AMENDMENT OF LOAN AGREEMENT
THIS AMENDMENT OF LOAN AGREEMENT (this "Amendment") is made as of this
3rd day of September, 2002, by and among CSS INDUSTRIES, INC. (the "Borrower"),
the lenders from time to time parties to the Loan Agreement defined below (the
"Lenders"), and PNC BANK, NATIONAL ASSOCIATION, as Administrative Agent (the
"Agent") for the Lenders.
Background:
A. The Agent, the Lenders and the Borrower entered into a Loan
Agreement dated as of April 30, 2001 (as heretofore modified and amended, the
"Loan Agreement"), pursuant to which the Lenders agreed to make Advances from
time to time to the Borrower.
B. The Borrower intends to acquire Crystal Creative Products, Inc. in a
transaction that would constitute a "Permitted Acquisition" under the Loan
Agreement. In connection therewith the Borrower wants to be able to borrow up to
an additional $50,000,000 under the Loan Agreement from an increase in the
Available Commitment which would be provided initially by PNC and which in turn
would be reduced by an amount equal to the proceeds of a proposed private
placement to be arranged with other institutional lenders. Accordingly, the
Borrower has requested an increase in the Available Commitment from $100,000,000
to $150,000,000 on the terms and conditions set forth herein.
C. As a result of the proposed increase in the Borrower's indebtedness
and other accounting changes, the Borrower has also requested and the Agent and
the Lenders have agreed to amend certain of the financial and other covenants in
the Loan Agreement, all on the terms and subject to the conditions set forth
herein.
NOW, THEREFORE, in consideration of the foregoing and for good and
valuable consideration, the legality and sufficiency of which are hereby
acknowledged, the parties hereto, intending to be legally bound hereby, agree as
follows:
1. Definitions. Capitalized terms used herein, including in the foregoing
recitals, and not otherwise defined herein shall have the meanings assigned to
them in the Loan Agreement.
2. Amendments to Loan Agreement. The Loan Agreement is hereby amended
effective as of September 3, 2002 (the "Effective Date") as follows:
(a) The definition of "Available Commitment" in Section 1.1 is amended and
restated to read in full as follows:
""Available Commitment": $100,000,000 as the same may be increased or
reduced pursuant to the terms of this Agreement."
(b) The definition of "Consolidated EBITDA" in Section 1.1 is amended and
restated to read in full as follows:
""Consolidated EBITDA": For any Person, for any period, the difference
between (a) the sum of the amounts for such period of (i) Consolidated
Net Income, plus (ii) Consolidated Tax Expense, plus (iii) Consolidated
Interest Expense, plus (iv) Consolidated Amortization Expense, plus (v)
Consolidated Depreciation Expense, plus (vi) all non-cash charges
resulting from the application of Financial Accounting Standard No. 142
(with respect to clauses (ii) through (vi) of this definition, to the
extent such amounts were deducted in computing Consolidated Net Income)
and (b) the amounts for such period of after-tax net gains on sales of
fixed assets and other after-tax extraordinary gains to the extent
included in Consolidated Net Income, excluding sales in the ordinary
course of business not to exceed $300,000 in the aggregate for any
fiscal year, all as determined on a consolidated basis for such Person
and its consolidated Subsidiaries."
(c) The following additional definitions are added to Section 1.1 in the
appropriate alphabetical order:
""Proposed Acquisition": The acquisition by the Borrower, directly or
indirectly, of all of the stock or substantially all of the assets of
the entity referred to in Schedule I attached hereto.
"Private Placement": The private placement of up to $50,000,000
principal amount of debt securities by the Borrower with institutional
lenders other than the Lenders made in connection with the Proposed
Acquisition."
