CREDIT AGREEMENT
dated as of
June 26, 2000
among
THE TOPPS COMPANY, INC.,
TOPPS ENTERPRISES, INC.,
The Lenders Party Hereto
and
THE CHASE MANHATTAN BANK,
as Agent
CREDIT AGREEMENT dated as of June 26, 2000, among THE TOPPS COMPANY,
INC., a Delaware corporation (the "Borrower"), TOPPS ENTERPRISES INC., a
Delaware corporation ("Topps Enterprises"), the Lenders party hereto (the
"Lenders"), and THE CHASE MANHATTAN BANK, as Agent (in such capacity, the
"Agent").
WITNESSETH
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WHEREAS, the Borrower has requested that the Lenders make available to
the Borrower a revolving credit facility of up to $35,000,000, the proceeds of
which are to be used as set forth herein; and
WHEREAS, the Lenders are willing to make such facility available to
the Borrower upon the terms and conditions set forth herein.
NOW, THEREFORE, the Borrower, Topps Enterprises, the Lenders and the
Agent hereby agree as follows:
ARTICLE I
Definitions
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SECTION 1.01. Defined Terms. As used in this Agreement, the following
terms have the meanings specified below:
"ABR", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at the Alternate Base Rate.
"Adjusted LIBO Rate" means, with respect to any Eurodollar Borrowing
for any Interest Period, an interest rate per annum. (rounded upwards, if
necessary, to the next 1/100 of 1%) equal to (a) the LIBO Rate for such Interest
Period multiplied by (b) the Statutory Reserve Rate.
"Administrative Questionnaire" means an Administrative Questionnaire
in a form supplied by the Agent.
"Affiliate" means, with respect to a specified Person, another Person
that directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.
"Agent" means The Chase Manhattan Bank, in its capacity as
administrative agent for the Lenders hereunder.
"Alternate Base Rate" means the greatest of (a) the Prime Rate in
effect on such day, (b) the Base CD Rate in effect on such day plus 1%, and (c)
the Federal Funds Effective Rate in effect on such day plus 1/2 of 1%. Any
change in the Alternate Base Rate due to a change in the Prime Rate, the Base CD
Rate or the Federal Funds Effective Rate shall be effective from and including
the effective date of such change in the Prime Rate, the Base CD Rate or the
Federal Funds Effective Rate, respectively.
"Applicable Percentage" means, with respect to any Lender, the
percentage of the total Revolving Commitments represented by such Lender's
Revolving Commitment. If the Revolving Commitments have terminated or expired,
the Applicable Percentages shall be determined based upon the Revolving
Commitments most recently in effect, giving effect to any assignments.
"Applicable Rate" means, for any day, with respect to any ABR Loan or
Eurodollar Loan, or with respect to the unused Commitment Fees payable
hereunder, as the case may be, the applicable rate per annum set forth below
under the caption "ABR Spread", "Eurodollar Spread" or "Commitment Fee Rate", as
the case may be:
________________________________________________________________________________
EBITDA Eurodollar Spread ABR Spread Commitment Fee
Rate
________________________________________________________________________________
>=$75,000,000 100 bps 0 25 bps
________________________________________________________________________________
>=$50,000,000 125 bps 0 25 bps
but <$75,000,000
________________________________________________________________________________
>=$25,000,000 150 bps 0 25 bps
but <$50,000,000
________________________________________________________________________________
>=$15,000,000 175 bps 0 25 bps
but <$25,000,000
________________________________________________________________________________
>=$5,000,000 200 bps 0 37.5 bps
but <$15,000,000
________________________________________________________________________________
<$5,000,000 225 bps 0 37.5 bps
________________________________________________________________________________
For these purposes, "EBITDA" shall be measured on a rolling four quarters basis,
looking backward beginning with the last fiscal quarter as to which financial
reporting has been made pursuant to Section 3.04, 5.01(a) or Section 5.01(b).
"Approved Internet Subsidiary" means a Subsidiary (i) formed in the
United States, engaged (or intended to be engaged) in a business that is (or is
intended to be) transacted primarily through the Internet, (ii) in which any of
the equity therein (other than a nominal amount) is owned (or, upon conversion
pursuant to Section 5.14(b), will be owned) by a Person or Persons unaffiliated
with the Borrower (prior to formation of such Subsidiary or conversion pursuant
to Section 5.14(b)), (iii) in which the Borrower or one or more Guarantors have
invested (by means of asset transfer, cash investment, the assumption or
incurrence of Indebtedness, including Intercompany Debt and Guaranties, or
otherwise), together with any previous or simultaneous investment in one or more
other such Subsidiaries, an aggregate amount of $10,000,000 or less (determined,
as of the date of each such investment, on the basis of fair market value, in
accordance with GAAP), and (iv) as to which the Agent has determined, in its
reasonable discretion, that such investment would be unlikely in the foreseeable
future to have Material Adverse Effect. (For these purposes, the fact that one
or more Loan Documents would cease to be enforceable against a Subsidiary upon
its release as a Guarantor pursuant to Section 5.14(b) shall not constitute a
Material Adverse Effect.)
2
"Assessment Rate" means, for any day, the annual assessment rate in
effect on such day that is payable by a member of the Bank Insurance Fund
classified as "well-capitalized" and within supervisory subgroup "B" (or a
comparable successor risk classification) within the meaning of 12 C.F.R. Part
327 (or any successor provision) to the Federal Deposit Insurance Corporation
for insurance by such Corporation of time deposits made in dollars at the
offices of such member in the United States; provided that if, as a result of
any change in any law, rule or regulation, it is no longer possible to determine
the Assessment Rate as aforesaid, then the Assessment Rate shall be such annual
rate as shall be determined by the Agent to be representative of the cost of
such insurance to the Lenders.
"Assignment and Acceptance" means an assignment and acceptance entered
into by a Lender and an assignee (with the consent of any party whose consent is
required by Section 9.04), and accepted by the Agent, in the form of Exhibit A
or any other form approved by the Agent.
"Base CD Rate" means the sum of (a) the Three-Month Secondary CD Rate
multiplied by the Statutory Reserve Rate plus (b) the Assessment Rate.
"Board" means the Board of Governors of the Federal Reserve System of
the United States of America.
"Borrower" means The Topps Company, Inc., a Delaware corporation.
"Borrowing" means Loans of the same Type, made, converted or continued
on the same date and, in the case of Eurodollar Loans, as to which a single
Interest Period is in effect.
"Borrowing Request" means a request by the Borrower for a Borrowing in
accordance with Section 2.03.
"Business Day" means any day that is not a Saturday, Sunday or other
day on which commercial banks in New York City are authorized or required by law
to remain closed; provided that, when used in connection with a Eurodollar Loan,
the term "Business Day" shall also exclude any day on which banks are not open
for dealings in dollar deposits in the London interbank market.
"Capital Expenditures" means, for any period, without duplication (a)
the additions to property, plant and equipment and other capital expenditures of
the Borrower and its consolidated Subsidiaries that are (or would be) set forth
in a consolidated statement of cash flows of the Borrower for such period
prepared in accordance with GAAP and (b) Capital Lease Obligations incurred by
the Borrower and its consolidated Subsidiaries during such period, excluding,
however, the amount of any Capital Expenditures paid for with proceeds of
casualty insurance as evidenced in writing and submitted to the Agent.
"Capital Lease Obligations" of any Person means the obligations of
such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP,
and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.
3
"Change in Control" means (a) the acquisition of ownership, directly
or indirectly, beneficially or of record, by any Person or group (within the
meaning of the Securities Exchange Act of 1934 and the rules of the Securities
and Exchange Commission thereunder as in effect on the date hereof) of shares
representing more than 20% of the aggregate ordinary voting power represented by
the issued and outstanding capital stock of the Borrower; or (b) occupation of a
majority of the seats (other than vacant seats) on the board of directors of the
Borrower by Persons who were neither (i) nominated by the board of directors of
the Borrower nor (ii) appointed by directors so nominated.
"Change in Law" means (a) the adoption of any law, rule or regulation
after the date of this Agreement, (b) any change in any law, rule or regulation
or in the interpretation or application thereof by any Governmental Authority
after the date of this Agreement, or (c) compliance by any Lender or the Issuing
Bank (or, for purposes of Section 2.15(b), by any lending office of such Lender
or by such Lender's or the Issuing Bank's holding company, if any) with any
request guideline or directive (whether or not having the force of law) of any
Governmental Authority made or issued after the date of this Agreement.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time.
"Commitment Fee" has the meaning set forth in Section 2.12(a).
"Consolidated Fixed Charge Ratio" means, on any date, the ratio of (i)
the sum of EBITDA minus unfinanced Capital Expenditures to (ii) current portion
of long term debt (as per GAAP but excluding any Indebtedness arising under this
Agreement) plus interest expense (as certified by a Financial Officer on a
quarterly basis). For purposes of calculating Consolidated Fixed Charge Ratio,
EBITDA, unfinanced Capital Expenditures and interest expense shall be measured
for the four fiscal quarter period ending on the date such ratio is being
tested.
"Consolidated Leverage Ratio" means, on any date, the ratio of
Consolidated Total Liabilities to Consolidated Net Worth.
"Consolidated Net Income" means, for any period of computation
thereof, the gross revenues from operations of the Borrower and its Subsidiaries
less all operating and non-operating expenses of the Borrower and its
Subsidiaries including taxes on income, all determined on a consolidated basis
in accordance with GAAP applied on a consistent basis.
"Consolidated Net Worth" means at any time as of which the amount
thereof is to be determined, the sum of the following in respect of the Borrower
and its Subsidiaries (determined on a consolidated basis): (i) the amount of
issued and outstanding share capital, plus (ii) the amount of additional paid-in
capital and retained income (or, in the case of a deficit minus the amount of
such deficit), plus (iii) the amount of any foreign currency translation
adjustment (if positive, or, if negative, minus the amount of such translation
adjustment) minus (iv) the amount of any treasury stock, all as determined in
accordance with GAAP applied on a consistent basis.
4
"Consolidated Tangible Net Worth" means, on any date, Consolidated Net
Worth less capitalized research and development costs, capitalized interest,
debt discount and expense, goodwill, trademarks, copyrights, franchises,
licenses and such other assets as are properly classified as "intangible
assets", all determined on a consolidated basis for the Borrower and its
Subsidiaries.
"Consolidated Total Assets" means, on any date, all amounts which
would, in conformity with GAAP, be included as assets on a balance sheet, all
determined on a consolidated basis for the Borrower and its Subsidiaries.
"Consolidated Total Liabilities" means, on any date, all amounts which
would, in conformity with GAAP, be included as liabilities on a balance sheet,
all determined on a consolidated basis for the Borrower and its Subsidiaries.
"Contract Notification Date" means the date which is 30 days prior to
(x) the date that any Material License will, by its own terms, expire, or (y)
the date the Borrower intends to terminate any Material License.
"Control" means the possession, directly or indirectly, of the power
to direct or cause the direction of the management or policies of a Person,
whether through the ability to exercise voting power, by contract or otherwise.
"Controlling" and "Controlled" have meanings correlative thereto.
"Default" means any event or condition which constitutes an Event of
Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
"Disclosed Matters" means the actions, suits and proceedings and the
environmental matters disclosed in Schedule 3.06.
"Documentary Letter of Credit" means a documentary letter of credit in
form and substance customarily issued by the Issuing Bank from time to time.
"dollars" or "$" refers to lawful money of the United States of
America.
"EBITDA" means, for any period, Consolidated Net Income (or net loss)
of the Borrower and its Subsidiaries for such period plus the sum of (i)
depreciation expense, (ii) amortization expense, (iii) net total income tax
expense and interest expense (as certified by a Financial Officer on a quarterly
basis) for such period, all determined on a consolidated basis in accordance
with GAAP applied on a consistent basis.
"Effective Date" means the date on which the conditions specified in
Section 4.01 are satisfied (or waived in accordance with Section 9.02).
"Eligible Assignee" means (i) a commercial bank having total assets in
excess of $250,000,000 and being governed by the Board; (ii) a finance company,
insurance company or other financial institution or fund acceptable to the Agent
which in the ordinary course of business extends credit of the type evidenced by
this Agreement and has total assets in excess of $100,000,000 and being governed
by the Board, and if not so governed, acceptable to the Borrower, whose consent
shall not be unreasonably withheld; and (iii) any other financial institution
satisfactory to both the Borrower and the Agent; provided that no such entity
that is organized under the laws of a jurisdiction outside the United States
shall be an Eligible Assignee unless such entity shall, if legally able to do
so, prior to the immediately following due date of any payment by the Borrower
hereunder, deliver to the Borrower such certificates, documents or other
evidence, as required by the Code or Treasury Regulations issued pursuant
thereto, including (A) Internal Revenue Service Form W-8 or W-9 and (B) Internal
Revenue Service Form 1001 or Form 4224 and any other certificate or statement of
exemption required by Treasury Regulation Section 1.1441-1, 1.1441-4 or
1.1441-6(c) or any subsequent version thereof or successors thereto, properly
completed and duly executed by such entity establishing that such payment is (i)
not subject to United States Federal withholding tax under the Code because such
payment is effectively connected with the conduct by such entity of a trade or
business in the United States, or (ii) totally exempt from the United States
Federal withholding tax.
5
"Environmental Laws" means all laws, rules, regulations, codes,
ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by any Governmental Authority,
relating in any way to the environment, preservation or reclamation of natural
resources, the management, release or threatened release of any Hazardous
Material or to environmental protection matters.
"Environmental Liability" means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities) of the Borrower or any Subsidiary, directly or
indirectly resulting from or based upon (a) violation of any Environmental Law,
(b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials,
(d) the release or threatened release of any Hazardous Materials into the
environment, or (e) any contract agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that together with the Borrower, is treated as a single employer
under Section 414(b) or (c) of the Code or, solely for purposes of Section 302
of ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.
"ERISA Event" means (a) any "reportable event", as defined in Section
4043 of ERISA or the regulations issued thereunder with respect to a Plan (other
than an event for which the 30-day notice period is waived); (b) the existence
with respect to any Plan of an "accumulated funding deficiency" (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the
filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan; (d) the incurrence by the Borrower or any of its ERISA Affiliates of any
liability under Title IV of ERISA with respect to the termination of any Plan;
(e) the receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan
administrator of any notice relating to an intention to terminate any Plan or
Plans or to appoint a trustee to administer any Plan; (f) the incurrence by the
Borrower or any of its ERISA Affiliates of any liability with respect to the
withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (g) the
receipt by the Borrower or any ERISA Affiliate of any notice concerning the
imposition of Withdrawal Liability or a determination that a Multiemployer Plan
is, or is expected to be, insolvent or in reorganization, within the meaning of
Title IV of ERISA.
6
"Eurodollar", when used in reference to any Loan or Borrowing, refers
to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Adjusted LIBO Rate.
"Event of Default" has the meaning assigned to such term in Article
VII.
"Existing Agreement" has the meaning assigned to such term in Section
4.01(f).
"Excluded Taxes" means, with respect to the Agent, any Lender, the
Issuing Bank or any other recipient of any payment to be made by or on account
of any obligation of the Borrower hereunder, (a) income or franchise taxes
imposed on (or measured by) its income, profits, or capital by any Governmental
Authority, or by the jurisdiction under the laws of which such recipient is
organized or in which its principal office is located or, in the case of any
Lender, in which its applicable lending office is located, (b) any branch
profits taxes imposed by the United States of America or any similar tax imposed
by any other jurisdiction in which the Borrower is located and (c) in the case
of a Foreign Lender (other than an assignee pursuant to a request by the
Borrower under Section 2.19(b)), any withholding tax that is imposed on amounts
payable to such Foreign Lender at the time such Foreign Lender becomes a party
to this Agreement (or designates a new lending office) or is attributable to
such Foreign Lender's failure to comply with Section 2.17(e), except to the
extent that such Foreign Lender (or its assignor, if any) was entitled, at the
time of designation of a new lending office (or assignment), to receive
additional amounts from the Borrower with respect to such withholding tax
pursuant to Section 2.17(a).
"Federal Funds Effective Rate" means, for any day, the weighted
average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by the Agent from three Federal funds brokers of
recognized standing selected by it.
"Financial Officer" means the chief financial officer, principal
accounting officer, treasurer or controller of the Borrower.
"Financing Transactions" means the execution, delivery and performance
by the Borrower of the Loan Documents, the borrowing of Loans, the use of the
proceeds thereof and the issuance of Letters of Credit hereunder.
"Foreign Lender" means any Lender that is organized under the laws of
a jurisdiction other than that in which the Borrower is located. For purposes of
this definition, the United States of America, each State thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.
7
"Foreign Subsidiary" means any Subsidiary that is organized under the
laws of a jurisdiction other than the United States of America or any State
thereof or the District of Columbia.
"GAAP" means generally accepted accounting principles in the United
States of America.
"Governmental Authority" means the government of the United States of
America, any other nation or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.
"Guarantee" of or by any Person (the "guarantor") means any
obligation, contingent or otherwise, of the guarantor guaranteeing or having the
economic effect of guaranteeing any Indebtedness or other obligation of any
other Person (the "primary obligor") in any manner, whether directly or
indirectly, and including any obligation of the guarantor, direct or indirect,
(a) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness or other obligation or to purchase (or to advance or
supply funds for the purchase of) any security for the payment thereof, (b) to
purchase or lease property, securities or services for the purpose of assuring
the owner of such Indebtedness or other obligation of the payment thereof, (c)
to maintain working capital, equity capital or any other financial statement
condition or liquidity of the primary obligor so as to enable the primary
obligor to pay such Indebtedness or other obligation, or (d) as an account party
in respect of any letter of credit or letter of guaranty issued to support such
Indebtedness or obligation; provided that the term Guarantee shall not include
endorsements for collection or deposit in the ordinary course of business.
"Guarantor" means (i) Topps Enterprises and any domestic Subsidiary
organized or acquired after the date hereof other than an Approved Internet
Subsidiary, or (ii) any other existing domestic Subsidiary which ceases to be
inactive (in any material respect) at any time after the Effective Date; all of
whom shall jointly and severally guaranty payment of the Borrower's Obligations.
"Hazardous Materials" means all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
"Hedging Agreement" means any interest rate protection agreement,
foreign currency exchange agreement, commodity price protection agreement or
other interest or currency exchange rate or commodity price hedging arrangement.
"Indebtedness" of any Person means, without duplication, (a) all
obligations of such Person for borrowed money or advances of any kind, (b) all
obligations of such Person evidenced by bonds, debentures, notes or similar
instruments, (c) all obligations of such Person upon which interest charges are
customarily paid, (d) all obligations of such Person under conditional sale or
other title retention agreements relating to property acquired by such Person,
(e) all obligations of such Person in respect of the deferred purchase price of
property or services (excluding current accounts payable incurred in the
ordinary course of business), (f) all Indebtedness of others secured by (or for
which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien on property owned or acquired by such
Persons, whether or not the Indebtedness secured thereby has been assumed, (g)
all Guarantees by such Person of Indebtedness of others, (h) all Capital Lease
Obligations of such Person, (i) all obligations, contingent or otherwise, of
such Person as an account party in respect of letters of credit and letters of
guaranty, and (j) all obligations, contingent or otherwise, of such Person in
respect of bankers acceptances. The Indebtedness of any Person shall include the
Indebtedness of any other entity (including any partnership in which such Person
is a general partner) to the extent such Person is liable therefor as a result
of such Person's ownership interest in or other relationship with such entity,
except to the extent the terms of such Indebtedness provide that such Person is
not liable therefor.
8
"Indemnified Taxes" means Taxes other than Excluded Taxes.
"Intercompany Debt" means loans, advances and any other extensions of
credit made by the Borrower and/or any Guarantor to any Subsidiary.
"Intercompany Note" means any promissory note, instrument or other
written indicia of an obligation by any Subsidiary to repay any Intercompany
Debt.
"Interest Election Request" means a request by the Borrower to convert
or continue a Borrowing in accordance with Section 2.07.
"Interest Payment Date" means (a) with respect to any ABR Loan, the
first day of each month and (b) with respect to any Eurodollar Loan, the last
day of the Interest Period applicable to the Borrowing of which such Loan is a
part and, in the case of a Eurodollar Borrowing with an Interest Period of more
than three months' duration, each day prior to the last day of such Interest
Period that occurs at intervals of three months' duration after the first day of
such Interest Period.
"Interest Period" means with respect to any Eurodollar Borrowing, the
period commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is one, two, three or six months
(or, with the consent of each Lender, nine or twelve months) thereafter, as the
Borrower may elect; provided that (i) if any Interest Period would end on a day
other than a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless such next succeeding Business Day would fall in
the next calendar month, in which case such Interest Period shall end on the
next preceding Business Day, and (ii) any Interest Period that commences on the
last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the last calendar month of such Interest
Period) shall end on the last Business Day of the last calendar month of such
Interest Period. For purposes hereof, the date of a Borrowing initially shall be
the date on which such Borrowing is made and thereafter shall be the effective
date of the most recent conversion or continuation of such Borrowing.
"Issuing Bank" means The Chase Manhattan Bank, in its capacity as the
issuer of Letters of Credit hereunder, and its successors in such capacity as
provided in Section 2.05(i). The Issuing Bank may, in its discretion, arrange
for one or more Letters of Credit to be issued by Affiliates of the Issuing
Bank, in which case the term "Issuing Bank" shall include any such Affiliate
with respect to Letters of Credit issued by such Affiliate.
9
"LC Disbursement" means a payment made by the Issuing Bank pursuant to
a Letter of Credit.
"LC Exposure" means, at any time, the aggregate amount of all
Documentary Letter of Credit Outstandings and all Standby Letter of Credit
Outstandings. The LC Exposure of any Lender at any time shall be its Applicable
Percentage of the total LC Exposure at such time.
"Lenders" means the Persons listed on Schedule 2.01 and any other
Person that shall have become a party hereto pursuant to an Assignment and
Acceptance, other than any such Person that ceases to be a party hereto pursuant
to an Assignment and Acceptance.
"Letter of Credit" means any letter of credit issued pursuant to this
Agreement which Letter of Credit shall be a Documentary Letter of Credit
(including the Topps SA Letters of Credit) or a Standby Letter of Credit.
"Letter of Credit Outstandings" means, at any time, the sum of (i) the
aggregate undrawn stated amount of all Letters of Credit then outstanding plus
(ii) all amounts theretofore drawn under Letters of Credit and not then
reimbursed.
"LIBO Rate" means, with respect to any Eurodollar Borrowing for any
Interest Period, the rate appearing on Page 3750 of the Dow Xxxxx Telerate
Service (or on any successor or substitute page of such Service, or any
successor to or substitute for such Service, providing rate quotations
comparable to those currently provided on such page of such Service, as
determined by the Agent from time to time for purposes of providing quotations
of interest rates applicable to dollar deposits in the London interbank market)
at approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period, as the rate for dollar deposits with a
maturity comparable to such Interest Period. In the event that such rate is not
available at such time for any reason, then the "LIBO Rate" with respect to such
Eurodollar Borrowing for such Interest Period shall be the rate at which dollar
deposits of $5,000,000 and for a maturity comparable to such Interest Period are
offered by the principal London office of the Agent in immediately available
funds in the London interbank market at approximately 11:00 a.m., London time,
two Business Days prior to the commencement of such Interest Period.
"Lien" means, with respect to any asset, (a) any mortgage, deed of
trust lien, pledge, hypothecation, encumbrance, charge or security interest in,
on or of such asset, (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement (or any
financing lease having substantially the same economic effect as any of the
foregoing) relating to such asset, and (c) in the case of securities, any
purchase option, call or similar right of a third party with respect to such
securities.
"Loan Documents" means this Agreement, the Topps Enterprises Guaranty,
the Topps SA Guaranty, any letter of credit application or any other agreement
submitted by the Borrower or Topps SA in connection with a Letter of Credit, and
any Guarantee or other instrument or agreement now existing or hereafter
executed and delivered in connection herewith or therewith.
"Loans" means the loans made by the Lenders to the Borrower pursuant
to this Agreement.
10
"LPT" means the incurrence or assumption of Indebtedness on account of
any buyout, acquisition or re-capitalization of the Borrower and/or any
Subsidiary (including any leveraged buyout, management buyout, merger,
acquisition, significant share repurchase or dividend payout) which causes
either (i) (x) the ratio of Consolidated Total Liabilities to Consolidated Total
Assets to be greater than .75 to 1.0 and (y) the total amount of all
Indebtedness related to the transaction in question or to any buyout or
acquisition in the past, or to any re-capitalization completed within one year
prior to the date of the transaction in question, to constitute 25% or more of
Consolidated Total Liabilities, or (ii) (x) a doubling of Consolidated Total
Liabilities and (y) a ratio of Consolidated Total Liabilities to Consolidated
Total Assets of greater than .50 to 1.0. For purposes of this definition only,
the term Consolidated Total Liabilities shall be deemed to include contingent
liabilities on account of non-perpetual preferred stock.
"Margin Stock" means "Margin Stock" as that term is defined in
Regulation U of the Board.
"Material Adverse Effect" means a material adverse effect on (a) the
business, assets, operations or condition, financial or otherwise, of the
Borrower and the Subsidiaries taken as a whole, (b) the ability of the Borrower
to perform any of its obligations under any Loan Document or (c) the validity or
enforceability of any Loan Document or the rights of or benefits available to
the Lenders under any Loan Document.
