FIRST AMENDMENT TO REVOLVING CREDIT, TERM LOAN
AND GOLD CONSIGNMENT AGREEMENT
FIRST AMENDMENT TO REVOLVING CREDIT, TERM LOAN AND GOLD CONSIGNMENT
AGREEMENT dated as of March 16, 1998 (this "AMENDMENT"), by and among (a)
COMMEMORATIVE BRANDS, INC. (formerly known as Scholastic Brands, Inc.) (the
"BORROWER"), a Delaware corporation having its principal place of business at
7211 Circle S Road, Austin, Texas 78745; (b) the lending institutions (the
"BANKS") set forth on the signature pages hereto; and (c) BANKBOSTON, N.A.
(formerly known as The First National Bank of Boston), a national banking
association and RHODE ISLAND HOSPITAL TRUST NATIONAL BANK, a national banking
association, as agents for themselves and the other Banks (in such capacity,
the "AGENTS"), amending certain provisions of the Revolving Credit, Term Loan
and Gold Consignment Agreement dated as of December 16, 1996 (as amended and
in effect from time to time, the "CREDIT AGREEMENT"), by and among the
Borrower, the Banks and the Agents. Terms not otherwise defined herein which
are defined in the Credit Agreement shall have the respective meanings herein
assigned to such terms in the Credit Agreement.
WHEREAS, the Borrower has requested that the Agents and the Banks agree
to amend the terms of the Credit Agreement in several respects all as
hereinafter more fully set forth; and
WHEREAS, the Agents and the Banks are willing to amend the terms of the
Credit Agreement in such respects upon the terms and subject to the
conditions contained herein;
NOW, THEREFORE, in consideration of the mutual agreements contained in
the Credit Agreement, and herein, and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties
hereto hereby agree as follows:
SECTION 1. AMENDMENT OF SECTION 1.1 OF THE CREDIT AGREEMENT. Subject
to the satisfaction of the conditions set forth in section 3 of this
Amendment, SECTION 1.1 of the Credit Agreement is hereby amended as follows:
(a) by restating clause (a) of the definition of "OVERDUE
RECEIVABLES" to read in its entirety as follows:
"(a) with respect to Accounts Receivable owing by independent sales
representatives of the division of the Borrower previously
constituting the "Scholastic Division" of the Balfour Sellers, one
hundred eighty (180) days past the earlier to occur of (i) the date
of the respective
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invoices therefor and (ii) the date of shipment thereof in the case
of goods or the end of the calendar month following the provision
thereof in the case of services,"
(b) by adding the following new definition of "COMPUTER CONVERSION
CAPITAL EXPENDITURES" thereto in proper alphabetical sequence:
"COMPUTER CONVERSION CAPITAL EXPENDITURES. Capital Expenditures
incurred by the Borrower or any of its Subsidiaries in connection
with the conversion of its Hewlett Packard computer system to an IBM
AS400 system."
SECTION 2. AMENDMENT OF SECTION 13.3 OF THE CREDIT AGREEMENT. Subject
to the satisfaction of the conditions set forth in section 3 of this
Amendment, SECTION 13.3 of the Credit Agreement is hereby restated to read in
its entirety as follows:
"13.3. CAPITAL EXPENDITURES. (a) The Borrower will not make, or
permit any Subsidiary of the Borrower to make, Capital Expenditures (other
than Computer Conversion Capital Expenditures) during any fiscal year set
forth in the table below (or the portion thereof, in the case of the
fiscal year in which the Closing Date occurs) that exceed, in the
aggregate, the amount set forth opposite such fiscal year in such table:
FISCAL YEAR AMOUNT
----------- ------
1997 $4,395,000
1998 $3,700,000
1999 $3,500,000
2000 $3,500,000
2001 $3,500,000
2002 $3,500,000
2003 $3,500,000
2004 $3,500,000
(b) The Borrower will not make, or permit any Subsidiary of the
Borrower to make, Computer Conversion Capital Expenditures (i) during the
period consisting of fiscal years 1998 and 1999 and the first fiscal
quarter of fiscal year 2000 that exceed, in the aggregate, $5,500,000 or
(ii) during any fiscal period other than fiscal years 1998 and 1999 and
the first fiscal quarter of fiscal year 2000; PROVIDED, HOWEVER, that if
during any fiscal year the amount of Capital Expenditures permitted by
SECTION 13.3(a) above for such fiscal year is not so utilized, such
unutilized amount may be utilized during such fiscal year only (and not
during any other fiscal year) to make Computer Conversion Capital
Expenditures."
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SECTION 3. CONDITIONS TO EFFECTIVENESS. The effectiveness of this
Amendment shall be subject to the delivery to the Dollar Agent by (or on
behalf of) the Borrower of the following, in form and substance satisfactory
to the Agents and the Banks:
(a) this Amendment signed by each of the Borrower, the Majority Banks
and the Agents;
(b) an amendment fee in the aggregate amount of $50,000, such fee to be
for the ratable accounts of the Dollar Banks in accordance with their
respective Commitment Percentages; and
(c) such other documents or instruments as any of the Agents or the Banks
may reasonably request.
