Exhibit 10.1
THIRD AMENDMENT TO SECOND AMENDED AND RESTATED
REVOLVING CREDIT AGREEMENT
AND OTHER LOAN DOCUMENTS
NEW ENGLAND BUSINESS SERVICE, INC.
THIRD AMENDMENT TO SECOND AMENDED AND RESTATED REVOLVING
CREDIT AGREEMENT AND OTHER LOAN DOCUMENTS dated as of March 13,
2003 (this "Amendment"), by and among NEW ENGLAND BUSINESS
SERVICE, INC. (the "Borrower"), a Delaware corporation having its
principal place of business at 000 Xxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000, and the Subsidiaries of the Borrower listed
on the signature pages hereto (the "Guarantors"), FLEET NATIONAL
BANK, formerly known as BankBoston, N.A., a national banking
association ("Fleet"), and the other lending institutions listed
on Schedule 1 to the Credit Agreement referred to below (together
with Fleet, the "Banks"), FLEET NATIONAL BANK, formerly known as
BankBoston, N.A., as agent for itself and such other lending
institutions (the "Agent"), and CITIZENS BANK OF MASSACHUSETTS,
as syndication agent.
WHEREAS, the Borrower, the Banks and the Agent are parties
to a Second Amended and Restated Revolving Credit Agreement dated
as of July 13, 2001 (as amended and in effect from time to time,
the "Credit Agreement," capitalized terms defined therein having
the same meanings herein as therein), pursuant to which the Banks
have extended credit to the Borrower on the terms and subject to
the conditions set forth therein;
WHEREAS, the Borrower has requested that the Agent and the
Banks amend the Credit Agreement to extend the Revolving Credit
Loan Maturity Date to February 28, 2006 and to make certain other
revisions;
WHEREAS, subject to the terms and conditions hereof, the
Agent and the Banks are willing to permit such extension and such
other revisions;
WHEREAS, subject to the terms and conditions set forth
herein, the Borrower, the Banks, and the Agent have agreed to
amend the Credit Agreement and certain other Loan Documents,
including the Addendum to Guaranty and the Intercompany
Subordination Agreements as set forth herein;
NOW, THEREFORE, in consideration of the foregoing, and for
other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto
hereby agree to amend the Credit Agreement, the Addendum to
Guaranty and the Subordination Agreements as follows:
1. Amendments to Definitions. Section 1.1 of the Credit
Agreement is hereby amended by:
(a) deleting the definition of "Applicable Eurodollar
Rate Margin" in its entirety and substituting in lieu
thereof the following new definition:
"Applicable Eurodollar Rate Margin. For any
fiscal quarter or portion thereof within any Interest Period with
respect to any Eurodollar Rate Loan, 1.25% per annum; provided,
however, that in the event that the ratio of Consolidated Funded
Debt (calculated as of the last day of such fiscal quarter or
portion thereof) to EBITDA (calculated for the four (4)
consecutive fiscal quarters ending on the last day of such fiscal
quarter or portion thereof) meets the requirements set forth in
the chart below, the Applicable Eurodollar Rate Margin shall,
commencing initially with the Third Amendment Effective Date and
thereafter commencing with the date on which the Borrower
delivers to the Banks the financial statements referred to in
6.4(a) or, as the case may be, 6.4(b) and ending on the date of
the next change to be effected pursuant to this paragraph, be the
percentage set forth opposite the applicable ratio of
Consolidated Funded Debt to EBITDA in the table below:
Ratio of Consolidated Funded Applicable Eurodollar
Debt to EBITDA Rate Margin
Less than or equal to 0.55%
1.0:1.0
Greater than 1.0:1.0 and 0.625%
less than or equal to
1.5:1.0
Greater than 1.5:1.0 and 0.875%
less than or equal to
2.0:1.0
Greater than 2.0:1.0 and 0.925%
less than or equal to
2.25:1.0
Greater than 2.25:1 1.25%
If any financial statements referred to above are not
delivered within the time periods specified in 6.4(a) or,
as the case may be, 6.4(b), then, until such financial
statements are delivered, the Applicable Eurodollar Rate
Margin as at the end of the fiscal period that would have
been covered thereby shall, for the purposes of this
definition, be deemed to be 1.25%. In addition, at all
times while a Default or an Event of Default shall have
occurred and be continuing, the Applicable Eurodollar Rate
Margin shall, for the purposes of this definition, be deemed
to be 1.25%."
(b) deleting the definition of "Consolidated Funded
Debt" in its entirety and substituting in lieu thereof the
following new definition:
"Consolidated Funded Debt. At any time of
determination, the sum of (i) the amount of the
Loans outstanding (after giving account to any
amounts requested) plus accrued but unpaid
interest thereon; plus (ii) the outstanding amount
of any other Indebtedness for borrowed money
(other than intercompany Indebtedness owed by the
Borrower and its Subsidiaries to each other and
permitted by the terms hereof) in respect of
Capitalized Leases, Synthetic Leases or which is
otherwise subject to the payment of interest plus
accrued but unpaid interest on such Indebtedness,
including expenses consisting of interest in
respect of Capitalized Leases, Synthetic Leases
and including commitment fee, agency fee, facility
fee, utilization fee, balance deficiency fee and
similar fee expenses in connection with the
borrowing of money plus (iii) Indebtedness
consisting of any Earnout Payment Obligations from
and after such time as such Earnout Payment
Obligations are properly classified as liabilities
for purposes of generally accepted accounting
principles."
(c) deleting the definition of "Consolidated Net
Income" in its entirety and substituting in lieu thereof the
following new definition:
"Consolidated Net Income. The consolidated
net income (or deficit) of the Borrower and its
Subsidiaries, after deduction of all expenses, taxes and
other proper charges, determined in accordance with
generally accepted accounting principles."