"Material Indebtedness" means Indebtedness (other than the Loans and
Letters of Credit), or obligations in respect of one or more Hedging Agreements,
of any one or more of the Borrower and its Subsidiaries, in each case with a
principal amount outstanding of at least $1,000,000. For purposes of determining
Material Indebtedness, the "principal amount" of the obligations of the Borrower
or any Subsidiary in respect of any Hedging Agreement at any time shall be the
maximum aggregate amount (giving effect to any netting agreements) that the
Borrower or such Subsidiary would be required to pay if such Hedging Agreement
were terminated at such time.
"Material Licenses" means the licenses set forth on Schedule 5.04.
"Material Subsidiary" means any Subsidiary whose assets constituted 5%
or more of Consolidated Total Assets on the balance sheet submitted most
recently (to the date in question) to the Agent pursuant to Section 5.01(a) or
Section 5.01(b).
"Maturity Date" means June 25, 2004.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Multiemployer Plan" means a multiemployer plan as defined in Section
4001(a)(3) of ERISA.
"Net Proceeds" means, with respect to any Permitted Asset Sale (a) the
gross sales price paid in any form in respect of such sale, net of (b) the sum
of (i) all reasonable fees and out-of-pocket expenses paid by the Borrower and
the Subsidiaries to third parties (other than Affiliates) in connection with
such sale, (ii) the amount of all payments required to be made by the Borrower
and the Subsidiaries as a result of such sale to repay Indebtedness (other than
Loans) secured by such asset or otherwise subject to mandatory prepayment as a
result of such sale (other than any such mandatory prepayment pursuant to this
Agreement), and (iii) the amount of all taxes paid (or reasonably estimated to
be payable) by the Borrower and the Subsidiaries, and the amount of any reserves
established by the Borrower and the Subsidiaries to fund contingent liabilities
reasonably estimated to be payable, in each case during the year that such sale
occurred or the next succeeding year and that are directly attributable to such
sale (as determined reasonably and in good faith by the chief financial officer
of the Borrower).
11
"Obligations" means the collective reference to (i) the unpaid
principal of and interest on the Loans and all other obligations and liabilities
of the Borrower to the Agent or any Lender (including, without limitation,
interest accruing at the then-applicable rate provided herein after the maturity
of the Loans and interest accruing at the then-applicable rate provided herein
after the filing of any petition in bankruptcy, or the commencement of any
insolvency, reorganization or like proceeding, relating to the Borrower, whether
or not a claim for post-filing or post-petition interest is allowed in such
proceeding), whether direct or indirect, absolute or contingent, due or to
become due, now existing or hereafter incurred, that may arise under, out of, or
in connection with this Agreement, the other Loan Documents, the Letters of
Credit (including, without limitation, the Topps SA Letters of Credit) or any
other documents made, delivered or given in connection herewith or therewith,
whether on account of principal, interest reimbursement obligations, fees,
indemnities, costs, expenses or otherwise (including, without limitation, all
fees and disbursements of counsel to the Agent or the Lenders that are required
to be paid by the Borrower or any Subsidiary pursuant to the terms of this
Agreement or any other Loan Document), and (ii) all obligations and liabilities
of the Borrower to any Lender or any affiliate of a Lender, whether direct or
indirect, absolute or contingent, due or to become due, now existing or
hereafter incurred, that may arise under, out of, or in connection with any
Hedging Agreement or any other document made, delivered or given in connection
therewith.
"Other Taxes" means any and all present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies arising
from any payment made under any Loan Document or from the execution, delivery or
enforcement of, or otherwise with respect to, any Loan Document, but Other Taxes
shall not include Excluded Taxes.
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA and any successor entity performing similar functions.
"Permitted Acquisitions" means an acquisition of the stock (or another
investment in the equity) or assets of another Person who is not a Subsidiary
(an "Acquisition") which meets the following criteria: (i) the Acquisition in
question would not cause the aggregate gross purchase price paid to the
acquiree(s) (in cash, stock, assumption of Indebtedness and/or otherwise) on
account of (A) all Acquisitions since the Effective Date to exceed $50,000,000
or (B) all Foreign Acquisitions (defined below) since the Effective Date to
exceed $15,000,000, (ii) the proposed acquiree is in the same or related line of
business as the Borrower or any Subsidiary (or the assets to be acquired are
utilized in the same or related line of business as the Borrower or any
Subsidiary), (iii) the Acquisition is to be friendly in nature (e.g. approved
and recommended by the target's board of directors), (iv) prior to and
immediately following the Acquisition, and after giving effect thereto, there
shall not have occurred a Default or an Event of Default, (v) all material
third-party consents and approvals necessary in connection with the Acquisition
shall have been obtained and copies of thereof shall have been delivered to the
Agent, (vi) evidence (reasonably satisfactory to the Agent) shall have been
delivered to the Agent that such stock (or other equity) or assets are to be
purchased free and clear of any Liens other than Permitted Encumbrances and, in
the case of stock (or other equity) free of any restrictions other than those
reasonably acceptable to the Agent, (vii) if the proposed acquiree becomes a
Subsidiary of the Borrower or any Guarantor, such Subsidiary shall timely comply
with Section 5.14 (if required by the terms of Section 5.14), (viii) such
Acquisition shall not result in an LPT, (ix) in the case of an Acquisition of a
Person organized outside of the United States (a "Foreign Acquisition"), (A) the
acquirer shall also be organized outside of the United States, and (B) any cash
paid on account of such Acquisition shall originate from a source outside of the
United States. With regard to the foregoing clause (viii), the Agent shall have
received prior to the consummation of said Permitted Acquisition, copies of all
documentation (including financial information and other information with
respect to the Borrower, the Guarantors, the proposed acquiree and the proposed
transaction, in detail reasonably satisfactory to the Agent, including evidence
of existing and continuing compliance with this Agreement, based upon the
Borrower's own projections of the effect of the Acquisition in question) related
to the Permitted Acquisition as may be reasonably required by the Agent.
12
"Permitted Asset Sales" means "arm's length" sales of assets by the
Borrower or a Subsidiary which do not cause a Default, provided that if one or
more Loans are outstanding at the time, then in the case of any such sale having
a gross sale price of greater than $5,000,000 (aggregated in the case of a
series of contemporaneous asset sales to the same purchaser or to more than one
purchaser who are Affiliates of each other), not less than 25% of any Net
Proceeds that are paid in cash or cash equivalents (including any cash received
in respect of non-cash proceeds) is applied, on or before the fifth Business Day
following each date of receipt of any such Net Proceeds (whether received at
closing or thereafter), to pay down (or satisfy, if applicable) the principal
amount of all Loans then outstanding.
"Permitted Encumbrances" means the following:
(a) Liens imposed by law for taxes that are not yet due or are being
contested in compliance with Section 5.05;
(b) carriers', warehousemen's, mechanics', materialmen's, repairmen's
and other like Liens imposed by law, arising in the ordinary course of business
and securing obligations that are not overdue by more than 30 days or are being
contested in compliance with Section 5.05;
(c) pledges and deposits made in the ordinary course of business in
compliance with workers' compensation, unemployment insurance and other social
security laws or regulations;
(d) deposits to secure the performance of bids, trade contracts,
leases, statutory obligations, surety and appeal bonds, performance bonds and
other obligations of a like nature, in each case in the ordinary course of
business;
(e) judgment liens in respect of judgments that do not constitute an
Event of Default under clause (k) of Article VII; and
(f) easements, zoning restrictions, rights-of-way and similar
encumbrances on real property imposed by law or arising in the ordinary course
of business that do not secure any monetary obligations and do not materially
detract from the value of the affected property or interfere with the ordinary
conduct of business of the Borrower or any Subsidiary;
provided that the term "Permitted Encumbrances" shall not include any Lien
securing Indebtedness.
13
"Permitted Investments" means the following:
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States of
America (or by any agency thereof to the extent such obligations are backed by
the full faith and credit of the United States of America), in each case
maturing within one year from the date of acquisition thereof,
(b) investments in commercial paper maturing within 270 days from the
date of acquisition thereof and having, at such date of acquisition, the highest
credit rating obtainable from S&P or from Moody's;
(c) investments in certificates of deposit, banker's acceptances and
time deposits maturing within 180 days from the date of acquisition thereof
issued or guaranteed by or placed with, and money market deposit accounts issued
or offered by, any domestic office of any commercial bank organized under the
laws of the United States of America or any State thereof which has a combined
capital and surplus and undivided profits of not less than $500,000,000;
(d) fully collateralized repurchase agreements with a term of not more
than 30 days for securities described in clause (a) above and entered into with
a financial institution satisfying the criteria described in clause (c) above;
(e) shares of mutual funds which invest in obligations described in
paragraphs (a) through (d) above, the shares of which mutual funds are at all
times rated "AAA" by S&P;
(f) shares of "money market funds" of financial institutions rated "A"
or better by S&P or "A2" or better by Moody's and shares of the Strong Municipal
Money Market Fund;
(g) investments received in connection with the bankruptcy or
reorganization of, or settlement of delinquent accounts and disputes with,
customers and suppliers, in each case in the ordinary course of business; and
(h) shares of auction rate municipal preferred securities rated A or
better by S&P.
"Person" means any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.
"Plan" means any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 302 of ERISA, and in respect of which the Borrower or
any ERISA Affiliate is (or, if such plan were terminated, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
14
"Prime Rate" means the rate of interest per annum publicly announced
from time to time by The Chase Manhattan Bank as its prime rate in effect at its
principal office in New York City; each change in the Prime Rate shall be
effective from and including the date such change is publicly announced as being
effective.
"Register" has the meaning set forth in Section 9.04.
"Related Parties" means, with respect to any specified Person, such
Person's Affiliates and the respective directors, officers, employees, agents
and advisors of such Person and such Person's Affiliates.
"Required Lenders" means, at any time, Lenders having Revolving
Exposures and unused Revolving Commitments representing at least 57% of the sum
of the total Revolving Exposures and unused Revolving Commitments at such time.
"Restricted Payment" means (i) any dividend or other distribution
(whether in cash, securities or other property) with respect to any shares of
any class of capital stock of the Borrower or any Subsidiary, or (ii) any
payment (whether in cash, securities or other property), including any sinking
fund or similar deposit, on account of the purchase, redemption, retirement,
acquisition, cancellation or termination of any such shares of capital stock of
the Borrower or any Subsidiary, or any option, warrant or other right to acquire
any such shares of capital stock of the Borrower or any Subsidiary.
"Revolving Availability Period" means the period from and including
the Effective Date to but excluding the earlier of the Maturity Date and the
date of termination of the Revolving Commitments.
"Revolving Commitment" means, with respect to each Lender, the
commitment, of such Lender to make Loans and to acquire participations in
Letters of Credit hereunder, expressed as an amount representing the maximum
aggregate amount of such Lender's Revolving Exposure hereunder, as such
commitment may be (a) reduced from time to time pursuant to Section 2.08 and (b)
reduced or increased from time to time pursuant to assignment by or to such
Lender pursuant to Section 9.04. The amount of each Lender's Revolving
Commitment is set forth on Schedule 2.01, or in the Assignment and Acceptance
pursuant to which such Lender shall have assumed its Revolving Commitment, as
applicable. The aggregate amount of the Lenders' Revolving Commitments is
$35,000,000.
"Revolving Exposure" means, with respect to any Lender at any time,
the sum of the outstanding principal amount of such Lender's Loans and its LC
Exposure at such time.
"S&P" means Standard & Poor's.
"Standby Letter of Credit" means a standby letter of credit in form
and substance customarily issued by the Issuing Bank from time to time and in
form and substance acceptable to the Agent and the Issuing Bank, and issued for
such purposes for which the Borrower has historically obtained standby letters
of credit, or for such other purposes as are reasonably acceptable to the Agent
and the Issuing Bank.
15
"Statutory Reserve Rate" means a fraction (expressed as a decimal),
the numerator of which is the number one and the denominator of which is the
number one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Agent is subject (a) with respect to the
Base CD Rate, for new negotiable nonpersonal time deposits in dollars of over
$100,000 with maturities approximately equal to three months and (b) with
respect to the Adjusted LIBO Rate, for eurocurrency funding (currently referred
to as "Eurocurrency Liabilities" in Regulation D of the Board). Such reserve
percentages shall include those imposed pursuant to such Regulation D.
Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be
subject to such reserve requirements without benefit of or credit for proration,
exemptions or offsets that may be available from time to time to any Lender
under such Regulation D or any comparable regulation. The Statutory Reserve Rate
shall be adjusted automatically on and as of the effective date of any change in
any reserve percentage.
"subsidiary" means, with respect to any Person (the "parent") at any
date, any corporation, limited liability company, partnership, association or
other entity the accounts of which would be consolidated with those of the
parent in the parent's consolidated financial statements if such financial
statements were prepared in accordance with GAAP as of such date, as well as any
other corporation, limited liability company, partnership, association or other
entity (a) of which securities or other ownership interests representing more
than 50% of the equity or more than 50% of the ordinary voting power or, in the
case of a partnership, more than 50% of the general partnership interests are,
as of such date, owned, controlled or held, or (b) that is, as of such date,
otherwise Controlled, by the parent or one or more subsidiaries of the parent or
by the parent and one or more subsidiaries of the parent.
"Subsidiary" means any subsidiary of the Borrower.
"Taxes" means any and all present or future taxes, levies, imposts,
duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"Three-Month Secondary CD Rate" means, for any day, the secondary
market rate for three-month certificates of deposit reported as being in effect
on such day (or, if such day is not a Business Day, the next preceding Business
Day) by the Board through the public information telephone line of the Federal
Reserve Bank of New York (which rate will, under the current practices of the
Board, be published in Federal Reserve Statistical Release H. 15(519) during the
week following such day) or, if such rate is not so reported on such day or such
next preceding Business Day, the average of the secondary market quotations for
three-month certificates of deposit of major money center banks in New York City
received at approximately 10:00 a.m., New York City time, on such day (or, if
such day is not a Business Day, on the next preceding Business Day) by the Agent
from three negotiable certificate of deposit dealers of recognized standing
selected by it.
"Topps Enterprises" means Topps Enterprises, Inc., a Delaware
corporation.
"Topps Enterprises Guaranty" means a guaranty of payment of even date
herewith (in the form of Exhibit C hereto), made by Topps Enterprises to the
Agent with respect to the Obligations.
16
"Topps SA" means Topps Latin America SA, a corporation organized under
the laws of Uruguay.
"Topps SA Guaranty" means the Guaranty, dated as of the Effective
Date, between the Borrower and the Agent.
"Topps SA Letters of Credit" means Documentary Letters of Credit
issued for the account of Topps SA for the benefit of its vendors, reimbursement
obligations in respect of which are guaranteed by the Borrower.
"Topps SA Letter of Credit Outstandings" means, at any time, the sum
of (i) the aggregate undrawn stated amount of all Topps SA Letters of Credit
then outstanding plus (ii) all amounts theretofore drawn under Topps SA Letters
of Credit and not then reimbursed.
"Travelers Letter of Credit" means a Standby Letter of Credit issued
under the Existing Agreement by The Chase Manhattan Bank.
"Type", when used in reference to any Loan or Borrowing, refers to
whether the rate of interest on such Loan, or on the Loans comprising such
Borrowing, is determined by reference to the Adjusted LIBO Rate or the Alternate
Base Rate.
"Withdrawal Liability" means liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. Classification of Loans and Borrowings. For purposes of
this Agreement, Loans and Borrowings may be classified and referred to by Type
(e.g., a "Eurodollar Loan" or an "ABR Borrowing").
SECTION 1.03. Terms Generally. The definitions of terms herein shall
apply equally to the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The word "will"
shall be construed to have the same meaning and effect as the word "shall".
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement instrument or other document as from time to time amended,
restated, supplemented or otherwise modified (subject to any restrictions on
such amendments, restatements, supplements or modifications set forth herein),
(b) any reference herein to any Person shall be construed to include such
Person's successors and assigns, (c) the words "herein", "hereof" and
"hereunder", and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (d) all
references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement and (e) the words "asset" and "property" shall be construed to
have the same meaning and effect and to refer to any and all tangible and
intangible assets and properties, including cash, securities, accounts and
contract rights.
17
SECTION 1.04. Accounting Terms, GAAP. (a) Except as otherwise
expressly provided herein, all terms of an accounting or financial nature shall
be construed in accordance with GAAP, as in effect from time to time; provided
that if the Borrower notifies the Agent that the Borrower requests an amendment
to any provision hereof to eliminate the effect of any change occurring after
the date hereof in GAAP or in the application thereof on the operation of such
provision (or if the Agent notifies the Borrower that the Required Lenders
request an amendment to any provision hereof for such purpose), regardless of
whether any such notice is given before or after such change in GAAP or in the
application thereof, then such provision shall be interpreted on the basis of
GAAP as in effect and applied immediately before such change shall have become
effective until such notice shall have been withdrawn or such provision amended
in accordance herewith.
(b) All consolidated financial data contemplated in Article VI shall,
for purposes of such portions of this Agreement, exclude any data attributable
to any Approved Internet Subsidiary.
ARTICLE II
The Credits
-----------
SECTION 2.01. Revolving Commitments. Subject to the terms and
conditions set forth herein, each Lender agrees to make Loans to the Borrower
from time to time during the Revolving Availability Period in an aggregate
principal amount that will not result in such Lender's Revolving Exposure
exceeding such Lender's Revolving Commitment. Within the foregoing limits and
subject to the terms and conditions set forth herein, the Borrower may borrow,
prepay and reborrow Loans.
SECTION 2.02. Loans and Borrowings. (a) Each Loan shall be made as
part of a Borrowing consisting of Loans of the same Type made by the Lenders
ratably in accordance with their respective Revolving Commitments. The failure
of any Lender to make any Loan required to be made by it shall not relieve any
other Lender of its obligations hereunder; provided that the Revolving
Commitments of the Lenders are several and no Lender shall be responsible for
any other Lender's failure to make Loans as required.
(b) Subject to Section 2.14, each Revolving Borrowing shall be
comprised entirely of ABR Loans or Eurodollar Loans as the Borrower may request
in accordance herewith. Each Lender at its option may make any Eurodollar Loan
by causing any domestic or foreign branch or Affiliate of such Lender to make
such Loan; provided that any exercise of such option shall not affect the
obligation of the Borrower to repay such Loan in accordance with the terms of
this Agreement.
(c) At the commencement of each Interest Period for any Eurodollar
Borrowing, such Borrowing shall be in an aggregate amount that is an integral
multiple of $100,000 and not less than $1,000,000. At the time that each ABR
Borrowing is made, such Borrowing shall be in an aggregate amount that is an
integral multiple of $100,000 and not less than $1,000,000; provided that an ABR
Borrowing may be in an aggregate amount that is equal to the entire unused
balance of the total Revolving Commitments or that is required to finance the
reimbursement of an LC Disbursement as contemplated by Section 2.05(e).
Borrowings of more than one Type may be outstanding at the same time.
18
(d) Notwithstanding any other provision of this Agreement, the
Borrower shall not be entitled to request, or to elect to convert or continue,
any Borrowing if the Interest Period requested with respect thereto would end
after the Maturity Date.
(e) Loans must be for general corporate purposes, including Permitted
Acquisitions, but only a total principal amount of $30,000,000 of money borrowed
hereunder for Permitted Acquisitions may be outstanding at any time during the
Revolving Availability Period.
SECTION 2.03. Requests for Borrowings. To request a Borrowing, the
Borrower shall notify the Agent of such request by telephone (a) in the case of
a Eurodollar Borrowing, not later than 11:00 a.m., New York City time, three
Business Days before the date of the proposed Borrowing or (b) in the case of an
ABR Borrowing, not later than 11:00 a.m., New York City time, one Business Day
before the date of the proposed Borrowing; provided that any such notice of an
ABR Borrowing to finance the reimbursement of an LC Disbursement as contemplated
by Section 2.05(e) may be given not later than 10:00 a.m., New York City time,
on the date of the proposed Borrowing. Each such telephonic Borrowing Request
shall be irrevocable and shall be confirmed promptly by hand delivery or
telecopy to the Agent of a written Borrowing Request in a form approved by the
Agent and signed by the Borrower. Each such telephonic and written Borrowing
Request shall specify the following information in compliance with Section 2.02:
(i) the aggregate amount of such Borrowing;
(ii) the date of such Borrowing, which shall be a Business Day;
(iii) whether such Borrowing is to be an ABR Borrowing or a Eurodollar
Borrowing;
(iv) in the case of a Eurodollar Borrowing, the initial Interest
Period to be applicable thereto, which shall be a period contemplated by the
definition of the term "Interest Period"; and
(v) the location and number of the Borrower's account to which funds
are to be disbursed, which shall comply with the requirements of Section 2.06.
If no election as to the Type of Borrowing is specified, then the requested
Borrowing shall be an ABR Borrowing. If no Interest Period is specified with
respect to any requested Eurodollar Borrowing, then the Borrower shall be deemed
to have selected an Interest Period of one month's duration. Promptly following
receipt of a Borrowing Request in accordance with this Section, the Agent shall
advise each Lender of the details thereof and of the amount of such Lender's
Loan to be made as part of the requested Borrowing.
SECTION 2.04. [This Section intentionally left blank.].
19
SECTION 2.05. Letters of Credit. (a) General. Subject to the terms and
conditions set forth herein, the Borrower may request the issuance of
Documentary Letters of Credit (including Topps SA Letters of Credit) and Standby
Letters of Credit for its own account and for the account of Topps SA (in the
case of the Topps SA Letters of Credit), in a form reasonably acceptable to the
Agent and the Issuing Bank, at any time and from time to time during the
Revolving Availability Period. In the event of any inconsistency between the
terms and conditions of this Agreement and the terms and conditions of any form
of letter of credit application or other agreement submitted by the Borrower to,
or entered into by the Borrower with, the Issuing Bank relating to any Letter of
Credit the terms and conditions of this Agreement shall control. The Borrower
shall not be obligated under any such letter of credit application or related
documents to provide collateral to the Issuing Bank other than a security
interest in the goods in respect of which such Letter of Credit is being issued,
in the case of a Documentary Letter of Credit, which security interest will
terminate upon reimbursement of a drawing under such Documentary Letter of
Credit. Standby Letters of Credit may only be issued as security for worker's
compensation insurance or for another purpose approved by the Agent, in its
reasonable discretion.
(b) Notice of Issuance, Amendment, Renewal, Extension, Certain
Conditions. To request the issuance of a Letter of Credit (or the amendment,
renewal or extension of an outstanding Letter of Credit), the Borrower shall
hand deliver or telecopy (or transmit by electronic communication, if
arrangements for doing so have been approved by the Issuing Bank) to the Issuing
Bank and the Agent (reasonably in advance of the requested date of issuance,
amendment, renewal or extension) a notice requesting the issuance of a Letter of
Credit, or identifying the Letter of Credit to be amended, renewed or extended,
and specifying the date of issuance, amendment renewal or extension (which shall
be a Business Day), the date on which such Letter of Credit is to expire (which
shall comply with paragraph (c) of this Section), the amount of such Letter of
Credit; the name and address of the beneficiary thereof and such other
information as shall be necessary to prepare, amend, renew or extend such Letter
of Credit. If requested by the Issuing Bank, the Borrower also shall submit a
letter of credit application on the Issuing Bank's standard form in connection
with any request for a Letter of Credit. A Letter of Credit shall be issued,
amended, renewed or extended only if (x) in the case of a Standby Letter of
Credit, the same shall be for the purpose permitted in paragraph (a) above, and
(y) after giving effect to such issuance, amendment, renewal or extension (i)
the Letter of Credit Outstandings shall not exceed $15,000,000, (ii) the Topps
SA Letter of Credit Outstandings shall not exceed $15,000,000, and (iii) the
total Revolving Exposures shall not exceed the total Revolving Commitments.
(c) Expiration Date. Each Letter of Credit other than a Standby Letter
of Credit shall expire at or prior to the close of business on the earlier of
(i) the date one year after the date of the issuance of such Letter of Credit
(or, in the case of any renewal or extension thereof, one year after such
renewal or extension) and (ii) the date that is five Business Days prior to the
Maturity Date.
(d) Participations. By the issuance of a Letter of Credit (or an
amendment to a Letter of Credit increasing the amount thereof) and without any
further action on the part of the Issuing Bank or the Lenders, the Issuing Bank
hereby grants to each Lender, and each Lender hereby acquires from the Issuing
Bank, a participation in such Letter of Credit equal to such Lender's Applicable
Percentage of the aggregate amount available to be drawn under such Letter of
Credit. In consideration and in furtherance of the foregoing, each Lender hereby
absolutely and unconditionally agrees to pay to the Agent for the account of the
Issuing Bank, such Lender's Applicable Percentage of each LC Disbursement made
by the Issuing Bank and not reimbursed by the Borrower on the date due as
provided in paragraph (e) of this Section, or of any reimbursement payment
required to be refunded to the Borrower for any reason. Each Lender acknowledges
and agrees that its obligation to acquire participations pursuant to this
paragraph in respect of Letters of Credit is absolute and unconditional and
shall not be affected by any circumstance whatsoever, including any amendment
renewal or extension of any Letter of Credit or the occurrence and continuance
of a Default or reduction or termination of the Revolving Commitments, and that
each such payment shall be made without any offset abatement, withholding or
reduction whatsoever.
