Exhibit 10.1
AMENDMENT NO. 1
THIS AMENDMENT NO. 1 (the "Amendment"), dated as
of May 12, 2000, to the Credit Agreement referenced
below, is by and among SCHOOL SPECIALTY, INC., a
Delaware corporation (the "Borrower"), the Subsidiaries
of the Borrower identified as "Guarantors" on the
signature pages hereto, the Lenders identified herein,
and BANK OF AMERICA, N.A., a national banking
association formerly known as NationsBank, N.A., as
Administrative Agent. Terms used herein but not
otherwise defined herein shall have the meanings
assigned to such terms in the Credit Agreement.
W I T N E S S E T H
WHEREAS, a $350 million credit facility has been
extended to the Borrower pursuant to the terms of that
Amended and Restated Credit Agreement, dated as of
September 30, 1998 (as amended and modified from time
to time, the "Credit Agreement"), by and among the
Borrower, certain Subsidiaries of the Borrower
identified therein, the Lenders party thereto, Bank One
Wisconsin and U.S. Bank National Association, as
Documentation Agents, and NationsBank, N.A. (now known
as Bank of America, N.A.), as Administrative Agent;
WHEREAS, the Borrower has requested certain
modifications to the Credit Agreement;
WHEREAS, the Required Lenders have consented to
the requested modifications on the terms and conditions
set forth herein;
NOW, THEREFORE, IN CONSIDERATION of the premises
and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
1. The Credit Agreement is amended in the
following respects:
1.1 The following definition is added to Section 1.1:
"Internet Subsidiary" means
XxxxXxx.xxx, Inc., a Wisconsin corporation.
1.2 A new clause (xv) is added to the definition
of Permitted Investments and clause (xiv) thereof is
amended, in each case to read as follows:
(xiv) Investments in and to the
Internet Subsidiary, provided that
the aggregate amount of all
Investments in and to the Internet
Subsidiary (including Investments
made under other clauses of this
definition of "Permitted
Investments") do not exceed, on a
cost basis, $50,000,000 at any time
outstanding;
(xv) other loans, advances and
investments of a nature not
contemplated in the foregoing
subsections in an amount not to
exceed, on a cost basis,
$15,000,000 in the aggregate at any
time outstanding.
1.3 The LOC Committed Amount as defined and
referenced in Section 2.2(a) is increased from
$10,000,000 to $15,000,000.
1.4 Subclause (i) of clause (b) of Section 3.4 is
amended to read as follows:
(i) such Net Proceeds are not
reinvested (or committed to be
reinvested) in the same or similar
property or assets within 270 days
of the date of sale, lease,
disposition, casualty, theft or
loss giving rise thereto, and
1.5 Section 7.9(d) is amended to read as follows:
(d) Capital Expenditures. Members
of the Consolidated Group will not
make Capital Expenditures in any
fiscal year in excess of:
Fiscal year 2000 $17,000,000
Fiscal year 2001 $19,000,000
Fiscal year 2002 $21,000,000
Fiscal year 2003 $23,000,000
The unused portion of Capital
Expenditures permitted but not used
in any fiscal year may be carried
over and used in the next fiscal
year (one-year carry-over).
2. Pursuant to Section 5.3 of the Credit
Agreement, the Borrower was required to provide certain
items, including mortgages, surveys, title policies,
appraisals and environmental reports, for all real
property owned by the Borrower on the date twelve
months after the Closing Date. The Borrower has not
provided the items required by Section 5.3 of the
Credit Agreement for the real property identified on
Schedule 1 hereto (the "Owned Real Property"). The
Required Lenders agree that the Borrower shall not be
required to provide the items required by Section 5.3
of the Credit Agreement for the Owned Real Property,
provided that (a) upon the occurrence and during the
continuance of an Event of Default, the Borrower shall
promptly provide the items required by Section 5.3 of
the Credit Agreement for the Owned Real Property upon
the request of the Administrative Agent and the
Required Lenders in their sole discretion, (b) in
addition to the covenants set forth in Section 8.2, the
Borrower shall not contract, create, incur, assume or
permit to exist any Lien otherwise permitted by clause
(xvii) of the definition of "Permitted Liens", and (c)
upon the sale, lease, transfer or other disposition of
the Owned Real Property (other than pursuant to sale
and leaseback transaction for fair value which shall
not require a prepayment), the Borrower shall,
notwithstanding the provisions of Section 3.4, promptly
repay the Term Loan (ratably to the remaining principal
amortization installments) in the amount of the Net
Proceeds received from the sale, lease, transfer or
other disposition of the Owned Real Property. The
Required Lenders agree to such application of the Net
Proceeds of the sale, lease, transfer or other
disposition of the Owned Real Property notwithstanding
the provisions of Sections 3.4(b) of the Credit
Agreement.