(d) deleting the definition of "Consolidated Total
Interest Expense" in its entirety and substituting in lieu
thereof the following new definition:
"Consolidated Total Interest Expense. For any
period, the aggregate amount of interest required to be
expensed by the Borrower and its Subsidiaries in accordance
with generally accepted accounting principles during such
period on all Indebtedness of the Borrower and its
Subsidiaries outstanding during all or any part of such
period, including expense consisting of interest in respect
of Capitalized Leases and Synthetic Leases, and excluding
commitment fee, agency fee, facility fee, utilization fee,
balance deficiency fee and similar fee expenses in
connection with the borrowing of money."
(e) deleting the definition of "EBITDA" in its
entirety and substituting in lieu thereof the following new
definition:
"EBITDA. The consolidated earnings (or loss) from
the operations of the Borrower and its Subsidiaries for any
period, after all expenses and other proper charges but
before payment or provision for any income taxes, interest
expense, depreciation or amortization for such period, and
excluding the Restructuring Charges (to the extent taken),
charges in respect of the impairment of goodwill or other
intangible assets of the Borrower and any of its
Subsidiaries in an amount not to exceed $20,000,000 in the
aggregate and any nonrecurring, noncash gains, in each case
determined in accordance with generally accepted accounting
principles. For purposes hereof, EBITDA shall include, on a
pro forma basis, EBITDA (calculated for any applicable
period, commencing with the four consecutive fiscal quarters
of the Borrower ending in the quarter in which such
Permitted Acquisition is made) of any Subsidiary acquired by
means of a Permitted Acquisition (including historical
earnings and cash flows associated with such Subsidiary and
any incurrence or reduction of Indebtedness associated with
such Permitted Acquisition, but excluding any projected
synergies or similar benefits expected to be realized as a
result of such event)."
(f) deleting the definition of "Intercompany
Subordination Agreement" in its entirety and substituting in
lieu thereof the following new definition in the order
required by alphabetical order:
"R&M Trust Intercompany Subordination Agreement.
The Intercompany Subordination Agreement, dated as of
October 8, 1998, among the Agent, the Borrower and R&M
Trust."
(g) deleting the definition of "Loan Documents" in its
entirety and substituting in lieu thereof the following new
definition:
"Loan Documents. This Credit Agreement, the
Notes, the Agent's Fee Letter, the Chiswick Trust
Intercompany Subordination Agreement, the R&M Trust
Intercompany Subordination Agreement and any other
subordination agreements entered into pursuant to 7.1(j) or
(o), the Guaranty and all documents evidencing or relating
to any interest rate protection arrangements entered into
between the Borrower and any Bank."
(h) deleting the definition of "Notes" in its entirety
and substituting in lieu thereof the following new
definition:
"Notes. The Competitive Bid Notes, the Syndicated
Notes and any replacements for such Notes issued in
connection with the Third Amendment or under 17.4 of the
Credit Agreement."
(i) deleting the definition of "Permitted Acquisition"
in its entirety and substituting in lieu thereof the
following new definition:
"Permitted Acquisition. Any acquisition of any
Person, business, division or specified group of assets by
the Borrower or any of the Guarantors (other than Xxxxxxx &
Xxxxxx, R&M Trust and Chiswick Trust), provided that, with
respect to any such other acquisition, (1) the Agent and the
Majority Banks approve, in their sole discretion, such
acquisition in writing in advance or (2) each of the
following conditions is met:
(a) immediately prior to and after, and
after giving effect to, such acquisition, no
Default or Event of Default shall then exist;
(b)(i) the aggregate consideration paid or
to be paid by the Borrower or any Guarantor (other
than Xxxxxxx & Xxxxxx, R&M Trust or Chiswick
Trust) in connection with any single such
acquisition (including consideration in the form
of cash, Earnout Payment Obligations, or the
assumption of Indebtedness for borrowed money,
debt or other similar monetary obligations by the
Borrower or any Guarantor (other than Xxxxxxx &
Xxxxxx, R&M Trust, or Chiswick Trust) (including
such Indebtedness in existence prior to the date
of such acquisition which was not incurred in
connection with or contemplation thereof) but
excluding stock or other equity interest
consideration) shall not exceed $35,000,000 and
(ii) the aggregate consideration paid or to be
paid by the Borrower or any Guarantor (other than
Xxxxxxx & Xxxxxx, R&M Trust or Chiswick Trust) in
connection with any such acquisition, including
consideration of the types described in clause
(b)(i) of this definition and stock or other
equity interest consideration (as valued for the
purpose of such acquisitions) shall not exceed
$40,000,000;
(c)(i) the aggregate consideration paid or to
be paid by the Borrower or any Guarantor (other
than Xxxxxxx & Xxxxxx, R&M Trust or Chiswick
Trust) in connection with all such acquisitions
(including consideration in the form of cash,
Earnout Payment Obligations, or the assumption of
Indebtedness for borrowed money, debt or other
similar monetary obligations by the Borrower or
any Guarantor (other than Xxxxxxx & Xxxxxx, R&M
Trust or Chiswick Trust) (including such
Indebtedness in existence prior to the date of any
such acquisition which was not incurred in
connection with or contemplation thereof) but
excluding stock or other equity interest
consideration) shall not exceed $60,000,000 and
(ii) the aggregate consideration paid or to be
paid by the Borrower or any Guarantor (other than
Xxxxxxx & Xxxxxx, R&M Trust or Chiswick Trust) in
connection with all such acquisitions, including
consideration of the types described in clause
(c)(i) of this definition and stock or other
equity interest consideration (as valued for the
purpose of such acquisitions) shall not exceed
$80,000,000;
(d) such acquisition shall have been
approved by the board of directors and
shareholders, if required, or other applicable
management of such Person, and to the extent
applicable, approval by final order of any
relevant bankruptcy court;
(e) either (i) such acquisition is the
acquisition of assets only (for use in
substantially the same line of business as the
line of business of the Borrower or any of its
Subsidiaries) or (ii) such acquisition involves
the purchase of the capital stock or other equity
interests of a Person and each of the following
conditions is met:
(A) such acquisition is the acquisition
of one hundred percent (100%) of the capital stock
or other equity interests of such Person.
