Exhibit 10.11
THIRD AMENDMENT TO REVOLVING CREDIT,
TERM LOAN AND GOLD CONSIGNMENT AGREEMENT
Third Amendment dated as of August 26, 1998 (the "Amendment")
amending that certain 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 COMMEMORATIVE BRANDS, INC.
(f/k/a Scholastic Brands, Inc.), a Delaware corporation (the "Borrower"),
BANKBOSTON, N.A. (f/k/a The First National Bank of Boston and successor by
merger to Rhode Island Hospital Trust National Bank), RHODE ISLAND HOSPITAL
TRUST NATIONAL BANK, a national banking association, and the other financial
institutions listed on Schedule 1 to the Credit Agreement (collectively, the
"Banks"); and BANKBOSTON, N.A. as agent for itself and the Banks.
Capitalized terms used herein and which are not otherwise defined shall have
the respective meanings ascribed thereto in the Credit Agreement.
WHEREAS, the Borrower and the Banks have agreed to modify certain
terms and conditions of the Credit Agreement as specifically set forth in
this Amendment;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements contained herein and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties
hereto hereby agree as follows:
SECTION 1. AMENDMENT TO SECTION 1.1 OF THE CREDIT AGREEMENT.
Section 1.1 of the Credit Agreement is hereby amended by inserting the
following definitions in the appropriate alphabetical order:
"SHORT TERM REVOLVING CREDIT NOTE. That certain Revolving Credit
Note dated as of the date hereof, by and between the Borrower and
BankBoston, N.A. in the aggregate principal amount of $8,000,000 which loan
is to be guaranteed by Castle Harlan Partners II, L.P."
SECTION 2. AMENDMENT TO SECTION 11.4 OF THE CREDIT AGREEMENT.
Section 11.4(f) of the Credit Agreement is hereby amended in its entirety to
read as follows:
"(f) (i) within fifteen (15) days after the end of each
calendar month, or at such earlier time as the Agents may reasonably
request, (A) a Borrowing Base Report setting forth the Borrowing Base as at
the end of such calendar month or other date so requested by the Agents,
and (B) a Consigned Precious Metal Report setting forth (1) the amount of
Consigned Precious Metal and Borrower's Precious Metal as of the end of
such calendar month or other date so requested by the Agents, and (2) a
calculation of the Consignment Advance Rate Percentage multiplied by the
Fair Market Value of the sum of (y) Borrower's Precious Metal plus (z)
Consigned Precious Metal as of the end of such calendar month or other date
so requested by the Agents, in each case together with supporting schedules
and documentation, with each such Borrowing Base Report and
Consigned Precious Metal Report to be accompanied by a certification by
the principal financial or accounting officer or treasurer of the Borrower
that the information contained therein is true and accurate in all material
respects, (ii) not later than Wednesday of each week, or at such earlier
time as the Agents may reasonably request, (A) an update of the most
recently delivered Borrowing Base Report updating the Borrowing Base as at
the end of the previous week or other date so requested by the Agents in
form reasonably acceptable to the Agents, and (B) an update of the
Consigned Precious Metal Report in form reasonably acceptable to the Agents
setting forth (1) the amount of Consigned Precious Metal and Borrower's
Precious Metal as of the end of such week or other date so requested by the
Agents, and (2) a calculation of the Consignment Advance Rate Percentage
multiplied by the Fair Market Value of the sum of (y) Borrower's Precious
Metal plus (z) Consigned Precious Metal as of the end of such week or other
date so requested by the Agents, in each case together with supporting
schedules and documentation, with each such updated Borrowing Base Report
and Consigned Precious Metal Report to be accompanied by a certification by
the principal financial or accounting officer or treasurer of the Borrower
that the information contained therein is true and accurate in all material
respects based upon the information then available to him/her and (iii) on
each Business Day a report aggregating the Borrower's sales, cash receipts
and such other information as may reasonably be requested by the Agent, in
a form reasonably acceptable to the Agent;"
SECTION 3. AMENDMENT TO SECTION 11.4 OF THE CREDIT AGREEMENT.
Section 11.4 of the Credit Agreement is hereby further amended by adding at
the end thereof the following new paragraphs (k) and (l):
"(k) on or prior to October 31, 1998 the report of the
Borrower's consultant hired to evaluate ways to improve the manufacturing
efficiencies of the Borrower, in form reasonably satisfactory to the Agent;
and
(l) on or prior to September 30, 1998, the Borrower's fiscal
1998 business plan, in form reasonably satisfactory to Agent."
SECTION 4. AMENDMENT TO SECTION 12.1 OF THE CREDIT AGREEMENT.
Section 12.1 of the Credit Agreement is hereby amended by adding paragraph
(z) to read as follows:
"(z) Indebtedness evidenced by the Short Term Revolving Credit
Note (including, without limitation Indebtedness under any indemnification
agreement (an "Indemnification Agreement") with any guarantor of such Short
Term Revolving Credit Note to the extent that it does not conflict with the
provisions of the underlying guarantee)."
SECTION 5. AMENDMENT TO SECTION 12.12 OF THE CREDIT AGREEMENT.