20
(e) Reimbursement. If the Issuing Bank shall make any LC Disbursement
in respect of a Letter of Credit, the Borrower shall reimburse such LC
Disbursement by paying to the Agent an amount equal to such LC Disbursement not
later than 12:00 noon, New York City time, on the date that such LC Disbursement
is made, if the Borrower shall have received notice of such LC Disbursement
prior to 10:00 a.m., New York City time, on such date, or, if such notice has
not been received by the Borrower prior to such time on such date, then not
later than 12:00 noon, New York City time, on (i) the Business Day that the
Borrower receives such notice, if such notice is received prior to 10:00 a.m.,
New York City time, on the day of receipt, or (ii) the Business Day immediately
following the day that the Borrower receives such notice, if such notice is not
received prior to such time on the day of receipt; provided that the Borrower
may, subject to the conditions to borrowing set forth herein, request in
accordance with Section 2.03 that such payment be financed with an ABR Borrowing
in an equivalent amount and, to the extent so financed, the Borrower's
obligation to make such payment shall be discharged and replaced by the
resulting ABR Borrowing. If the Borrower fails to make such payment when due,
the Agent shall notify each Lender of the applicable LC Disbursement, the
payment then due from the Borrower in respect thereof and such Lender's
Applicable Percentage thereof. Promptly following receipt of such notice, each
Lender shall pay to the Agent its Applicable Percentage of the payment then due
from the Borrower, in the same manner as provided in Section 2.06 with respect
to Loans made by such Lender (and Section 2.06 shall apply, mutatis mutandis, to
the payment obligations of the Lenders), and the Agent shall promptly pay to the
Issuing Bank the amounts so received by it from the Lenders. Promptly following
receipt by the Agent of any payment from the Borrower pursuant to this
paragraph, the Agent shall distribute such payment to the Issuing Bank or, to
the extent that Lenders have made payments pursuant to this paragraph to
reimburse the Issuing Bank, then to such Lenders and the Issuing Bank as their
interests may appear. Any payment made by a Lender pursuant to this paragraph to
reimburse the Issuing Bank for any LC Disbursement (other than the funding of
ABR Loans as contemplated above) shall not constitute a Loan and shall not
relieve the Borrower of its obligation to reimburse such LC Disbursement.
(f) Obligations Absolute. The Borrower's obligation to reimburse LC
Disbursements as provided in paragraph (e) of this Section shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement under any and all circumstances whatsoever and
irrespective of (i) any lack of validity or enforceability of any Letter of
Credit or this Agreement, or any term or provision therein, (ii) any draft or
other document presented under a Letter of Credit proving to be forged,
fraudulent or invalid in any respect or any statement therein being untrue or
inaccurate in any respect (iii) payment by the Issuing Bank under a Letter of
Credit against presentation of a draft or other document that does not comply
with the terms of such Letter of Credit, or (iv) any other event or circumstance
whatsoever, whether or not similar to any of the foregoing, that might, but for
the provisions of this Section, constitute a legal or equitable discharge of, or
provide a right of setoff against the Borrower's obligations hereunder. Neither
the Agent, the Lenders nor the Issuing Bank, nor any of their Related Parties,
shall have any liability or responsibility by reason of or in connection with
the issuance or transfer of any Letter of Credit or any payment or failure to
make any payment thereunder (irrespective of any of the circumstances referred
to in the preceding sentence), or any error, omission, interruption, loss or
delay in transmission or delivery of any draft, notice or other communication
under or relating to any Letter of Credit (including any document required to
make a drawing thereunder), any error in interpretation of technical terms or
any consequence arising from causes beyond the control of the Issuing Bank;
provided that the foregoing shall not be construed to excuse the Issuing Bank
from liability to the Borrower to the extent of any direct damages (as opposed
to consequential damages, claims in respect of which are hereby waived by the
Borrower to the extent permitted by applicable law) suffered by the Borrower
that are caused by the Issuing Bank's failure to exercise care when determining
whether drafts and other documents presented under a Letter of Credit comply
with the terms thereof. The parties hereto expressly agree that, in the absence
of gross negligence or wilful misconduct on the part of the Issuing Bank (as
finally determined by a court of competent jurisdiction), the Issuing Bank shall
be deemed to have exercised care in each such determination in furtherance of
the foregoing and without limiting the generality thereof, the parties agree
that, with respect to documents presented which appear on their face to be in
substantial compliance with the terms of a Letter of Credit, the Issuing Bank
may, in its sole discretion, either accept and make payment upon such documents
without responsibility for further investigation, regardless of any notice or
information to the contrary, or refuse to accept and make payment upon such
documents if such documents are not in strict compliance with the terms of such
Letter of Credit.
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(g) Disbursement Procedures. The Issuing Bank shall, promptly
following its receipt thereof, examine all documents purporting to represent a
demand for payment under a Letter of Credit. The Issuing Bank shall promptly
notify the Agent and the Borrower by telephone (confirmed by telecopy) of such
demand for payment and whether the Issuing Bank has made or will make an LC
Disbursement thereunder; provided that any failure to give or delay in giving
such notice shall not relieve the Borrower of its obligation to reimburse the
Issuing Bank and the Lenders with respect to any such LC Disbursement.
(h) Interim Interest. If the Issuing Bank shall make any LC
Disbursement, then, unless the Borrower shall reimburse such LC Disbursement in
full on the date such LC Disbursement is made, the unpaid amount thereof shall
bear interest, for each day from and including the date such LC Disbursement is
made to but excluding the date that the Borrower reimburses such LC Disbursement
at the rate per annum then applicable to ABR Loans; provided that, if the
Borrower fails to reimburse such LC Disbursement when due pursuant to paragraph
(e) of this Section, then Section 2.13(c) shall apply. Interest accrued pursuant
to this paragraph shall be for the account of the Issuing Bank, except that
interest accrued on and after the date of payment by any Lender pursuant to
paragraph (e) of this Section to reimburse the Issuing Bank shall be for the
account of such Lender to the extent of such payment.
(i) Replacement of the Issuing Bank. The Issuing Bank may be replaced
at any time by written agreement among the Borrower, the Agent, the replaced
Issuing Bank and the successor Issuing Bank; provided, however, that the
opportunity to serve as the replacement Issuing Bank shall be offered first to
LaSalle Bank National Association (A) for as long as it shall be the only Lender
other than the bank which is the Issuing Bank being replaced, and (B) at any
other time as long as it holds a Revolving Commitment of $15,000,000 or more.
The Agent shall notify the Lenders of any such replacement of the Issuing Bank.
At the time any such replacement shall become effective, the Borrower shall pay
all unpaid fees accrued for the account of the replaced Issuing Bank pursuant to
Section 2.12(b). From and after the effective date of any such replacement (i)
the successor Issuing Bank shall have all the rights and obligations of the
Issuing Bank under this Agreement with respect to Letters of Credit to be issued
thereafter, and (ii) references herein to the term "Issuing Bank" shall be
deemed to refer to such successor or to any previous Issuing Bank, or to such
successor and all previous Issuing Banks, as the context shall require. After
the replacement of an Issuing Bank hereunder, the replaced Issuing Bank shall
remain a party hereto and shall continue to have all the rights and obligations
of an Issuing Bank under this Agreement with respect to Letters of Credit issued
by it prior to such replacement, but shall not be required to issue additional
Letters of Credit.
22
(j) Cash Collateralization. Subject to the provision of the following
sentence, the Borrower shall, on or before the Maturity Date, deposit in an
account with the Agent in the name of the Agent and for the benefit of the
Lenders, an amount in cash equal to 105% of the sum of (i) the aggregate undrawn
stated amount of any Standby Letter of Credit having an expiration date later
than the Maturity Date plus (ii) all amounts theretofore drawn under any such
Standby Letter of Credit and not then reimbursed plus (iii) any accrued and
unpaid interest thereon. If any Event of Default shall occur and be continuing,
on the Business Day that the Borrower receives notice from the Agent or the
Required Lenders (or, if the maturity of the Loans has been accelerated, Lenders
with LC Exposure representing greater than 66-2/3% of the total LC Exposure)
demanding the deposit of cash collateral pursuant to this paragraph, the
Borrower shall deposit in such cash collateral account, an amount in cash equal
to 105% of the LC Exposure as of such date plus any accrued and unpaid interest
thereon; provided that the obligation to deposit such cash collateral shall
become effective immediately, and such deposit shall become immediately due and
payable, without demand or other notice of any kind, upon the occurrence of any
Event of Default with respect to the Borrower described in clause (h) or (i) of
Section 7.01. Each such deposit shall be held by the Agent as collateral for the
payment and performance of the obligations of the Borrower under this Agreement.
The Agent shall have exclusive dominion and control, including the exclusive
right of withdrawal, over such account. Other than any interest earned on the
investment of such deposits, which investments shall be made at the option and
sole discretion of the Agent and at the Borrower's risk and expense, such
deposits shall not bear interest. Interest or profits, if any, on such
investments shall accumulate in such account. Moneys in such account shall be
applied by the Agent to reimburse the Issuing Bank for LC Disbursements for
which it has not been reimbursed and, to the extent not so applied, shall be
held for the satisfaction of the reimbursement obligations of the Borrower for
the LC Exposure at such time or, if the maturity of the Loans has been
accelerated (but subject to the consent of Lenders with LC Exposure representing
greater than 66-2/3% of the total LC Exposure), be applied to satisfy other
obligations of the Borrower under this Agreement. If the Borrower is required to
provide an amount of cash collateral hereunder as a result of the occurrence of
an Event of Default, such amount (to the extent not applied as aforesaid) shall
be returned to the Borrower within three Business Days after all Events of
Default have been cured or waived. It is expressly agreed that amounts deposited
into such account in respect of a Standby Letter of Credit shall remain on
deposit after the termination of this Agreement so long as such Letter of Credit
remains outstanding, and to the extent that such funds have not been applied to
the Obligations, shall be returned to the Borrower following the expiration of
such Letter of Credit or the return thereof, in each case without the same
having been drawn.
(k) Any Letter of Credit which has been issued under the Existing
Agreement (including the Travelers Letter of Credit) which remains outstanding
as of the Effective Date shall be deemed to have been issued as a Letter of
Credit pursuant to this Agreement except that no fronting fees (under Section
2.12(b)) shall be payable on account of such carried over Letters of Credit.
23
SECTION 2.06. Funding of Borrowings. (a) Each Lender shall make each
Loan to be made by it hereunder on the proposed date thereof by wire transfer of
immediately available funds by 12:00 noon, New York City time, to the account of
the Agent most recently designated by it for such purpose by notice to the
Lenders. The Agent will make such Loans available to the Borrower by promptly
crediting the amounts so received, in like funds, to an account of the Borrower
maintained with the Agent in New York City and designated by the Borrower in the
applicable Borrowing Request; provided that ABR Loans made to finance the
reimbursement of an LC Disbursement as provided in Section 2.05(e) shall be
remitted by the Agent to the Issuing Bank.
(b) Unless the Agent shall have received notice from a Lender prior to
the proposed date of any Borrowing that such Lender will not make available to
the Agent such Lender's share of such Borrowing, the Agent may assume that such
Lender has made such share available on such date in accordance with paragraph
(a) of this Section and may, in reliance upon such assumption, make available to
the Borrower a corresponding amount. In such event, if a Lender has not in fact
made its share of the applicable Borrowing available to the Agent, then the
applicable Lender and the Borrower severally agree to pay to the Agent forthwith
on demand such corresponding amount with interest thereon, for each day from and
including the date such amount is made available to the Borrower to but
excluding the date of payment to the Agent at (i) in the case of such Lender,
the greater of the Federal Funds Effective Rate and a rate determined by the
Agent in accordance with banking industry rules on interbank compensation, or
(ii) in the case of the Borrower, the interest rate applicable to the Loans so
funded by the Agent. If such Lender pays such amount to the Agent, then such
amount shall constitute such Lender's Loan included in such Borrowing.
SECTION 2.07. Interest Elections. (a) Each Borrowing initially shall
be of the Type specified in the applicable Borrowing Request and, in the case of
a Eurodollar Borrowing, shall have an initial Interest Period as specified in
such Borrowing Request. Thereafter, the Borrower may elect to convert such
Borrowing to a different Type or to continue such Borrowing and, in the case of
a Eurodollar Borrowing, may elect Interest Periods therefor, all as provided in
this Section. The Borrower may elect different options with respect to different
portions of the affected Borrowing, in which case each such portion shall be
allocated ratably among the Lenders holding the Loans comprising such Borrowing,
and the Loans comprising each such portion shall be considered a separate
Borrowing.
(b) To make an election pursuant to this Section, the Borrower shall
notify the Agent of such election by telephone by the time that a Borrowing
Request would be required under Section 2.03 if the Borrower were requesting a
Borrowing of the Type resulting from such election to be made on the effective
date of such election. Each such telephonic Interest Election Request shall be
irrevocable and shall be confirmed promptly by hand delivery or telecopy to the
Agent of a written Interest Election Request in a form approved by the Agent and
signed by the Borrower.
(c) Each telephonic and written Interest Election Request shall
specify the following information in compliance with Section 2.02 and paragraph
(f) of this Section:
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(i) the Borrowing to which such Interest Election Request applies and,
if different options are being elected with respect to different portions
thereof, the portions thereof to be allocated to each resulting Borrowing (in
which case the information to be specified pursuant to clauses (iii) and (iv)
below shall be specified for each resulting Borrowing);
(ii) the effective date of the election made pursuant to such Interest
Election Request which shall be a Business Day;
(iii) whether the resulting Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing; and
(iv) if the resulting Borrowing is a Eurodollar Borrowing, the
Interest Period to be applicable thereto after giving effect to such election,
which shall be a period contemplated by the definition of the term "Interest
Period".
If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then the Borrower shall be deemed to have
selected an Interest Period of one month's duration.
(d) Promptly following receipt of an Interest Election Request, the
Agent shall advise each Lender, in writing, of the details thereof and of such
Lender's portion of each resulting Borrowing.
(e) If the Borrower fails to deliver a timely Interest Election
Request with respect to a Eurodollar Borrowing prior to the end of the Interest
Period applicable thereto, then, unless such Borrowing is repaid as provided
herein at the end of such Interest Period, such Borrowing shall be converted to
an ABR Borrowing. Notwithstanding any contrary provision hereof, if an Event of
Default has occurred and is continuing and the Agent, at the request of the
Required Lenders, so notifies the Borrower, then, so long as an Event of Default
is continuing (i) no outstanding Borrowing may be converted to or continued as a
Eurodollar Borrowing and (ii) unless repaid, each Eurodollar Borrowing shall be
converted to an ABR Borrowing at the end of the Interest Period applicable
thereto.
SECTION 2.08. Termination and Reduction of Revolving Commitments.
(a) Unless previously terminated, the Revolving Commitments shall
terminate on the Maturity Date.
(b) The Borrower may at any time terminate, or from time to time
reduce, the Revolving Commitments; provided that (i) each reduction of the
Revolving Commitments shall be in an amount that is an integral multiple of
$100,000 and not less than $1,000,000, and (ii) the Borrower shall not terminate
or reduce the Revolving Commitments if, after giving effect to any concurrent
prepayment of the Loans in accordance with Section 2.11, the sum of the
Revolving Exposures would exceed the total Revolving Commitments.
25
(c) The Borrower shall notify the Agent of any election to terminate
or reduce the Revolving Commitments under paragraph (b) of this Section at least
three Business Days prior to the effective date of such termination or
reduction, specifying such election and the effective date thereof. Promptly
following receipt of any notice, the Agent shall advise the Lenders, in writing,
of the contents thereof. Each notice delivered by the Borrower pursuant to this
Section shall be irrevocable; provided that a notice of termination of the
Revolving Commitments delivered by the Borrower may state that such notice is
conditioned upon the effectiveness of other credit facilities, in which case
such notice may be revoked by the Borrower (by notice to the Agent on or prior
to the specified effective date) if such condition is not satisfied. Any
termination or reduction of the Revolving Commitments shall be permanent. Each
reduction of the Revolving Commitments shall be made ratably among the Lenders
in accordance with their respective Revolving Commitments.
(d) The Lenders, at the option of the Required Lenders, shall have the
right upon notice to the Borrower, to permanently reduce (or terminate, if
applicable) the Revolving Commitments by an amount equal to each payment
required to be made to the Agent on account of any Permitted Asset Sale;
provided that such notice of such reduction shall be made within five Business
Days after the Agent has been notified of the receipt of a payment on account of
such a sale, during which period the Borrower may not borrow or cause the
issuance of any Letter of Credit hereunder if such borrowing or new Letter of
Credit would cause the total Revolving Exposures to exceed the total amount to
which the Revolving Commitments may be reduced pursuant to this paragraph (d).
Notwithstanding the foregoing, the Revolving Commitments may not be reduced so
as to cause the total LC Exposures to exceed the resulting total Revolving
Commitments.
SECTION 2.09. Repayment of Loans, Evidence of Debt. (a) The Borrower
hereby unconditionally promises to pay to the Agent for the account of each
Lender (i) the then unpaid principal amount of each Loan of such Lender, on the
Maturity Date, and (ii) the amount of Net Proceeds required to be paid on
account of a Permitted Asset Sale, as and when required hereunder.
(b) Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing the Indebtedness of the Borrower to such
Lender resulting from each Loan made by such Lender, including the amounts of
principal and interest payable and paid to such Lender from time to time
hereunder.
(c) The Agent shall maintain accounts in which it shall record (i) the
amount of each Loan made hereunder, the Type thereof and the Interest Period
applicable thereto, (ii) the amount of any principal or interest due and payable
or to become due and payable from the Borrower to each Lender hereunder and
(iii) the amount of any sum received by the Agent hereunder for the account of
the Lenders and each Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to paragraph
(b) or (c) of this Section shall be prima facie evidence of the existence and
amounts of the obligations recorded therein; provided that the failure of any
Lender or the Agent to maintain such accounts or any error therein shall not in
any manner affect the obligation of the Borrower to repay the Loans in
accordance with the terms of this Agreement.
(e) Any Lender may request that Loans made by it be evidenced by a
grid promissory note (in the form of Exhibit D hereto). In such event the
Borrower shall prepare, execute and deliver to such Lender such promissory note
payable to the order of such Lender (or, if requested by such Lender, to such
Lender and its registered assigns). Thereafter, the Loans evidenced by such
promissory note and interest thereon shall at all times (including after
assignment pursuant to Section 9.04) be represented by one or more grid
promissory notes in such form payable to the order of the payee named therein
(or, if such promissory note is a registered note, to such payee and its
registered assigns).
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SECTION 2.10. [This Section has been intentionally omitted.]
SECTION 2.11. Prepayment of Loans. (a) The Borrower shall have the
right at any time and from time to time to prepay any Borrowing in whole or in
part, subject to the requirements of this Section.
(b) In the event and on each occasion that Net Proceeds in the form or
cash or cash equivalents are received by or on behalf of the Borrower or any
Subsidiary (with respect to a Permitted Asset Sale), the Borrower shall make
payment to the Agent of the amount(s), required in order for the transaction in
question to comply with the definition of a "Permitted Asset Sale" in Section
1.01, as and when such payments are required in order to maintain such
compliance.
(c) Prior to any optional or mandatory prepayment of Borrowings
hereunder, the Borrower shall select the Borrowing or Borrowings to be prepaid
and shall specify such selection in the notice of such prepayment pursuant to
paragraph (d) of this Section; provided that each prepayment of Borrowings shall
be applied to prepay ABR Borrowings before any other Borrowings.
(d) The Borrower shall notify the Agent by telephone (confirmed by
telecopy) of any prepayment hereunder (i) in the case of prepayment of a
Eurodollar Borrowing, not later than 11:00 a.m., New York City time, three
Business Days before the date of prepayment or (ii) in the case of prepayment of
an ABR Borrowing, not later than 11:00 a.m., New York City time, one Business
Day before the date of prepayment. Each such notice shall be irrevocable and
shall specify the prepayment date, the principal amount of each Borrowing or
portion thereof to be prepaid; provided that, if a notice of optional prepayment
is given in connection with a conditional notice of termination of the Revolving
Commitments as contemplated by Section 2.08, then such notice of prepayment may
be revoked if such notice of termination is revoked in accordance with Section
2.08. Promptly following receipt of any such notice, the Agent shall advise the
Lenders, in writing, of the contents thereof. Each partial prepayment of any
Borrowing shall be in the minimum amount of $500,000 and (thereafter) in
$100,000 increments thereof (or such other amount as may be needed to satisfy a
mandatory repayment requirement under Section 2.11(b). Each prepayment of a
Borrowing shall be applied ratably to the Loans included in the prepaid
Borrowing. Prepayments shall be accompanied by accrued interest to the extent
required by Section 2.13.
SECTION 2.12. Fees. (a) In addition to any "up front" commitment fee
paid on the Effective Date, the Borrower agrees to pay to the Agent for the
account of each Lender a commitment fee (the "Commitment Fee"), which shall
accrue at the Applicable Rate on the average daily unused amount of the
Revolving Commitment of such Lender during the period from and including the
Effective Date to but excluding the date on which such Commitment terminates.
Accrued Commitment Fees shall be payable in arrears on the last day of May,
August, November and February of each year and on the date on which the
Revolving Commitments terminate, commencing on the first such date to occur
after the date hereof. All Commitment Fees shall be computed on the basis of a
year of 360 days and shall be payable for the actual number of days elapsed
(including the first day but excluding the last day). For purposes of computing
Commitment Fees, a Revolving Commitment of a Lender shall be deemed to be used
to the extent of the outstanding Loans and LC Exposure of such Lender.
27
(b) The Borrower agrees to pay (i) to the Agent for the account of
each Revolving Lender (on the basis of its Applicable Percentage) a
participation fee with respect to its participations in Letters of Credit, which
shall be calculated at the rate of .25% of the full amount of each draw under
each Documentary Letter of Credit, and shall accrue at a per annum rate of .75%
of the face amount of each Standby Letter of Credit, during the period from and
including the Effective Date to but excluding the later of the date on which
such Lender's Revolving Commitment terminates and the date on which such Lender
ceases to have any LC Exposure, and (ii) to the Issuing Bank a fronting fee
which shall be calculated and payable as set forth in a separate letter of even
date herewith. In addition to the fees in the nature of those referred to in the
preceding sentence (without duplication), the Borrower agrees to pay the Issuing
Bank's standard fees with respect to the issuance, amendment renewal or
extension of any Letter of Credit or processing of drawings thereunder.
Participation fees and fronting fees accrued through and including the last day
of May, August, November and February of each year shall be payable on the third
Business Day following such last day, commencing on the first such date to occur
after the Effective Date; provided that all such fees shall be payable on the
date on which the Revolving Commitments terminate and any such fees accruing
after the date on which the Revolving Commitments terminate shall be payable on
demand. Any other fees payable to the Issuing Bank pursuant to this paragraph
shall be payable within 10 days after demand. All participation fees and
fronting fees shall be computed on the basis of a year of 360 days and shall be
payable for the actual number of days elapsed (including the first day but
excluding the last day).
(c) The Borrower agrees to pay to the Agent, for its own account, fees
payable in the amounts and at the times separately agreed upon between the
Borrower and the Agent.
(d) All fees payable hereunder shall be paid on the dates due, in
immediately available funds, to the Agent (or to the Issuing Bank, in the case
of fees payable to it) for distribution, in the case of Commitment Fees and
participation fees, to the Lenders entitled thereto. Fees paid shall not be
refundable under any circumstances, absent arithmetic error.
SECTION 2.13. Interest. (a) The Loans comprising each ABR Borrowing
shall bear interest at the Alternate Base Rate plus the Applicable Rate.
(b) The Loans comprising each Eurodollar Borrowing shall bear interest
at the Adjusted LIBO Rate for the Interest Period in effect for such Borrowing
plus the Applicable Rate.
(c) Notwithstanding the foregoing, if any principal of or interest on
any Loan or any fee or other amount payable by the Borrower hereunder is not
paid when due, whether at stated maturity, upon acceleration or otherwise, such
overdue amount shall bear interest, after as well as before judgment, at a rate
per annum equal to (i) in the case of overdue principal of any Loan, 2% plus the
rate otherwise applicable to such Loan as provided in the preceding paragraphs
of this Section or (ii) in the case of any other amount, 2% plus the rate
applicable to ABR Loans as provided in paragraph (a) of this Section.
28
(d) Accrued interest on each Loan shall be payable in arrears on each
Interest Payment Date for such Loan and upon termination of the Revolving
Commitments; provided that (i) interest accrued pursuant to paragraph (c) of
this Section shall be payable on demand, (ii) in the event of any repayment or
prepayment of any Loan (other than a prepayment of an ABR Loan prior to the end
of the Revolving Availability Period), accrued interest on the principal amount
repaid or prepaid shall be payable on the date of such repayment or prepayment,
and (iii) in the event of any conversion of any Eurodollar Loan prior to the end
of the current Interest Period therefor, accrued interest on such Loan shall be
payable on the effective date of such conversion.