(B) such Person is in substantially the
same line of business as the Borrower or any of
its Subsidiaries,
(C) the Borrower or a Guarantor (other
than Xxxxxxx & Xxxxxx, R&M Trust or Chiswick
Trust) is the survivor of any merger or
consolidation with such Person;
(D) not less than ten (10) Business Days
prior to such acquisition, the Borrower shall
notify the Banks thereof, and
(E) contemporaneously with the
occurrence of any such acquisition, the Borrower
shall (I) cause such Person, if such Person shall
be engaged in business of any kind or nature
(other than having qualified to do business in a
foreign jurisdiction) or shall have a net worth or
assets of more than a de minimis value, to
guaranty all of the Obligations hereunder pursuant
to the Guaranty, and (II) cause such Person to
deliver to the Banks and the Agent (aa) evidence
of proper corporate or other entity authorization,
and (bb) legal opinions with respect to each of
the matters and documents set forth in this clause
(E), in each case, in form and substance
satisfactory to the Agent and the Banks; and
(f) the Agent shall have received each of
the following, each in form and substance
satisfactory to the Agent: (i) a compliance
certificate evidencing pro forma compliance with
the requirements of 8 hereof following the
consummation of any such acquisition, (ii) due
diligence summaries evidencing the Borrower's or
such Guarantor's (other than Xxxxxxx & Xxxxxx, R&M
Trust or Chiswick Trust), as the case may be, due
diligence with respect to the Person or assets
being acquired and (iii) such other information,
including financial statements, as the Agent or
the Majority Banks may request.
(j) deleting the definition of "Permitted Joint
Venture" in its entirety and substituting in lieu thereof
the following new definition:
"Permitted Joint Venture. Investment by the
Borrower or any Guarantor (other than Xxxxxxx & Xxxxxx, R&M Trust
or Chiswick Trust) in any Person, provided that, with respect to
any such Investment, (1) the Agent and the Majority Banks
approve, in their sole discretion, such Investment in writing in
advance or (2) each of the following conditions is met:
(a) immediately prior to and after, and
after giving effect to, such Investment, no Default or Event
of Default shall then exist;
(b) subject to the limitations set forth in
subsection (d) of this definition, (i) the aggregate
consideration paid or to be paid by the Borrower or any
Guarantor (other than Xxxxxxx & Xxxxxx, R&M Trust or
Chiswick Trust) in connection with all such Investments
(including consideration in the form of cash, Earnout
Payment Obligations, or the assumption of Indebtedness for
borrowed money, debt or other similar monetary obligations
by the Borrower or any Guarantor (other than Xxxxxxx &
Xxxxxx, R&M Trust or Chiswick Trust) (including any such
Indebtedness in existence prior to the date of such
Investment which was not incurred in connection with or in
contemplation thereof) but excluding stock or other equity
interest consideration) shall not exceed $10,000,000, and
(ii) the aggregate consideration paid or to be paid by the
Borrower or any Guarantor (other than Xxxxxxx & Xxxxxx, R&M
Trust or Chiswick Trust) in connection with all such
Investments, including consideration of the type described
in and included in clause (b)(i) of this definition and
stock or other equity interest consideration (as valued for
the purpose of any such Investment) shall not exceed
$20,000,000;
(c) such Investment shall have been approved
by the board of directors and shareholders, if required, or
other applicable management of such Person;
(d) (i) such Person is in substantially the
same line of business as the Borrower or any of its
Subsidiaries or (ii) in a different line of business from
that of the Borrower or any of its Subsidiaries so long as,
and notwithstanding the limitations set forth in subsection
(b) of this definition, (A) the aggregate consideration paid
or to be paid by the Borrower or any Guarantor (other than
Xxxxxxx & Xxxxxx, R&M Trust, or Chiswick Trust) in
connection with such Investment under this subsection
(d)(ii) (including consideration in the form of cash,
Earnout Payment Obligations, or the assumption of
Indebtedness for borrowed money, debt or other similar
monetary obligations by the Borrower or such Guarantor
(other than Xxxxxxx & Xxxxxx, R&M Trust, or Chiswick Trust)
(including any such Indebtedness in existence prior to the
date of such Investment which was not incurred in connection
with or in contemplation thereof) but excluding stock or
other equity interest consideration) shall not exceed
$1,000,000, and (B) the aggregate consideration paid or to
be paid by the Borrower or any Guarantor (other than Xxxxxxx
& Xxxxxx, R&M Trust or Chiswick Trust) in connection with
such Investment under this subsection (d)(ii), including
consideration of the type described in and included in
clause (d)(ii)(A) of this definition and stock or other
equity interest consideration (as valued for the purpose of
any such Investment) shall not exceed $5,000,000;
(e) following the making of such Investment,
neither the Borrower nor any of its Subsidiaries shall own a
majority or more of the capital stock or other equity
interests of such Person;
(f) not less than ten (10) Business Days
prior to the making of such Investment, the Borrower shall
notify the Banks thereof; and
(g) the Agent shall have received each of
the following, each in form and substance satisfactory to
the Agent: (i) a compliance certificate evidencing pro forma
compliance with the requirements of 8 hereof following the
making of any such Investment, (ii) due diligence summaries
evidencing the Borrower's or such Guarantor's (other than
Xxxxxxx & Xxxxxx, R&M Trust or Chiswick Trust), as the case
may be, due diligence with respect to the Person, and (iii)
such other information, including financial statements, as
the Agent or the Majority Banks may request."
(k) deleting the definition of "Revolving Credit Loan
Maturity Date" in its entirety and substituting in lieu
thereof the following new definition:
"Revolving Credit Loan Maturity Date. February
28, 2006."
(l) deleting the definition of "Unsecured Subordinated
Promissory Note" in its entirety.
(m) inserting, in alphabetical order, the following
new definitions:
"Chiswick Trust Unsecured Subordinated Promissory
Note. The promissory note evidencing the Indebtedness
permitted by 7.1(o)(ii) in form and substance (including
any modifications thereof) satisfactory to the Agent."
"Earnout Payment Obligations. In connection with
any acquisition, earnout or deferred purchase price
obligations, such as payments required to be made in the
future based on performance or other standards."
"Intercompany Subordination Agreements.