(d) Section 2.3(b) is hereby amended and restated to read in full as
follows:
"(b)(i) The Borrower may at any time during the term of this Agreement,
subject to clause (d) of this Section 2.3, request a one-time increase
in the Available Commitment by sending a written notice thereof to the
Administrative Agent. Such notice shall specify the total amount of the
increase requested by the Borrower, which amount shall not exceed
$50,000,000 (the amount so requested being the "Available Commitment
Increase"). PNC shall have the sole right to increase its Pro Rata
Share by the amount of the Available Commitment Increase, which
increase (subject to compliance with the conditions of the first
sentence of this clause (i)) shall become effective at such time as
PNC, the Administrative Agent and the Borrower shall agree. The
Administrative Agent shall notify each Lender of the date the Available
Commitment Increase becomes effective. Inasmuch as it is contemplated
that the Available Commitment Increase will be temporary and so as to
avoid interim adjustments to each Lender's pro rata portions of
outstanding Advances, until the earlier of (A) the 90th day following
an increase in the Available Commitment pursuant to this clause (i) and
(B) the date the Available Commitment is reduced as provided in clause
(ii) of this Section 2.3(b) (the "Interim Period"), notwithstanding any
other provisions of this Agreement, the Pro Rata Shares and Pro Rata
Percentages of the Lenders shall not change as they are applied to
Advances of any kind hereunder up to an aggregate of $100,000,000 and
each Lender including PNC shall be obligated to make or participate in
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and be entitled to repayment and other rights in respect of all such
Advances based on its current Pro Rata Share and Pro Rata Percentage
otherwise in effect at such time. Any Advances in excess of an
aggregate of $100,000,000 shall be made solely from the increase in
PNC's Pro Rata Share resulting from the Available Commitment Increase
and PNC shall correspondingly have 100% of the entitlements to
repayment and other rights in respect of such Advances. Similarly,
during the Interim Period, Available Commitment Fees shall be
calculated separately in respect of the existing $100,000,000 Available
Credit for the pro rata benefit of all Lenders based on the Pro Rata
Percentages of the Lenders otherwise in effect at such time, and in
respect of the amount of the Available Commitment Increase for the sole
benefit of PNC. However, during the Interim Period, Majority Lenders
shall be determined based on the actual Pro Rata Shares of each Lender
(including and giving effect to the increase in PNC's Pro Rata Share
resulting from the Available Commitment Increase). At the expiration of
the Interim Period, if the Available Commitment has not been reduced as
provided in clause (ii) of this Section 2.3(b), then the Pro Rata
Shares and Pro Rata Percentages shall be adjusted for all purposes to
give effect to the Available Commitment Increase and the Administrative
Agent shall prepare and deliver to each Lender a substitute Annex I to
this Agreement setting forth the Pro Rata Shares and Pro Rata
Percentages of the Lenders as so adjusted and shall coordinate with the
Lenders the adjustment among the Lenders of all outstanding Advances in
a manner consistent with the Pro Rata Percentages as so adjusted and
none of the limitations or special provisions hereunder applicable
during the Interim Period shall thereafter apply.
(ii) If the Available Commitment is increased pursuant to clause (i) of
this Section 2.3(b), at the time the Borrower closes the Private
Placement, the Available Commitment shall be permanently reduced by an
amount equal to the lesser of (x) the amount of the proceeds of the
Private Placement and (y) the amount by which the Available Commitment
was increased pursuant to clause (i) of this Section 2.3(b) and, if the
proceeds of the Private Placement are less than the amount referred to
in clause (y) above, the Available Commitment may, at the Borrower's
option, also be reduced at such time by an additional amount up to the
amount of such difference, and the Borrower shall make any prepayments
of Advances to the extent required by the terms of Section 2.11(a) as a
result of such reduction. Notwithstanding any other provision of this
Agreement regarding the application of any reduction in the Available
Commitment on a pro rata basis to each Lender's Pro Rata Share, any
reduction of the Available Commitment pursuant to the foregoing
provisions of this clause (ii) shall be applied solely to reduce the
Available Commitment of PNC. At the time of any such reduction of the
Available Commitment, the Administrative Agent shall notify each Lender
thereof and, if necessary, prepare and deliver to each Lender a
substitute Annex I to this Agreement setting forth the Pro Rata Shares
and Pro Rata Percentages of the Lenders as adjusted to give effect to
such reduction, and coordinate with the Lenders the adjustment among
the Lenders of all outstanding Advances in a manner consistent with the
Pro Rata Percentages as so adjusted.
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(iii) The Borrower shall deliver to PNC such replacement Revolving
Credit Notes as may be necessary from time to time to reflect any
increases or decreases in its Pro Rata Share of the Available
Commitment pursuant to this Section 2.3(b)."
(e) Section 6.11 is amended and restated in full as follows:
"6.11 Indebtedness. The Borrower shall not, nor shall it cause or
permit any of the Guarantors to (a) make any prepayments of any nature
whatsoever (or deposit money or other Property for the purpose thereof)
on any existing or future long-term Indebtedness to any Person except
the conversion of Indebtedness to equity so long as the entire amount
of the portion of the Indebtedness so prepaid is so converted or (b)
hereafter incur or be or become liable for Indebtedness except for (i)
Indebtedness to the Lenders pursuant to this Agreement, (ii) purchase
money financing supported by Liens permitted pursuant to Sections
6.3(a)(3) or 6.3(a)(5) above and Indebtedness secured by the existing
Liens described in Section 6.3(a)(4), (iii) Indebtedness permitted
under Section 6.4(b), (iv) Indebtedness under the notes issued in
connection with the Private Placement in a principal amount not
exceeding the lesser of (A) $50,000,000, and (B) the amount by which
$150,000,000 exceeds the Available Commitment at such time and (v)
additional Indebtedness in an aggregate principal amount, together with
all obligations described in Section 6.5(f) herein, not exceeding
$20,000,000 at any one time outstanding."