(e) All interest hereunder shall be computed on the basis of a year of
360 days, except that interest computed by reference to the Alternate Base Rate
at times when the Alternate Base Rate is based on the Prime Rate shall be
computed on the basis of a year of 365 days (or 366 days in a leap year), and in
each case shall be payable for the actual number of days elapsed (including the
first day but excluding the last day). The applicable Alternate Base Rate or
Adjusted LIB0 Rate shall be determined by the Agent, and such determination
shall be conclusive absent manifest error.
SECTION 2.14. Alternate Rate of Interest. If prior to the commencement
of any Interest Period for a Eurodollar Borrowing:
(a) the Agent determines (which determination shall be conclusive
absent manifest error) that adequate and reasonable means do not exist for
ascertaining the Adjusted LIBO Rate for such Interest Period;
(b) the Agent is advised by the Required Lenders that the Adjusted
LIBO Rate for such Interest Period will not adequately and fairly reflect the
cost to such Lenders of making or maintaining their Loans included in such
Borrowing for such Interest Period, to a degree which such Lenders have
determined to be material; or
(c) the Agent determines (which determination shall be conclusive
absent manifest error) that it would be illegal to conduct a Eurodollar
Borrowing at the time in question;
then the Agent shall give notice thereof to the Borrower and the Lenders by
telephone or telecopy as promptly as practicable thereafter and, until the Agent
notifies the Borrower and the Lenders that the circumstances giving rise to such
notice no longer exist, (i) any Interest Election Request that requests the
conversion of any Borrowing to, or continuation of any Borrowing as a Eurodollar
Borrowing, shall be ineffective, and (ii) if any Borrowing Request requests a
Eurodollar Borrowing, such Borrowing shall be made as an ABR Borrowing.
SECTION 2.15. Increased Costs. (a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special deposit or
similar requirement against assets of, deposits with or for the account of, or
credit extended by, any Lender (except any such reserve requirement reflected in
the Adjusted LIBO Rate) or the Issuing Bank; or
(ii) impose on any Lender or the Issuing Bank or the London interbank
market any other condition affecting this Agreement or Eurodollar Loans made by
such Lender or any Letter of Credit or participation therein;
29
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan), or to increase the cost to such Lender or the
Issuing Bank of participating in, issuing or maintaining any Letter of Credit,
or to reduce the amount of any sum received or receivable by such Lender or the
Issuing Bank hereunder (whether of principal, interest or otherwise), then the
Borrower will pay to such Lender or the Issuing Bank, as the case may be, such
additional amount or amounts as will compensate such Lender or the Issuing Bank,
as the case may be, for such additional costs incurred or reduction suffered.
(b) If any Lender or the Issuing Bank determines that any Change in
Law regarding capital requirements has or would have the effect of reducing the
rate of return on such Lender's or the Issuing Bank's capital or on the capital
of such Lender's or the Issuing Bank's holding company, if any, as a consequence
of this Agreement or the Loans made by, or participations in Letters of Credit
held by, such Lender, or the Letters of Credit issued by the Issuing Bank, to a
level below that which such Lender or the Issuing Bank or such Lender's or the
Issuing Bank's holding company could have achieved but for such Change in Law
(taking into consideration such Lender's or the Issuing Bank's policies and the
policies of such Lender's or the Issuing Bank's holding company with respect to
capital adequacy), then from time to time the Borrower will pay to such Lender
or the Issuing Bank, as the case may be, such additional amount or amounts as
will compensate such Lender or the Issuing Bank or such Lender's or the Issuing
Bank's holding company for any such reduction suffered.
(c) A certificate of a Lender or the Issuing Bank setting forth the
amount or amounts necessary to compensate such Lender or the Issuing Bank or its
holding company, as the case may be, as specified in paragraph (a) or (b) of
this Section shall be delivered to the Borrower and shall be conclusive absent
manifest error. The Borrower shall pay such Lender or the Issuing Bank, as the
case may be, the amount shown as due on any such certificate within 10 days
after receipt thereof
(d) Failure or delay on the part of any Lender or the Issuing Bank to
demand compensation pursuant to this Section shall not constitute a waiver of
such Lender's or the Issuing Bank's right to demand such compensation; provided
that the Borrower shall not be required to compensate a Lender or the Issuing
Bank pursuant to this Section for any increased costs or reductions incurred
more than 270 days prior to the date that such Lender or the Issuing Bank, as
the case may be, notifies the Borrower of the Change in Law giving rise to such
increased costs or reductions and of such Lender's or the Issuing Bank's
intention to claim compensation therefor; provided further that, if the Change
in Law giving rise to such increased costs or reductions is retroactive, then
the 270-day period referred to above shall be extended to include the period of
retroactive effect thereof.
SECTION 2.16. Break Funding Payments. In the event of (a) the payment
of any principal of any Eurodollar Loan other than on the last day of an
Interest Period applicable thereto (including as a result of an Event of
Default), (b) the Borrower's election to convert a Borrowing or continue a
Borrowing as a Eurodollar Borrowing which results in the Interest Period
therefor commencing before and ending after a date on which any principal of the
Loans is to be repaid and the payment of such principal during such Interest
Period, (c) the conversion of any Eurodollar Loan other than on the last day of
the Interest Period applicable thereto, (d) the failure to borrow, convert,
continue or prepay any Loan on the date specified in any notice delivered
30
pursuant hereto (regardless of whether such notice may be revoked under Section
2.11(d) and is revoked in accordance therewith), or (e) the assignment of any
Eurodollar Loan other than on the last day of the Interest Period applicable
thereto as a result of a request by the Borrower pursuant to Section 2.19, then,
in any such event, the Borrower shall compensate each Lender for the loss, cost
and expense attributable to such event (and in the case of clause (b) above, the
Borrower will make such compensation on the applicable principal repayment
date). In the case of a Eurodollar Loan, such loss, cost or expense to any
Lender shall be deemed to include an amount determined by such Lender to be the
excess, if any, of (i) the amount of interest which would have accrued on the
principal amount of such Loan had such event not occurred, at the Adjusted LIBO
Rate that would have been applicable to such Loan, for the period from the date
of such event to the last day of the then current Interest Period therefor (or,
in the case of a failure to borrow, convert or continue, for the period that
would have been the Interest Period for such Loan), over (ii) the amount of
interest which would accrue on such principal amount for such period at the
interest rate which such Lender would bid were it to bid, at the commencement of
such period, for dollar deposits of a comparable amount and period from other
banks in the Eurodollar market. A certificate of any Lender setting forth any
amount or amounts that such Lender is entitled to receive pursuant to this
Section shall be delivered to the Borrower and shall be conclusive absent
manifest error. The Borrower shall pay such Lender the amount shown as due on
any such certificate within 10 days after receipt thereof
SECT10N 2.17. Taxes. (a) Any and all payments by or on account of any
obligation of the Borrower hereunder or under any other Loan Document shall be
made free and clear of and without deduction for any Indemnified Taxes or Other
Taxes; provided that if the Borrower shall be required to deduct any Indemnified
Taxes or Other Taxes from such payments, then (i) the sum payable shall be
increased as necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section) the Agent,
Lender or Issuing Bank (as the case may be) receives an amount equal to the sum
it would have received had no such deductions been made, (ii) the Borrower shall
make such deductions, and (iii) the Borrower shall pay the full amount deducted
to the relevant Governmental Authority in accordance with applicable law.
(b) In addition, the Borrower shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) The Borrower shall indemnify the Agent, each Lender and the
Issuing Bank, within 10 days after written demand therefor, for the full amount
of any Indemnified Taxes or Other Taxes paid by the Agent, such Lender or the
Issuing Bank, as the case may be, on or with respect to any payment by or on
account of any obligation of the Borrower hereunder or under any other Loan
Document (including Indemnified Taxes or Other Taxes imposed or asserted on or
attributable to amounts payable under this Section) and any penalties, interest
and reasonable expenses arising therefrom or with respect thereto, whether or
not such Indemnified Taxes or Other Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority. A certificate as to the amount
of such payment or liability delivered to the Borrower by a Lender or the
Issuing Bank, or by the Agent on its own behalf or on behalf of a Lender or the
Issuing Bank, shall be conclusive absent manifest error.
(d) As soon as practicable after any payment of Indemnified Taxes or
Other Taxes by the Borrower to a Governmental Authority, the Borrower shall
deliver to the Agent the original or a certified copy of a receipt issued by
such Governmental Authority evidencing such payment, a copy of the return
reporting such payment or other evidence of such payment reasonably satisfactory
to the Agent.
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(e) Any Foreign Lender that is entitled to an exemption from or
reduction of withholding tax under the law of the jurisdiction in which the
Borrower is located, or any treaty to which such jurisdiction is a party, with
respect to payments under this Agreement shall deliver to the Borrower (with a
copy to the Agent), at the time or times prescribed by applicable law, such
properly completed and executed documentation prescribed by applicable law or
reasonably requested by the Borrower as will permit such payments to be made
without withholding or at a reduced rate.
SECTION 2.18. Payments Generally; Pro Rata Treatment, Sharing of
Setoffs. (a) The Borrower shall make each payment required to be made by it
hereunder or under any other Loan Document (whether of principal, interest, fees
or reimbursement of LC Disbursements, or of amounts payable under Section 2.15,
2.16 or 2.17, or otherwise) prior to 12:00 noon, New York City time, on the date
when due, in immediately available funds, without set-off or counterclaim. Any
amounts received after such time on any date may, in the discretion of the
Agent, be deemed to have been received on the next succeeding Business Day for
purposes of calculating interest thereon. All such payments shall be made to the
Agent at its offices at 0 XxxxxXxxx Xxxxxx, Xxxxxxxx, Xxx Xxxx 00000, except
payments to be made directly to the Issuing Bank as expressly provided herein,
and except that payments pursuant to Sections 2.15, 2.16, 2.17 and 9.03 shall be
made directly to the Persons entitled thereto, and payments pursuant to other
Loan Documents shall be made to the Persons specified therein. The Agent shall
distribute any such payments received by it for the account of any other Person
to the appropriate recipient promptly following receipt thereof. If any payment
under any Loan Document shall be due on a day that is not a Business Day, the
date for payment shall be extended to the next succeeding Business Day, and, in
the case of any payment accruing interest, interest thereon shall be payable for
the period of such extension. All payments under each Loan Document shall be
made in dollars.
(b) If at any time insufficient funds are received by and available to
the Agent to pay fully all amounts of principal, unreimbursed LC Disbursements,
interest and fees then due hereunder, such funds shall be applied (i) first
towards payment of interest and fees then due hereunder, ratably among the
parties entitled thereto in accordance with the amounts of interest and fees
then due to such parties, and (ii) second, towards payment of principal and
unreimbursed LC Disbursements then due hereunder, ratably among the parties
entitled thereto in accordance with the amounts of principal and unreimbursed LC
Disbursements then due to such parties.
(c) If any Lender shall, by exercising any right of set-off or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Loans, or participations in LC Disbursements resulting in
such Lender receiving payment of a greater proportion of the aggregate amount of
its Loans and participations in LC Disbursements and accrued interest thereon
than the proportion received by any other Lender, then the Lender receiving such
greater proportion shall purchase (for cash at face value) participations in the
Loans and participations in LC Disbursements of other Lenders to the extent
necessary so that the benefit of all such payments shall be shared by the
Lenders ratably in accordance with the aggregate amount of principal of and
32
accrued interest on their respective Loans and participations in LC
Disbursements; provided that (i) if any such participations are purchased and
all or any portion of the payment giving rise thereto is recovered, such
participations shall be rescinded and the purchase price restored to the extent
of such recovery, without interest, and (ii) the provisions of this paragraph
shall not be construed to apply to any payment made by the Borrower pursuant to
and in accordance with the express terms of this Agreement or any payment
obtained by a Lender as consideration for the assignment of or sale of a
participation in any of its Loans or participations in LC Disbursements to any
assignee or participant other than to the Borrower or any Subsidiary or
Affiliate thereof (as to which the provisions of this paragraph shall apply).
The Borrower consents to the foregoing and agrees, to the extent it may
effectively do so under applicable law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against the
Borrower rights of set-off and counterclaim with respect to such participation
as fully as if such Lender were a direct creditor of the Borrower in the amount
of such participation.
(d) Unless the Agent shall have received notice from the Borrower
prior to the date on which any payment is due to the Agent for the account of
the Lenders or the Issuing Bank hereunder that the Borrower will not make such
payment, the Agent may assume that the Borrower has made such payment on such
date in accordance herewith and may, in reliance upon such assumption,
distribute to the Lenders or the Issuing Bank, as the case may be, the amount
due. In such event, if the Borrower has not in fact made such payment, then each
of the Lenders or the Issuing Bank, as the case may be, severally agrees to
repay to the Agent forthwith on demand the amount so distributed to such Lender
or Issuing Bank with interest thereon, for each day from and including the date
such amount is distributed to it to but excluding the date of payment to the
Agent at the greater of the Federal Funds Effective Rate and a rate determined
by the Agent in accordance with banking industry rules on interbank
compensation.
(e) If any Lender shall fail to make any payment required to be made
by it pursuant to Section 2.05(d) or (e), 2.06(b), 2.18(d) or 9.03(c), then the
Agent may, its discretion (notwithstanding any contrary provision hereof), apply
any amounts thereafter received by the Agent for the account of such Lender to
satisfy such Lender's obligations under such Sections until all such unsatisfied
obligations are fully paid.
SECTION 2.19. Mitigation Obligations, Replacement of Lenders. (a) If
any Lender requests compensation under Section 2.15, or if the Borrower is
required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 2.17, then such
Lender shall use reasonable efforts to designate a different lending office for
funding or booking its Loans hereunder or to assign its rights and obligations
hereunder to another of its offices, branches or affiliates, if, in the judgment
of such Lender, such designation or assignment (i) would eliminate or reduce
amounts payable pursuant to Section 2.15 or 2.17, as the case may be, in the
future, and (ii) would not subject such Lender to any unreimbursed cost or
expense and would not otherwise be disadvantageous to such Lender. The Borrower
hereby agrees to pay all reasonable costs and expenses incurred by any Lender in
connection with any such designation or assignment.
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(b) If any Lender requests compensation under Section 2.15, or if the
Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.17,
or if any Lender defaults in its obligation to fund Loans hereunder, then the
Borrower may, at its sole expense and effort, upon notice to such Lender and the
Agent require such Lender to assign and delegate, without recourse (in
accordance with and subject to the restrictions contained in Section 9.04), all
its interests, rights and obligations under this Agreement to an assignee that
shall assume such obligations (which assignee may be another Lender, if a Lender
accepts such assignment); provided that (i) the Borrower shall have received the
prior written consent of the Agent (and, if a Revolving Commitment is being
assigned, the Issuing Bank), which consent shall not unreasonably be withheld,
(ii) such Lender shall have received payment of an amount equal to the
outstanding principal of its Loans and participations in LC Disbursements,
accrued interest thereon, accrued fees and all other amounts payable to it
hereunder, from the assignee (to the extent of such outstanding principal and
accrued interest and fees) or the Borrower (in the case of all other amounts),
and (iii) in the case of any such assignment resulting from a claim for
compensation under Section 2.15 or payments required to be made pursuant to
Section 2.17, such assignment will result in a reduction in such compensation or
payments. A Lender shall not be required to make any such assignment and
delegation if, prior thereto, as a result of a waiver by such Lender or
otherwise, the circumstances entitling the Borrower to require such assignment
and delegation cease to apply.
ARTICLE III
Representations and Warranties
------------------------------
The Borrower represents and warrants to the Lenders that:
SECTION 3.01. Organization; Powers. Each of the Borrower and its
Subsidiaries is duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization, has all requisite power and
authority to carry on its business as now conducted and, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, is qualified to do business in,
and is in good standing in, every jurisdiction where such qualification is
required.
SECTION 3.02. Authorization, Enforceability. The Financing
Transactions to be entered into by the Borrower and Topps Enterprises are within
their respective corporate powers and have been duly authorized by all necessary
corporate and, if required, stockholder action. This Agreement has been duly
executed and delivered by the Borrower and Topps Enterprises and constitutes,
and each other Loan Document to which the Borrower or Topps Enterprises (as
applicable) is to be a party, when executed and delivered by the Borrower or
Topps Enterprises (as applicable) will constitute, a legal, valid and binding
obligation of the Borrower or Topps Enterprises (as applicable), enforceable in
accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other laws affecting creditors' rights generally
and subject to general principles of equity, regardless of whether considered in
a proceeding in equity or at law.
34
SECTION 3.03. Governmental Approvals, No Conflicts. The Financing
Transactions (a) do not require any consent or approval of, registration or
filing with, or any other action by, any Governmental Authority, except such as
have been obtained or made and are in full force and effect, (b) will not
violate any applicable law or regulation or the charter, bylaws or other
organizational documents of the Borrower or any of its Subsidiaries or any order
of any Governmental Authority, (c) will not violate or result in a default under
any indenture, agreement or other instrument binding upon the Borrower or any of
its Subsidiaries or its assets, or give rise to a right thereunder to require
any payment to be made by the Borrower or any of its Subsidiaries, and (d) will
not result in the creation or imposition of any Lien on any asset of the
Borrower or any of its Subsidiaries.
SECTION 3.04. Financial Condition; No Material Adverse Change. (a) The
Borrower has heretofore furnished to the Lenders its consolidated and
consolidating balance sheet and statements of income, stockholders equity and
cash flows (i) as of and for the fiscal year ended February 27, 1999, (A) in the
case of the consolidated financials, reported on by Deloitte & Touche, L.L.P.,
independent public accountants, and (B) in the case of the consolidating
financials, certified by the Borrower's chief financial officer, and (ii) as of
and for the fiscal quarter ended November 27, 1999 (A) in the case of the
consolidated financials, reviewed by Deloitte & Touche, L.L.P., independent
public accountants, and (B) in the case of consolidating financials, certified
by the Borrower's chief financial officer. Such financial statements present
fairly, in all material respects, the financial position and results of
operations and cash flows of the Borrower and its consolidated Subsidiaries as
of such dates and for such periods in accordance with GAAP.
(b) Except as disclosed in the financial statements referred to above
or the notes thereto and except for the Disclosed Matters, after giving effect
to the Financing Transactions, none of the Borrower or its Subsidiaries has, as
of the Effective Date, any Material Indebtedness (except as set forth on
Schedule 3.04) or contingent liabilities, unusual long-term commitments or
unrealized losses.
35
(c) Since November 27, 1999 there has been no material adverse change
in the business, assets, operations, prospects or condition, financial or
otherwise, of the Borrower and its Subsidiaries, taken as a whole.
SECTION 3.05. Properties. (a) Each of the Borrower and its
Subsidiaries has good title to, or valid leasehold interests in, all the real
and personal property material to its business, subject to no transfer
restrictions or Liens of any kind (other than as set forth on Schedule 6.02),
except for minor defects in title that do not interfere with its ability to
conduct its business as currently conducted or to utilize such properties for
their intended purposes.
(b) Each of the Borrower and its Subsidiaries owns, or is licensed to
use, all trademarks, tradenames, copyrights, patents and other intellectual
property material to its business, and the use thereof by the Borrower and its
Subsidiaries does not infringe upon the rights of any other Person, except for
any such infringements that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.
(c) Schedule 3.05 sets forth the address of each real property that is
owned or leased by the Borrower or any of its Subsidiaries as of the Effective
Date after giving effect to the Financing Transactions.
(d) Neither the Borrower nor any of its Subsidiaries is a party to any
contract, agreement, lease or instrument, the performance of which, either
unconditionally or upon the happening of an event, will result in or require the
creation of a Lien on any assets of the Borrower or its Subsidiaries, or
otherwise result in a violation of this Agreement, other than Liens arising
under documentation with respect to Documentary Letters of Credit.
SECTION 3.06. Litigation and Environmental Matters. (a) There are no
actions, suits or proceedings by or before any arbitrator or Governmental
Authority pending against or, to the knowledge of the Borrower, threatened
against or affecting the Borrower or any of its Subsidiaries (i) as to which
there is a reasonable likelihood of an adverse determination and that if
adversely determined, could reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect (other than the Disclosed
Matters), or (ii) that involve any of the Loan Documents or the Financing
Transactions.
(b) Except for the Disclosed Matters and except with respect to any
other matters that, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, neither the Borrower nor any of
its Subsidiaries (i) has failed to comply with any Environmental Law or to
obtain, maintain or comply with any permit, license or other approval required
under any Environmental Law, (ii) has become subject to any Environmental
Liability, (iii) has received notice of any claim with respect to any
Environmental Liability or (iv) knows of any basis for any Environmental
Liability.
(c) Since the date of this Agreement, there has been no change in the
status of the Disclosed Matters that, individually or in the aggregate, has
resulted in, or materially increased the likelihood of, a Material Adverse
Effect.
SECTION 3.07. Compliance with Laws and Agreements. Each of the
Borrower and its Subsidiaries is in compliance with all laws, regulations and
orders of any Governmental Authority applicable to it or its property and all
indentures, agreements and other instruments binding upon it or its property,
except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect. Neither the
Borrower nor any Subsidiary is (a) a party to any judgment, order, decree or any
agreement or instrument or subject to restrictions which could reasonably be
likely to have a Material Adverse Effect or to materially adversely affect the
ability of the Borrower to observe the covenants and agreements contained herein
or with respect to any other Indebtedness, or (b) in default in the performance,
observance or fulfillment of any of the obligations, covenants or conditions
contained in any agreement or instrument to which it is a party, which default
has, or if not remedied within any applicable grace period could reasonably be
likely to have, a Material Adverse Effect or to materially adversely affect the
ability of the Borrower or Topps Enterprises to observe the covenants and
agreements contained herein or any other Loan Document.
36
SECTION 3.08. Investment and Holding Company Status. Neither the
Borrower nor any of its Subsidiaries is (a) an "investment company" or an
"affiliated Person" of, or "promoter" or "principal underwriter" for, an
"investment company," as defined in, or subject to regulation under, the
Investment Company Act of 1940, or (b) a "holding company" as defined in, or
subject to regulation under, the Public Utility Holding Company Act of 1935.
SECTION 3.09. Taxes. Each of the Borrower and its Subsidiaries has
timely filed or caused to be filed all tax returns and reports required to have
been filed and has paid or caused to be paid all Taxes required to have been
paid by it, except (a) Taxes that are being contested in good faith by
appropriate proceedings and for which the Borrower or such Subsidiary, as
applicable, has set aside on its books adequate reserve, or (b) to the extent
that the failure to do so could not reasonably be expected to result in a
Material Adverse Effect. Each of the Borrower and its Subsidiaries has paid, or
has provided adequate reserves for the payment of, all material Federal, state
and foreign income taxes applicable for all prior fiscal years and for the
current fiscal year to the date hereof.
SECTION 3.10. ERISA. No ERISA Event has occurred or is reasonably
expected to occur that, when taken together with all other such ERISA Events for
which liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect. The present value of all accumulated
benefit obligations under each Plan (based on the assumptions used for purposes
of Statement of Financial Accounting Standards No. 87) did not, as of the date
of the most recent financial statements reflecting such amounts, exceed by more
than $3,000,000 the fair market value of the assets of such Plan, and the
present value of all accumulated benefit obligations of all underfunded Plans
(based on the assumptions used for purposes of Statement of Financial Accounting
Standards No. 87) did not, as of the date of the most recent financial
statements reflecting such amounts, exceed by more than $3,000,000 the fair
market value of the assets of all such underfunded Plans.
SECTION 3.11. Disclosure. The Borrower has disclosed to the Lenders
all agreements, instruments and corporate or other restrictions to which the
Borrower or any of its Subsidiaries is subject, and all other matters known to
any of them, that, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect. None of the reports, financial
statements, certificates or other information furnished by or on behalf of the
Borrower to the Agent or any Lender in connection with the negotiation of this
Agreement or any other Loan Document, or delivered hereunder or thereunder (as
modified or supplemented by other information so furnished) contains any
material misstatement of fact or omits to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading; provided that with respect to projected financial
information, the Borrower represents only that such information was prepared in
good faith based upon assumptions believed to be reasonable at the time.
SECTION 3.12. Subsidiaries and Affiliates. Schedule 3.12 sets forth as
of the Effective Date the name of, and the ownership interest of the Borrower
in, each Subsidiary and each Affiliate of the Borrower. The outstanding shares
or other equity interests of each such Subsidiary and each Affiliate have been
duly authorized and validly issued and are fully paid and nonassessable; and the
Borrower and each such Subsidiary owns beneficially and of record all the shares
and other interests it is listed as owning in Schedule 3.12, free and clear of
any Lien. Schedule 3.12 also sets forth as of the Effective Date a complete
description of all Intercompany Notes and Intercompany Debt held by the
Borrower. The Borrower owns beneficially and legally all such Intercompany Notes
and Intercompany Debt, free and clear of any Lien.
37
SECTION 3.13. Insurance. Schedule 3.13 sets forth a description of all
insurance maintained by or on behalf of the Borrower and its Subsidiaries as of
the Effective Date. As of the Effective Date, all premiums in respect of such
insurance have been paid.