Collectively, the Chiswick Trust Intercompany Subordination
Agreement and the R&M Trust Intercompany Subordination
Agreement."
"R&M Trust Unsecured Subordinated Promissory Note.
The promissory note evidencing the Indebtedness permitted by
7.1(o)(i) in form and substance (including any
modifications thereof) satisfactory to the Agent."
"Third Amendment. The Third Amendment to Second
Amended and Restated Revolving Credit Agreement dated as of
March 13, 2003 among the Borrower, the Guarantors of the
Borrower listed on the signature pages thereto, the Agent,
and the Banks."
"Third Amendment Effective Date. The "Effective
Date", as defined in the Third Amendment."
2. Amendment of 2.7 of the Credit Agreement. Section
2.7(e) of the Credit Agreement is hereby deleted in its entirety.
3. Amendment of 2.9 of the Credit Agreement. Section 2.9
of the Credit Agreement is hereby deleted in its entirety.
4. Amendment of 4.2 of the Credit Agreement. Section 4.2
of the Credit Agreement is hereby amended by deleting in
subsection (b), after the text "provided, further, that if the
Total Commitment is increased or decreased during any calendar
quarter", the text "pursuant to 2.9 hereof or otherwise".
5. Amendment of 6.13 of the Credit Agreement. Section
6.13 of the Credit Agreement is hereby restated in its entirety
as follows:
"6.13. Certain Intercompany Payments. The Borrower
will (a) promptly upon R&M Trust's receipt thereof, cause R&M
Trust to lend to the Borrower pursuant to the R&M Trust Unsecured
Subordinated Promissory Note all amounts (net of reasonable,
ordinary course operating expenses) received by it from time to
time from Xxxxxxx & Xxxxxx or otherwise, and (b) promptly upon
Chiswick Trust's receipt thereof, cause Chiswick Trust to lend to
the Borrower pursuant to the Chiswick Trust Unsecured
Subordinated Promissory Note all amounts (net of reasonable,
ordinary course operating expenses) received by it from time to
time from Chiswick or otherwise."
6. Amendment of 6.17 of the Credit Agreement. Section
6.17 of the Credit Agreement is hereby amended by inserting,
immediately following 6.16 thereof and immediately before 7
thereof, the following new 6.17:
"6.17. Termination of Financing Statement and Lease.
The Borrower shall (a) within sixty (60) days following the Third
Amendment Effective Date, cause the termination of the financing
statement (file number 972-004466 filed with the Tennessee
Secretary of State's office) filed by FBS Business Finance
Corporation against all inventory and proceeds thereof of
PremiumWear, with the Borrower hereby acknowledging that there is
no outstanding security interest evidenced by such financing
statement and no Indebtedness outstanding with respect thereto
and (b) prior to March 30, 2003, exercise its buy-out option to
discontinue the commercial lease between the Borrower and
Xxxxxxxx Properties, LLC with respect to the real property
located at 000 Xxxx Xxxxxxxx Xxxx, Xxxxxx 0000 - 0000, Xxxxxx,
Massachusetts, and within sixty (60) days following the
termination of such lease on September 30, 2003, cause the
termination of the financing statement (file number 200209466700
filed with the Massachusetts Secretary of Commonwealth's office)
filed by Xxxxxxxx Properties, LLC to secure obligations under
such lease."
7. Amendment of 7.1 of the Credit Agreement. Section 7.1
of the Credit Agreement is hereby amended by:
(a) deleting subsection (o) thereof in its
entirety and substituting in lieu thereof the following
new subsection (o):
"(o) Indebtedness of the Borrower to (i) R&M
Trust under and pursuant to the R&M Trust Unsecured
Subordinated Promissory Note from the Borrower to R&M
Trust, which such Indebtedness is subordinated to the
Obligations on terms and conditions satisfactory to the
Agent, which shall include the R&M Trust Intercompany
Subordination Agreement, and (ii) Chiswick Trust under
and pursuant to the Chiswick Trust Unsecured
Subordinated Promissory Note from the Borrower to
Chiswick Trust, which such Indebtedness is subordinated
to the Obligations on terms and conditions satisfactory
to the Agent, which shall include the Chiswick Trust
Intercompany Subordination Agreement;"
(b) deleting subsection (r) thereof in its
entirety and substituting in lieu thereof the following
new subsection (r):
"(r) (i) Indebtedness of the Borrower not to
exceed $50,000,000 in aggregate principal amount under
the Note Purchase Agreement dated as of November 9,
2001 (the "Note Purchase Agreement"), by and among the
Borrower and each of the purchasers listed in Schedule
A attached thereto, so long as such Indebtedness is
subject to the Intercreditor Agreement (as defined in
the Note Purchase Agreement); and
(ii) so long as no Default or Event of
Default shall have occurred and be continuing or would
occur as a result of the incurrence of any thereof and
with the prior written consent of the Agent, unsecured
Indebtedness of the Borrower to Persons which are not
its Subsidiaries consisting of: (A) Indebtedness which
is expressly subordinated and made junior to the
payment and performance in full of the Obligations; and
(B) Indebtedness which may rank pari passu with the
Obligations;
provided, however, that the aggregate principal
amount of Indebtedness incurred pursuant to clauses (i)
and (ii) shall not at any time exceed $125,000,000; the
sum of the Total Commitment plus the aggregate
principal amount of any Indebtedness otherwise
permitted by this 7.1(r) shall not at any time exceed
$325,000,000; and with respect to clause (ii) only,
(1) the aggregate principal amount of Indebtedness
incurred pursuant to 7.1(r)(ii) shall not at any time
exceed $75,000,000; (2) the terms of any Indebtedness
permitted pursuant to 7.1(r)(ii) shall include such
terms and conditions as the Agent may require, with the
Agent being satisfied with the form and substance of
the documentation evidencing such Indebtedness and
hereby being authorized to enter into such
intercreditor or other agreements with the holders of
any Indebtedness permitted by 7.1(r)(ii) as the Agent
shall deem necessary or appropriate; and (3) prior to
the incurrence of any Indebtedness pursuant to
7.1(ii), the Borrower shall provide to the Agent and
each of the Banks pro forma financial statements and
compliance certificates in the form of Exhibit G
indicating that for the period from the date of the
incurrence of such Indebtedness until the Revolving
Credit Loan Maturity Date, no Default or Event of
Default would result from the incurrence of such
Indebtedness;"
(c) deleting subsection (t) thereof in its
entirety and substituting in lieu thereof the following
new subsection (t):
"(t) Indebtedness consisting of the guaranty
by any Subsidiary of the Borrower of any
Indebtedness permitted by 7.1(r);"
(d) adding the following new subsections (u) and
(v):
"(u) in connection with any Permitted
Acquisition, if any, Indebtedness consisting of
any Earnout Payment Obligations;
(v) Indebtedness of the Borrower or any of
its Subsidiaries (other than Xxxxxxx & Xxxxxx,
Chiswick Trust or R&M Trust) not otherwise
expressly permitted under subsections (a) - (u) of
this 7.1, in an aggregate amount not to exceed
$5,000,000 at any one time."
