SIXTH AMENDMENT TO CREDIT AGREEMENT
This SIXTH AMENDMENT TO CREDIT AGREEMENT dated as of December 1, 2000 (this
"Amendment"), is by and between AKI, INC., a Delaware corporation, formerly
known as Arcade, Inc. ("Borrower") and HELLER FINANCIAL, INC., a Delaware
corporation ("Lender").
R E C I T A L S:
A. Borrower and Lender are parties to that certain Credit Agreement dated
as of April 30, 1996 (as the same has been and hereafter may be amended,
restated, supplemented or otherwise modified from time to time, the "Credit
Agreement").
B. Borrower and Lender wish to amend the Credit Agreement as provided
herein.
NOW, THEREFORE, the parties agree as follows:
1. Definitions. Capitalized terms used in this Amendment, unless otherwise
defined herein, shall have the meanings ascribed to such terms in the Credit
Agreement.
2. Amendments to the Credit Agreement.
(a) Subsection 1.2(A) of the Credit Agreement is amended by deleting
the first sentence thereto and substituting therefor the following two
sentences:
"(A) Interest. From the date the Loans are made and the other
Obligations become due and payable in accordance with the
terms of this Agreement and the other Loan Documents, the
Obligations shall bear interest at the sum of the Base Rate
plus three-quarters of one percent (0.75%) per annum and/or,
with respect to any LIBOR Rate Loan, the sum of the LIBOR
Rate plus two and one-half percent (2.50%) per annum.
Notwithstanding the foregoing, commencing February 1, 2001,
the Loans and the other Obligations as they become due and
payable in accordance with the terms of this Agreement and
the other Loan Documents, shall bear interest at the sum of
the Base Rate plus one percent (1.00%) per annum and/or,
with respect to any LIBOR Rate Loan, the sum of the LIBOR
Rate plus two and three-quarters percent (2.75%) per annum."
(b) Subsection 1.2(C) of the Credit Agreement is amended by deleting
the phrase "two and one-half percent (2.50%)" and substituting therefor the
phrase "two and three-quarters percent (2.75%)."
(c) Clause (E) of subsection 3.1 of the Credit Agreement is deleted
and the following clause (E) of subsection 3.1(E) is substituted therefor:
"(E) the Refinanced Bridge Indebtedness;"
(d) Subsection 3.5 of the Credit Agreement is amended by adding the
following as clauses (J) and (K) thereto:
"(J) Borrower may use proceeds of Revolving Loans to (1)
repurchase certain notes evidencing the Refinanced Bridge
Indebtedness and (2) make dividend payments or distributions
to Holdings solely to permit Holdings to repurchase certain
13 1/2% senior discount debentures due 2009 issued pursuant
to that certain Indenture dated June 25, 1998 between
Holdings and State Street Bank and Trust Company, provided
that, in each case, all of the following conditions are
satisfied:
(i) Borrower shall provide written notice to Heller
that the proceeds of a Revolving Loan are to be used to
repurchase, directly or indirectly, any of the notes or
debentures referred to in this clause (J) of subsection 3.5,
and the aggregate amount of all such repurchases under this
clause (J) of subsection 3.5 shall not exceed $4,000,000;
(ii) no Default or Event of Default has occurred and is
continuing or would arise as a result of any such
repurchase;
(iii) after giving effect to any such repurchase,
Borrower is in compliance on a pro forma basis with the
covenants set forth in subsections 4.3, 4.4 and 4.5,
recomputed for the most recent month for which financial
statements have been delivered; and
(iv) after giving effect to any such repurchase, the
Maximum Revolving Loan Balance exceeds the aggregate
outstanding principal balance of Revolving Loans by not less
than $3,000,000; and
(K) upon Borrower's repurchase of notes and debentures in the
aggregate amount permitted under the foregoing clause (J),
Borrower may use proceeds of Revolving Loans to (1)
repurchase certain notes evidencing the Refinanced Bridge
Indebtedness and (2) make dividend payments or distributions
to Holdings solely to permit Holdings to repurchase certain
13 1/2% senior discount debentures due 2009 issued pursuant
to that certain Indenture dated June 25, 1998 between
Holdings and State Street Bank and Trust Company, provided
that, in each case, all of the following conditions are
satisfied:
(i) Borrower shall provide written notice to Heller
that the proceeds of a Revolving Loan are to be used to
repurchase,
directly or indirectly, any of the notes or debentures
referred to in this clause (K) of subsection 3.5;
(ii) Borrower shall provide Heller with a twelve (12)
month forecast of Borrower's balance sheet, income statement
and statement of cash flows on a monthly basis after giving
effect to the proposed Revolving Loan draw pursuant to this
clause (K) of subsection 3.5, which forecast shall
demonstrate that the Maximum Revolving Loan Balance shall
exceed the aggregate outstanding principal balance of
Revolving Loans by not less than $3,000,000 during each of
the twelve (12) months listed in the forecast;
(iii) no Default or Event of Default has occurred and
is continuing or would arise as a result of any such
repurchase;
(iv) after giving effect to any such repurchase,
Borrower is in compliance on a pro forma basis with the
covenants set forth in subsections 4.3, 4.4 and 4.5,
recomputed for the most recent month for which financial
statements have been delivered; and
(v) after giving effect to any such repurchase, the
Maximum Revolving Loan Balance exceeds the aggregate
outstanding principal balance of Revolving Loans by not less
than $3,000,000."