SECTION 3.14. Labor Matters. As of the Effective Date, except for the
Disclosed Matters, none of the employees of the Borrower or any Subsidiary is
subject to any collective bargaining agreement and there are no strikes,
lockouts or slowdowns against the Borrower or any Subsidiary pending or, to the
knowledge of the Borrower, threatened, that are reasonably likely to have a
Material Adverse Effect. The hours worked by and payments made to employees of
the Borrower and the Subsidiaries have not been in material violation of the
Fair Labor Standards Act or any other applicable Federal, state, local or
foreign law dealing with such matters except to the extent that any such
violation could not reasonably be expected to result in a Material Adverse
Effect. All payments due from the Borrower or any Subsidiary, or for which any
claim may be made against the Borrower or any Subsidiary, on account of wages
and employee health and welfare insurance and other benefits, have been paid or
accrued as a liability on the books of the Borrower or such Subsidiary. The
consummation of the Financing Transactions will not give rise to any right of
termination or right of renegotiation on the part of any union under any
collective bargaining agreement to which the Borrower or any Subsidiary is bound
that is reasonably likely to have a Material Adverse Effect.
SECTION 3.15. Solvency. Immediately after the consummation of the
Financing Transactions to occur on the Effective Date and immediately following
the making of any Loan made on the Effective Date, and after giving effect to
the application of the proceeds of such Loans, (a) the fair value of the
respective assets of the Borrower at a fair valuation, will exceed its debts and
liabilities, subordinated, contingent or otherwise; (b) the present fair
saleable value of the respective property of the Borrower will be greater than
the amount that will be required to pay the probable liability of its debts and
other liabilities, subordinated, contingent or otherwise, as such debts and
other liabilities become absolute and matured; (c) the Borrower will be able to
pay its debts and liabilities, subordinated, contingent or otherwise, as such
debts and liabilities become absolute and matured; and (d) the Borrower will not
have unreasonably small capital with which to conduct the business in which it
is engaged as such business is now conducted and is proposed to be conducted
following the Effective Date.
SECTION 3.16. No Default. As of the date hereof, there does not exist
any Default or Event of Default hereunder.
SECTION 3.17. Place of Business. As of the date hereof, the Borrower
has no office, mailing address or other place of business in the United Kingdom.
38
SECTION 3.18. Year 2000. Any reprogramming required to permit the
proper functioning, in and following the year 2000 of (i) the Borrower's
computer systems and (ii) equipment containing embedded microchips (including
systems and equipment supplied by others or with which Borrower's systems
interface) and the testing of all such systems and equipment, as so
reprogrammed, was substantially complete by December 31, 1999. No matter arising
out of any changes necessitated by the so-called "Y2K" problem has resulted in a
Material Adverse Effect.
SECTION 3.19. Federal Reserve Regulations. The Borrower is not engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying Margin Stock.
ARTICLE IV
Conditions
----------
SECTION 4.01. Effective Date. The obligations of the Lenders to make
Loans and of the Issuing Bank to issue Letters of Credit hereunder shall not
become effective until the date on which each of the following conditions is
satisfied (or waived in accordance with Section 9.02):
(a) The Agent (or its counsel) shall have received from each party
hereto either (i) a counterpart of this Agreement signed on behalf of such
party, or (ii) written evidence satisfactory to the Agent (which may include
telecopy transmission of a signed signature page of this Agreement) that such
party has signed a counterpart of this Agreement.
(b) The Agent shall have received a favorable written opinion
(addressed to the Agent and the Lenders and dated the Effective Date) of Xxxxxxx
Xxxx & Xxxxxxxxx, counsel for the Borrower, covering such matters relating to
the Borrower, Topps Enterprises, the Loan Documents or the Financing
Transactions as the Required Lenders shall reasonably request. The Borrower
hereby requests such counsel to deliver such opinion.
(c) The Agent shall have received such documents and certificates as
the Agent or its counsel may reasonably request relating to the organization,
existence and good standing of the Borrower and Topps Enterprises, the
authorization of the Financing Transactions and any other legal matters relating
to the Borrower, Topps Enterprises, the Loan Documents or the Financing
Transactions, all in form and substance satisfactory to the Agent and its
counsel.
(d) The Agent shall have received a certificate, dated the Effective
Date and signed by the President, a Vice President or a Financial Officer of the
Borrower, confirming compliance with the conditions set forth in paragraphs (a)
and (b) of Section 4.02.
(e) The Agent shall have received all fees and other amounts due and
payable on or prior to the Effective Date, including, to the extent invoiced,
reimbursement or payment of all out-of-pocket expenses required to be reimbursed
or paid by the Borrower hereunder or under any other Loan Document.
39
(f) All amounts outstanding under the Credit Agreement dated as of May
11, 1998 among the Borrower, the Agent and the "Lenders" party thereto, as
amended (the "Existing Agreement"), shall have been satisfied or disposed of to
the satisfaction of the Agent.
(g) The Agent shall have received evidence satisfactory to it that the
insurance required by Section 5.07 is in effect.
(h) The Borrower and the Subsidiaries shall have granted the Agent
access to and the right to inspect all reports, audits and other internal
information of the Borrower and the Subsidiaries relating to environmental
matters, and any third-party verification of certain matters relating to
compliance with Environmental Laws requested by the Agent, and the Agent shall
be satisfied that the Borrower and the Subsidiaries are in compliance in all
material respects with all applicable Environmental Laws and be satisfied with
the costs of maintaining such compliance.
(i) All consents and approvals required to be obtained from any
Governmental Authority or other Person as shall be required to consummate the
transactions contemplated hereby shall have been obtained, and all applicable
waiting periods and appeal periods shall have expired, in each case without the
imposition of any burdensome conditions.
(j) The Lenders shall have received (i) audited consolidated financial
statements of the Borrower for the fiscal year ended February 27, 1999, (ii) if
available, satisfactory audited consolidated financial statements of the
Borrower for the fiscal year ended February 26, 2000, (iii) satisfactory
reviewed interim consolidated financial statements of the Borrower for the
quarterly period ended November 27, 1999, and (iv) unaudited consolidating
financial statements for all statements above.
(k) The Agent shall have received the Topps SA Guaranty and the Topps
Enterprises Guaranty duly executed by the Borrower and Topps Enterprises,
respectively.
(l) The Agent and the Lenders shall have received such other
documents, instruments, certificates and opinions as are customary for
transactions of this type or as the Agent or any Lender may reasonably request,
and shall be satisfied with such other conditions as it may reasonably require.
The Agent shall notify the Borrower and the Lenders of the Effective
Date, and such notice shall be conclusive and binding. Notwithstanding the
foregoing, the obligations of the Lenders to make Loans, and of the Issuing Bank
to issue Letters of Credit hereunder, shall not become effective unless each of
the foregoing conditions is satisfied (or waived pursuant to Section 9.02) at or
prior to 3:00 p.m., New York City time, on June 30, 2000 (and, in the event such
conditions are not so satisfied or waived, the Revolving Commitments shall
terminate at such time).
SECTION 4.02. Each Credit Event. The obligation of each Lender to make
a Loan on the occasion of any Borrowing, and of the Issuing Bank to issue,
amend, renew or extend any Letter of Credit, is subject to the satisfaction of
the following conditions:
40
(a) The representations and warranties of the Borrower set forth in
the Loan Documents shall be true and correct on and as of the date of such
Borrowing or the date of issuance, amendment, renewal or extension of such
Letter of Credit, as applicable, except to the extent they expressly relate to
an earlier date (it being understood that references to a specific date, to "the
date hereof" and to "the Effective Date" are not repeated as of the date of such
Borrowing).
(b) At the time of and immediately after giving effect to such
Borrowing or the issuance, amendment, renewal or extension of such Letter of
Credit, as applicable, no Default shall have (or would have) occurred and be
continuing.
(c) Each condition to the making of a Loan, or the issuance,
amendment, renewal or extension of a Letter of Credit, as applicable, under
Article II, shall have been satisfied .
(d) If a certification is required under Section 5.04(c), the Agent
shall have received such certificate which must state that the Borrower has
determined that the termination or lapse of the Material License in question
will not have a Material Adverse Effect.
(e) If as of the close of the most recent reporting period under
Section 5.01(a) or (b), the Borrower was not required to provide the
certification required under Section 5.01(c) with respect to Sections 6.04,
6.07, 6.13 and 6.14, such a certificate must be provided (based upon the data
from the most recent reporting period) prior to the making of any Loan, together
with the Borrowing Request for such Loan.
Each Borrowing Request shall be accompanied by a certificate, dated
the date of the Borrowing Request, signed by the President, a Vice President or
a Financial Officer of the Borrower as to the matters specified in paragraphs
(a), (b) and (c) of this Section.
SECTION 4.03. Additional Condition For Each Loan. If at any time prior
to a Borrowing Request an LPT shall have occurred, the obligation of the Lenders
to make any Loan which is requested by such Borrowing Request is further subject
to the condition that the Agent shall have determined, in its reasonable
judgment, that the effect of the transaction which gave rise to such LPT is no
longer continuing (i.e., the Borrower and its Subsidiaries do not remain
leveraged by reason of such transaction to the extent required to constitute an
LPT).
ARTICLE V
Affirmative Covenants
---------------------
Until the Revolving Commitments have expired or been terminated and
the principal of and interest on each Loan and all fees payable hereunder shall
have been paid in full, and all Letters of Credit shall have expired or
terminated, and all LC Disbursements shall have been reimbursed, the Borrower
covenants and agrees with the Lenders that:
SECTION 5.01. Financial Statements and Other Information. The Borrower
will furnish to the Agent and each Lender:
41
(a) Within 90 days after the end of each fiscal year of the Borrower,
its audited consolidated and unaudited consolidating balance sheet and related
statements of operations, stockholders equity and cash flows as of the end of
and for such year, setting forth in each case in comparative form the figures
for the previous fiscal year, (i) in the case of the audited consolidated
financial statements, reported on by Deloitte & Touche, L.L.P. or other
independent public accountants of recognized national standing (without a "going
concern" or like qualification or exception and without any qualification or
exception as to the scope of such audit), and (ii) in the case of the unaudited
consolidating financial statements, certified by the Borrower's chief financial
officer, to the effect that such consolidated financial statements present
fairly in all material respects the financial condition and results of
operations of the Borrower and its consolidated Subsidiaries on a consolidated
basis in accordance with GAAP consistently applied;
(b) Within 45 days after the end of each of the first three fiscal
quarters of each fiscal year of the Borrower, its consolidated and consolidating
balance sheet and related statements of operations (including a schedule setting
forth the results of operations by business segment), stockholders' equity and
cash flows as of the end of and for such fiscal quarter and the then elapsed
portion of the fiscal year, setting forth in each case in comparative form the
figures for the corresponding period or periods of (or, in the case of the
balance sheet as of the end of) the previous fiscal year, (i) in the case of the
consolidated financial statements, reviewed by Deloitte & Touche, L.L.P. or
other independent public accountants of recognized national standing, and (ii)
in the case of the unaudited consolidating financial statements, certified by
the Borrower's chief financial officer as presenting fairly in all material
respects the financial condition and results of operations of the Borrower and
its consolidated Subsidiaries on a consolidated basis in accordance with GAAP
consistently applied, subject to normal year-end audit adjustments;
(c) Concurrently with any delivery of financial statements under
clause (a) or (b) above, a certificate of a Financial Officer, substantially in
the form of Exhibit B (or such other form reasonably satisfactory to the Agent)
(i) certifying as to whether a Default has occurred and, if a Default has
occurred, specifying the details thereof and any action taken or proposed to be
taken with respect thereto, (ii) setting forth reasonably detailed calculations
showing performance in respect of Sections 6.06, 6.16 and 6.17 (and Section
6.04, 6.07, 6.13 and 6.14 if any Loan is outstanding at the time of the making
of such certificate or was outstanding as of the close of the reporting period
in question), and (iii) stating whether any change in GAAP or in the application
thereof has occurred since the date of the Borrower's audited financial
statements referred to in Section 3.04 and, if any such change has occurred,
specifying the effect of such change on the financial statements accompanying
such certificate;
(d) Concurrently with any delivery of financial statements under
clause (a) above, a certificate of the accounting firm that reported on such
financial statements stating whether they obtained knowledge during the course
of their examination of such financial statements of any Default (which
certificate may be limited to the extent required by accounting rules or
guidelines);
(e) Within 45 days after the end of each fiscal quarter, a list of any
Intercompany Debt (whether or not evidenced by an Intercompany Note) outstanding
as of the end of such fiscal quarter;
42
(f) [This clause has been intentionally omitted];
(g) by May 1 of each calendar year, financial projections for the
current fiscal year on a quarterly basis, in each case setting forth among other
things, the Borrower's projected gross sales, projected net sales and projected
results of operations of each business segment (domestic and foreign), for the
Borrower and its Subsidiaries in form and content consistent with Borrower's
official plan as presented to its Board of Directors;
(h) within 45 days after the end of each fiscal quarter, any revision
of projections previously delivered to the Agent or the projections referred to
in clause (g) above, such revised projected balance sheets, projected statements
of operations and projected statements of cash flows with an explanation of all
material variances to the profit and loss statement from the projections as they
existed prior to such revision;
(i) promptly after the same become publicly available, copies of all
periodic and other reports, proxy statements and other materials filed by the
Borrower or any Subsidiary with the Securities and Exchange Commission, or any
Governmental Authority succeeding to any or all of the functions of said
Commission, or with any national securities exchange, or distributed by the
Borrower to its shareholders generally, as the case may be; and
(j) promptly following any request therefor, such other information
regarding the operations, business affairs and financial condition of the
Borrower or any Subsidiary, or compliance with the terms of any Loan Document,
as the Agent or any Lender may reasonably request.
SECTION 5.02. Notices of Material Events. The Borrower will furnish to
the Agent and each Lender prompt written notice of the following:
(a) the occurrence of any Default;
(b) the filing or commencement of any action, suit or proceeding
by or before any arbitrator or Governmental Authority against or
affecting the Borrower or any Affiliate thereof that, if
adversely determined, could reasonably be expected to result in a
Material Adverse Effect;
(c) the occurrence of any ERISA Event that alone or together with
any other ERISA Events that have occurred, could reasonably be
expected to result in liability of the Borrower and its
Subsidiaries in an aggregate amount exceeding $750,000; and
(d) any other development that results in, or could reasonably be
expected to result in, a Material Adverse Effect.
43
Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the Borrower setting forth the
details of the event or development requiring such notice and any action taken
or proposed to be taken with respect thereto.
SECTION 5.03. [This Section has been intentionally omitted].
SECTION 5.04. Existence, Conduct of Business. The Borrower will, and
will cause each of its Subsidiaries to, do or cause to be done all things
necessary to preserve, renew and keep in full force and effect (a) its legal
existence and (b) the rights, licenses, permits, privileges, franchises,
patents, copyrights, trademarks and trade names which are material to the
conduct of its business taken, in case of the Borrower, individually and in the
case of any Subsidiary, as a whole with the other Subsidiaries; provided that
the foregoing shall not prohibit any merger, consolidation, liquidation or
dissolution to the extent the same is permitted under Section 6.03 and, if
applicable, 6.04 (i); provided, further, that the Borrower shall be permitted to
terminate, or allow to lapse, any Material License in the exercise of its
reasonable business judgment to the extent that the Borrower (a) provides
written notice on the Contract Notification Date that such Material License will
terminate or may be terminated, or allowed to lapse without renewal, (b) if
requested by the Agent, advises the Agent of the status of any negotiations
which may be transpiring in respect of such Material License, and (c) furnishes
to the Agent a certificate stating the determination by the Borrower of whether
such lapse or termination will or will not have a Material Adverse Effect, by
the sooner of (x) the date of the first Borrowing Request or request for the
issuance, amendment, renewal or extension of a Letter of Credit under Section
2.05 following the date that such Material License terminates or is allowed to
lapse, or (y) 30 days following the date that such Material License terminates
or is allowed to lapse.
SECTION 5.05. Payment of Obligations. The Borrower will, and will
cause each of its Subsidiaries to, pay its Indebtedness and other obligations
(for which the failure to pay would constitute an Event of Default under Section
7.01(f)), including Tax liabilities, before the same shall become delinquent or
in default, except where (a) the validity or amount thereof is being contested
in good faith by appropriate proceedings, (b) the Borrower or such Subsidiary
has set aside on its books adequate reserves with respect thereto in accordance
with GAAP, (c) such contest effectively suspends collection of the contested
obligation and the enforcement of any Lien securing such obligation, and (d) the
failure to make payment pending such contest could not reasonably be expected to
result in a Material Adverse Effect.
SECTION 5.06. Maintenance of Properties. The Borrower will, and will
cause each of its Subsidiaries to, keep and maintain or replace all property
material to the conduct of its (respective) business in good working order and
condition, ordinary wear and tear excepted.
SECTION 5.07. Insurance. (a) The Borrower will, and will cause each of
its Subsidiaries to, maintain, with financially sound and reputable insurance
companies:
(i) fire and extended coverage insurance, on a replacement cost
basis, with respect to all personal property and improvements to
real property, in such amounts as are customarily maintained by
companies in the same or similar business operating in the same
or similar locations;
44
(ii) commercial general liability insurance against claims for
bodily injury, death or property damage occurring upon, about or
in connection with the use of any properties owned, occupied or
controlled by it providing coverage on an occurrence basis with a
combined single limit of not less than $10,000,000 and including
the broad form CGL endorsement;
(iii) business interruption insurance, insuring against loss of
gross earnings for a period of not less than 12 months arising
from any risks or occurrences required to be covered by insurance
pursuant to clause (i) above; and
(iv) such other insurance as may be required by law.
Deductibles or self-insured retention shall not exceed $500,000 for fire and
extended coverage policies, $1,000,000 for commercial general liability policies
or 30 days for business interruption policies.
(b) Each such policy referred to in this paragraph also shall provide that
it shall not be canceled, materially modified or not renewed (i) by reason of
nonpayment of premium except upon not less than 10 days' prior written notice
thereof by the insurer to the Agent (giving the Agent the right to cure defaults
in the payment of premiums), or (ii) for any other reason except upon not less
than 30 days' prior written notice thereof by the insurer to the Agent. The
Borrower shall deliver to the Agent, prior to the cancellation, modification or
non-renewal of any such policy of insurance, a copy of a renewal or replacement
policy (or other evidence of renewal of a policy previously delivered to the
Agent) together with evidence satisfactory to the Agent of payment of the
premium therefor.
SECTION 5.08. Notice of Asset Sale; LPT; Approved Internet Subsidiary
Investment; and Foreign Investment.
(a) The Borrower will, and will cause each of its Subsidiaries to, notify
the Agent (i) of the Borrower's or any such Subsidiary's having entered into any
agreement for the sale of any asset which sale could trigger a reduction of the
Revolving Commitments under Section 2.08(d), promptly upon entering into any
such agreement, (ii) of the closing of any such sale, immediately upon such
closing, and (iii) of the receipt of any payment of any kind on account of such
asset.
(b) The Borrower will notify the Agent of the consummation of any
transaction giving rise to an LPT, promptly upon the consummation thereof,
whether or not the same constitutes a Default at the time in question.
45
(c) The Borrower will notify the Agent of each investment made by the
Borrower or any Guarantor in an Approved Internet Subsidiary, upon the making
thereof. Such notice shall set forth the amount of such investment and the basis
for such computation.
(d) The Borrower will notify the Agent of any Permitted Acquisition of the
type defined as a "Foreign Acquisition" (within the definition of Permitted
Acquisition in Section 1.01), and shall simultaneously certify to the Agent that
the cash paid on account of such Foreign Acquisition originates from a source
outside the United States.
SECTION 5.09. Books and Records, Inspection and Audit Rights. The Borrower
will, and will cause each of its Subsidiaries to, keep proper books of record
and account in which full, true and correct entries are made of all dealings and
transactions in relation to its business and activities. The Borrower will, and
will cause each of its Subsidiaries to, permit any representatives designated by
the Agent or any Lender, upon reasonable prior notice, to visit and inspect its
properties, to examine and make extracts from its books and records, and to
discuss its affairs, finances and condition with its officers and independent
accountants, all at such reasonable times and as often as reasonably requested.
SECTION 5.10. Compliance with Laws. The Borrower will, and will cause each
of its Subsidiaries to, comply with all laws, rules, regulations and orders of
any Governmental Authority applicable to it or its property, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.
SECTION 5.11. Notice of Discharge of Hazardous Material or Environmental
Complaint. The Borrower will, and will cause each of its Subsidiaries to,
promptly provide to the Agent true, accurate and complete copies of any and all
notices, complaints, orders, directives, claims or citations received by the
Borrower or any Subsidiary relating to any (a) violation or alleged violation by
the Borrower or any Subsidiary of any applicable Environmental Law; (b) release
or threatened release by the Borrower or any Subsidiary, or at any facility or
property owned or operated by the Borrower or any Subsidiary, of any Hazardous
Material, except where occurring legally; or (c) liability or alleged liability
of the Borrower or any Subsidiary for the costs of cleaning up, removing,
remediating or responding to a release of Hazardous Materials.
SECTION 5.12. Environmental Compliance. If the Borrower or any Subsidiary
shall receive letter, notice, complaint, order, directive, claim or citation
alleging that the Borrower or any Subsidiary has violated any Environmental Law
or is liable for the costs of cleaning up, removing, remediating or responding
to a release of Hazardous Materials, the Borrower shall, within the time period
permitted by the applicable Environmental Law or the Governmental Authority
responsible for enforcing such Environmental Law, remove or remedy, or cause the
applicable Subsidiary to remove or remedy, such violation or release or satisfy
such liability, except where the failure to do so is not reasonably likely to
result in a Material Adverse Effect or unless the applicability of the
Environmental Law, the fact of such violation or liability, or what is required
to remove or remedy such violation, is being contested by the Borrower or the
applicable Subsidiary by appropriate proceedings diligently conducted and all
reserves with respect thereto as may be required under GAAP, if any, have been
made.
46
SECTION 5.13. Use of Proceeds and Letters of Credit. The proceeds of the
Loans and Letters of Credit will be used for general working capital needs of
the Borrower and (in the case of Standby Letters of Credit) to guaranty the
payment of workers' compensation insurance in the ordinary course of business or
for another purpose approved by the Agent in its reasonable discretion. No part
of the proceeds of any Loan will be used, whether directly or indirectly, (i) to
purchase or carry Margin Stock or to extend credit to others for the purpose of
purchasing or carrying Margin Stock or to refund Indebtedness originally
incurred for such purpose, or (ii) for any purpose that entails a violation of
any of the Regulations of the Board, including Regulations T, U and X.
SECTION 5.14. Additional Subsidiaries. (a) If any additional Subsidiary is
formed or acquired or if any inactive existing Subsidiary shall become active in
any material respect, after the Effective Date, the Borrower will notify the
Agent and the Lenders thereof, and the Borrower will, if such Subsidiary is
formed in the United States (or organized under the laws of the United States or
any State or subdivision thereof) and is not an Approved Internet Subsidiary,
cause such Subsidiary to become a guarantor of the Obligations, jointly and
severally with all other Guarantors, within 10 Business Days after such
Subsidiary is formed, acquired or activated (as applicable), pursuant to
documentation reasonably satisfactory to the Agent.
(b) If the Borrower wishes to convert an existing Guarantor into an
Approved Internet Subsidiary, the Borrower shall provide the Agent with at least
30 days prior written notice of the intended date of such conversion, which
notice shall include a detailed explanation of all of the proposed transactions
associated with such conversion, including the investment by the third-party (or
parties) in the Subsidiary in question (the "Conversion Transactions"), as well
as a detailed statement of the reasons for the Borrower's belief that upon
consummation of the Conversion Transactions, such Subsidiary should qualify as
an Approved Internet Subsidiary. If the Subsidiary qualifies as an Approved
Internet Subsidiary, such Subsidiary will be released from its obligations as a
Guarantor upon consummation of the Conversion Transactions. For purposes of this
paragraph (b), the amount invested by the Borrower (and one or more Guarantors,
if applicable) shall include (i) any new investment made or intended to be made
by the Borrower or any Guarantor in such Subsidiary, and (ii) the aggregate
amount of all investments in such Subsidiary made by the Borrower and all
Guarantors prior to the Conversion Transactions (determined, on the date of each
such investment, on the basis of fair market value, in accordance with GAAP).
(c) An Approved Internet Subsidiary shall cease to qualify as such if all
Persons unaffiliated with the Borrower except through such Subsidiary shall
cease to own an equity interest in such Subsidiary, whereupon the Borrower shall
cause such Subsidiary to comply with Section 5.14(a) as if it were newly formed.
SECTION 5.15. Further Assurances. The Borrower will execute any and all
further documents, agreements and instruments, and take all such further actions
which may be required under any applicable law, or which the Agent or the
Required Lenders may reasonably request, to effectuate the transactions
contemplated by the Loan Documents, all at the expense of the Borrower.
47
SECTION 5.16. Changes to Loan Documents. The Borrower will, and will cause
its Subsidiaries to: (i) provide further assurances of any kind reasonably
requested by any Lender purchasing an interest in the Letters of Credit, the
Loans and/or Revolving Commitments after the Effective Date; and (ii) make
amendments, if reasonably required by any Lender purchasing any such interest
after the Effective Date; provided, however, that no such amendment (which the
Borrower or any Subsidiary is required to make) shall: (A) increase any interest
rate or fees for which any of them is responsible hereunder; (B) reduce any of
the Revolving Commitments or shorten the Maturity Date; (C) require the Borrower
or any Subsidiary to obtain any consent or estoppel certificate from a Person
not Controlled by any of them and having no legal obligation to provide the
same; (D) provide any collateral; (E) add any new and burdensome covenant or
increase more than nominally any obligation of any of them under any affirmative
or negative covenant hereunder; (F) require the Borrower or any Subsidiary to
make any representation or warranty which it cannot in good faith make; (G)
shorten any cure period with respect to any Default or create any new Event of
Default; or (H) add any new and burdensome conditions of lending or issuance.
