AMENDMENT AND LIMITED WAIVER OF LOAN AGREEMENT
THIS AMENDMENT AND LIMITED WAIVER OF LOAN AGREEMENT (this "Amendment")
is made as of this 24th day of June, 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 (the "Loan Agreement"), pursuant to which
the Lenders agreed to make Advances from time to time to the Borrower.
B. The Borrower has requested an increase in the Available Commitment
from $75,000,000 to $100,000,000 pursuant to the provisions of Section 2.3 of
the Loan Agreement and one or more of the Lenders have agreed to participate in
the Requested Increase.
C. In connection with the Requested Increase and in order to enable the
Borrower to effectuate the repurchase of capital stock of the Borrower from
certain of its shareholders (the "Special Shares Repurchase"), the Borrower has
also requested and the Agent and the Lenders have agreed to amend one of the
financial covenants in the Loan Agreement and to waive certain provisions of the
Loan Agreement to permit the Special Shares Repurchase, 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 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 June 21, 2002 (the "Effective Date") as follows:
(a) The Requested Increase of $25,000,000 is hereby confirmed and agreed to
by the Agent, the Lenders and the Borrower and is hereby allocated to the
Lenders so that the Pro Rata Percentages and Pro Rata Shares of the Lenders
after giving effect to the Requested Increase are as set forth on Annex I
attached hereto, which is hereby substituted for Annex I originally attached to
the Loan Agreement. If less than all of the Lenders participate in the Requested
Increase or participate in the Requested Increase other than on a pro rata basis
based on their existing Pro Rata Percentages, then each Lender participating in
the Requested Increase, the Borrower and the Agent shall execute and deliver a
duly completed Commitment and Acceptance as provided in Section 2.3(b) of the
Loan Agreement the effective date of each of which shall be the same as the
Effective Date.
(b) The following new defined term is added to Section 1.1 in the
appropriate alphabetical order:
"'Special Shares Repurchase': The purchase by the Borrower of capital
stock of the Borrower from certain of its shareholders in one or more
transactions during the period beginning June 21, 2002 and ending
September 30, 2002 the consideration for which is paid in cash
simultaneously with each such purchase."
(c) Section 6.6(a) is amended and restated in full as follows:
"(a) The Borrower shall not, nor shall it cause or permit any of
its Subsidiaries (other than the Bankruptcy Remote Subsidiary) to,
directly or indirectly: declare, pay, authorize or make any form of
dividend (except for stock dividends or stock splits) or return any
capital, in cash or property, to its shareholders, their successors or
assigns or repurchase, redeem or retire any of the capital stock of the
Borrower, except (A) as expressly permitted by Section 6.1 hereof, (B)
dividends payable to the Borrower or any Guarantor by any Subsidiary,
and (C) if, after giving effect to such dividend, distribution to
shareholders, repurchase, redemption or retirement the Borrower is in
compliance with Section 7.2."
(d) Section 7.2 is amended and restated to read in full as follows:
"7.2 Minimum Consolidated Net Worth. The Borrower shall have and
maintain a minimum Consolidated Net Worth of not less than $193,027,000
for the period from the Closing Date through March 31, 2001. For each
subsequent fiscal quarter thereafter, the Borrower shall maintain,
minimum Consolidated Net Worth in an amount not less than the sum of
the preceding fiscal year-end's minimum Consolidated Net Worth
requirement plus an amount equal to fifty (50%) percent of the
Borrower's current year-to-date Consolidated Net Income through the end
of such fiscal quarter (with no adjustment for losses) minus the lesser
of (i) $45,000,000 and (ii) the aggregate amount paid by the Borrower
for the Special Shares Repurchase."
3. Limited Waiver. The Agent and the Lenders hereby waive the provisions of
Section 6.12 of the Loan Agreement to the extent necessary to permit the
Borrower to enter into the Special Shares Repurchase so long as the Borrower has
complied with the other provisions of the Loan Agreement in connection
therewith. Except as set forth in the preceding sentence, this Amendment does
not and shall not be deemed to constitute a waiver by the Agent or the Lenders
of any Event of Default, or of any event which with the passage of time or the
giving of notice or both would constitute an Event of Default, nor does it
obligate the Agent or the Lenders to agree to any further modifications to the
Loan Agreement or any other Loan Document or constitute a waiver of any other
rights or remedies.
4. Replacement Notes. The Borrower shall issue to each Lender which has
increased its Pro Rata Share a replacement Revolving Credit Note in the face
amount of its Pro Rata Share as set forth on Annex I attached hereto in
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substitution for, but not as a novation of, its existing Revolving Credit Note
which existing Revolving Credit Note shall be surrendered by such Lender to the
Agent for cancellation.
5. 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.
6. 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.
7. 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.
8. 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:
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(i) counterparts of this Amendment executed by the Borrower, the Lenders
and the Guarantors;
(ii) duly executed Commitment and Acceptances to the extent required by
Section 2(a);
(iii) duly executed replacement Revolving Credit Notes required pursuant
to Section 4;
(iv) 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
(v) 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.
(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 benefit of each
Lender which has increased its Pro Rata Share a fee equal to one-quarter of one
percent (0.25%) on the amount of such increase.
9. 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
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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.
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.
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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 and Limited Waiver 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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