NEW ENGLAND BUSINESS SERVICE, INC. AMENDMENT NO. 2 TO NOTE PURCHASE AGREEMENT
Exhibit 10.1
NEW ENGLAND BUSINESS SERVICE, INC.
AMENDMENT NO. 2 TO NOTE PURCHASE AGREEMENT
As of May 10, 2004
The Prudential Insurance
Company of America
1114 Avenue of the Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
New England Business Service, Inc. (hereinafter, the "Company"), together with its successors and
assigns, agrees with you as follows:
| 1. | PRELIMINARY STATEMENTS. |
The Company issued and sold $50,000,000 aggregate principal amount of its 7.23% Senior Notes due November 9, 2008 (the “Notes”, as they may be amended, restated or otherwise modified from time to time), pursuant to that certain Note Purchase Agreement, dated as of November 9, 2001 (as amended by that certain Amendment No. 1 to Note Purchase Agreement, dated as of January 20, 2004, and as in effect immediately prior to giving effect to the amendments provided for by this Amendment Agreement (as hereinafter defined), the “Existing Note Agreement”, and as amended hereby, the “Note Purchase Agreement”). The register for the registration and transfer of the Notes indicates that you are currently the holder of the entire outstanding principal amount of the Notes.
| 2. | DEFINED TERMS. |
Capitalized terms used herein and not otherwise defined herein have the meanings ascribed to them in the Existing Note Agreement.
| 3. | AMENDMENTS. |
Subject to Section 5, the Existing Note Agreement is amended as provided for by this Amendment No. 1 to Note Purchase Agreement (the “Amendment Agreement”) as follows:
(a) SCHEDULE B, Definition of Consolidated EBITDA. The definition of Consolidated EBITDA in Schedule B to the Existing Note Agreement shall be and is hereby amended and restated in its entirety to read as follows: |
“Consolidated EBITDA” means, for any period, the sum of:
(a) Consolidated Net Income for such period; plus |
(b) to the extent, and only to the extent, that such aggregate amount was deducted in the computation of Consolidated Net Income for such period, the aggregate amount of: |
(i) Consolidated Interest Expense for such period; and |
(ii) income tax expense, depreciation expense, amortization expense and other non-cash expenses of the Company and its Subsidiaries, determined on a consolidated basis for such Persons; |
| provided, however, that (i) in connection with the calculation of Consolidated EBITDA for any period of four consecutive fiscal quarters of the Company, the financial impact of any acquisition of any Person or assets made by the Company or any Subsidiary during such period shall be taken into account (based on pro forma financial statements prepared using the actual historical financial statements of such Person being acquired, copies of which shall be delivered to the holders) as if such acquisition had occurred on the first day of such period, and (ii) (A) for purposes of determining Consolidated EBITDA for any period which includes any period prior to June 26, 2004, Consolidated EBITDA shall exclude all Restructuring Charges incurred up to $13,250,000 in the aggregate, and (B) for purposes of determining Consolidated EBITDA for any period ending after June 26, 2004, Consolidated EBITDA shall exclude all Noncash Restructuring Charges incurred up to $7,500,000 in the aggregate during any Fiscal Year; provided that there shall be no duplication of the amounts referred to in the foregoing clauses (A) and (B).” |
(b) SCHEDULE B, Definition of Restructuring Charges. The definition of Restructuring Charges in Schedule B to the Existing Note Agreement shall be and is hereby amended and restated in its entirety to read as follows: |
| ““Restructuring Charges” — means charges incurred by the Company arising directly from the exit of a business operation, the write-down or write-off of goodwill from an acquisition, or the integration of a business entity that is recorded in its financial statements as (i) an exit cost, (ii) an asset impairment charge, (iii) losses on disposal of assets, or (iv) other similar costs, in each case solely to the extent such charges are non-recurring in nature. Restructuring Charges shall include, in any event, those items listed on Schedule 1 for the fiscal year ended June 30, 2001.” |
| 4. | REPRESENTATIONS AND WARRANTIES OF THE COMPANY. |
To induce you to enter into this Amendment Agreement and to consent to the amendments to the Exiting Note Agreement affected hereby (the “Amendments”), the Company represents and warrants as follows:
| 4.1. | Reaffirmation of Representations and Warranties; Subsidiary Guarantors. |
All of the representations and warranties contained in Section 5 of the Note Purchase Agreement were true and correct at and as of the date made. Except to the extent of changes resulting from transactions contemplated or permitted by the Note Purchase Agreement, changes occurring in the ordinary course of business (which changes, either singly or in the aggregate, have not been materially adverse) and to the extent that such representations and warranties relate expressly to an earlier date and after giving effect to the provisions hereof, such representations and warranties, after giving effect to this Amendment Agreement, are also correct at and as of the date hereof. Each Subsidiary Guarantor which delivered a Subsidiary Guaranty shall have executed and delivered to you the Consent and Reaffirmation attached hereto as Exhibit A.
| 4.2. | Organization, Power and Authority, etc. |
The Company is a corporation duly incorporated and validly existing in good standing under the laws of Delaware and has all requisite corporate power and authority to enter into and perform its obligations under this Amendment Agreement.
| 4.3. | Legal Validity. |
The execution and delivery of this Amendment Agreement by the Company and compliance by the Company with its obligations hereunder: (a) are within the corporate powers of the Company; and (b) are legal and do not conflict with, result in any breach of, constitute a default under, or result in the creation of any Lien upon any property of the Company under the provisions of: (i) any charter instrument or bylaw to which the Company is a party or by which the Company or any of its property may be bound; (ii) any order, judgment, decree or ruling of any court, arbitrator or Governmental Authority applicable to either the Company or its property; or (iii) any agreement or instrument to which the Company is a party or by which the Company or any of its property may be bound or any statute or other rule or regulation of any Governmental Authority applicable to the Company or its property, except where such conflict, breach or default could not reasonably be expected to have a Material Adverse Effect.