ARTICLE VI
Negative Covenants
------------------
The Borrower covenants and agrees with the Lenders that (i) at the times
indicated in Sections 6.04(a), 6,05, 6.07(b), 6.13, 6.14, 6.16 and 6.17, and
(ii) otherwise at all times from (and including) the Effective Date until the
Revolving Commitments have expired or terminated, the principal of and interest
on each Loan and all fees payable hereunder have been paid in full, all Letters
of Credit have expired or terminated, all LC Disbursements shall have been
reimbursed and all other Obligations satisfied in full:
SECTION 6.01. [This Section has been intentionally omitted.]
SECTION 6.02. Liens. The Borrower will not, and will not permit any
Subsidiary to, create, incur, assume or permit to exist (A) any Lien on any
property or asset now owned or hereafter acquired by it, or (B) assign or sell
any income or revenues (including accounts receivable) or rights in respect of
any portion thereof as part of a factoring or other type of "off balance sheet"
financing arrangement, except:
(i) Liens or assets of, or assignments or sales of assets by, a
Subsidiary which is not required to be a Guarantor under the
terms of this Agreement;
(ii) Permitted Encumbrances;
(iii)any Lien on any property or asset of the Borrower or any
Subsidiary existing on the date hereof and set forth in Schedule
6.02; provided that (i) such Lien shall not apply to any other
property or asset of the Borrower or any Subsidiary and (ii) such
Lien shall secure only those obligations which it secures on the
date hereof;
48
(iv) Liens on fixed or capital assets acquired, constructed or
improved by the Borrower or any Subsidiary; provided that (A)
such security interests and the Indebtedness secured thereby are
incurred prior to or within 90 days after such acquisition or the
completion of such construction or improvement, (B) the
Indebtedness secured thereby does not exceed 95% of the cost of
acquiring, constructing or improving such fixed or capital
assets, and (C) such security interests shall not apply to any
other property or assets of the Borrower or any Subsidiary; and
(v) Liens on property of the Borrower shipped under or in connection
with Documentary Letters of Credit permitted under this Agreement
(if such Liens are in favor of the issuer of such Documentary
Letters of Credit) and all property of the Borrower in the actual
or constructive possession of the Issuing Bank with respect to
Documentary Letters of Credit, other than property held in a
fiduciary capacity of such Issuing Bank.
SECTION 6.03. Fundamental Changes. (a) The Borrower will not, and will not
permit any Subsidiary to, merge into or consolidate with any other Person, or
permit any other Person to merge into or consolidate with it, or liquidate or
dissolve, except that, if at the time thereof and immediately after giving
effect thereto no Default shall have occurred and be continuing (i) any
Subsidiary may merge into the Borrower in a transaction in which the Borrower is
the surviving corporation, (ii) any Subsidiary may merge into any Subsidiary in
a transaction in which the surviving entity is a Subsidiary, and (iii) any
Subsidiary may liquidate or dissolve if the Borrower determines in good faith
that such liquidation or dissolution is in the best interests of the Borrower
and is not materially disadvantageous to the Lenders; provided that any such
merger involving a Person that is not a wholly owned Subsidiary immediately
prior to such merger shall not be permitted unless also permitted by Section
6.04.
(b) The Borrower will not, and will not permit any of its Subsidiaries to,
engage to any material extent in any business other than businesses of the type
conducted by the Borrower and its Subsidiaries on the date of execution of this
Agreement and businesses reasonably related thereto.
SECTION 6.04. Investments, Loans, Advances, Guarantees and Acquisitions.
(a) At any time when any principal or interest on account of any Loan is
outstanding in whole or in part: (A) the Borrower will not and will not permit
any Guarantor to make or permit to exist any investment in the equity of any
Subsidiary which was a Subsidiary prior to such investment but which is not a
Guarantor (or which is not required to be a Guarantor) other than an Approved
Internet Subsidiary, unless the aggregate amount of such investments at the time
in question shall not exceed $12,000,000 (amounts subject to such calculation
are to be determined by reference to the Borrower's balance sheet); (B) the
Borrower will not and will not permit any Guarantor to incur or permit to exist
any Intercompany Debt (whether or not evidenced by an Intercompany Note), or
Guarantee any obligation of any Subsidiary which is not a Guarantor (or which is
not required to be a Guarantor), unless the aggregate principal amount of all
such items at the time in question shall not exceed $40,000,000 plus any amount
guaranteed pursuant to the Topps SA Guaranty (amounts subject to such
calculation shall be determined by reference to the principal amount actually
owing or for which the Borrower or a Guarantor is contingently liable (as
applicable) at the time of calculation, and not to the original principal amount
49
thereof if different); (C) the Borrower will not and will not permit any
Guarantor to make any loan or advance to, or Guarantee any obligation of, any
officer, employee or director of the Borrower or any Subsidiary, except for
loans, advances to (or Guarantees for the benefit of) such officers, directors
and employees made in the ordinary course of business (including to finance
relocation expenses) not exceeding an aggregate principal amount of $1,000,000
at any time outstanding; and (D) the Borrower will not and will not permit any
Subsidiary to purchase, hold or acquire (including pursuant to any merger with
any Person that was not a wholly-owned Subsidiary prior to such merger) any
capital stock, evidence of Indebtedness or other equity or securities (including
any option, warrant or other right to acquire any of the foregoing) of any
Person other than a Subsidiary which was a Subsidiary prior to such event, or
make or permit to exist any investment or any other interest in any Person other
than a Subsidiary which was a Subsidiary prior to such event, or purchase or
otherwise acquire (in one transaction or a series of transactions) any assets of
any other Person constituting a business unit, except (in any case contemplated
by this clause (D)) Permitted Investments and Permitted Acquisitions.
(b) The Borrower will not, and will not permit any Guarantor to invest (by
means of asset transfer, cash investment, the assumption or incurrence of
Indebtedness or otherwise) more than an aggregate (for all such investments made
at any time) of $10,000,000 in all Approved Internet Subsidiaries. The value of
each such investment shall be determined as set forth in the definition of
"Approved Internet Subsidiary" in Section 1.01.
(c) The Borrower will not and will not permit any Guarantor to (i)
purchase, hold or acquire (including pursuant to any merger with any Person that
was not a wholly-owned Subsidiary prior to such merger) any capital stock,
evidence of Indebtedness or other equity or securities (including any option,
warrant or other right to acquire any of the foregoing) of any Person (other
than a Subsidiary which was a Subsidiary prior to such event) which is either
not organized in the United States or not in the same or a related line of
business as the Borrower or a Subsidiary which is not an Approved Internet
Subsidiary, or (ii) make or permit to exist any investment or any other interest
in any such Person, or (iii) purchase or otherwise acquire (in one transaction
or a series of transactions) any assets of any such Person constituting a
business unit unless the assets to be acquired are intended to be utilized in
the same or a related line of business as the Borrower or a Subsidiary which is
not an Approved Internet Subsidiary.
SECTION 6.05. Asset Sales. At any time when any principal or interest on
account of any Loan is outstanding in whole or in part, the Borrower will not,
and will not permit any of its Subsidiaries to, sell, transfer, lease or
otherwise dispose of any asset, including any capital stock, nor will the
Borrower permit any of its Subsidiaries to issue any additional shares of its
capital stock or other ownership interest in such Subsidiary, except:
(a) sales of inventory, used, surplus or obsolete equipment and
Permitted Investments in the ordinary course of business;
(b) the granting of licenses in trademarks or other intellectual
property owned by the Borrower or any of its Subsidiaries;
50
(c) sales, transfers and dispositions to the Borrower or a
Subsidiary; provided that any such sales, transfers or
dispositions made in compliance with Section 6.08 (other than in
reliance on Section 6.08 (d)); and
(d) Permitted Asset Sales;
provided that all sales, transfers, leases and other dispositions
permitted hereby shall be made for fair value.
SECTION 6.06. Hedging Agreements. The Borrower will not and will not
permit any of its Subsidiaries to, enter into any Hedging Agreements, other than
Hedging Agreements entered into in the ordinary course of business to hedge or
mitigate risks to which the Borrower or any Subsidiary is exposed in the conduct
of its business or the management of its liabilities in an aggregate notional
amount not to exceed $75,000,000.
SECTION 6.07. Restricted Payments, Certain Payments of Indebtedness.
(a) The Borrower will not, and will not permit any Subsidiary to, declare or
make, or agree to pay or make, directly or indirectly, any Restricted Payment of
the type described in clause (i) of the definition of "Restricted Payments" in
Section 1.01, except (i) the Borrower may declare and pay dividends with respect
to its capital stock payable solely in additional shares of its common stock, or
other equity securities not redeemable at the option of a holder thereof, (ii)
Subsidiaries may declare and pay dividends ratably with respect to their capital
stock (or equivalent) and (iii) the Borrower may make Restricted Payments
pursuant to and in accordance with stock option plans or other benefit plans for
management or employees or consultants of the Borrower and its Subsidiaries.
(b) At any time (from and including the Effective Date) when any
Obligation with respect to any Loan or Letter of Credit shall be unsatisfied in
whole or in part, or any Letter of Credit shall not have terminated or expired,
or otherwise be outstanding, the Borrower will not make any Restricted Payment
of the type described in clause (ii) of the definition of "Restricted Payment"
in Section 1.01, unless after making such Restricted Payment (x) an aggregate of
$25,000,000 or less of such Restricted Payments will have been made during (A)
the three fiscal quarters ending prior to the quarter in which the Restricted
Payment in question is to be made (but excluding any portion of such fiscal
quarters occurring prior to the Effective Date) and (B) such current fiscal
quarter, (y) an aggregate of $50,000,000 or less of such Restricted Payments
will have been made from (and including) the Effective Date to (and including)
the date of the Restricted Payment in question, and (z) the Restricted Payment
in question will not result in an LPT.
SECTION 6.08. Transactions with Subsidiaries. The Borrower will not,
and will not permit any Subsidiary to, sell, lease or otherwise transfer any
property or assets to, or purchase, lease or otherwise acquire any property or
assets from, or otherwise engage in any other transactions with, any of its
Subsidiaries, except (a) transactions in the ordinary course of business that
are at prices and on terms and conditions not less favorable to the Borrower or
such Subsidiary than could be obtained on an arm's length basis from unrelated
third parties, (b) any Restricted Payment not prohibited by Section 6.07, (c)
the transactions described in Section 6.04, when not prohibited under Section
6.04, and (d) the transactions described in Section 6.05 when not prohibited
under Section 6.05.
51
SECTION 6.09. Restrictive Agreements. The Borrower will not, and will
not permit any Subsidiary to, directly or indirectly, enter into, incur or
permit to exist any agreement or other arrangement that prohibits, restricts or
imposes any condition upon (a) the ability of the Borrower or any Subsidiary to
create, incur or permit to exist any Lien upon any of its property or assets, or
(b) the ability of any Subsidiary to pay dividends or other distributions with
respect to any shares of its capital stock, or to make or repay loans or
advances to the Borrower or any other Subsidiary or to Guarantee Indebtedness of
the Borrower or any other Subsidiary; provided that (i) the foregoing shall not
apply to restrictions and conditions imposed by law or by any Loan Document,
(ii) the foregoing shall not apply to restrictions and conditions (A) applying
solely to one or more Subsidiaries which are not (and are not required to be)
Guarantors or (B) existing on the date hereof and identified on Schedule 6.09
(but shall apply to any extension or renewal of, or any amendment or
modification expanding the scope of, any such restriction or condition
identified on Schedule 6.09), (iii) the foregoing shall not apply to customary
restrictions and conditions contained in agreements relating to the sale of a
Subsidiary pending such sale, provided such restrictions and conditions apply
only to the Subsidiary that is to be sold and such sale is permitted hereunder,
(iv) foregoing clause (a) shall not apply to restrictions or conditions imposed
by any agreement relating to secured Indebtedness permitted by this Agreement if
such restrictions or conditions apply only to the property or assets securing
such Indebtedness, and (v) the foregoing clause (a) shall not apply to customary
provisions in leases restricting the assignment thereof
SECTION 6.10. Amendment of Material Documents. The Borrower will not,
and will not permit any Subsidiary to, amend, modify or waive any of its rights
under its certificate of incorporation, by-laws or other organizational
documents if the same is reasonably likely to have a Material Adverse Effect or
would result in an Event of Default under any of the Loan Documents.
SECTION 6.11. Limitations on Sales and Leasebacks. The Borrower will
not, and will not permit any Subsidiary to, enter into any arrangement with any
Person providing for the leasing by the Borrower or any Subsidiary of real or
personal property which has been or is to be sold or transferred by the Borrower
or any Subsidiary to such Person, or to any other Person to whom funds have been
or are to be advanced by such Person on the security of such property or rental
obligations of the Borrower or any Subsidiary, unless the transaction in
question is determined by the Agent, in its reasonable discretion, to constitute
(or to be tantamount to) a financing lease of the type permitted under Section
6.02(iv).
SECTION 6.12. Fiscal Year. The Borrower will not, and will not permit
any Subsidiary to, change its fiscal year.
SECTION 6.13. Consolidated Leverage Ratio. At any time when any
principal or interest with respect to any Loan shall be outstanding in whole or
in part, the Borrower will not permit the Consolidated Leverage Ratio to be
greater than 1.6 to 1.0, determined on the basis of the then most recent
financial statements provided under Section 5.01(a) or Section 5.01(b).
52
SECTION 6.14. Consolidated Fixed Charge Ratio. At any time when any
principal or interest with respect to any Loan shall be outstanding in whole or
in part, the Borrower will not permit the Consolidated Fixed Charge Ratio to be
less than 2.5 to 1.0, determined on the basis of the then most recent financial
statements provided under Section 5.01(a) or Section 5.01(b).
SECTION 6.15. [This Section has been intentionally omitted.]
SECTION 6.16. Consolidated Net Loss. At any time (from and including
the Effective Date) when any principal or interest with respect to any Loan or
any Obligation with respect to any Letter of Credit shall be unsatisfied in
whole or in part, or any Letter of Credit shall not have terminated or expired,
or otherwise be outstanding, the Borrower and its Subsidiaries will not incur
(and shall not have incurred since the Effective Date) a consolidated net loss
(i) in any amount for any three consecutive fiscal quarters, or (ii) for any two
consecutive fiscal quarters combined, in an amount greater than 8% of
Consolidated Net Worth as of the close of the fiscal quarter prior to the first
such quarter in which the consolidated net loss in question was incurred. For
purposes of the foregoing sentence, consolidated net losses shall be determined
as of the end of a fiscal quarter.
SECTION 6.17. Consolidated Tangible Net Worth. At any time (from and
including the Effective Date) when any principal or interest with respect to any
Loan or any Obligation with respect to any Letter of Credit shall be unsatisfied
in whole or in part, or any Letter of Credit shall not have terminated or
expired, or otherwise be outstanding, the Borrower and its Subsidiaries will not
permit Consolidated Tangible Net Worth to be less than the greater of (i)
$10,000,000 or (ii) (w) Consolidated Tangible Net Worth as set forth on the last
quarterly financial statement provided to the Bank prior to the Effective Date
plus (x) 50% of aggregate Consolidated Net Income (as long as Consolidated Net
Income is greater than zero) from the Effective Date through the close of the
last fiscal quarter or year (whichever is later) for which the Borrower has
reported pursuant to Section 5.01(a) or Section 5.01(b), minus (y) the aggregate
amount of Restricted Payments (on account of common stock) from and including
the Effective Date of the type described in clause (ii) of the definition of
"Restricted Payments" in Section 1.01 (to the extent the same were permitted
under Section 6.07 (b) at the time they were made), and minus (z) the aggregate
amount of write-offs of intangible assets from and including the Effective Date;
(y) being calculated in the manner prescribed by clause (x) of Section 6.07(b),
and (z) being calculated in the manner prescribed in clause (x) of this Section
6.17.
SECTION 6.18. [This Section has been intentionally omitted.]
SECTION 6.19. [This Section has been intentionally omitted.]
53
ARTICLE VII
Events of Default
-----------------
SECTION 7.01. Events of Default. If any of the following events
("Events of Default") shall occur:
(a) the Borrower shall fail to pay any principal of any Loan or any
reimbursement obligation in respect of any LC Disbursement when and as the same
shall become due and payable, whether at the due date thereof or at a date fixed
for prepayment thereof or otherwise;
(b) the Borrower shall fail to pay any interest on any Loan or any fee
or any other amount (other than an amount referred to in clause (a) of this
Section) payable under this Agreement or any other Loan Document, within three
days after the same shall become due and payable;
(c) any representation or warranty made or deemed made by or on behalf
of the Borrower or any Subsidiary (including Topps Enterprises) in or in
connection with any Loan Document or any amendment or modification thereof or
waiver thereunder, or in any report, certificate, financial statement or other
document furnished pursuant to or in connection with any Loan Document, or any
amendment or modification thereof or waiver thereunder, shall prove to have been
incorrect when made or deemed made;
(d) the Borrower shall fail to observe or perform any covenant,
condition or agreement contained in Section 5.02, 5.04 (with respect to the
existence of the Borrower), 5.09, 5.13 or 5.14 or in Article VI;
(e) the Borrower shall fail to observe or perform any covenant,
condition or agreement contained in any Loan Document (other than those
specified in clause (a), (b) or (d) of this Section), and such failure shall
continue unremedied for a period of 30 days;
(f) Topps Enterprises shall default beyond applicable periods of
notice and grace, if any, under the Topps Enterprises Guaranty, or any Person
shall be in default under any other Guarantee with respect to any of the
Obligations, or the Borrower or any Subsidiary shall fail to make any payment
(whether of principal or interest and regardless of amount) in respect of any
Material Indebtedness, when and as the same shall become due and payable;
(g) any event or condition occurs that results in any Material
Indebtedness becoming due prior to its scheduled maturity or that enables or
permits (with or without the giving of notice, the lapse of time or both) the
holder or holders of any Material Indebtedness or any trustee or agent on its or
their behalf to cause any Material Indebtedness to become due, or to require the
prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled
maturity; provided that this clause (g) shall not apply to (i) secured
Indebtedness that becomes due as a result of the voluntary sale or transfer of
the property or assets securing such Indebtedness or (ii) events or conditions
cured within 30 days from occurrence unless the related Material Indebtedness
has become due within such 30 day period;
54
(h) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed seeking (i) liquidation, reorganization or other relief
in respect of the Borrower or any Material Subsidiary or its debts, or of a
substantial part of its assets, under any Federal, state or foreign bankruptcy,
insolvency, receivership or similar law now or hereafter in effect, or (ii) the
appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for the Borrower or any Material Subsidiary or for a
substantial part of its assets, and, in any such case, such proceeding or
petition shall continue undismissed for 60 days or an order or decree approving
or ordering any of the foregoing shall be entered;
(i) the Borrower or any Material Subsidiary shall (A) voluntarily
commence any proceeding or file any petition seeking liquidation, reorganization
or other relief under any Federal, state or foreign bankruptcy, insolvency,
receivership or similar law now or hereafter in effect, (B) consent to the
institution of, or fail to contest in a timely and appropriate manner, any
proceeding or petition described in clause (h) of this Article, (C) apply for or
consent to the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for the Borrower or any Material Subsidiary, or
for a substantial part of its assets, (D) file an answer admitting the material
allegations of a petition filed against it in any such proceeding, (E) make a
general as assignment for the benefit of creditors or (F) take any action for
the purpose of effecting any of the foregoing;
(j) the Borrower or any Material Subsidiary shall become unable, admit
in writing its inability or fall generally to pay its debts as they become due;
(k) one or more judgments for the payment of money in an aggregate
amount in excess of $2,000,000 shall be rendered against the Borrower, any
Subsidiary or any combination thereof and the same shall remain undischarged for
a period of 30 consecutive days during which execution shall not be effectively
stayed, or any action shall be legally taken by a judgment creditor to attach or
levy upon any assets of the Borrower or any Subsidiary to enforce any such
judgment;
(l) an ERISA Event shall have occurred that in the opinion of the
Required Lenders, when taken together with all other ERISA Events that have
occurred, could reasonably be expected to result in liability of the Borrower
and its Subsidiaries in an aggregate amount exceeding $750,000 in any year;
(m) any Lien purported to be created under any documentation
pertaining to a Documentary Letter of Credit shall be asserted by the Borrower
not to be a valid Lien, except as a result of (i) the sale or other disposition
of the applicable assets in a transaction permitted under the Loan Documents or
(ii) the termination of the Lien in accordance with Section 2.05(a).
(n) a Change in Control shall occur; or
(o) if any Loan Document ceases to be in full force and effect (other
than by reason of any action by the Agent, including any release pursuant to
Section 5.14(b)), or if without the written consent of the Lenders, this
Agreement or any other Loan Document shall be disaffirmed or shall terminate, be
terminable or be terminated or become void or unenforceable for any reason
whatsoever (other than in accordance with its terms in the absence of default or
by reason of any action by the Lenders or the Agent);
55
then, and in every such event (other than an event with respect to the Borrower
described in clause (h) or (i) of this Section ), and at any time thereafter
during the continuance of such event, the Agent may, and at the request of the
Required Lenders or any single Lender having a Revolving Commitment in excess of
$10,000,000 shall, by notice to the Borrower, take either or both of the
following actions, at the same or different times: (i) terminate the Revolving
Commitments, and thereupon the Revolving Commitments shall terminate
immediately, and (ii) declare the Loans then outstanding to be due and payable
in whole (or in part, in which case any principal not so declared to be due and
payable may thereafter be declared to be due and payable), and thereupon the
principal of the Loans so declared to be due and payable, together with accrued
interest thereon and all fees and other Obligations of the Borrower accrued
hereunder, shall become due and payable immediately, without presentment demand,
protest or other notice of any kind, all of which are hereby waived by the
Borrower; and in case of any event with respect to the Borrower described in
clause (h) or (i) of this Section, the Revolving Commitments shall automatically
terminate and the principal of the Loans then outstanding, together with accrued
interest thereon and all fees and other Obligations of the Borrower accrued
hereunder, shall automatically become due and payable, without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
the Borrower.
ARTICLE VIII
The Agent
---------
SECTION 8.01. Relationship with Lenders. (a) Each of the Lenders and
the Issuing Bank hereby irrevocably appoints the Agent as its agent and
authorizes the Agent to take such actions on its behalf and to exercise such
powers as are delegated to the Agent by the terms of the Loan Documents,
together with such actions and powers as are reasonably incidental thereto.
(b) The bank serving as the Agent hereunder shall have the same rights
and powers in its capacity as a Lender as any other Lender and may exercise the
same as though it were not the Agent, and such bank and its Affiliates may
accept deposits from, lend money to and generally engage in any kind of business
with the Borrower or any Subsidiary or other Affiliate thereof as if it were not
the Agent hereunder.
(c) The Agent shall not have any duties or obligations except those
expressly set forth in the Loan Documents. Without limiting the generality of
the foregoing, (a) the Agent shall not be subject to any fiduciary or other
implied duties, regardless of whether a Default has occurred and is continuing,
(b) the Agent shall not have any duty to take any discretionary action or
exercise any discretionary powers, except discretionary rights and powers
expressly contemplated by the Loan Documents that the Agent is required to
exercise in writing by the Required Lenders (or such other number or percentage
of the Lenders as shall be necessary under the circumstances as provided in
Section 9.02), and (c) except as expressly set forth in the Loan Documents, the
Agent shall not have any duty to disclose, and shall not be liable for the
failure to disclose, any information relating to the Borrower or any of its
56
Subsidiaries that is communicated to or obtained by the bank serving as Agent or
any of its Affiliates in any capacity. The Agent shall not be liable for any
action taken or not taken by it with the consent or at the request of the
Required Lenders (or such other number or percentage of the Lenders as shall be
necessary under the circumstances as provided in Section 9.02) except for its
own gross negligence or willful misconduct in the execution of any such action,
or otherwise in the absence of its own gross negligence or wilful misconduct.
The Agent shall not be deemed to have knowledge of any Default unless and until
written notice thereof is given to the Agent by the Borrower or a Lender, and
the Agent shall not be responsible for or have any duty to ascertain or inquire
into (i) any statement, warranty or representation made in or in connection with
any Loan Document, (ii) the contents of any certificate, report or other
document delivered thereunder or in connection therewith, (iii) the performance
or observance of any of the covenants, agreements or other terms or conditions
set forth in any Loan Document, (iv) the validity, enforceability, effectiveness
or genuineness of any Loan Document or any other agreement, instrument or
document, or (v) the satisfaction of any condition set forth in Article IV or
elsewhere in any Loan Document, other than to confirm receipt of items expressly
required to be delivered to the Agent.
