall be, unless otherwise agreed to by the Agent, at
least five Business Days after the execution of this Assignment and Assumption).
Upon such acceptance and recording, from and after the Assignment Effective
Date, the Agent shall make all payments in respect of the Assigned Interest
(including payments of principal, interest, fees and other amounts) to the
Assignee, whether such amounts have accrued prior to the Assignment Effective
Date or accrue subsequent to the Assignment Effective Date. The Assignor and the
Assignee shall make all appropriate adjustments in payments for periods prior to
the Assignment Effective Date by the Agent or with respect to the making of this
assignment directly between themselves.
From and after the Assignment Effective Date, (i) the Assignee shall be a party
to the Credit Agreement and, to the extent provided in (x) this Assignment and
Assumption and (y) Section 9.04 of the Credit Agreement, have the rights and
obligations of a Lender thereunder and under the other Loan Documents and shall
be bound by the provisions thereof, and (ii) the Assignor shall, to the extent
provided in (x) this Assignment and Assumption and (y) Section 9.04 of the
Credit Agreement, relinquish its rights and be released from its obligations
under the Credit Agreement; provided, that the Assignor hereby represents and
warrants that the restrictions set forth in Section 9.04(b) of the Credit
Agreement pertaining to the minimum amount of assignments have been satisfied.
This Assignment and Assumption shall be construed in accordance with and
governed by the laws of the State of New York, without regard to conflicts of
laws principles and by federal law to the extent applicable.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Assumption to be executed by their respective duly authorized officers on the
said Schedule I.
Schedule I to Assignment and Assumption
Respecting the Credit Agreement,
dated as of September 14, 2004 among The Topps Company, Inc.,
Topps Enterprises, Inc., Topps Finance, Inc., WizKids, Inc.,
the Lenders party thereto, together with their successors
and assigns and JPMorgan Chase Bank , as Agent
Legal Name of Assignor:
Legal Name of Assignee:
Assignment Effective Date:
Principal Revolving Commitment Amount Assigned: $__________
Revolving Commitment Percentage Assigned: __________%
Principal Revolving Commitment Amount Retained: $___________
Revolving Commitment Percentage Retained: __________%
Face Amount of Letters of Credit Assigned: $___________
Face Amount of Letters of Credit Retained: $___________
ACCEPTED:
JPMORGAN CHASE BANK
as Agent _______________________,
as Assignor
By: __________________________ By: ____________________
Name: Name:
Title: Title:
________________________,
as Assignee
By: _________________________
Name:
Title:
CONSENT OF THE BORROWER to the extent that the Assignee is not an Eligible
Assignee or as required in Section 9.04(b)(ii) of the Credit Agreement where
such assignment is not to a Lender or an Affiliate of a Lender or is not an
assignment of the entire remaining amount of the assigning Lender's Commitment
or Loans
THE TOPPS COMPANY, INC.
By: __________________________
Name:
Title:
EXHIBIT B
---------
COMPLIANCE CERTIFICATE
----------------------
Reference is made to the Credit Agreement, dated as of September 14, 2004, among
the Topps Company, Inc., as Borrower, Topps Enterprises, Inc., Topps Finance,
Inc., WizKids, Inc., JPMorgan Chase Bank, as Lender and Agent, and the other
Lenders party thereto, as the same may have been amended, supplemented or
otherwise modified (the "Credit Agreement").
The undersigned hereby certifies as follows:
1. [To be included where required under Section 5.01(c)] The Borrower is in
compliance with the financial covenants contained in the Credit Agreement
as follows:
[Insert covenant compliance calculations as set forth on the attached
Schedule.
2. [No Default has occurred or is continuing under the Credit Agreement or a
Default has occurred and [specifications of details thereof and any action
taken or proposed to be taken with respect thereto]]; and
3. [No Change in GAAP or the application thereof has occurred since [____] or
a change in GAAP or in the application thereof has occurred since [____]
and [specifications affecting such change on the financial statements
accompanying such certificate]].
THE TOPPS COMPANY, INC.