8. Amendment of 7.3 of the Credit Agreement. Section 7.3
of the Credit Agreement is hereby amended by:
(a) deleting the text of subsection (f) in its
entirety, and inserting in lieu thereof the following
text:
"(f) Investments consisting of (i) the
Guaranty and (ii) any guaranty from any Subsidiary
or Subsidiaries of the Borrower guarantying
Indebtedness permitted by 7.1(r);"
(b) deleting subsection (t) thereof in its
entirety and substituting in lieu thereof the following
new subsection (t):
"(t) Investments by the Borrower or any of
its Subsidiaries (other than Xxxxxxx & Xxxxxx,
Chiswick Trust and R&M Trust) in mutual funds,
annuities or insurance policies directly relating
to or in connection with the Indebtedness
permitted by Section 7.1(q) in an aggregate amount
not to exceed such Permitted Indebtedness; and"
(c) adding the following new subsection (u):
"(u) Investments not otherwise expressly
permitted under subsections (a) - (t) of this
7.3, in an aggregate amount not to exceed
$5,000,000."
9. Amendment of 7.5 of the Credit Agreement. Section 7.5
of the Credit Agreement is hereby amended by deleting in Section
7.5.2(e) thereof, the text "Permitted Investments", and
substituting in lieu thereof the text "Investments permitted
under 7.3 hereof".
10. Amendment of 7.11 and 7.12 of the Credit Agreement.
Sections 7.11 and 7.12.2 of the Credit Agreement are hereby
amended by:
(a) deleting subsection (c) in Section 7.11 and
the sentence immediately following such subsection in
their entirety, and inserting in lieu thereof the
following text:
"(c) contemporaneously with the formation of
a domestic Subsidiary, the Borrower shall (i) cause
such domestic Subsidiary, if such domestic Subsidiary
shall engage in business of any kind or nature (other
than qualifying to do business in a foreign
jurisdiction), shall have a net worth or assets of more
than a de minimis value or shall issue any capital
stock to any person other than the Borrower or a
Subsidiary of the Borrower, to guaranty all of the
Obligations hereunder pursuant to the Guaranty, and
(ii) cause such domestic Subsidiary to deliver to the
Banks and the Agent satisfactory evidence of proper
corporate or other authorization and legal opinions
with respect to such Guaranty. Upon the notice to the
Agent required by subsection (b) of the immediately
preceding sentence, and in the case of a domestic
Subsidiary, the delivery to the Agent of the items
required by subsections (c)(i) and (ii) of the
immediately preceding sentence, Schedule 5.19 shall be,
and shall be deemed to be, automatically amended to
include such new Subsidiary."
(b) deleting in Section 7.12.2, the text "an
Unsecured Subordinated Promissory Note" following the
text "other than the lending to the Borrower pursuant
to" and substituting in lieu thereof the following text
"the R&M Trust Unsecured Subordinated Promissory Note
or the Chiswick Trust Unsecured Subordinated Promissory
Note (as applicable)"
(c) inserting in Section 7.12.2, the text "R&M
Trust" following the text "the Chiswick Trust
Intercompany Subordination Agreement, the R&M
Contribution Agreement or the".
11. Amendment of 7.14 and 7.15 of the Credit Agreement.
Sections 7.14 and 7.15 of the Credit Agreement are hereby amended
by:
(a) deleting Section 7.14 in its entirety and
inserting the following new 7.14 in lieu thereof:
"7.14. Subordinated or Pari Passu
Indebtedness. The Borrower will not, and will not
permit any of its Subsidiaries to,
(a) amend, supplement or otherwise
modify the terms of (i) any subordinated
Indebtedness permitted by 7.1(r)(ii)(A)
(other than any extension of the date of
payment therefor or any reductions in the
rate at which interest or other fees are
payable to the holders thereof in connection
therewith) or (ii) any pari passu
Indebtedness permitted by 7.1(r)(i) or
7.1(r)(ii)(B) in any manner which could
reasonably be expected to result in the
occurrence of a Default or an Event of
Default; provided, however, that the Borrower
will not, and will not permit any of its
Subsidiaries to, enter into any such
amendments, supplements or modifications
described in this subsection (a) without
providing to the Agent and the Banks copies
thereof within five (5) days following the
effectiveness thereof; or
(b) prepay, redeem or repurchase any
of the subordinated or pari passu
Indebtedness permitted by 7.1(r); provided,
however, that the Borrower may prepay, redeem
or repurchase any pari passu Indebtedness
permitted by 7.1(r)(i) or 7.1(r)(ii)(B) so
long as (x) no Default or Event of Default
has occurred and is continuing or would occur
as a result thereof, and (y) immediately
after each such prepayment, redemption or
repurchase of pari passu Indebtedness
permitted by 7.1(r)(i) and 7.1(r)(ii)(B),
(i) the aggregate amount of the Banks'
Unfunded Commitments (after giving effect to
all Syndicated Loans and Competitive Bid
Loans requested) shall equal or exceed
$10,000,000; and (ii) Consolidated Funded
Debt, as of the date of such prepayment,
redemption or repurchase (and after giving
effect thereto), shall not exceed (A)(1)
EBITDA for the four fiscal quarters of the
Borrower ending at the end of the fiscal
quarter of the Borrower ending immediately
prior to such prepayment, redemption or
repurchase multiplied by (2) 2.5 minus (B)
$10,000,000."