(d) The Agent shall be entitled to rely upon, and shall not incur any
liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper Person. The Agent also may rely
upon any statement made to it orally or by telephone and believed by it to be
made by the proper Person, and shall not incur any liability for relying
thereon. The Agent may consult with legal counsel (who may be counsel for the
Borrower), independent accountants and other experts selected by it, and shall
not be liable for any action taken or not taken by it in accordance with the
advice of any such counsel, accountants or experts. The Agent shall be fully
justified in failing or refusing to take any action under this Agreement or any
other Loan Document unless it shall first receive such advice or concurrence of
the Required Lenders (or, if so specified by this Agreement, all the Lenders) as
it deems appropriate or it shall first be indemnified to its satisfaction by the
Lenders against any and all liability and expense which may be incurred by it by
reason of taking or continuing to take any such action (it being understood that
this provision shall not release the Agent from performing any action with
respect to the Borrower expressly required to be performed by it pursuant to the
terms hereof) under this Agreement. The Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement and the
other Loan Documents in accordance with a request of the Required Lenders (or,
if so specified by this Agreement, all the Lenders), and such request and any
action taken or failure to act pursuant thereto shall be binding upon all the
Lenders.
(e) The Agent may perform any and all of its duties and exercise its
rights and powers by or through any one or more sub-agents appointed by the
Agent. The Agent and any such sub-agent may perform any and all its duties and
exercise its rights and powers through their respective Related Parties. The
exculpatory provisions of the preceding paragraphs shall apply to any such
sub-agent and to the Related Parties of each Agent and any such sub-agent, and
shall apply to their respective activities in connection with the syndication of
the credit facility provided for herein as well as activities as Agent.
57
(f) Subject to the appointment and acceptance of a successor Agent as
provided in this paragraph, the Agent may resign at any time by notifying the
Lenders, the Issuing Bank and the Borrower. Upon any such resignation, the
Required Lenders shall have the right, in consultation with the Borrower, to
appoint a successor. If no successor shall have been so appointed by the
Required Lenders and shall have accepted such appointment within 30 days after
the retiring Agent gives notice of its resignation, then the retiring Agent may,
on behalf of the Lenders and the Issuing Bank, appoint a successor Agent, which
shall be a bank with an office in New York, New York, or an Affiliate of any
such bank. Upon the acceptance of its appointment as Agent hereunder by a
successor, such successor shall succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent and the retiring
Agent shall be discharged from its duties and obligations hereunder. The fees
payable by the Borrower to a successor Agent shall be the same as those payable
to its predecessor unless otherwise agreed between the Borrower and such
successor. After the Agent's resignation hereunder, the provisions of this
Article and Section 9.03 shall continue in effect for the benefit of such
retiring Agent, its sub-agents and their respective Related Parties in respect
of any actions taken or omitted to be taken by any of them while it was acting
as Agent.
(g) Each Lender acknowledges that it has, independently and without
reliance upon the Agent or any other Lender and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon the Agent or any other Lender and
based on such documents and information as it shall from time to time deem
appropriate, continue to make its own decisions in taking or not taking action
under or based upon this Agreement, any other Loan Document or related agreement
or any document furnished hereunder or thereunder.
SECTION 8.02. Indemnification. Each Lender agrees to indemnify and hold
harmless the Agent (to the extent not reimbursed under Section 9.03, but without
limiting the obligations of the Borrower under Section 9.03), ratably in
accordance with the aggregate principal amount of the respective Revolving
Commitments of and/or Loans and L/C Exposure held by the Lenders (or, if all of
the Revolving Commitments shall have been terminated or expired, ratably in
accordance with the aggregate outstanding amount of the Loans and L/C Exposure
held by the Lenders), for any and all liabilities (including, without
limitation, pursuant to any Environmental Law), obligations, losses, damages,
penalties, actions, judgments, deficiencies, suits, costs, expenses (including
reasonable attorneys' fees) or disbursements of any kind and nature whatsoever
that may be imposed on, incurred by or asserted against the Agent, the Issuing
Bank or any Lender arising out of or by reason of any investigation in or in any
way relating to or arising out of any Loan Document or any other documents
contemplated by or referred to therein, for any action taken or omitted to be
taken by the Agent, the Issuing Bank or any Lender under or in respect of any of
the Loan Documents or other such documents or the transactions contemplated
thereby (including, without limitation, the costs and expenses that the Borrower
is obligated to pay under Section 9.03, but excluding, unless an Event of
Default or Default has occurred and is continuing, normal administrative costs
and expenses incident to the performance of its agency duties hereunder) or the
enforcement of any of the terms hereof or thereof or of any such other
documents; provided, however, that no Lender shall be liable for any of the
foregoing to the extent they are determined by a court of competent jurisdiction
58
in a final and nonappealable judgment to have resulted from the gross negligence
or willful misconduct of the Agent. The agreements set forth in this Section
8.02 shall survive the payment of all Loans, expiration or termination of the
Revolving Commitments and all Letters of Credit, and the payment, satisfaction,
and performance of all other Obligations, and shall be in addition to and not in
lieu of any other indemnification agreements contained in this Agreement of any
other Loan Document.
ARTICLE IX
Miscellaneous
-------------
SECTION 9.01. Notices. Except in the case of notices and other
communications expressly permitted to be given by telephone, all notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail, or sent by telecopy, as follows:
(a) if to the Borrower, to it at Xxx Xxxxxxxxx Xxxxxx Xxx Xxxx,
Xxx Xxxx, 00000-0000, Attention of Xx. Xxxxxxxxx X. Xxxxxx (Telecopy No.
212-376-0621), with a copy to Xxxxxxx Xxxx & Xxxxxxxxx, 000 Xxxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000-0000 (Telecopy No. 212-728-8111), Attention of Xxxxxxx
Xxxxxx, Esq.;
(b) if to the Agent, to The Chase Manhattan Bank, 0 XxxxxXxxx
Xxxxxx, 00xx Xxxxx, Xxxxxxxx, Xxx Xxxx 00000, Attention of Xx. Xxxxxxxxxxx
Xxxxxx and Regional Manager (Telecopy No. 718-242-3846), with a copy to Esanu
Katsky Xxxxxx & Siger, LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention of Xxxxxxx X. Xxxxxx, Esq. (Telecopy No. 212-953-6899);
(c) if to the Issuing Bank, to it at the address provided in
paragraph (b).
(d) if to LaSalle Bank National Association, 000 Xxxxx XxXxxxx
Xxxxxx, Xxxxxxx, XX 00000, Attention of Xx. Xxxxxx X. Xxxxx (Telecopy No. (312)
904-9293), with a copy to Xxxxxx Price Xxxxxxx & Kammholz, 000 Xxxxx XxXxxxx
Xxxxxx, Xxxxxxx, XX 00000, Attention of Xxxxxxx X. Xxxxxxxx, Esq. (Telecopy No.
(000) 000-0000).
(e) if to any other Lender, to it at its address (or telecopy
number) set forth in its Administrative Questionnaire.
Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All notices and
other communications given to any party hereto in accordance with the provisions
of this Agreement shall be deemed to have been given on the date of receipt. The
Agent agrees to forward to each Lender copies of all material notices received
by the Agent, including notices pursuant to Section 5.08.
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SECTION 9.02. Waivers, Amendments. (a) No failure or delay by the
Agent the Issuing Bank or any Lender in exercising any right or power hereunder
or under any other Loan Document shall operate as a waiver thereof, nor shall
any single or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The rights
and remedies of the Agent, the Issuing Bank and the Lenders hereunder and under
the other Loan Documents are cumulative and are not exclusive of any rights or
remedies that they would otherwise have. No waiver of any provision of any Loan
Document or consent to any departure by the Borrower therefrom, shall in any
event be effective unless the same shall be permitted by paragraph (b) of this
Section, and then such waiver or consent shall be effective only in the specific
instance and for the purpose for which given. Without limiting the generality of
the foregoing, the making of a Loan or issuance of a Letter of Credit shall not
be construed as a waiver of any Default, regardless of whether the Agent, any
Lender or the Issuing Bank may have had notice or knowledge of such Default at
the time.
(b) Neither this Agreement nor any other Loan Document, nor any
provision hereof or thereof, may be waived, amended or modified except in the
case of this Agreement, pursuant to an agreement or agreements in writing
entered into by the Borrower and the Required Lenders or, in the case of any
other Loan Document, pursuant to an agreement or agreements in writing entered
into by the Agent and the Borrower, in each case with the consent of the
Required Lenders; provided that no such agreement, waiver, amendment or
modification shall (i) increase the Revolving Commitment of any Lender without
the written consent of each Lender, (ii) reduce the principal amount of any Loan
or LC Disbursement or reduce the rate of interest thereon, or reduce any fees
payable hereunder (to any Lender as a Lender), without the written consent of
each Lender affected thereby, (iii) postpone the Maturity Date, or reduce the
amount of, waive or excuse any payment of the principal amount of any Loan or LC
Disbursement or any interest thereon, or any fees payable hereunder to any
Lender (as a Lender), without the written consent of each Lender affected
thereby, (iv) change Section 2.18(b) or (c) in a manner that would alter the pro
rata sharing of payments required thereby, without the written consent of each
Lender, (v) change any of the provisions of this Section or the definition of
"Required Lenders" or any other provision of any Loan Document specifying the
number or percentage of Lenders required to waive, amend or modify any rights
thereunder or make any determination or grant any consent thereunder, without
the written consent of each Lender, (vi) release any Subsidiary (to the extent
such Subsidiary is obligated under any Guarantee of any Obligations) from any
Guarantee, or limit its liability in respect of such Guarantee, without the
written consent of each Lender, or (vii) change any provision of Article V or
Article VI, without the written consent of each Lender having a Revolving
Commitment of $15,000,000 or more; and provided further that no such agreement
shall amend, modify or otherwise affect the rights or duties of the Agent or the
Issuing Bank, without the prior written consent of the Agent or the Issuing
Bank, as the case may be.
SECTION 9.03. Expenses, Indemnity, Damage Waiver. (a) The Borrower
shall pay (i) all reasonable out-of-pocket expenses incurred by the Agent and
its Affiliates, including the reasonable fees, charges and disbursements of
counsel for the Agent in connection with the syndication of the credit facility
provided for herein, the preparation and administration of the Loan Documents or
any amendments, modifications or waivers of the provisions thereof (whether or
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not the transactions contemplated hereby or thereby shall be consummated), (ii)
all reasonable out-of-pocket expenses incurred by the Issuing Bank in connection
with the issuance, amendment, renewal or extension of any Letter of Credit or
any demand for payment thereunder, and (iii) all out-of-pocket expenses incurred
by the Agent, the Issuing Bank or any Lender, including the fees, charges and
disbursements of any counsel for the Agent, the Issuing Bank or any Lender, in
connection with the enforcement or protection of its rights in connection with
the Loan Documents, including its rights under this Section, or in connection
with the Loans made or Letters of Credit issued hereunder, including all such
out-of-pocket expenses incurred during any workout, restructuring or
negotiations in respect of such Loans or Letters of Credit.
(b) The Borrower shall indemnify the Agent, the Issuing Bank and
each Lender, and each Related Party of any of the foregoing Persons (each such
Person being called an "Indemnitee") against and hold each Indemnitee harmless
from, any and all losses, claims, damages, liabilities and related expenses,
including the fees, charges and disbursements of any counsel for any Indemnitee,
incurred by or asserted against any Indemnitee arising out of, in connection
with, or as a result of (i) the execution or delivery of any Loan Document or
any other agreement or instrument contemplated hereby, the performance by the
parties to the Loan Documents of their respective obligations thereunder or the
consummation of the Financing Transactions or any other transactions
contemplated hereby, (ii) any Loan or Letter of Credit or the use of the
proceeds therefrom (including any refusal by the Issuing Bank to honor a demand
for payment under a Letter of Credit if the documents presented in connection
with such demand do not strictly comply with the terms of such Letter of
Credit), (iii) any actual or alleged presence or release of Hazardous Materials
on or from any property owned or operated by the Borrower or any of its
Subsidiaries, or any Environmental Liability related in any way to the Borrower
or any of its Subsidiaries, or (iv) any actual or prospective claim, litigation,
investigation or proceeding relating to any of the foregoing, whether based on
contract, tort or any other theory and regardless of whether any Indemnitee is a
party thereto; provided that such indemnity shall not, as to any Indemnitee, be
available to the extent that such losses, claims, damages, liabilities or
related expenses are determined by a court of competent jurisdiction by final
and nonappealable judgment to have resulted from the gross negligence or wilful
misconduct of such Indemnitee.
(c) To the extent that the Borrower fails to pay any amount
required to be paid by it to the Agent or the Issuing Bank under paragraph (a)
or (b) of this Section, each Lender severally agrees to pay to the Agent or the
Issuing Bank, as the case may be, such Lender's pro rata share (determined as of
the time that the applicable unreimbursed expense or indemnity payment is
sought) of such unpaid amount; provided that the unreimbursed expense or
indemnified loss, claim, damage, liability or related expense, as the case may
be, was incurred by or asserted against the Agent or the Issuing Bank in its
capacity as such. For purposes hereof, a Lender's "pro rata share" shall be
determined based upon its share of the sum of the total Revolving Exposures and
unused Revolving Commitments at the time.
(d) To the extent permitted by applicable law, the Borrower and
Topps Enterprises shall not assert, and each hereby waives, any claim against
any Indemnitee, on any theory of liability, for special, indirect, consequential
or punitive damages (as opposed to direct or actual damages) arising out of, in
connection with, or as a result of, this Agreement or any agreement or
instrument contemplated hereby, the Financing Transactions, any Loan or Letter
of Credit, or the use of the proceeds thereof.
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(e) All amounts due under this Section shall be payable promptly
after written demand therefor.
SECTION 9.04. Successors and Assigns.
(a) The provisions of this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns permitted hereby (including any Affiliate of the Issuing Bank that
issues any Letter of Credit), except that the Borrower may not assign or
otherwise transfer any of its rights or obligations hereunder without the prior
written consent of each Lender (and any attempted assignment or transfer by the
Borrower without such consent shall be null and void). Nothing in this
Agreement, express or implied, shall be construed to confer upon any Person
(other than the parties hereto, their respective successors and assigns
permitted hereby (including any Affiliate of the Issuing Bank that issues any
Letter of Credit) and, to the extent expressly contemplated hereby, the Related
Parties of each of the Agent, the Issuing Bank and each Lender) any legal or
equitable right, remedy or claim under or by reason of this Agreement.
(b) Any Lender may assign to one or more Eligible Assignees all
or a portion of its rights and obligations under this Agreement (including all
or a portion of its Revolving Commitment and the Loans at the time owing to it);
provided that (i) except in the case of an assignment to a Lender or an
Affiliate of a Lender, the Agent (and, in the case of an assignment of all or a
portion of a Revolving Commitment or any Lender's obligations in respect of its
LC Exposure, the Issuing Bank) must give their prior written consent to such
assignment (which consent shall not be unreasonably withheld), (ii) except in
the case of an assignment to a Lender or an Affiliate of a Lender or an
assignment of the entire remaining amount of the assigning Lender's Revolving
Commitment or Loans, the amount of the Revolving Commitment or Loans of the
assigning Lender subject to each such assignment (determined as of the date the
Assignment and Acceptance with respect to such assignment is delivered to the
Agent) shall not be less than $5,000,000 and, after giving effect thereto, the
assigning Lender shall retain a Revolving Commitment and Loans aggregating at
least $5,000,000, in each case unless the Agent and the Borrower otherwise
consent, (iii) each partial assignment shall be made as an assignment of a
proportionate part of all the assigning Lender's rights and obligations under
this Agreement, (iv) the parties to each assignment shall execute and deliver to
the Agent an Assignment and Acceptance, together with a processing and
recordation fee of $3,500, and (v) the assignee, if it shall not be a Lender,
shall deliver to the Agent an Administrative Questionnaire. Subject to
acceptance and recording thereof pursuant to paragraph (d) of this Section, from
and after the effective date specified in each Assignment and Acceptance the
assignee thereunder shall be a party hereto and, to the extent of the interest
assigned by such Assignment and Acceptance, have the rights and obligations of a
Lender under this Agreement, and the assigning Lender thereunder shall, to the
extent of the interest assigned by such Assignment and Acceptance, be released
from its obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all of the assigning Lender's rights and obligations under
this Agreement, such Lender shall cease to be a party hereto but shall continue
to be entitled to the benefits of Sections 2.15, 2.16, 2.17 and 9.03). Any
assignment or transfer by a Lender of rights or obligations under this Agreement
that does not comply with this paragraph shall be treated for purposes of this
Agreement as a sale by such Lender of a participation in such rights and
obligations accordance with paragraph (e) of this Section.
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(c) The Agent, acting for this purpose as an agent of the
Borrower, shall maintain at one of its offices in The City of New York a copy of
each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Revolving
Commitment of, and principal amount of the Loans and LC Disbursements owing to,
each Lender pursuant to the terms hereof from time to time (the "Register"). The
entries in the Register shall be conclusive, and the Borrower, the Agent, the
Issuing Bank and the Lenders may treat each Person whose name is recorded in the
Register pursuant to the terms hereof as a Lender hereunder for all purposes of
this Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Borrower, the Issuing Bank and any Lender, at
any reasonable time and from time to time upon reasonable prior notice.
(d) Upon its receipt of a duly completed Assignment and
Acceptance executed by an assigning Lender and an assignee, the assignee's
completed Administrative Questionnaire (unless the assignee shall already be a
Lender hereunder), the processing and recordation fee referred to in paragraph
(b) of this Section and any written consent to such assignment required by
paragraph (b) of this Section, the Agent shall accept such Assignment and
Acceptance and record the information contained therein in the Register. No
assignment shall be effective for purposes of this Agreement unless it has been
recorded in the Register as provided in this paragraph.
(e) Any Lender may, without the consent of the Borrower, the
Agent or the Issuing Bank, sell participations to one or more banks or other
entities (a "Participant") in all or a portion of such Lender's rights and
obligations under this Agreement (including all or a portion of its Revolving
Commitment and the Loans owing to it); provided that (i) such Lender's
obligations under this Agreement shall remain unchanged, (ii) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations, and (iii) the Borrower, the Agent, the Issuing Bank and the
other Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement. Any
agreement or instrument pursuant to which a Lender sells such a participation
shall provide that such Lender shall retain the sole right to enforce the Loan
Documents and to approve any amendment, modification or waiver of any provision
of the Loan Documents; provided that such agreement or instrument may provide
that such Lender will not, without the consent of the Participant, agree to any
amendment, modification or waiver described in the first proviso to Section
9.02(b) that affects such Participant. Subject to paragraph (f) of this Section,
the Borrower agrees that each Participant shall be entitled to the benefits of
Sections 2.15, 2.16 and 2.17 to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to paragraph (b) of this Section,
but the aggregate amount payable by the Borrower to the Lender selling the
participation and the Participant shall not exceed the amount which would
otherwise be payable in the absence of the participation. To the extent
permitted by law, each Participant also shall be entitled to the benefits of
Section 9.08 as though it were a Lender, provided such Participant agrees to be
subject to Section 2.18(c) as though it were a Lender.
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(f) A Participant shall not be entitled to receive any greater
payment under Section 2.15 or 2.17 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such Participant,
unless the sale of the participation to such Participant is made with the
Borrower's prior written consent. A Participant that would be a Foreign Lender
if it were a Lender shall not be entitled to the benefits of Section 2.17,
unless the Borrower is notified of the participation sold to such Participant
and such Participant agrees, for the benefit of the Borrower, to comply with
Section 2.17(e) as though it were a Lender.
(g) Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement to secure
obligations of such Lender, including any pledge or assignment to secure
obligations to a Federal Reserve Bank, and this Section shall not apply to any
such pledge or assignment of a security interest; provided that no such pledge
or assignment of a security interest shall release a Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender
as a party hereto.
SECTION 9.05. Survival. All covenants, agreements, representations and
warranties made by the Borrower and Topps Enterprises in the Loan Documents and
in the certificates or other instruments delivered in connection with or
pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the other parties hereto and shall survive the
execution and delivery of the Loan Documents and the making of any Loans and
issuance of any Letters of Credit, regardless of any investigation made by any
such other party or on its behalf, and notwithstanding that the Agent, the
Issuing Bank or any Lender may have had notice or knowledge of any Default or
incorrect representation or warranty at the time any credit is extended
hereunder, and shall continue in full force and effect as long as the principal
of or any accrued interest on any Loan or any fee or any other amount payable
under this Agreement is outstanding and unpaid, or any Letter of Credit is
outstanding and so long as the Revolving Commitments have not expired or
terminated. The provisions of Sections 2.15, 2.16, 2.17 and 9.03 and Article
VIII shall survive and remain in full force and effect regardless of the
consummation of the transactions contemplated hereby, the repayment of the
Loans, the expiration or termination of the Letters of Credit and the Revolving
Commitments, or the termination of this Agreement or any provision hereof.
SECTION 9.06. Counterparts, Integration, Effectiveness. This Agreement
may be executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Agreement, the other
Loan Documents and any separate letter agreements with respect to fees payable
to the Agent constitute the entire contract among the parties relating to the
subject matter hereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof. Except
as provided in Section 4.01, this Agreement shall become effective when it shall
have been executed by the Agent and when the Agent shall have received
counterparts hereof which, when taken together, bear the signatures of each of
the other parties hereto, and thereafter shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns.
Delivery of an executed counterpart of a signature page of this Agreement by
telecopy shall be effective as delivery of a manually executed counterpart of
this Agreement.
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SECTION 9.07. Severability. Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof, and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 9.08. Right of Setoff. Subject to Section 2.18(c), if an Event
of Default shall have occurred and be continuing, each Lender and each of its
Affiliates is hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held and
other obligations at any time owing by such Lender or Affiliate to or for the
credit or the account of the Borrower against any of and all the obligations of
the Borrower now or hereafter existing under this Agreement held by such Lender,
irrespective of whether or not such Lender shall have made any demand under this
Agreement and although such obligations may be unmatured. The rights of each
Lender under this Section are in addition to other rights and remedies
(including other rights of setoff) which such Lender may have.
SECTION 9.09. Governing Law; Jurisdiction: Consent to Service of
Process.
(a) This Agreement shall be construed in accordance with and
governed by the law of the State of New York.
(b) The Borrower hereby irrevocably and unconditionally submits,
for itself and its property, to the nonexclusive jurisdiction of the Supreme
Court of the State of New York sitting in New York County and of the United
States District Court of the Southern District of New York, and any appellate
court from any thereof, in any action or proceeding arising out of or relating
to any Loan Document, or for recognition or enforcement of any judgment, and
each of the parties hereto hereby irrevocably and unconditionally agrees that
all claims in respect of any such action or proceeding may be heard and
determined in such New York State or, to the extent permitted by law, in such
Federal court. Each of the parties hereto agrees that a final judgment in any
such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement or any other Loan Document shall affect any right that
the Agent, the Issuing Bank or any Lender may otherwise have to bring any action
or proceeding relating to this Agreement or any other Loan Document against the
Borrower or its properties in the courts of any jurisdiction.
(c) The Borrower hereby irrevocably and unconditionally waives,
to the fullest extent it may legally and effectively do so, any objection which
it may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or any other Loan
Document in any court referred to in paragraph (b) of this Section. Each of the
parties hereto hereby irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.
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(d) Each party to this Agreement irrevocably consents to service
of process in the manner provided for notices in Section 9.01. Nothing in this
Agreement or any other Loan Document will affect the right of any party to this
Agreement to serve process in any other manner permitted by law.
SECTION 9.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE FINANCING
TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER, AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN
INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS
AND CERTIFICATIONS IN THIS SECTION.
SECTION 9.11. Headings. Article and Section headings and the Table of
Contents (if any) used herein are for convenience of reference only, are not
part of this Agreement and shall not affect the construction of, or be taken
into consideration in interpreting, this Agreement.
SECTION 9.12. Confidentiality. Each of the Agent, the Issuing Bank and
the Lenders agrees to maintain the confidentiality of the Information (as
defined below), except that Information may be disclosed (a) to its and its
Affiliates, directors, officers, employees and agents, including accountants,
legal counsel and other advisors (it being understood that the Persons to whom
such disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (b) to the
extent requested by any regulatory authority, (c) to the extent required by
applicable laws or regulations or by any subpoena or similar legal process, (d)
to any other party to this Agreement, (e) in connection with the exercise of any
remedies hereunder or any suit, action or proceeding relating to this Agreement
or any other Loan Document, or the enforcement of rights hereunder or
thereunder, (f) subject to an agreement containing provisions substantially the
same as those of this Section, to any assignee of or Participant in, or any
prospective assignee of or Participant in, any of its rights or obligations
under this Agreement, (g) with the consent of the Borrower, or (h) to the extent
such Information (A) becomes publicly available other than as a result of a
breach of this Section or (B) becomes available to the Agent, the Issuing Bank
or any Lender on a non-confidential basis from a source other than the Borrower
provided the Agent, the Issuing Bank or any Lender does not have actual
knowledge that such other source is in breach of any confidentiality agreement
with the Borrower. For the purposes of this Section, "Information" means all
information received from the Borrower or its agents relating to the Borrower or
its business, other than any such information that is available to the Agent,
the Issuing Bank or any Lender on a non-confidential basis prior to disclosure
by the Borrower; provided the Agent, the Issuing Bank or any Lender does not
have actual knowledge that such source is in breach of any confidentiality
agreement with the Borrower. The Agent, the Issuing Bank and each Lender each
agrees that neither it nor its Affiliates will use any Information in connection
with the performance by it of services for companies other than the Borrower and
its Subsidiaries.