(e) Subsection 10.1 of the Credit Agreement is amended by deleting the
definition of "Refinanced Bridge Indebtedness" contained therein and
substituting therefor the following definition:
"Refinanced Bridge Indebtedness" means those certain 10 1/2%
senior notes due 2008 in the aggregate principal amount of
$115,000,000 issued pursuant to that certain Debenture dated
June 25, 1998, between Borrower and IBJ Schroder Bank &
Trust Company, as trustee.
3. Representations and Warranties. To induce Lender to enter into this
Amendment, Borrower represents and warrants to Lender that:
(a) the execution, delivery and performance by Borrower of this
Amendment are within its corporate power, have been duly authorized by all
necessary corporate action and do not and will not contravene or conflict
with any provision of law applicable to Borrower, the Certificate of
Incorporation or By-laws of Borrower, or any order, judgment or decree of
any court or other agency of government or any contractual obligation
binding upon Borrower;
(b) the Credit Agreement as amended as of the date hereof is the
legal, valid and binding obligation of Borrower enforceable against
Borrower in accordance with its terms;
(c) each of the representations and warranties set forth in Section 5
of the Credit Agreement (other that those which, by their terms,
specifically are made as of a certain date prior to the date hereof) are
true and correct in all material respects as of the date hereof; and
(d) no Default or Event of Default has occurred and is continuing.
4. Conditions. The effectiveness of the amendments stated in this Amendment
is subject to each of the following conditions precedent or concurrent:
(a) No Default or Event of Default under the Credit Agreement, as
amended hereby, shall have occurred and be continuing;
(b) Borrower shall have executed and delivered this Amendment and such
other documents and instruments as Lender may require shall have been
executed and/or delivered to Lender; and
(c) All legal matters incident to this Amendment shall be satisfactory
to Lender and its legal counsel.
5. Miscellaneous.
(a) Captions. Section captions used in this Amendment are for
convenience only, and shall not affect the construction of this Amendment.
(b) Governing Law. This Amendment shall be a contract made under and
governed by the laws of the State of New York, without regard to conflict
of laws principals. Whenever possible each provision of this Amendment
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Amendment shall be prohibited
by or invalid under such law, such provision shall be ineffective to the
extent of such prohibition or invalidity, without invalidating the
remainder of such provision or the remaining provisions of this Amendment.
(c) Counterparts. This Amendment may be executed in any number of
counterparts, and each such counterpart shall be deemed to be an original,
but all such counterparts shall together constituted but one and the same
Agreement.
(d) Successors and Assigns. This Amendment shall be binding upon
Borrower and Lender and their respective successors and assigns, and shall
inure to the sole benefit of Borrower and Lender and their respective
successors and assigns.
(e) References. Any reference to the Credit Agreement contained in any
notice, request, certificate, or other document executed concurrently with
or after the
execution and delivery of this Amendment shall be deemed to include this
Amendment unless the context shall otherwise require.
(f) Continued Effectiveness. The Credit Agreement, as amended hereby,
and each of the other Loan Documents, remain in full force and effect.
(g) Costs, Expenses and Taxes. Borrower affirms and acknowledges that
subsection 1.3(B) of the Credit Agreement applies to this Amendment and the
transactions and Agreements and document contemplated hereunder.
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Delivered at Chicago, Illinois, as of the day and year first above written.
AKI, INC., a Delaware corporation, formerly
known as Arcade, Inc.
By: /s/ Kenneth A. Budde
--------------------------
Kenneth A. Budde
Chief Financial Officer
HELLER FINANCIAL, INC., a Delaware corporation
By: /s/ Susan Koehnlein
--------------------------
Susan Koehnlein
Assistant Vice President
AKI HOLDING CORP., a Delaware corporation
By: /s/ Kenneth A. Budde
--------------------------
Kenneth A. Budde
Chief Financial Officer