(f) Section 7.3 is amended and restated to read in full as follows:
"7.3 Ratio of Consolidated Funded Debt to Consolidated Capitalization
The Borrower shall have and maintain at all times from and after the
Closing Date a ratio of Consolidated Funded Debt to Consolidated
Capitalization equal to or less than .50 to 1, except for the fiscal
quarters ending September 30, 2002 and December 31, 2002 when such
ratio shall be equal to or less than .60 to 1."
3. Amendment to the Loan Documents. All references to the Loan Agreement in
the Loan Documents shall be deemed to refer to the Loan Agreement as amended
hereby.
4. Ratification of the Loan Documents. Notwithstanding anything to the
contrary herein contained or any claims of the parties to the contrary, the
Agent, the Lenders and the Borrower agree that the Loan Documents are in full
force and effect and each such document shall remain in full force and effect,
as amended by this Amendment and the Borrower hereby ratifies and confirms its
obligations thereunder.
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5. Representations and Warranties.
(a) The Borrower hereby certifies that after giving effect to this
Amendment, (i) the representations and warranties of the Borrower in the Loan
Agreement are true and correct in all material respects as if made on the date
hereof and (ii) no Event of Default and no event which could become an Event of
Default with the passage of time or the giving of notice, or both, under the
Loan Agreement or the other Loan Documents exists on the date hereof.
(b) The Borrower further represents that the Borrower has all the requisite
power and authority to enter into and to perform its obligations under this
Amendment, and that the execution, delivery and performance of this Amendment
have been duly authorized by all requisite action and will not violate or
constitute a default under any provision of any applicable law, rule,
regulation, order, writ, judgment, injunction, decree, determination or award
presently in effect or of the Certificate of Incorporation, by-laws or other
organizational documents of the Borrower, or of any indenture, note, loan or
loan agreement, license or any other agreement, lease or instrument to which the
Borrower is a party or by which the Borrower or any of its properties are bound.
(c) The Borrower also further represents that its obligations to repay the
Advances, together with all interest accrued thereon, are absolute and
unconditional, and there exists no right of set off or recoupment, counterclaim
or defense of any nature whatsoever to payment of the Advances.
(d) The Borrower also further represents that there have been no changes to
the Certificate of Incorporation, by-laws or other organizational documents of
the Borrower since the most recent date true and correct copies thereof were
delivered to the Agent.
6. Conditions Precedent. The amendments set forth herein shall be effective
as of the Effective Date upon the fulfillment, to the satisfaction of the Agent
and its counsel, of the following conditions precedent:
(a) The Borrower shall have delivered to the Agent the following, all of
which shall be in form and substance satisfactory to the Agent and shall be duly
completed and executed:
(i) counterparts of this Amendment executed by the Borrower, the Lenders
and the Guarantors;
(ii) copies, certified by the Secretary or an Assistant Secretary of the
Borrower of resolutions of the board of directors of the Borrower in
effect on the date hereof authorizing the execution, delivery and
performance of this Amendment and the other documents and
transactions contemplated hereby; and
(iii) such additional documents, certificates and information as the Agent
may reasonably request.
(b) After giving effect to this Amendment, the representations and
warranties set forth in the Loan Agreement shall be true and correct on and as
of the date hereof.
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(c) After giving effect to this Amendment, no Event of Default, and no
event which, with the passage of time or the giving of notice, or both, would
become such an Event of Default shall have occurred and be continuing as of the
date hereof.
(d) The Borrower shall have paid to the Agent for the pro rata benefit of
each Lender (based on the current Pro Rata Percentages) an amendment fee of
$30,000.