(b) inserting immediately following 7.14 thereof
and immediately before 8 thereof, the following new 7.15:
"7.15. Additional Lease Obligations. The
Borrower will not, and will not permit any of its
Subsidiaries to, incur any additional lease
obligations (other than those permitted by 6.17)
to Xxxxxxxx Properties, LLC which are secured by
any assets of the Borrower or any of its
Subsidiaries."
12. Amendment of 8.2 of the Credit Agreement. Section 8.2
of the Credit Agreement is hereby restated in its entirety as
follows:
"8.2 Minimum Fixed Charge Coverage Ratio.
The Borrower will not, as at the end of any four (4)
consecutive fiscal quarters of the Borrower ending on any quarter
end, permit the ratio of (a) EBITDA for such period minus Capital
Expenditures for such period to (b) Consolidated Total Interest
Expense for such period plus any scheduled amortization payments
on Indebtedness for borrowed money or in respect of any
Capitalized Leases permitted by 7.1, to be less than (a)
4.00:1.00 for any such period ending on or before September 30,
2004 and (b) 3.25:1.00 for any such period ending thereafter."
13. Amendment of 8.3 of the Credit Agreement. Section 8.3
of the Credit Agreement is hereby restated in its entirety as
follows:
"8.3. Consolidated Net Worth.
The Borrower will not permit Consolidated Net Worth at
any time to be less than the sum of (a) $130,000,000, plus (b) on
a cumulative basis, fifty percent (50%) of positive Consolidated
Net Income for each fiscal quarter beginning with the fiscal
quarter ended March 29, 2003, plus (c) one hundred percent (100%)
of the proceeds of any sale by the Borrower or any Subsidiary of
(i) equity securities issued by the Borrower or such Subsidiary,
or (ii) warrants or subscription rights for equity securities
issued by the Borrower or such Subsidiary."
14. Amendment of 11.1 of the Credit Agreement. Section
11.1 of the Credit Agreement is hereby amended by deleting
subsection (q) thereof, and substituting in lieu thereof the
following new subsection (q):
"(q) the holders of any Indebtedness permitted
pursuant to 7.1(r) shall accelerate the maturity of all or any
part of such Indebtedness, or, except in each case as permitted
by 7.14 hereof, (i) the terms of such Indebtedness shall be
amended, supplemented or otherwise modified without the prior
written consent of the Agent and the Majority Banks, (ii) such
Indebtedness shall be prepaid, redeemed or repurchased in whole
or in part or (iii) an offer to prepay, redeem or repurchase such
Indebtedness in whole or in part shall have been made;"
15. Amendment of 15 of the Credit Agreement. Section 15
of the Credit Agreement is hereby amended by inserting after the
text "or the transactions contemplated hereby" and before the
text "including, without limitation,", the text "(except to the
extent resulting solely from the gross negligence or willful
misconduct of the indemnified party)".
16. Replacement of Schedules 1, 5.18, 5.19, 7.1, 7.2 and
7.3 to the Credit Agreement. Schedules 1, 5.18, 5.19, 7.1, 7.2
and 7.3 to the Credit Agreement are hereby deleted in their
entirety, and Schedules 1, 5.18, 5.19, 7.1, 7.2 and 7.3 attached
hereto are hereby substituted in lieu thereof.
17. Transitional Arrangements; Allocations. Effective as
of the Effective Date, each Bank shall make such dispositions and
arrangements with each other Bank with respect to the then
outstanding Loans (the "Adjustment") as shall result in the
amount of Loans owed to each Bank being equal to the product of
such Bank's Commitment Percentage multiplied by the aggregate
Loans outstanding on the Effective Date (the "Adjusted Amount").
Each of the Borrower and the Guarantors hereby agrees that each
Bank's Adjusted Amount shall be Loans owed by the Borrower to
such Bank as if such Bank had initially made Loans to the
Borrower in the amount of the Adjusted Amount. Each Bank hereby
waives any breakage costs arising in connection with the
Adjustment to which it might have otherwise been entitled under
4.10 of the Credit Agreement (as if the Adjustment resulted in
prepayments of the Loans reallocated pursuant to the Adjustment).
Upon the occurrence of the Adjustment, (a) the Agent shall
appropriately adjust its records to reflect each Bank's Adjusted
Amount and (b) the Borrower shall promptly issue to each of the
Banks whose Commitment has changed an Amended and Restated
Syndicated Note in the form of Exhibit A hereto in connection
with this Amendment and the contemplated reallocation of the
Total Commitment. Immediately thereafter each of the Banks
receiving an Amended and Restated Syndicated Note shall promptly
return to the Agent its existing Amended and Restated Syndicated
Note. The Banks shall make any appropriate adjustments in
payments received in respect of the Obligations which are
allocable to periods prior to the Effective Date directly among
themselves as shall be necessary to effect the proper allocation
of such payments among the Banks, reflecting their respective
portions of the applicable Obligations held by them from time to
time.
18. Amendment of Annex 1 to Form of Guaranty. The Addendum
to Guaranty is hereby amended by inserting immediately following
Section 2 thereof the following new sections:
"3. The Additional Guarantor is a wholly-owned direct
or indirect Subsidiary of the Borrower.
4. No provision of the Additional Guarantor's
charter, other incorporation or formation papers, by-laws, or
stock or certificate provisions prohibits the undersigned from
making distributions to the Borrower.
5. The Additional Guarantor hereby affirms that each
of the representations and warranties set forth in 5 of the
Credit Agreement is true and correct in all material respects
with respect to the Additional Guarantor as of the date hereof
(except to the extent of changes resulting from transactions
contemplated or permitted by the Credit Agreement and the other
Loan Documents and changes occurring in the ordinary course of
business that singly or in the aggregate are not materially
adverse, and except to the extent that such representations and
warranties relate expressly to an earlier date)."