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SECTION 9.13. Interest Rate Limitation. Notwithstanding anything
herein to the contrary, if at any time the interest rate applicable to any Loan,
together with all fees, charges and other amounts which are treated as interest
on such Loan under applicable law (collectively, the "Charges"), shall exceed
the maximum lawful rate (the "Maximum Rate") which may be contracted for,
charged, taken, received or reserved by the Lender holding such Loan in
accordance with applicable law, the rate of interest payable in respect of such
Loan hereunder, together with all Charges payable in respect thereof, shall be
limited to the Maximum Rate and, to the extent lawful, the interest and Charges
that would have been payable in respect of such Loan but were not payable as a
result of the operation of this Section shall be cumulated, and the interest and
Charges payable to such Lender in respect of other Loans or periods shall be
increased (but not above the Maximum Rate therefor) until such cumulated amount,
together with interest thereon at the Federal Funds Effective Rate to the date
of repayment, shall have been received by such Lender.
SECTION 9.14. Topps Enterprises. Topps Enterprises has joined in this
Agreement, as a Subsidiary and a Guarantor, in order to provide its confirmation
of all representations and warranties made herein by the Borrower with respect
to Topps Enterprises and to set forth its agreement to perform all of the things
required herein to be "caused" by the Borrower with respect to Topps
Enterprises.
SECTION 9.15. Termination of Existing Security. The Chase Manhattan
Bank hereby agrees to terminate the "Security Documents" as that term is defined
in the Existing Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and year
first above written.
TOPPS ENTERPRISES, INC. THE TOPPS COMPANY, INC.
By: /Xxxxx X. Xxxxxx/ By: /Xxxxx X Xxxxxx/
----------------------- -------------------------
Name: Xxxxx X. Xxxxxx Name: Xxxxx X. Xxxxxx
Title: Vice President Title: Vice President
LASALLE BANK NATIONAL THE CHASE MANHATTAN BANK,
ASSOCIATION individually and as Agent
By: /Xxxxx Xxxxx/ By: /Xxxxxxxxxxx X. Xxxxxx/
------------------------ ----------------------------
Name: Xxxxx Xxxxx Name: Xxxxxxxxxxx X. Xxxxxx
Title: Senior Vice President Title: Vice President
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SCHEDULE 2.01
REVOLVING COMMITMENTS
---------------------
The Chase Manhattan Bank $20,000,000
LaSalle Bank National Association $15,000,000
69
EXHIBIT A
ASSIGNMENT AND ACCEPTANCE
-------------------------
Dated: __________, ______
Reference is made to the Credit Agreement, dated as of June 26, 2000 (as
amended, amended and restated, supplemented, modified and in effect from time to
time, the "Credit Agreement"), among THE TOPPS COMPANY, INC., a Delaware
corporation (the "Borrower"), Topps Enterprises, Inc. ("Topps Enterprises"), the
Lenders party thereto (together with their successors and assigns, the
"Lenders"), and THE CHASE MANHATTAN BANK, as agent (in such capacity, the
"Agent") for the Lenders. Capitalized terms used herein and not otherwise
defined shall have the meanings assigned to such terms in the Credit Agreement.
This Assignment and Acceptance between the Assignor (as set forth on Schedule I
hereto and made a part hereof) and the Assignee (as set forth on the said
Schedule I ) is dated as of the Assignment Effective Date (as set forth on the
said Schedule I).
The Assignor hereby irrevocably sells and assigns to the Assignee without
recourse to the Assignor, and the Assignee hereby irrevocably purchases and
assumes from the Assignor without recourse to the Assignor, as of the Assignment
Effective Date, an undivided interest (the "Assigned Interest") in and to all
the Assignor's rights and obligations under the Credit Agreement as are set
forth on the said Schedule I (the "Assigned Facilities"), in a principal amount
for each Assigned Facility as set forth on the said Schedule I.
The Assignor (i) makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the Credit Agreement or any other of the Loan
Documents or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Credit Agreement, any other of the Loan Documents or
any other instrument or document furnished pursuant thereto, other than that it
is the legal and beneficial owner of the interest being assigned by it hereunder
and that such interest is free and clear of any adverse claim; [and] (ii) makes
no representation or warranty and assumes no responsibility with respect to the
financial condition of the Borrower, Topps Enterprises, any of the other
Subsidiaries of the Borrower or any other obligor of any of their respective
obligations under the Credit Agreement or the performance or observance by the
Borrower, Topps Enterprises, or any of the other Subsidiaries of the Borrower of
any of their respective obligations under the Credit Agreement, any of the other
Loan Documents or any other instrument or document furnished pursuant thereto;
[and (iii) attaches the Note held by it (the "Note") evidencing the Assigned
Facilities and requests that the Agent exchange the Note for a new note payable
to the Assignor (if the Assignor has retained any interest in the Assigned
Facilities) and [or] a new note payable to the Assignee in the [respective]
amount(s) which reflect the assignment being made hereby (and after giving
effect to any other assignments which have become effective on the Assignment
Effective Date)]
70
The Assignee (i) represents and warrants that it is legally authorized to enter
into this Assignment and Acceptance and that it is an Eligible Assignee; (ii)
confirms that it has received a copy of the Credit Agreement, together with
copies of the most recent financial statements delivered pursuant to Section
5.01 thereof, and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Acceptance; (iii) agrees that it will, independently and without
reliance upon the Agent, the Assignor, any other Lender or any other Person and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under the Credit Agreement, any of the other Loan Documents or any other
instrument or document furnished pursuant thereto; (iv) appoints and authorizes
the Agent to take such action as agent on its behalf and to exercise such powers
and discretion under the Credit Agreement, the other Loan Documents or any other
instrument or document furnished pursuant thereto as are delegated to the Agent
by the terms thereof, together with such powers as are reasonably incidental
thereto; (v) agrees that it will be bound by the provisions of the Credit
Agreement and will perform in accordance with its terms all of the obligations
which by the terms of the Credit Agreement are required to be performed by it as
a Lender; and (vi) if the Assignee is organized under the laws of a jurisdiction
outside the United States, attaches the forms prescribed by the Internal Revenue
Service of the United States certifying as to the Assignee's exemption from
United States withholding taxes with respect to all payments to be made to the
Assignee under the Credit Agreement or such other documents as are necessary to
indicate that all such payments are subject to such tax at a rate reduced by an
applicable tax treaty.
Following the execution of this Assignment and Acceptance, it will be delivered
to the Agent, together with a processing and recordation fee of $3,500 for
acceptance by it and recording by the Agent pursuant to Section 9.04(b) of the
Credit Agreement, effective as of the Assignment Effective Date (which
Assignment Effective Date shall be, unless otherwise agreed to by the Agent, at
least five Business Days after the execution of this Assignment and Acceptance).
Upon such acceptance and recording, from and after the Assignment Effective
Date, the Agent shall make all payments in respect of the Assigned Interest
(including payments of principal, interest, fees and other amounts) to the
Assignee, whether such amounts have accrued prior to the Assignment Effective
Date or accrue subsequent to the Assignment Effective Date. The Assignor and the
Assignee shall make all appropriate adjustments in payments for periods prior to
the Assignment Effective Date by the Agent or with respect to the making of this
assignment directly between themselves.
From and after the Assignment Effective Date, (i) the Assignee shall be a party
to the Credit Agreement and, to the extent provided in (x) this Assignment and
Acceptance and (y) Section 9.04 of the Credit Agreement, have the rights and
obligations of a Lender thereunder and under the other Loan Documents and shall
be bound by the provisions thereof, and (ii) the Assignor shall, to the extent
provided in (x) this Assignment and Acceptance and (y) Section 9.04 of the
Credit Agreement, relinquish its rights and be released from its obligations
under the Credit Agreement; provided, that the Assignor hereby represents and
warrants that the restrictions set forth in Section 9.04(b) of the Credit
Agreement pertaining to the minimum amount of assignments have been satisfied.
71
This Assignment and Acceptance shall be construed in accordance with and
governed by the laws of the State of New York, without regard to conflicts of
laws principles and by federal law to the extent applicable.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Acceptance to be executed by their respective duly authorized officers on the
said Schedule I.
72
Schedule I to Assignment and Acceptance Respecting
the Credit Agreement, dated as of June 26, 2000
among The Topps Company, Inc., Topps Enterprises, Inc.,
the Lenders party thereto, together with their successors
and assigns and The Chase Manhattan Bank, as Agent
Legal Name of Assignor:
Legal Name of Assignee:
Assignment Effective Date:
Principal Revolving Commitment Amount Assigned: $__________
Revolving Commitment Percentage Assigned: __________%
Principal Revolving Commitment Amount Retained: $___________
Revolving Commitment Percentage Retained: __________%
Face Amount of Letters of Credit Assigned: $___________
Face Amount of Letters of Credit Retained: $___________
ACCEPTED:
THE CHASE MANHATTAN BANK,
as Agent _______________________,
as Assignor
By: __________________________ By: _________________________
Name: Name:
Title: Title:
____________________________,
as Assignee
By: _________________________
Name:
Title:
73
CONSENT OF THE BORROWER to the extent that the Assignee is not an Eligible
Assignee or as required in Section 9.04(b)(ii) of the Credit Agreement where
such assignment is not to a Lender or an Affiliate of a Lender or is not an
assignment of the entire remaining amount of the assigning Lender's Commitment
or Loans
THE TOPPS COMPANY, INC.
By: __________________________
Name:
Title:
74
EXHIBIT B
COMPLIANCE CERTIFICATE
Reference is made to the Credit Agreement, dated as of June 26, 2000, among the
Topps Company, Inc., as Borrower, Topps Enterprises, Inc., The Chase Manhattan
Bank, as Lender and Agent, and the other Lenders party thereto, as the same may
have been amended, supplemented or otherwise modified (the "Credit Agreement").
The undersigned hereby certifies as follows:
1. [To be included where required under Section 5.01(c)] The Borrower is
in compliance with the financial covenants contained in the Credit
Agreement as follows:
[Insert covenant compliance calculations as set forth on the attached
Schedule.
2. [No Default has occurred or is continuing under the Credit Agreement
or a Default has occurred and [specifications of details thereof and
any action taken or proposed to be taken with respect thereto]]; and
3. [No Change in GAAP or the application thereof has occurred since
[____] or a change in GAAP or in the application thereof has occurred
since [____] and [specifications affecting such change on the
financial statements accompanying such certificate]].
THE TOPPS COMPANY, INC.
By: _________________________
Title:
75
EXHIBIT C
---------
TOPPS ENTERPRISES GUARANTY
--------------------------
THIS GUARANTY, dated as of June 26, 2000 (together with any
amendments, restatements, modifications and supplements, this "Guaranty ") made
by TOPPS ENTERPRISES, INC., a Delaware corporation (the "Guarantor"), in favor
of THE CHASE MANHATTAN BANK, as agent (the "Agent") for the lenders (the
"Lenders") party to the Credit Agreement (as hereinafter defined). Capitalized
terms not otherwise defined herein shall have the meanings assigned to such
terms in the Credit Agreement.
WHEREAS, the Agent, the Lenders, The Topps Company, Inc. (the
"Obligor"), and the Guarantor entered into a Credit Agreement dated as of the
date hereof (as amended, supplemented or otherwise modified from time to time,
the "Credit Agreement").
WHEREAS, in consideration for the Agent's and the Lenders' agreement
to enter into the Credit Amendment and the transactions contemplated thereby,
the Guarantor has agreed to guaranty the payment of the obligations owing under
the Credit Agreement.
WHEREAS, it is a condition precedent to the effectiveness of the
Credit Amendment that the Guarantor shall have executed and delivered to the
Agent and the Lenders this Guaranty;
NOW, THEREFORE, in consideration of the premises and for other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged by the Guarantor, the Guarantor agrees with Agent and the Lenders
as follows:
SECTION 1. Guaranty. (a) The Guarantor hereby unconditionally
guarantees the punctual payment when due, of all obligations of every kind or
character now or hereafter existing, whether matured or unmatured, contingent or
liquidated, of the Obligor to each of the Agent and the Lenders under the Credit
Agreement, whether for principal, interest, fees, expenses or otherwise and
whether in United States dollars or other currencies, and any and all reasonable
expenses (including reasonable counsel fees and expenses) incurred by the Agent
and the Lenders in enforcing any of their respective rights under this Guaranty
(all such obligations being collectively referred to as the "Obligations").
SECTION 2. Guaranty of Payment. The Guarantor further agrees that its
guarantee hereunder constitutes a guarantee of payment and performance when due
and not of collection, and waives any right to require that any resort be had by
any of the Lenders to (i) the Obligor, (ii) any other guarantor, (iii) any
collateral of any kind, any balance of any deposit account or credit on the
books of any of the Lenders in favor of the Obligor or any other Person, or (iv)
recourse against any other party.
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SECTION 3. Guaranty Absolute. The Guarantor guarantees that the
Obligations will be performed and paid strictly in accordance with the terms of
the Loan Documents, regardless of any law, regulation or order now or hereafter
in effect in any jurisdiction affecting any of such terms or the rights of any
of the Lenders with respect thereto; and such guarantee is not subject to any
setoff, counterclaim or defense. The Obligations of the Guarantor hereunder are
independent of the obligations of other persons under any other related
document, and a separate action or actions may be brought and prosecuted
hereunder whether the action is brought against any such person or whether any
such person is joined in any such action or actions. The liability of the
Guarantor under this Guaranty shall be absolute and unconditional, and shall not
be affected or released in any way, irrespective of:
(i) any lack of validity or enforceability of any or all of the Loan
Documents or of any or all of the Obligations;
(ii) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Obligations, or any other amendment
or waiver of or any consent to departure from any document evidencing
or relating to any of the Obligations or of any or all of the Loan
Documents, including, but not limited to, an increase or decrease in
the Obligations;
(iii) any taking and holding of any collateral or any additional
guaranty for all or any of the Obligations, or any amendment,
alteration, exchange, substitution, transfer, enforcement, waiver,
subordination, termination, or release of any collateral securing any
or all of the Obligations, or such guaranty, or any non-perfection of
any collateral or any consent to departure from any such guaranty;
(iv) any manner of application of collateral, or proceeds thereof, to
all or any of the Obligations, or the manner of sale of any collateral
securing any of the Obligations;
(v) any consent by one or more of the Lenders to the change,
restructuring or termination of the corporate structure or existence
of the Obligor, or any other guarantor of any of the Obligations, or
any Affiliate of any of them, and any corresponding restructuring of
the Obligations, or any other restructuring or refinancing of the
Obligations or any portion thereof;
(vi) any modification, compromise, settlement or release by one or
more of the Lenders, by operation of law or otherwise, collection or
other liquidation of any or all of the Obligations or any liability of
the Obligor and/or any other guarantor, or of any collateral, in whole
or in part, or any refusal of payment by one or more of the Lenders,
in whole or in part, from the Obligor or any guarantor in connection
with any of the Obligations, whether or not with notice to, or further
assent by, or any reservation of rights against, the Guarantor;
77
(vii) the waiver of the performance or observance by the Obligor or
any other guarantor of any of the Obligations of any agreement,
covenant, term or condition to be performed by any of them;
(viii) the voluntary or involuntary liquidation, dissolution, sale of
all or substantially all of the property, marshaling of assets and
liabilities, receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, arrangement, composition or
readjustment, or other similar application or proceeding affecting the
Obligor or any other guarantor of any of their respective assets;
(ix) the release of the Obligor or any other guarantor of any of the
Obligations from the performance or observance of any agreement,
covenant, term or condition contained in any agreement or document
evidencing or relating to the Obligations or the Loan Documents by
operation of law; or
(x) any other circumstance (including, but not limited to, any statute
of limitations) which might otherwise constitute a defense available
to, or a discharge of, the Guarantor.
Without limiting the generality of the foregoing, the Guarantor hereby
consents, and hereby agrees, that the rights of the Lenders hereunder, and the
liability of the Guarantor hereunder, shall not be affected by any and all
releases of any collateral or any other guaranty of any of the Obligations. This
Guaranty shall continue to be effective or be reinstated, as the case may be, if
at any time any payment of any of the Obligations is rescinded or must otherwise
be returned by any Lender upon the insolvency, bankruptcy or reorganization of
the Obligor or otherwise, all as though such payment had not been made.
SECTION 4. Waivers. The Guarantor waives presentment to, demand of
payment from and protest to the Obligor, or any other guarantor of any of the
Obligations, and also waives notice of acceptance of its guarantee and notice of
protest for non-payment. The Guarantor hereby further waives promptness,
diligence, notice of acceptance and any other notice with respect to any of the
Obligations and this Guaranty and any requirement that the Lenders protect,
secure, perfect or insure any security interest or lien or any property subject
thereto or exhaust any right or take any action against the Obligor, or any
other guarantor of any of the Obligations or any other Person or any collateral.
SECTION 5. Other Waivers. The Guarantor hereby waives any right to
require the Agent or the Lenders to proceed against the Obligor, any other
guarantor or any other Person, or to proceed against any collateral, or pursue
any other remedy in the power of the Agent or the Lenders.
78
SECTION 6. Subrogation. Upon payment by the Guarantor of any sums to
the Lenders hereunder, all rights of the Guarantor against the Obligor arising
as a result thereof by way of right of subrogation or otherwise, shall in all
respects be subordinate and junior in right of payment to the prior final and
indefeasible payment in full of all the Obligations. If any amount shall be paid
to the Guarantor for the account of the Obligor, such amount shall be held in
trust for the benefit of the Lenders and shall forthwith be paid to the Lenders
to be credited and applied to the Obligations, whether matured or unmatured.
SECTION 7. Amendments, Etc. No amendment or waiver of any provision of
this Guaranty nor consent to any departure by the Guarantor herefrom shall in
any event be effective unless the same shall be in writing and signed by the
Lenders and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.
SECTION 8. Notices, Etc. All notices and other communications to any
party provided for hereunder shall be in writing (including telegraphic,
telecopy, telex or cable communication) and mailed, telegraphed, telecopied,
telexed, cabled or delivered, addressed to such party, in the case of the
Guarantor, at Xxx Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000 Attention of
Xx. Xxxxxx Xxxxx (Telecopy No. 212-376-0621) with a copy to Xxxxxxx Xxxx &
Xxxxxxxxx, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000 (Telecopy No.
212-728-8111), Attention of Xxxxxxx Xxxxxx, Esq., in the case of the Agent, at
the address of the Agent referred to in Section 9.01(b) of the Credit Agreement,
or as to any party at such other address as shall be designated by such party in
a written notice to each other party complying as to delivery with the terms of
this Section. All such notices and other communications shall be effective (a)
when received, if mailed or delivered, or (b) when delivered to the telegraph
company, transmitted by telecopier, confirmed by telex answerback or delivered
to the cable company, respectively, addressed as aforesaid.
SECTION 9. No Waiver, Remedies. No failure on the part of any of the
Lenders to exercise, and no delay in exercising, any right hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right hereunder preclude any other or further exercise thereof or the exercise
of any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law, the Credit Agreement or any other
agreement relating to the Obligations.
SECTION 10. Right of Set-off Upon the occurrence and during the
continuance of any Event of Default, the Lenders are hereby authorized at any
time and from time to time, to the fullest extent permitted by law, to set off
and apply any and all deposits (general or special, time or demand, provisional
or final) at any time held and other indebtedness at any time owing by the Agent
or the Lenders to or for the credit or the account of the Guarantor against any
and all of the Obligations of the Guarantor now or hereafter existing under this
Guaranty, irrespective of whether the Lenders shall have made any demand under
this Guaranty and although such Obligations may be contingent and unmatured. The
rights of the Lenders under this Section 10 are in addition to other rights and
remedies (including, without limitation, other rights of set-off) which the
Lenders may have.
79
SECTION 11. Continuing Guaranty. Transfer of Note; Release of
Guaranty. This Guaranty is a continuing guaranty and shall (i) remain in full
force and effect until the payment in full of all of the Obligations and all
other amounts payable under this Guaranty, (ii) be binding upon the Guarantor,
its successors and assigns, and (iii) inure to the benefit of and be enforceable
by the Lenders and their respective successors, transferees and assigns. Without
limiting the generality of the foregoing clause (iii), each Lender may assign or
otherwise transfer any instrument of indebtedness of the Obligor held by it, or
any interest therein, or grant any participation in its rights or Obligations
under any agreement relating to the Obligations and the Loan Documents subject
to the provisions of such agreement to any other person, and such other person
shall thereupon become vested with all the rights in respect thereof granted to
the Lender.
SECTION 12. Jurisdiction, Waiver of Jury Trial. THE GUARANTOR HEREBY
IRREVOCABLY SUBMITS ITSELF TO THE EXCLUSIVE JURISDICTION OF BOTH THE SUPREME
COURT OF THE STATE OF NEW YORK, NEW YORK COUNTY AND THE UNITED STATES DISTRICT
COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND ANY APPEAL THEREFROM, FOR THE
PURPOSE OF ANY SUIT, ACTION OR OTHER PROCEEDING ARISING OUT OF OR RELATING TO
THIS GUARANTY, AND HEREBY WAIVES, AND AGREES NOT TO ASSERT, BY WAY OF MOTION, AS
A DEFENSE OR OTHERWISE, IN ANY SUIT, ACTION OR PROCEEDING, ANY CLAIM THAT IT IS
NOT PERSONALLY SUBJECT TO THE JURISDICTION OF THE ABOVE-NAMED COURTS FOR ANY
REASON WHATSOEVER, THAT SUCH SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN
INCONVENIENT FORUM OR THAT THIS GUARANTY MAY NOT BE ENFORCED IN OR BY SUCH
COURTS. NEITHER THE GUARANTOR NOR THE LENDER WILL SEEK TO CONSOLIDATE SUCH
PROCEEDING INTO ANY ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN
WAIVED. SECTION 9.10 OF THE CREDIT AGREEMENT SHALL APPLY TO THIS GUARANTY.
SECTION 13. Applicable Law. THIS GUARANTY SHALL IN ALL RESPECTS BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED WHOLLY WITHIN SUCH STATE.
SECTION 14. Expenses of the Agent and the Lenders. The Guarantor
agrees to pay all reasonable and necessary out-of-pocket expenses incurred by
the Agent and the Lenders in connection with the enforcement or protection of
its rights or the rights of the Agent and the Lenders generally in connection
with the Guaranty including, but not limited to, the reasonable fees and
disbursements of counsel for the Agent and the Lenders.
[Signature on Following Page]
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IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.
TOPPS ENTERPRISES, INC.
By:_________________________________
Name:
Title:
81
EXHIBIT D
REVOLVING CREDIT NOTE
$___________ New York, New York
_____ ____, ____
FOR VALUE RECEIVED, THE TOPPS COMPANY, INC., a corporation organized
under the laws of Delaware (the "Borrower"), hereby promises to pay to the order
of ____________________________________ (the "Lender") at its office at
_________________ _______________________________, or at such other place as the
Lender directs in writing, the principal sum of _______________________
($__________) or, if less, the then outstanding amount loaned by the Lender to
the Borrower pursuant to the Credit Agreement (defined below), in lawful money
of the United States of America and in immediately available funds, on the
Maturity Date (or sooner if required under the Credit Agreement) and in the
manner provided in the Credit Agreement. The Borrower also promises to pay
interest on the unpaid principal balance hereof, for the period such balance is
outstanding, at the said office of the Lender, or at such other place as the
Lender directs in writing, in like money, at the rate(s) of interest as provided
in the Credit Agreement on the dates and in the manner provided in the Credit
Agreement.
The date and amount of each Loan (as defined in the Credit Agreement)
made by the Lender to the Borrower under the Credit Agreement, and each payment
of principal thereof, shall be recorded by the Lender on its books and prior to
any transfer of this Revolving Credit Note (or, at the discretion of the Lender,
at any other time), endorsed by the Lender on Schedule A attached hereto or any
continuation thereof; provided however, that the failure of the Lender to make
such a notation or any error therein shall not affect the obligation of the
Borrower to repay the Loans made by the Lender in accordance with the Credit
Agreement and this Revolving Credit Note.
This is a promissory note made pursuant to Section 2.09(e) of that
certain Credit Agreement dated as of June 26, 2000 (as amended, modified or
supplemented from time to time, the "Credit Agreement"), among the Borrower,
Topps Enterprises, Inc., the Agent (defined therein), and the "Lenders" party
thereto, and evidences the Loans made by the Lender under the Credit Agreement.
All capitalized terms not defined herein shall have the meanings given to them
in the Credit Agreement.
The Credit Agreement provides for the acceleration of the maturity of
principal upon the occurrence of certain Events of Default and for prepayments
on the terms and conditions specified therein.
82
The Borrower waives presentment, notice of dishonor, protest and any
other notice or formality with respect to this Revolving Credit Note.
The Revolving Credit Note is subject in all respects to the Credit
Agreement, including, without limitation, the interest rate limitation
provisions in Section 9.13 thereof.
This Revolving Credit Note shall be governed by, and interpreted and
construed in accordance with, the laws of the State of New York, without regard
to conflicts of law principles.
THE TOPPS COMPANY, INC.
By: ______________________________
Name:
Title:
83
SCHEDULE A
----------
Amount Amount of Balance Notation
Date of Loan Payment Outstanding By
---- ------- --------- ----------- --------
84