7. Miscellaneous
(a) To induce the Agent and the Lenders to enter into this Amendment, the
Borrower waives and releases and forever discharges the Agent and the Lenders
and their respective officers, directors, attorneys, agents, and employees from
any liability, damage, claim, loss or expense of any kind of which it has
knowledge as of the date hereof against any of them arising out of or relating
to the Loan Documents. The Borrower further agrees to indemnify and hold the
Agent, the Lenders and their respective officers, directors, attorneys, agents
and employees (collectively, the "Indemnitees") harmless from any loss, damage,
judgment, liability or expense (including reasonable attorneys' fees), other
than any such loss, damage judgment, liability or expense caused by the
Indemnitee's own willful misconduct or gross negligence, suffered by or rendered
against any of them on account of any claims arising out of or relating to the
Loan Documents. The Borrower further states that it has carefully read the
foregoing release and indemnity, knows the contents thereof and grants the same
as its own free act and deed.
(b) All terms, conditions, provisions and covenants in the Loan Documents
and all other documents delivered to the Agent in connection therewith shall
remain unaltered and in full force and effect except as modified or amended
hereby. To the extent that any term or provision of this Amendment is or may be
deemed expressly inconsistent with any term or provision in any Loan Document or
any other document executed in connection therewith, the terms and provisions
hereof shall control.
(c) This Amendment constitutes the entire agreement of the parties with
respect to the subject matter hereof and supersedes all prior and
contemporaneous understandings and agreements.
(d) In the event any provisions of this Amendment shall be held invalid or
unenforceable by any court of competent jurisdiction, such holding shall not
invalidate or render unenforceable any other provision hereof.
(e) This Amendment shall be governed by and construed according to the laws
of the Commonwealth of Pennsylvania.
(f) This Agreement shall inure to the benefit of, and be binding upon, the
parties hereto and their respective successors and assigns and may be executed
in one or more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
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(g) The headings used in this Agreement are for convenience of reference
only, do not form a part of this Amendment and shall not affect in any way the
meaning or interpretation of this Amendment.
The Borrower expressly ratifies and confirms the waiver of jury trial
provisions contained in the Loan Documents.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of
the day and year first above written.
CSS INDUSTRIES, INC.
By: __________________________________
Name: ________________________________
Title: _______________________________
PNC BANK, NATIONAL ASSOCIATION,
as a Lender, as Swing Line Lender, as
Fronting Lender and as Administrative
Agent
By: __________________________________
Name: ________________________________
Title: _______________________________
WACHOVIA BANK, NATIONAL ASSOCIATION,
as a Lender
By: __________________________________
Name: ________________________________
Title: _______________________________
FLEET NATIONAL BANK, as a Lender
By: __________________________________
Name: ________________________________
Title: _______________________________
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CITIZENS BANK OF PENNSYLVANIA, as a
Lender
By: __________________________________
Name: ________________________________
Title: _______________________________
UNION PLANTERS BANK, as a Lender
By: __________________________________
Name: ________________________________
Title: _______________________________
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ACKNOWLEDGMENT AND AGREEMENT
Each of the undersigned hereby acknowledges the provisions of the
foregoing Amendment of Loan Agreement (the "Amendment") and confirms and agrees
that its obligations under its Guaranty Agreement in favor of the Lenders
referred to in the Amendment shall be unimpaired by the Amendment and are hereby
ratified and confirmed in all respects in respect of the Obligations of CSS
Industries, Inc. under the Loan Agreement, as amended.
THE PAPER MAGIC GROUP, INC.
By: __________________________________
Name: ________________________________
Title: _______________________________
BERWICK DELAWARE, INC.
By: __________________________________
Name: ________________________________
Title: _______________________________
BERWICK OFFRAY LLC (formerly Berwick
Industries LLC)
By: __________________________________
Name: ________________________________
Title: _______________________________
XXXX INC.
By: __________________________________
Name: ________________________________
Title: _______________________________
XXXX DELAWARE, INC.
By: __________________________________
Name: ________________________________
Title: _______________________________
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PHILADELPHIA INDUSTRIES, INC.
By: __________________________________
Name: ________________________________
Title: _______________________________
LLM HOLDINGS, INC.
By: __________________________________
Name: ________________________________
Title: _______________________________
THE PAPER MAGIC GROUP, INC.
(a Delaware corporation)
By: __________________________________
Name: ________________________________
Title: _______________________________
DON POST STUDIOS, INC.
By: __________________________________
Name: ________________________________
Title: _______________________________
LION RIBBON COMPANY, INC. (formerly
Daylight Acquisition Corp.)
By: __________________________________
Name: ________________________________
Title: _______________________________
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THE PAPER MAGIC GROUP (HONG KONG) LTD.
By: __________________________________
Name: ________________________________
Title: _______________________________
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Schedule I
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Crystal Creative Products, Inc.
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