By: _________________________
Title:
EXHIBIT C
---------
JOINT AND SEVERAL GUARANTY OF PAYMENT
-------------------------------------
THIS JOINT AND SEVERAL GUARANTY OF PAYMENT , dated as of September 14, 2004
(together with any amendments, restatements, modifications and supplements, this
"Guaranty ") made by TOPPS ENTERPRISES, INC., a Delaware corporation TOPPS
FINANCE INC., a Delaware corporation and WIZKIDS, INC., a Delaware limited
liability company (each a "Guarantor" and, jointly, the "Guarantors"), in favor
of JPMORGAN CHASE BANK, as agent (the "Agent") for the lenders (the "Lenders")
party to the Credit Agreement (as hereinafter defined). Capitalized terms not
otherwise defined herein shall have the meanings assigned to such terms in the
Credit Agreement.
WHEREAS, the Agent, the Lenders, The Topps Company, Inc. (the "Obligor"),
and the Guarantors entered into a Credit Agreement dated as of the date hereof
(as amended, supplemented or otherwise modified from time to time, the "Credit
Agreement").
WHEREAS, in consideration for the Agent's and the Lenders' agreement to
enter into the Credit Agreement and the transactions contemplated thereby, the
Guarantors have agreed to jointly and severally guaranty the payment of the
obligations owing under the Credit Agreement.
WHEREAS, it is a condition precedent to the effectiveness of the Credit
Agreement that the Guarantors shall have executed and delivered to the Agent and
the Lenders this Guaranty;
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged by the Guarantors, the Guarantors agree with Agent and the Lenders
as follows:
SECTION 1. Guaranty. (a) The Guarantors hereby, jointly and severally,
unconditionally guarantee the punctual payment when due, of all obligations of
every kind or character now or hereafter existing, whether matured or unmatured,
contingent or liquidated, of the Obligor to each of the Agent and the Lenders
under the Credit Agreement, whether for principal, interest, fees, expenses or
otherwise and whether in United States dollars or other currencies, and any and
all reasonable expenses (including reasonable counsel fees and expenses)
incurred by the Agent and the Lenders in enforcing any of their respective
rights and obligations under this Guaranty (all of the foregoing obligations
being collectively referred to as the "Obligations").
SECTION 2. Guaranty of Payment. Each Guarantor further agrees that its
guarantee hereunder constitutes a guarantee of payment and performance when due
and not of collection, and waives any right to require that any resort be had by
any of the Lenders to (i) the Obligor, (ii) any other guarantor, (iii) any
collateral of any kind, any balance of any deposit account or credit on the
books of any of the Lenders in favor of the Obligor or any other Person, or (iv)
recourse against any other Person or party.
SECTION 3. Guaranty Absolute. Each Guarantor guarantees that the
Obligations will be performed and paid strictly in accordance with the terms of
the Loan Documents, regardless of any law, regulation or order now or hereafter
in effect in any jurisdiction affecting any of such terms or the rights of any
of the Lenders with respect thereto; and such guarantee is not subject to any
setoff, counterclaim or defense. The Obligations of each Guarantor hereunder are
independent of the obligations of other Persons under any other related
document, and a separate action or actions may be brought and prosecuted
hereunder whether the action is brought against any such Person or whether any
such Person is joined in any such action or actions. The liability of each
Guarantor under this Guaranty shall be absolute and unconditional, and shall not
be affected or released in any way, irrespective of:
(i) any lack of validity or enforceability of any or all of the Loan
Documents or of any or all of the Obligations;
(ii) any change in the time, manner or place of payment of, or in any other
term of, all or any of the Obligations, or any other amendment or
waiver of or any consent to departure from any document evidencing or
relating to any of the Obligations or of any or all of the Loan
Documents, including, but not limited to, an increase or decrease in
the Obligations;
(iii)any taking and holding of any collateral or any additional guaranty
for all or any of the Obligations, or any amendment, alteration,
exchange, substitution, transfer, enforcement, waiver, subordination,
termination, or release of any collateral securing any or all of the
Obligations, or such guaranty, or any non-perfection of any collateral
or any consent to departure from any such guaranty;
(iv) any manner of application of collateral, or proceeds thereof, to all