3. The Required Lenders agree that, so long as
no Default or Event of Default has occurred and is
continuing and so long as no Default or Event of
Default would exist after giving effect thereto on a
Pro Forma Basis, (a) notwithstanding the provisions of
Section 7.12 or 8.4(b) of the Credit Agreement, the
Borrower may sell or transfer all or any portion of its
capital stock or other ownership interest in the
Internet Subsidiary, (b) notwithstanding the provisions
of Section 3.3 or 3.4 of the Credit Agreement, the
Borrower shall not be required to prepay the Loans or
reduce the Commitments by the proceeds of the
sale or transfer of its ownership interest in the Internet
Subsidiary, and (c) upon the sale or transfer by the
Borrower (to a person other than a member of the
Consolidated Group) of more than 50% of its capital
stock or other ownership interests in the Internet
Subsidiary, the Administrative Agent, on behalf of the
Lenders, shall execute such releases and other
documents as may be reasonably necessary or desirable
to release the Internet Subsidiary from its obligations
under the Credit Documents and to release the security
interests of the Administrative Agent, for the benefit
of the Lenders, in the Collateral (as defined in the
Security Agreement) of the Internet Subsidiary and in
the capital stock or other ownership interests in the
Internet Subsidiary.
4. The Borrower has notified the Administrative
Agent that (a) effective February 25, 1999, Re-Print,
LLC, a Subsidiary of the Borrower and a Guarantor under
the Credit Agreement, changed its name to
XxxxxxxxxXxxxxx.xxx, LLC, (b) effective December 26,
1998, Beckley-Cardy, Inc., a Subsidiary of the
Borrower, merged into The National School Supply
Company, a Subsidiary of the Borrower and a Guarantor
under the Credit Agreement ("National School"), (c)
effective December 26, 1998, National School merged
into the Borrower and (d) effective December 31, 1999,
Sax Arts & Crafts, Inc., a Subsidiary of the Borrower
and a Guarantor under the Credit Agreement, merged into
the Borrower. Pursuant to Section 6.3(c) of the
Security Agreement, the Borrower is required to provide
the Administrative Agent with 30 days' prior written
notice of any change in name or change in corporate
structure. The Borrower's failure to comply with
Section 6.3(c) of the Security Agreement is an Event of
Default pursuant to Section 9.1(d) of the Credit
Agreement. The Required Lenders hereby waive any
Default or Event of Default which may have existed
prior to the date hereof solely as a result of the
Borrower's failure to comply with Section 6.3(c) of the
Security Agreement with respect to the name change and
corporate structure changes described in clauses (a),
(b), (c) and (d) of this Section 4.
5. The Borrower hereby gives notice to the
Administrative Agent and the Lenders that all notices
and other communications to the Borrower shall be
provided in accordance with Section 11.1 of the Credit
Agreement to the address set forth below:
School Specialty, Inc.
000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxx 00000
Attn: Xxxx Xxxxxxxxxx
Telephone: 000-000-0000
Telecopy: 000-000-0000
6. This Amendment shall be effective as of the
date set forth above upon satisfaction of the following
conditions precedent:
(a) receipt by the Administrative Agent of
multiple counterparts of this Amendment, executed
by the Borrower, the Guarantors and the Required
Lenders;
(b) receipt by the Administrative Agent of
multiple counterparts of a Joinder Agreement,
executed and delivered by the Internet Subsidiary,
together with (i) an officer's certificate of the
Internet Subsidiary dated as of the date of the
Joinder Agreement and substantially in the form of
Schedule 5.1(i)(v) to the Credit Agreement with
appropriate insertions and attachments, (ii) an
opinion of counsel to the Internet Subsidiary
relating to the Joinder Agreement and the
transactions contemplated therein, in form and
substance satisfactory to the Administrative Agent
and the Required Lenders, and (iii) UCC-1financing
statements and such other documents as are
necessary to perfect the security interest of the
Administrative
Agent, for the benefit of the
Lenders, in the Collateral (as defined in the
Security Agreement) of the Internet Subsidiary;
and
(c) receipt by the Administrative Agent of
multiple counterparts of a pledge joinder
agreement, executed and delivered by the Borrower,
pursuant to which the Borrower pledges its capital
stock and other ownership interests in the
Internet Subsidiary to the Administrative Agent,
for the ratable benefit of the Lenders, under the
terms of the Pledge Agreement, together with (i)
certified resolutions of the Borrower relating to
the Pledge Joinder Agreement and the transactions
contemplated therein and (ii) the stock
certificates evidencing the capital stock and
other ownership interests of the Borrower in the
Internet Subsidiary, together with undated stock
powers executed in blank.
