EXHIBIT 10.11
WAIVER AND AMENDMENT TO LOAN AGREEMENT
THIS WAIVER AND AMENDMENT TO LOAN AGREEMENT (this "Amendment") is made
as of this ____ day of March, 2002, by and among CSS INDUSTRIES, INC., a
Delaware corporation (the "Borrower"), the lending institutions which are
parties hereto (each a "Lender" and collectively, the "Lenders") and PNC BANK,
NATIONAL ASSOCIATION in its capacity as administrative agent for the Lenders (in
such capacity, the "Administrative Agent").
BACKGROUND
A. The Lenders, the Borrower and the Administrative Agent are parties
to a Loan Agreement, dated as of April 30, 2001 (as heretofore amended and
modified, the "Loan Agreement"), pursuant to which the Lenders agreed to make
revolving credit loans to the Borrower in an aggregate outstanding amount of up
to Seventy-five Million Dollars ($75,000,000) (the "Loan"). The Loan is
evidenced by the Borrower's Revolving Credit Notes in the aggregate principal
amount of $75,000,000 (the "Notes").
B. The Borrower intends to exercise its option under that certain
Claims Put Agreement, dated as of January 16, 2002, (the "Put Agreement")
between the Borrower and Third Avenue Trust (the "Buyer") pursuant to which the
Borrower will transfer and assign its right and title to certain accounts
receivable owed to the Borrower by one of its customers arising from merchandise
delivered or services rendered by the Borrower or its subsidiaries (the
"Receivables") in exchange for good and valuable consideration.
C. The Borrower has requested and the Administrative Agent and the
Lenders agree to waive any Event of Default which, absent this waiver, would
result from the Borrower's exercise of its rights and performance of its
obligations under the Put Agreement and to modify one of the covenants in the
Loan Agreement in order to permit possible future transfers and exchanges of
other receivables under similar circumstances, all on the terms and subject to
the conditions herein set forth.
NOW THEREFORE, the parties hereto, intending to be legally bound
hereby, agree as follows:
AGREEMENT
1. Terms and References. Capitalized terms used herein and not
otherwise defined herein shall have the meanings given to such terms in the Loan
Agreement. Unless otherwise specified, section references herein shall refer to
sections of the Loan Agreement.
2. Waiver. The Borrower has requested and the Lenders hereby agree to
waive any violation of the covenant contained in Section 6.12 that would
otherwise arise as a result of Borrower's exercise of its option under the Put
Agreement and the transfer of Receivables to the Buyer in accordance with the
terms thereof. The foregoing waiver shall not be deemed to operate as a, or
obligate the Lenders to grant any, future waiver or modification of
the provisions of Section 6.12 or of any other term, condition or Default under
the Loan Agreement.
3. Amendment to Loan Agreement. The Loan Agreement is hereby amended as
follows:
(a) Section 6.12 of the Loan Agreement is hereby amended by
(i) deleting the parenthesis appearing in clause (b)(i)(C)(2) thereof after the
phrase "nationally recognized exchange" and inserting a parenthesis at the end
of clause (b)(i)(C)(3) immediately after the word "sold", (ii) deleting the word
"and" immediately prior to clause (b)(v) thereof and (iii) deleting the period
at the end of Section 6.12 and inserting the following clause (b)(vi);
"; and (vi) sales or transfers of accounts receivable
of the Borrower or any of its Subsidiaries made in connection
with any agreement, including but not limited to credit
insurance, that seeks to limit the risk of default by or
bankruptcy of any customer of the Borrower or any of its
Subsidiaries on any such accounts receivable owed to the
Borrower or any of its Subsidiaries for merchandise delivered
or services rendered by the Borrower or any of its
Subsidiaries to such customer; provided that (A) no Default or
Event of Default has occurred and is continuing at the time of
such sale or transfer and (B) the consideration received for
such accounts receivable shall be an amount at least
substantially equal to the fair market value of the accounts
receivable which is the subject of the Asset Sale, as
certified to the Administrative Agent by the Borrower's chief
financial officer or vice president of finance.
4. Loan Documents. Except where the context clearly requires otherwise,
all references to the Loan Agreement in any of the Loan Documents or any other
document delivered to the Lenders or the Administrative Agent in connection
therewith shall be to the Loan Agreement, as amended by this Amendment.