or any of the Obligations, or the manner of sale of any collateral
securing any of the Obligations;
(v) any consent by one or more of the Lenders to the change, restructuring
or termination of the corporate structure or existence of the Obligor,
or any Guarantor or other guarantor of any of the Obligations, or any
Affiliate of any of them, and any corresponding restructuring of the
Obligations, or any other restructuring or refinancing of the
Obligations or any portion thereof;
(vi) any modification, compromise, settlement or release by one or more of
the Lenders, by operation of law or otherwise, collection or other
liquidation of any or all of the Obligations or any liability of the
Obligor and/or any Guarantor or other guarantor, or of any collateral,
in whole or in part, or any refusal of payment by one or more of the
Lenders, in whole or in part, from the Obligor or Guarantor or other
guarantor in connection with any of the Obligations, whether or not
with notice to, or further assent by, or any reservation of rights
against, such Guarantor;
(vii)the waiver of the performance or observance by the Obligor or any
other guarantor of any of the Obligations of any agreement, covenant,
term or condition to be performed by any of them;
(viii) the voluntary or involuntary liquidation, dissolution, sale of all
or substantially all of the property, marshaling of assets and
liabilities, receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, arrangement, composition or
readjustment, or other similar application or proceeding affecting the
Obligor or any Guarantor or other guarantor or any of their respective
assets;
(ix) the release of the Obligor or any Guarantor or other guarantor of any
of the Obligations from the performance or observance of any
agreement, covenant, term or condition contained in any agreement or
document evidencing or relating to the Obligations or the Loan
Documents by operation of law; or
(x) any other circumstance (including, but not limited to, any statute of
limitations) which might otherwise constitute a defense available to,
or a discharge of, such Guarantor.
Without limiting the generality of the foregoing, each Guarantor hereby
consents, and hereby agrees, that the rights of the Lenders hereunder, and the
liability of the such Guarantor hereunder, shall not be affected by any and all
releases of any collateral or any other guaranty of any of the Obligations. This
Guaranty shall continue to be effective or be reinstated, as the case may be, if
at any time any payment of any of the Obligations is rescinded or must otherwise
be returned by any Lender upon the insolvency, bankruptcy or reorganization of
the Obligor or otherwise, all as though such payment had not been made.
SECTION 4. Waivers. Each Guarantor waives presentment to, demand of payment
from and protest to the Obligor, or any Guarantor or other guarantor of any of
the Obligations, and also waives notice of acceptance of its guarantee and
notice of protest for non-payment. Each Guarantor hereby further waives
promptness, diligence, notice of acceptance and any other notice with respect to
any of the Obligations and this Guaranty and any requirement that the Lenders
protect, secure, perfect or insure any security interest or lien or any property
subject thereto or exhaust any right or take any action against the Obligor, or
any Guarantor or other guarantor of any of the Obligations or any other Person
or any collateral.
SECTION 5. Other Waivers. Each Guarantor hereby waives any right to require
the Agent or the Lenders to proceed against the Obligor, any Guarantor or other
guarantor or any other Person, or to proceed against any collateral, or pursue
any other remedy in the power of the Agent or the Lenders.
SECTION 6. Subrogation. Upon payment by any of all of the Guarantors of any
sums to the Lenders hereunder, all rights of each of the Guarantors against the
Obligor arising as a result thereof by way of right of subrogation or otherwise,
shall in all respects be subordinate and junior in right of payment to the prior
final and indefeasible payment in full of all the Obligations. If any amount
shall be paid to any Guarantor for the account of the Obligor, such amount shall
be held in trust for the benefit of the Lenders and shall forthwith be paid to
the Lenders to be credited and applied to the Obligations, whether matured or
unmatured.
SECTION 7. Amendments, Etc. No amendment or waiver of any provision of this
Guaranty nor consent to any departure by any Guarantor herefrom shall in any
event be effective unless the same shall be in writing and signed by the Lenders
and then such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given.