19. Amendment of Subordination Agreements.
(a) the R&M Trust Subordination Agreement is hereby amended
by the addition of the following new section:
"16. Each of the Borrower, R&M Trust and the Agent hereby
acknowledges and confirms that this Agreement continues in full
force and effect, and all references to the Credit Agreement
herein shall refer to the Second Amended and Restated Revolving
Credit Agreement, dated as of July 13, 2001 by and among New
England Business Service, Inc., as Borrower, Fleet National Bank,
as Agent and the Banks listed on Schedule 1 thereto, as amended,
restated, modified or supplemented from time to time."
(b) the Chiswick Trust Subordination Agreement is hereby
amended by the addition of the following new section:
"16. Each of the Borrower, Chiswick Trust and the Agent
hereby acknowledges and confirms that this Agreement continues in
full force and effect, and all references to the Credit Agreement
herein shall refer to the Second Amended and Restated Revolving
Credit Agreement, dated as of July 13, 2001 by and among New
England Business Service, Inc., as Borrower, Fleet National Bank,
as Agent and the Banks listed on Schedule 1 thereto, as amended,
restated, modified or supplemented from time to time."
20. Representations and Warranties. The Borrower and each
of the Guarantors hereby represents and warrants to the Agent and
the Banks as of the date hereof, and as of any date on which the
conditions set forth in 21 below are met, as follows:
(a) The execution and delivery by each of the Borrower
and the Guarantors of this Amendment and all other
instruments and agreements, including without limitation the
Replacement Notes (as defined in 21(b) hereto), required to
be executed and delivered by the Borrower or any of the
Guarantors in connection with the transactions contemplated
hereby or referred to herein (collectively, the "Amendment
Documents"), and the performance by each of the Borrower and
the Guarantors of any of their obligations and agreements
under the Amendment Documents and the Credit Agreement and
the other Loan Documents, as amended hereby, are within the
corporate or other authority of each of the Borrower and the
Guarantors, have been authorized by all necessary corporate
proceedings on behalf of each of the Borrower and the
Guarantors, and do not and will not contravene any provision
of law or the Borrower's charter or any of the Guarantors'
charters, other incorporation or organizational papers, by-
laws or any stock provision or any amendment thereof or of
any indenture, agreement, instrument or undertaking binding
upon the Borrower or any of the Guarantors.
(b) Each of the Amendment Documents and the Credit
Agreement and other Loan Documents, as amended hereby, to
which the Borrower or any of the Guarantors is a party
constitute legal, valid and binding obligations of such
Person, enforceable in accordance with their terms, except
as limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or affecting
generally the enforcement of creditors' rights.
(c) No approval or consent of, or filing with, any
governmental agency or authority is required to make valid
and legally binding the execution, delivery or performance
by the Borrower or any of the Guarantors of the Amendment
Documents or the Credit Agreement or other Loan Documents,
as amended hereby, or the consummation by the Borrower or
any of the Guarantors of the transactions among the parties
contemplated hereby and thereby or referred to herein.
(d) The representations and warranties contained in 5
of the Credit Agreement and in the other Loan Documents were
true and correct at and as of the date made. Except to the
extent of changes resulting from transactions contemplated
or permitted by the Credit Agreement and the other Loan
Documents, changes occurring in the ordinary course of
business (which changes, either singly or in the aggregate,
have not been materially adverse) and to the extent that
such representations and warranties relate expressly to an
earlier date and after giving effect to the provisions
hereof, such representations and warranties, after giving
effect to this Amendment, also are correct at and as of the
date hereof.
(e) Each of the Borrower and the Guarantors has
performed and complied in all material respects with all
terms and conditions herein required to be performed or
complied with by it prior to or at the time hereof, and as
of the date hereof, after giving effect to the provisions of
this Amendment and the other Amendment Documents, there
exists no Event of Default or Default.
(f) Each of the Borrower and the Guarantors
acknowledges and agrees that the representations and
warranties contained in this Amendment shall constitute
representations and warranties referred to in 11.1(e) of
the Credit Agreement, a breach of which shall constitute an
Event of Default.
21. Effectiveness. This Amendment shall become effective
as of the date first written above (the "Effective Date") upon
the satisfaction of each of the following conditions, in each
case in a manner satisfactory in form and substance to the Agent
and the Banks:
(a) This Amendment shall have been duly executed and
delivered by each of the parties thereto and shall be in full
force and effect;
(b) The Borrower shall have executed and delivered to the
Agent an Amended and Restated Syndicated Note in favor of each
Bank which agrees to modify its Commitment in existence
immediately prior to the Effective Date, in a principal amount
equal to such Bank's Commitment (as allocated by the Agent
hereunder and set forth in Schedule 1 attached hereto), such Note
substantially in the form of Exhibit A hereto (the "Replacement
Notes");
(c) The Agent shall have received from the Secretary of the
Borrower and each of the Guarantors a copy, certified by such
Secretary to be true and complete as of the date hereof, of each
of (i) its charter or other organizational documents as in effect
on such date of certification, (ii) its by-laws as in effect on
such date, and (iii) the resolutions of its Board of Directors or
other management authorizing, to the extent it is a party
thereto, the execution, delivery and performance of this
Amendment, the Replacement Notes and any other Amendment
Documents; provided, however, that in lieu of providing the items
required by subsections (i) and (ii) of this subsection (c), such
Secretary may certify, to the extent true and correct, that
charter documents and by-laws previously provided to the Agent
are true and correct as of the date hereof, in full force and
effect and have not been amended, rescinded or revoked;
(d) The Agent shall have received from each of the Borrower
and the Guarantors an incumbency certificate, dated as of the
date hereof, signed by a duly authorized officer of the Borrower
or such Guarantor, as the case may be, and giving the name and
bearing a specimen signature of each individual who shall be
authorized to sign, in the name and on behalf of the Borrower or
such Guarantor, as the case may be, the Amendment Documents;
(e) The Agent shall have received from the Borrower good
standing certificates for each of the Borrower and the
Guarantors, issued by the Secretary of State of each such
entity's jurisdiction of incorporation or organization;
(f) The Agent shall have received favorable legal opinions
addressed to the Agent and the Banks, dated as of the date
hereof, in form and substance satisfactory to the Agent, from
LeBoeuf, Lamb, Xxxxxx and XxxXxx LLP counsel to the Borrower,
with respect to the Borrower and each Guarantor (with respect to
its Guaranty);
(g) The Agent shall have received in cash, for the account
of each Bank party to this Amendment, an amendment fee in an
amount agreed to by the Agent, the Borrower and such Bank;
(h) The Agent shall have received, for the account of Fleet
Securities, Inc., an arrangement fee in an amount equal to that
agreed to by Fleet Securities, Inc., the Agent and the Borrower
as of the date hereof; and
(i) Such other items, documents, agreements, items or
actions as the Agent may reasonably request in order to
effectuate the transactions contemplated hereby.