5. Borrower's Ratification. The Borrower agrees that it has no defenses
or set-offs against the Lenders or the Administrative Agent or their respective
officers, directors, employees, agents or attorneys, with respect to the Loan
Documents, all of which are in full force and effect, and that all of the terms
and conditions of the Loan Documents not inconsistent herewith shall remain in
full force and effect unless and until modified or amended in writing in
accordance with their terms. The Borrower hereby ratifies and confirms its
obligations under the Loan Documents and agrees that the execution and delivery
of this Amendment does not in any way diminish or invalidate any of its
obligations thereunder.
6. Representations and Warranties. The Borrower hereby represents and
warrants to the Administrative Agent and the Lenders that:
(a) Except as otherwise previously disclosed to the
Administrative Agent and the Lenders, the representations and warranties made in
the Loan Agreement, as amended by this Amendment, are true and correct as of the
date hereof;
2
(b) No Default or Event of Default under the Loan Agreement
exists on the date hereof; and
(c) This Amendment has been duly authorized, executed and
delivered so as to constitute the legal, valid and binding obligation of the
Borrower, enforceable in accordance with its terms.
All of the above representations and warranties shall survive the
making of this Amendment.
7. Conditions Precedent. The effectiveness of this Amendment is subject
to the fulfillment, to the satisfaction of the Administrative Agent and its
counsel, of the following conditions precedent:
(a) The Borrower shall have delivered to the Administrative
Agent, with copies or counterparts for each Lender as appropriate, the
following, all of which shall be in form and substance satisfactory to the
Administrative Agent and shall be duly completed and executed:
(i) This Amendment and
(ii) Such additional documents, certificates and information
as the Administrative Agent or the Lenders may require, pursuant to the terms
hereof, or otherwise reasonably request.
(b) This Amendment shall have been executed and delivered by
the Administrative Agent and Majority Lenders.
(c) The representations and warranties set forth in the Loan
Agreement, as amended by this Amendment, shall be true and correct on and as of
the date hereof.
(d) No Default or Event of Default shall have occurred and be
continuing as of the date hereof.
Upon the satisfaction of the foregoing conditions, this Amendment shall
be binding on the Borrower, the Administrative Agent and all of the Lenders
(whether or not they have executed this Agreement).
8. Miscellaneous.
(a) All terms, conditions, provisions and covenants in the
Loan Documents and all other documents delivered to the Administrative Agent and
the Lenders in connection therewith shall remain unaltered and in full force and
effect except as modified or amended hereby. To the extent that any term or
provision of this Amendment is or may be deemed expressly inconsistent with any
term or provision in any Loan Document or any other document executed in
connection therewith, the terms and provisions hereof shall control.
3
(b) The execution, delivery and effectiveness of this
Amendment shall neither operate as a waiver of any right, power or remedy of the
Administrative Agent or the Lenders under any of the Loan Documents nor
constitute a waiver of any Event of Default or default thereunder except to the
extent specifically set forth in Section 2 hererof.
(c) In consideration of Administrative Agent's and the
Lenders' agreement to amend the existing credit facility, the Borrower hereby
waives and releases the Administrative Agent, the Lenders and their respective
officers, attorneys, agents and employees from any liability, suit, damage,
claim, loss or expense of any kind or failure whatsoever and howsoever arising
of which it has ever had, or has as of the date of this Amendment, knowledge.
(d) This Amendment constitutes the entire agreement of the
parties with respect to the subject matter hereof and supersedes all prior and
contemporaneous understandings and agreements.
(e) In the event any provisions of this Amendment shall be
held invalid or unenforceable by any court of competent jurisdiction, such
holding shall not invalidate or render unenforceable any other provision hereof.
(f) This Amendment shall be governed by and construed
according to the laws of the Commonwealth of Pennsylvania.
(g) This Amendment shall inure to the benefit of, and be
binding upon, the parties hereto and their respective successors and assigns and
may be executed in one or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
(h) The headings used in this Amendment are for convenience of
reference only, do not form a part of this Amendment and shall not affect in any
way the meaning or interpretation of this Amendment.
4
IN WITNESS WHEREOF, the undersigned have caused this Amendment to be
executed by their duly authorized officers as of the date first above written.
CSS INDUSTRIES, INC.
By:
------------------------------------
Title
Attest:
--------------------------------
PNC BANK, NATIONAL ASSOCIATION, as the
Administrative Agent and a Lender
By:
------------------------------------
Title
FIRST UNION NATIONAL BANK
By:
------------------------------------
Name
Title
FLEET NATIONAL BANK
By:
------------------------------------
Name
Title
CITIZENS BANK OF PENNSYLVANIA
By:
------------------------------------
Name
Title
UNION PLANTERS BANK
By:
------------------------------------
Name
Title
5