Section 12.12 of the Credit Agreement is hereby amended in its entirety to
read as follows:
"12.12 TRANSACTIONS WITH AFFILIATES. The Borrower will not, nor
will the Borrower permit or suffer any of its Subsidiaries to, conduct any
transactions among themselves or with any Affiliates of the Borrower, other
than (a) so long as no Event of
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Default shall have occurred and be continuing and none would result from
the making thereof and the Short Term Revolving Credit Note has been paid
in full, payment of the CH Management Fee in an aggregate amount not to
exceed $1,500,000 during any fiscal year of the Borrower, PROVIDED that
any portion of such amount not paid during any fiscal year may be paid in
any subsequent fiscal year, (b) transactions with Oakley Insurance Group
regarding the Borrower's insurance policies and coverage upon terms not
materially less favorable to the Borrower or such Subsidiary than it could
obtain in a comparable arm's-length transaction with a party other than
Oakley Insurance Group, (c) a Permitted Preferred Stock Replacement, (d)
transactions among the Borrower and its Subsidiaries, (e) any Permitted
Employee Stock Repurchases, (f) any Permitted Common Stock Repurchase,
(g) transactions constituting Investments permitted by Sections 12.3(h) or
(o) hereof, (h) transactions in the ordinary course of the Borrower's or
such Subsidiary's business, consistent with past practices, and upon terms
not materially less favorable to the Borrower or such Subsidiary than it
could obtain in a comparable arm's-length transaction with a party other
than the Borrower, such Subsidiary or such Affiliate and (i) entering into
an Indemnification Agreement."
SECTION 6. ADDITION TO SECTION 12 OF THE CREDIT AGREEMENT. The
following new Section 12.15 is hereby added to the Credit Agreement:
"Section 12.15. SHORT TERM REVOLVING CREDIT NOTE. The Borrower
will not amend, supplement, or otherwise modify the terms of the Short Term
Revolving Credit Note or prepay, redeem, cause the defeasance of or
repurchase the Short Term Revolving Credit Note; PROVIDED, HOWEVER, so long
as no Default or Event of Default has occurred and is continuing, the
Borrower may make regularly scheduled payments of interest on account of
the Short Term Revolving Credit Note; PROVIDED, FURTHER, the Borrower may
make principal payments on account of the Short Term Revolving Credit Note
so long as (a) no Default or Event of Default exist or would exist after
the making of such payment and (b) both before and immediately after the
making of such payment, an amount equal to the Borrowing Base MINUS
$2,000,000 exceeds the Outstanding Facility."
SECTION 7. CONDITIONS TO EFFECTIVENESS. This Amendment shall
not become effective until the Agent receives a counterpart of this
Amendment, executed by the each of the Borrower, the Agent and the Majority
Banks.
SECTION 8. REPRESENTATIONS AND WARRANTIES. The representations
and warranties of the Borrower contained in the Credit Agreement were true
and correct when made and continue to be true and correct on and as of the
date hereof as if made on the date hereof except to the extent of changes
resulting from transactions contemplated or permitted by the Credit Agreement
and to the extent that such representations and warranties relate expressly
to an earlier date. No Default or Event of Default has occurred and is
continuing.
SECTION 9. RATIFICATION, ETC. Except as expressly amended
hereby, the Credit Agreement and all documents, instruments and agreements
related thereto, including, but not limited to the Security Documents, are
hereby ratified and confirmed in all respects and shall continue in full
force and effect. The Credit Agreement and this Amendment shall be read and
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construed as a single agreement. 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.
SECTION 10. NO WAIVER. Nothing contained herein shall
constitute a waiver of, impair or otherwise affect any Obligations, any other
obligation of the Borrower or any rights of the Agent or the Banks consequent
thereon.
SECTION 11. 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 12. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF
MASSACHUSETTS (WITHOUT REFERENCE TO CONFLICT OF LAWS).
SECTION 13. DESIGNATED SENIOR INDEBTEDNESS. The Indebtedness
evidenced by the Short Term Revolving Credit Note constitutes, and the
Borrower hereby specifically designates such Indebtedness as, Designated
Senior Indebtedness for purposes of the Indenture. The Agent hereby consents
to such designation.
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment
as a document under seal as of the date first above written.
COMMEMORATIVE BRANDS, INC. (f/k/a Scholastic
Brands, Inc.)
BY: /s/ C.W. Walls
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NAME: C.W. Walls
TITLE: Vice-President/Treasurer
BANKBOSTON, N.A. (f/k/a The First National Bank
of Boston and successor by merger to Rhode
Island Hospital Trust National Bank), individually
and as Agent
BY: /s/ Robert J. Brandon
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NAME: Robert J. Brandon
TITLE: Director
LASALLE NATIONAL BANK
BY: /s/ David P. Gibson
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NAME: David P. Gibson
TITLE: Vice President
CREDITANSTALT CORPORATE
FINANCE, INC.
BY: /s/ John G. Taylor
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NAME: John G. Taylor
TITLE: Senior Associate
BY: /s/ Robert M. Biringer
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NAME: Robert M. Biringer
TITLE: Executive Vice President
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FLEET PRECIOUS METALS INC.
BY: /s/ Stephen F. O'Sullivan
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NAME: Stephen F. O'Sullivan
TITLE: Vice President
BY: /s/ Karen M. Sheil
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NAME: Karen M. Sheil
TITLE: Vice President
HELLER FINANCIAL, INC.
BY: /s/ Julia F. Maslanka
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NAME: Julia F. Maslanka
TITLE: Vice President
SANWA BUSINESS CREDIT
CORPORATION
BY: /s/ Peter W. Skavla
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NAME: Peter W. Skavla
TITLE: Vice President
UNION BANK OF CALIFORNIA, N.A.
BY: /s/ Gretchen Wile
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NAME: Gretchen Wile
TITLE: Loan Officer
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