22. Miscellaneous Provisions.
(a) Each of the Borrower and the Guarantors hereby ratifies
and confirms all of its Obligations to the Agent and the Banks
under the Credit Agreement, as amended hereby, and the other Loan
Documents, including, without limitation, the Loans, and each of
the Borrower and the Guarantors hereby affirms its absolute and
unconditional promise to pay to the Banks and the Agent the
Loans, reimbursement obligations and all other amounts due or to
become due and payable to the Banks and the Agent under the
Credit Agreement and the other Loan Documents, as amended hereby.
Except as expressly amended hereby, each of the Credit Agreement
and the other Loan Documents shall continue in full force and
effect. This Amendment and the Credit Agreement shall hereafter
be read and construed together as a single document, and all
references in the Credit Agreement, any other Loan Document or
any agreement or instrument related to the Credit Agreement shall
hereafter refer to the Credit Agreement as amended by this
Amendment.
(b) Without limiting the expense reimbursement requirements
set forth in 14 of the Credit Agreement, the Borrower agrees to
pay on demand all costs and expenses, including reasonable
attorneys' fees, of the Agent incurred in connection with this
Amendment.
(c) THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS
(WITHOUT REFERENCE TO CONFLICT OF LAWS) AND SHALL TAKE EFFECT AS
A SEALED INSTRUMENT IN ACCORDANCE WITH SUCH LAWS.
(d) This Amendment may be executed in any number of
counterparts, and all such counterparts shall together constitute
but one instrument. In making proof of this Amendment it shall
not be necessary to produce or account for more than one
counterpart signed by each party hereto by and against which
enforcement hereof is sought.
[Remainder of page intentionally left blank.]
IN WITNESS WHEREOF, the undersigned have duly
executed this Amendment as a sealed instrument as of the
date first set forth above.
BORROWER:
NEW ENGLAND BUSINESS SERVICE,
INC.
By: /s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: Executive Vice President,
Chief Financial Officer and
Treasurer
BANKS:
FLEET NATIONAL BANK formerly
known as BankBoston, N.A.,
individually and as Agent
By: /s/ Xxxxx Xxxxxxxx Xxxxxxxxxxx
Name: Xxxxx Xxxxxxxx Xxxxxxxxxxx
Title: Vice President
KEY BANK N.A.
By:/s/ Xxxx Xxxxxx
Name: Xxxx Xxxxxx
Title: Vice President
CITIZENS BANK OF
MASSACHUSETTS,
as successor to USTrust
By:/s/ Xxxxxx Xxxxxxx
Name: Xxxxxx Xxxxxxx
Title: Vice President
SUNTRUST BANK
By:/s/ Xxxx Xxxxxx
Name: Xxxx Xxxxxx
Title: Assistant Vice President
NATIONAL CITY BANK
By:/s/ Xxxx X. Xxxxxxxxx
Name: Xxxx X. Xxxxxxxxx
Title: Vice President
THE BANK OF NOVA SCOTIA
By:/s/ Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Managing Director
BANKNORTH, N.A.
By:/s/ Xxx X. Xxxxxxxxx
Name: Xxx X. Xxxxxxxxx
Title: Senior Vice President
XXXXXXX BANK
By:/s/ Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Vice President
Signature page
to the Third Amendment
Each of the undersigned hereby acknowledges the
foregoing Third Amendment as of the Effective Date, agrees
to the provisions of 18 and, to the extent applicable, 19
and further agrees that its obligations under the Guaranty
will extend to the Credit Agreement, as so amended, and the
other Loan Documents, as so amended.
XXXXX SYSTEMS, INC.
By: /s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: Treasurer
CHISWICK, INC.
By: /s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: Treasurer
PREMIUMWEAR, INC.
By: /s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: Treasurer
RAPIDFORMS, INC.
By: /s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: Treasurer
XXXXXXX & XXXXXX, INC.
By: /s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: Treasurer
R&M TRUST
Xxxxxx X. Xxxxxx and Xxxxx
Xxxxxxx, as Trustees under
Declaration of Trust of R&M
Trust dated July 20, 1998 and
filed with the Secretary of
the Commonwealth of
Massachusetts on July 27,
1998, and not individually
By: /s/ Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx, as
Trustee under said
Declaration of Trust and
not individually
By: /s/ Xxxxx Xxxxxxx
Xxxxx Xxxxxxx, as Trustee
under said
Declaration of Trust and
not individually
CHISWICK TRUST
Xxxxxx X. Xxxxxx and Xxxxx
Xxxxxxx, as Trustees under
Declaration of Trust of
Chiswick Trust dated September
15, 1999 and filed with the
Secretary of the Commonwealth
of Massachusetts on September
17, 1999, and not individually
By: /s/ Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx, as
Trustee under said
Declaration of Trust and
not individually
By: /s/ Xxxxx Xxxxxxx
Xxxxx Xxxxxxx, as Trustee
under said
Declaration of Trust and
not individually
XXXXXXXX.XXX, INC.
By: /s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: Treasurer
PWI HOLDINGS, INC.
By: /s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: Treasurer
NEBS INTERACTIVE, INC.
By: /s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: Treasurer