This Amendment Agreement has been duly authorized by all necessary action on the part of the Company, has been executed and delivered by a duly authorized officer of the Company, and constitutes a legal, valid and binding obligation of the Company, enforceable in accordance with its terms, except that enforceability may be limited by applicable bankruptcy, reorganization, arrangement, insolvency, moratorium, or other similar laws affecting the enforceability of creditors’ rights generally and subject to the availability of equitable remedies.
| 4.4. | No Defaults. |
No event has occurred and no condition exists that, upon the execution and delivery of this Amendment Agreement and upon giving effect thereto, would constitute a Default or an Event of Default.
| 5. | EFFECTIVENESS OF AMENDMENTS. |
The Amendments shall become effective as of March 27, 2004 upon receipt by the Company of the written consent of the Required Holders.
| 6. | EXPENSES. |
Whether or not the Amendments become effective, the Company will promptly (and in any event within thirty (30) days of receiving any statement or invoice therefor) pay all fees, expenses and costs relating to this Amendment Agreement, including, but not limited to, the reasonable fees of your special counsel, Xxxxxxx XxXxxxxxx LLP, incurred in connection with the preparation, negotiation and delivery of the Amendment Agreement and any other documents related thereto. Nothing in this Section shall limit the Company’s obligations pursuant to Section 15 of the Existing Note Agreement.
| 7. | MISCELLANEOUS. |
| 7.1. | Part of Existing Note Agreement; Future References, etc. |
| This Amendment Agreement shall be construed in connection with and as a part of the Existing Note Agreement and, except as expressly amended by this Amendment Agreement, all terms, conditions and covenants contained in the Existing Note Agreement are hereby ratified and shall be and remain in full force and effect. Any and all notices, requests, certificates and other instruments executed and delivered after the execution and delivery of this Amendment Agreement may refer to the Existing Note Agreement without making specific reference to this Amendment Agreement, but nevertheless all such references shall include this Amendment Agreement unless the context otherwise requires. |
| 7.2. | Counterparts. |
| This Amendment Agreement may be executed in any number of counterparts, each of which shall be an original but all of which together shall constitute one instrument. Each counterpart may consist of a number of copies hereof, each signed by less than all, but together signed by all, of the parties hereto. |
| 7.3. | Governing Law. |
| THIS AMENDMENT AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW OF THE STATE OF NEW YORK EXCLUDING CHOICE-OF-LAW PRINCIPLES OF THE LAW OF SUCH STATE THAT WOULD REQUIRE THE APPLICATION OF THE LAWS OF A JURISDICTION OTHER THAN NEW YORK. |
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If you are in agreement with the foregoing, please so indicate by signing the acceptance below on the accompanying counterpart of this agreement and returning it to the Company, whereupon it will become a binding agreement between you and the Company.
| NEW ENGLAND BUSINESS SERVICE, INC. /s/ Xxxxxx X. Xxxxxx —————————————— Name: Xxxxxx X. Xxxxxx Title: Executive Vice President, Chief Financial Officer and Treasurer |
The foregoing Amendment Agreement is hereby accepted as of the date first above written.
| THE PRUDENTIAL INSURANCE COMPANY OF AMERICA /s/ Xxxxx X. Xxxxxx —————————————— Name: Xxxxx X. Xxxxxx Title: Vice President |
EXHIBIT A
CONSENT AND REAFFIRMATION
Each of the undersigned (the “Subsidiary Guarantors”) hereby (i) acknowledges receipt of a copy of the foregoing Amendment No. 2 to Note Purchase Agreement (the “Second Amendment”); (ii) consents to the Company’s execution and delivery thereof; (iii) agrees to be bound thereby; and (iv) affirms that nothing contained therein shall modify in any respect whatsoever its guaranty of the obligations of the Company to the holders of the Notes pursuant to the terms of those certain Subsidiary Guaranties, entered into by the Subsidiary Guarantors pursuant to the terms of the Note Purchase Agreement (collectively, the “Guaranty”), and (v) reaffirms that the Guaranty is and shall continue to remain in full force and effect. Although each of the Subsidiary Guarantors has been informed of the matters set forth herein and in the Second Amendment and has acknowledged and agreed to same, such Subsidiary Guarantors understand that the holders of the Notes have no obligation to inform any of the Subsidiary Guarantors of such matters in the future or to seek any of the Subsidiary Guarantors’ acknowledgment or agreement to future amendments or waivers, and nothing herein shall create such a duty.
In witness whereof, each of the undersigned has executed this Consent and Reaffirmation on and as of the date of such Second Amendment.
| CHISWICK, INC. MASS DISTRIBUTION, INC. XXXXX SYSTEMS, INC. NEBS INTERACTIVE, INC. PREMIUMWEAR, INC. RAPIDFORMS, INC. XXXXXXX & XXXXXX, INC. SAFEGUARD BUSINESS SYSTEMS, INC. XXXXXXX XXXXXXX COMPANY VERIPACK, INC. (f/k/a XXXXXXXX.XXX, INC.) |
| /s/ Xxxxxx X. Xxxxxx —————————————— Name: Xxxxxx X. Xxxxxx Title: Treasurer |