SECTION 4. REPRESENTATIONS AND WARRANTIES; NO DEFAULT; AUTHORIZATION.
The Borrower hereby represents and warrants to the Banks and the Agents as
follows:
(a) Each of the representations and warranties made by it in the
Credit Agreement was true as of the date as of which it was made and is
true as and at the date of this Amendment (except to the extent of changes
resulting from transactions contemplated or permitted by the Credit
Agreement and the other Loan Documents and changes occurring in the
ordinary course of business that in the aggregate are not materially
adverse, and to the extent that such representations and warranties relate
expressly to an earlier date), and, after the execution of this Amendment,
no Default or Event of Default has occurred and is continuing as of the
date of this Amendment; and
(b) This Amendment has been duly authorized, executed and delivered
by the Borrower and is in full force and effect, and the agreements and
obligations of the Borrower contained herein and in the Credit Agreement,
respectively, constitute the legal, valid and binding obligations of the
Borrower, enforceable against the Borrower in accordance with their
respective terms, except as enforceability is limited by bankruptcy,
insolvency, reorganization, moratorium or other laws relating to or
affecting generally the enforcement of creditors' rights and except to the
extent that availability of the remedy of specific performance or
injunctive relief is subject to the discretion of the court before which
any proceeding therefor may be brought.
SECTION 5. RATIFICATION, ETC. Except as expressly amended hereby, the
Credit Agreement and all documents, instruments and agreements related
thereto are hereby ratified and confirmed in all respects. All references in
the Credit Agreement or any related agreement or instrument to the Credit
Agreement shall hereafter refer to the Credit Agreement as amended hereby.
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SECTION 6. NO IMPLIED WAIVER. Except as expressly provided herein,
nothing contained herein shall constitute a waiver of, impair or otherwise
affect any Obligations, or any right of any of the Agents or the Banks
consequent thereon.
SECTION 7. COUNTERPARTS. This Amendment may be executed in one or more
counterparts, each of which shall be deemed an original but which together
shall constitute one and the same instrument.
SECTION 8. GOVERNING LAW. THIS AMENDMENT SHALL FOR ALL PURPOSES BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH
OF MASSACHUSETTS (WITHOUT REFERENCE TO CONFLICTS OF LAW).
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IN WITNESS WHEREOF, the undersigned have duly executed this Amendment as
a sealed instrument as of the date first above written.
COMMEMORATIVE BRANDS, INC.
By: /s/ Richard A. Fritsche
------------------------------------
Name: Richard A. Fritsche
Title: CFO
BANKBOSTON, N.A. (formerly known as The
First National Bank of Boston),
individually and as Agent
By: /s/ James J. Ward
------------------------------------
Name: James J. Ward
Title: VP
RHODE ISLAND HOSPITAL TRUST
NATIONAL BANK, individually and
as Agent
By: /s/ Michael E. Smith
------------------------------------
Name: Michael E. Smith
Title: First Vice President
CREDITANSTALT-BANKVEREIN
By: /s/ Robert M. Biringer
------------------------------------
Name: Robert M. Biringer
Title: Executive Vice President
By: /s/ John G. Taylor
------------------------------------
Name: John G. Taylor
Title: Senior Associate
LASALLE NATIONAL BANK
By: /s/ David P. Gibson
------------------------------------
Name: David P. Gibson
Title: Vice President
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FLEET PRECIOUS METALS INC.
By: /s/ Stephen F. O'Sullivan
------------------------------------
Name: Stephen F. O'Sullivan
Title: Vice President
By: /s/ David P. Berube
------------------------------------
Name: David P. Berube
Title: AVP
HELLER FINANCIAL, INC.
By: /s/ UNREADABLE
------------------------------------
Name:
Title: Vice President
SANWA BUSINESS CREDIT
CORPORATION
By: /s/ Peter L. Skavla
------------------------------------
Name: Peter L. Skavla
Title: Vice President
UNION BANK OF CALIFORNIA, N.A.
By: /s/ Gretchen Wile
------------------------------------
Name: Gretchen Wile
Title: Loan Officer
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CONSENT OF GUARANTOR
The undersigned hereby acknowledges and consents to the First Amendment to
Revolving Credit, Term Loan and Gold Consignment Agreement, dated as of March
16, 1998, and agrees that the Guaranty dated as of December 16, 1996,
executed by the undersigned in favor of the Agents, the Collateral Agent and
the Banks, and all of the other Loan Documents to which the undersigned is a
party remain in full force and effect, and the undersigned confirms and
ratifies all of its obligations thereunder.
CBI NORTH AMERICA, INC.
(formerly known as SBI North America, Inc.)
By: /s/ C. W. Walls
-----------------------------------------
Name: C. W. Walls
Title: Secretary Treasurer