SECTION 8. Notices, Etc. All notices and other communications to any party
provided for hereunder shall be in writing (including telegraphic, telecopy,
telex or cable communication) and mailed, telegraphed, telecopied, telexed,
cabled or delivered, addressed to such party, in the case of the Guarantors, at
Xxx Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000 Attention of Xx. Xxxxxx
Xxxxx (Telecopy No. 212-376-0621) with a copy to Xxxxxxx Xxxx & Xxxxxxxxx, 000
Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000 (Telecopy No. 212-728-8111),
Attention of Xxxxxxx Xxxxxx, Esq., in the case of the Agent, at the address of
the Agent referred to in Section 9.01(b) of the Credit Agreement, or as to any
party at such other address as shall be designated by such party in a written
notice to each other party complying as to delivery with the terms of this
Section. All such notices and other communications shall be effective (a) when
received, if mailed or delivered, or (b) when delivered to the telegraph
company, transmitted by telecopier, confirmed by telex answerback or delivered
to the cable company, respectively, addressed as aforesaid.
SECTION 9. No Waiver, Remedies. No failure on the part of any of the
Lenders to exercise, and no delay in exercising, any right hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right hereunder preclude any other or further exercise thereof or the exercise
of any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law, the Credit Agreement or any other
agreement relating to the Obligations.
SECTION 10. Right of Set-off. Upon the occurrence and during the
continuance of any Event of Default, the Lenders are hereby authorized at any
time and from time to time, to the fullest extent permitted by law, to set off
and apply any and all deposits (general or special, time or demand, provisional
or final) at any time held and other indebtedness at any time owing by the Agent
or the Lenders to or for the credit or the account of any Guarantor against any
and all of the Obligations of such Guarantor now or hereafter existing under
this Guaranty, irrespective of whether the Lenders shall have made any demand
under this Guaranty and although such Obligations may be contingent and
unmatured. The rights of the Lenders under this Section 10 are in addition to
other rights and remedies (including, without limitation, other rights of
set-off) which the Lenders may have.
SECTION 11. Continuing Guaranty. Transfer of Note; Release of Guaranty.
This Guaranty is a continuing guaranty and shall (i) remain in full force and
effect until the payment in full of all of the Obligations and all other amounts
payable under this Guaranty, (ii) be binding upon each Guarantor, its successors
and assigns, and (iii) inure to the benefit of and be enforceable by the Lenders
and their respective successors, transferees and assigns. Without limiting the
generality of the foregoing clause (iii), each Lender may assign or otherwise
transfer any instrument of indebtedness of the Obligor held by it, or any
interest therein, or grant any participation in its rights or Obligations under
any agreement relating to the Obligations and the Loan Documents subject to the
provisions of such agreement, to any other Person, and such other Person shall
thereupon become vested with all the rights in respect thereof granted to the
Lender.
SECTION 12. Jurisdiction, Waiver of Jury Trial. EACH GUARANTOR (AND THE
AGENT AND THE LENDERS BY THEIR ACCEPTANCE HEREOF) HEREBY IRREVOCABLY SUBMITS
ITSELF TO THE EXCLUSIVE JURISDICTION OF BOTH THE SUPREME COURT OF THE STATE OF
NEW YORK, NEW YORK COUNTY AND THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK AND ANY APPEAL THEREFROM, FOR THE PURPOSE OF ANY SUIT,
ACTION OR OTHER PROCEEDING ARISING OUT OF OR RELATING TO THIS GUARANTY, AND
HEREBY WAIVES, AND AGREES NOT TO ASSERT, BY WAY OF MOTION, AS A DEFENSE OR
OTHERWISE, IN ANY SUIT, ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT
PERSONALLY SUBJECT TO THE JURISDICTION OF THE ABOVE-NAMED COURTS FOR ANY REASON
WHATSOEVER, THAT SUCH SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT
FORUM OR THAT THIS GUARANTY MAY NOT BE ENFORCED IN OR BY SUCH COURTS. NEITHER
THE GUARANTORS NOR THE LENDERS WILL SEEK TO CONSOLIDATE SUCH PROCEEDING INTO ANY
ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. SECTION 9.10 OF
THE CREDIT AGREEMENT SHALL APPLY TO THIS GUARANTY.