7. Except as modified hereby, all of the terms
and provisions of the Credit Agreement and the other
Credit Documents (including schedules and exhibits
thereto) shall remain in full force and effect.
8. The Credit Parties hereby affirm that the
representations and warranties set out in Section 6 of
the Credit Agreement are true and correct as of the
date hereof (except those which expressly relate to an
earlier period).
9. Each of the Guarantors (i) acknowledges and
consents to all of the terms and conditions of this
Amendment, (ii) affirms all of its obligations under
the Credit Documents and (iii) agrees that this
Amendment and all documents executed in connection
herewith do not operate to reduce or discharge the
Guarantors' obligations under the Credit Agreement or
the other Credit Documents.
10. The Borrower agrees to pay all reasonable
costs and expenses of the Administrative Agent in
connection with the preparation, execution and delivery
of this Amendment, including without limitation the
reasonable fees and expenses of Xxxxx & Xxx Xxxxx,
PLLC.
11. This Amendment may be executed in any number
of counterparts, each of which when so executed and
delivered shall be deemed an original and it shall not
be necessary in making proof of this Amendment to
produce or account for more than one such counterpart.
12. This Amendment shall be deemed to be a
contract made under, and for all purposes shall be
construed in accordance with the laws of the State of
New York.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, each of the parties hereto has
caused a counterpart of this Amendment to be duly
executed and delivered as of the date first above
written.
BORROWER: SCHOOL SPECIALTY, INC.
a Delaware corporation
By: /s/ Xxxx X. Xxxxxxxxxx
-----------------------------
Name: Xxxx X. Xxxxxxxxxx
Title: CFO
GUARANTORS: CHILDCRAFT EDUCATION CORP.,
a New York corporation
XXXXXXXXXXXXXXX.XXX, LLC,
a Delaware limited liability company
BIRD-IN-HAND WOODWORKS, INC.,
a New Jersey corporation
SPORTIME, LLC,
a Delaware limited liability company
XXXXXXX.XXX, INC.,
a Wisconsin corporation
By: /s/ Xxxxxx X. Xxxxxxxx
-------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: CEO
[Signature Pages Continue]
LENDERS: BANK OF AMERICA, N.A., a national banking
association formerly known as NationsBank, N.A.,
individually as a Lender and in its
capacity as Administrative Agent
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Managing Director
BANK ONE, NA (main office, Chicago)
By: /s/ Xxxxxxx X. Xxxxxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Managing Director
U.S. BANK NATIONAL ASSOCIATION
By: /s/ Xxxxxx Xxxxxx
--------------------------------
Name: Xxxxxx Xxxxxx
Title: Senior Vice President
THE BANK OF NEW YORK
By: _______________________________
Name:
Title:
XXXXXX TRUST AND SAVINGS BANK
By: /s/ Xxxxxx X. Xxxxx
---------------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President
FIRSTAR BANK MILWAUKEE, N.A.
By: _______________________________
Name:
Title:
CITIZENS BANK OF MASSACHUSETTS AS SUCCESSOR
TO US TRUST
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Director
[Signature Pages Continue]
LASALLE NATIONAL BANK
By: _______________________________
Name:
Title:
ST. XXXXXXX BANK, F.S.B.
By: /s/ Xxxx X. Tans
--------------------------------
Name: Xxxx X. Tans
Title: Vice President
UNION BANK OF CALIFORNIA, N.A.
By: /s/ Xxxxxxxx X. Xxxxxxx
--------------------------------
Name: Xxxxxxxx X. Xxxxxxx
Title: Senior Vice President
SCHEDULE 1
000 Xxxxxxx Xxxxx 000 Xxxxxxx
Xxxxxx, XX 00000 Xxxxxxxxx, XX 00000
0000 Xxxxx Xxxxx Xxxxxx Xxxxx Xxxxxxx 000 Xxxx
Xxxxxx, XX 00000 Xxxxxx, XX 00000