SECTION 13. Applicable Law. THIS GUARANTY SHALL IN ALL RESPECTS BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED WHOLLY WITHIN SUCH STATE.
SECTION 14. Expenses of the Agent and the Lenders. The Guarantors agree to
pay all reasonable and necessary out-of-pocket expenses incurred by the Agent
and the Lenders in connection with the enforcement or protection of its rights
or the rights of the Agent and the Lenders generally in connection with the
Guaranty including, but not limited to, the reasonable fees and disbursements of
counsel for the Agent and the Lenders.
SECTION 15. Joint and Several Guaranty. All obligations of the Guarantors
under this Guaranty shall be joint and several.
[Signature on Following Page]
IN WITNESS WHEREOF, the Guarantors have caused this Guaranty
to be duly executed and delivered by its officer thereunto duly authorized as of
the date first above written.
TOPPS ENTERPRISES, INC.
By:_________________________________
Name:
Title:
TOPPS FINANCE, INC.
By:_________________________________
Name:
Title:
WIZKIDS, INC.
By:_________________________________
Name:
Title:
EXHIBIT D
---------
REVOLVING CREDIT NOTE
New York, New York
$ __________
------- ----, ----
FOR VALUE RECEIVED, THE TOPPS COMPANY, INC., a corporation organized under
the laws of Delaware (the "Borrower"), hereby promises to pay to the order of
__________________________________ (the "Lender") at its office at
_________________ _______________________________, or at such other place as the
Lender directs in writing, the principal sum of _______________________
($__________) or, if less, the then outstanding amount loaned by the Lender to
the Borrower pursuant to the Credit Agreement (defined below), in lawful money
of the United States of America and in immediately available funds, on the
Maturity Date (or sooner if required under the Credit Agreement) and in the
manner provided in the Credit Agreement. The Borrower also promises to pay
interest on the unpaid principal balance hereof, for the period such balance is
outstanding, at the said office of the Lender, or at such other place as the
Lender directs in writing, in like money, at the rate(s) of interest as provided
in the Credit Agreement on the dates and in the manner provided in the Credit
Agreement.
The date and amount of each Loan (as defined in the Credit Agreement) made
by the Lender to the Borrower under the Credit Agreement, and each payment of
principal thereof, shall be recorded by the Lender on its books and prior to any
transfer of this Revolving Credit Note (or, at the discretion of the Lender, at
any other time), endorsed by the Lender on Schedule A attached hereto or any
continuation thereof; provided however, that the failure of the Lender to make
such a notation or any error therein shall not affect the obligation of the
Borrower to repay the Loans made by the Lender in accordance with the Credit
Agreement and this Revolving Credit Note.
This is a promissory note made pursuant to Section 2.09(e) of that certain
Credit Agreement dated as of September 14, 2004 (as amended, modified or
supplemented from time to time, the "Credit Agreement"), among the Borrower,
Topps Enterprises, Inc., Topps Finance, Inc., WizKids, Inc., the Agent (defined
therein), and the "Lenders" party thereto, and evidences the Loans made by the
Lender under the Credit Agreement. All capitalized terms not defined herein
shall have the meanings given to them in the Credit Agreement.
The Credit Agreement provides for the acceleration of the maturity of
principal upon the occurrence of certain Events of Default and for prepayments
on the terms and conditions specified therein.
The Borrower waives presentment, notice of dishonor, protest and any other
notice or formality with respect to this Revolving Credit Note.
The Revolving Credit Note is subject in all respects to the Credit
Agreement, including, without limitation, the interest rate limitation
provisions in Section 9.13 thereof.
This Revolving Credit Note shall be governed by, and interpreted and
construed in accordance with, the laws of the State of New York, without regard
to conflicts of law principles.
THE TOPPS COMPANY, INC.
By: ______________________________
Name:
Title:
SCHEDULE A
----------
Amount Amount of Balance
Date of Loan Payment Outstanding Notation By
---- ------- --------- ----------- -----------
