Execution Copy
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CSS INDUSTRIES, INC.
$50,000,000 4.48% Senior Notes due December 13, 2009
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NOTE PURCHASE AGREEMENT
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Dated as of December 12, 2002
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TABLE OF CONTENTS
(Not a part of the Agreement)
SECTION HEADING PAGE
SECTION 1. AUTHORIZATION OF NOTES.................................................................1
SECTION 2. SALE AND PURCHASE OF NOTES; SUBSIDIARY GUARANTIES......................................1
SECTION 3. CLOSING................................................................................2
SECTION 4. CONDITIONS TO CLOSING..................................................................2
Section 4.1. Representations and Warranties.........................................................2
Section 4.2. Performance; No Default................................................................3
Section 4.3. Compliance Certificates................................................................3
Section 4.4. Opinions of Counsel....................................................................3
Section 4.5. Purchase Permitted by Applicable Law, etc..............................................4
Section 4.6. Related Transactions...................................................................4
Section 4.7. Payment of Special Counsel Fees........................................................4
Section 4.8. Private Placement Number...............................................................4
Section 4.9. Changes in Corporate Structure.........................................................4
Section 4.10. Guaranty Agreements....................................................................4
Section 4.11. Intercreditor Agreement................................................................5
Section 4.12. Bank Loan Agreement....................................................................5
Section 4.13. Funding Instructions...................................................................5
Section 4.14. Proceedings and Documents..............................................................5
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY..........................................5
Section 5.1. Organization; Power and Authority......................................................5
Section 5.2. Authorization, etc.....................................................................6
Section 5.3. Disclosure.............................................................................6
Section 5.4. Organization and Ownership of Shares of Subsidiaries; Affiliates.......................6
Section 5.5. Financial Statements...................................................................7
Section 5.6. Compliance with Laws, Other Instruments, etc...........................................7
Section 5.7. Governmental Authorizations, etc.......................................................7
Section 5.8. Litigation; Observance of Agreements, Statutes and Orders..............................7
Section 5.9. Taxes..................................................................................8
Section 5.10. Title to Property; Leases..............................................................8
Section 5.11. Licenses, Permits, etc.................................................................8
Section 5.12. Compliance with ERISA..................................................................9
Section 5.13. Private Offering by the Company........................................................9
Section 5.14. Use of Proceeds; Margin Regulations...................................................10
Section 5.15. Existing Indebtedness; Future Liens...................................................10
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Section 5.16. Foreign Assets Control Regulations, etc...............................................10
Section 5.17. Status under Certain Statutes.........................................................11
Section 5.18. Environmental Matters.................................................................11
SECTION 6. REPRESENTATIONS OF THE PURCHASERS.....................................................11
Section 6.1. Purchase for Investment...............................................................11
Section 6.2. Source of Funds.......................................................................12
SECTION 7. INFORMATION AS TO COMPANY.............................................................13
Section 7.1. Financial and Business Information....................................................13
Section 7.2. Officer's Certificate.................................................................16
Section 7.3. Inspection............................................................................16
SECTION 8. PREPAYMENT OF THE NOTES...............................................................17
Section 8.1. Required Prepayments..................................................................17
Section 8.2. Optional Prepayments with Make-Whole Amount...........................................17
Section 8.3. Change in Control.....................................................................18
Section 8.4. Allocation of Partial Prepayments.....................................................20
Section 8.5. Maturity; Surrender, etc..............................................................20
Section 8.6. Purchase of Notes.....................................................................21
Section 8.7. Make-Whole Amount.....................................................................21
SECTION 9. AFFIRMATIVE COVENANTS.................................................................22
Section 9.1. Compliance with Law...................................................................22
Section 9.2. Insurance.............................................................................22
Section 9.3. Maintenance of Properties.............................................................23
Section 9.4. Payment of Taxes and Claims...........................................................23
Section 9.5. Corporate Existence, etc..............................................................23
Section 9.6. Notes to Rank Pari Passu..............................................................23
Section 9.7. Changes in Status of Subsidiaries.....................................................24
Section 9.8. Additional Guarantors.................................................................24
SECTION 10. NEGATIVE COVENANTS....................................................................25
Section 10.1. Transactions with Affiliates..........................................................25
Section 10.2. Minimum Net Worth.....................................................................25
Section 10.3. Fixed Charge Coverage Ratio...........................................................26
Section 10.4. Leverage Ratio........................................................................26
Section 10.5. Mergers, Consolidations and Sales of Assets...........................................26
Section 10.6. Liens and Encumbrances................................................................29
Section 10.7. Sale and Leaseback Transactions.......................................................30
Section 10.8. Investments...........................................................................30
Section 10.9. Line of Business......................................................................32
SECTION 11. EVENTS OF DEFAULT.....................................................................32
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SECTION 12. REMEDIES ON DEFAULT, ETC..............................................................34
Section 12.1. Acceleration..........................................................................34
Section 12.2. Other Remedies........................................................................35
Section 12.3. Rescission............................................................................35
Section 12.4. No Waivers or Election of Remedies, Expenses, etc.....................................35
SECTION 13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.........................................36
Section 13.1. Registration of Notes.................................................................36
Section 13.2. No Transfers of Notes to Competitors; Transfer and Exchange of Notes..................36
Section 13.3. Replacement of Notes..................................................................37
SECTION 14. PAYMENTS ON NOTES.....................................................................37
Section 14.1. Place of Payment......................................................................37
Section 14.2. Home Office Payment...................................................................37
SECTION 15. EXPENSES, ETC.........................................................................38
Section 15.1. Transaction Expenses..................................................................38
Section 15.2. Survival..............................................................................38
SECTION 16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT..........................38
SECTION 17. AMENDMENT AND WAIVER..................................................................39
Section 17.1. Requirements..........................................................................39
Section 17.2. Solicitation of Holders of Notes......................................................39
Section 17.3. Binding Effect, etc...................................................................39
Section 17.4. Notes Held by Company, etc............................................................40
SECTION 18. NOTICES...............................................................................40
SECTION 19. REPRODUCTION OF DOCUMENTS.............................................................40
SECTION 20. CONFIDENTIAL INFORMATION..............................................................41
SECTION 21. SUBSTITUTION OF PURCHASER.............................................................42
SECTION 22. MISCELLANEOUS.........................................................................42
Section 22.1. Successors and Assigns................................................................42
Section 22.2. Payments Due on Non-Business Days.....................................................42
Section 22.3. Severability..........................................................................42
Section 22.4. Construction..........................................................................42
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Section 22.5. Counterparts..........................................................................43
Section 22.6. Governing Law.........................................................................43
Section 22.7. Consent to Jurisdiction and Service of Process........................................43
Signature........................................................................................................44
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SCHEDULE A -- Information Relating to Purchasers
SCHEDULE B -- Defined Terms
SCHEDULE 4.9 -- Changes in Corporate Structure
SCHEDULE 5.3 -- Disclosure Materials
SCHEDULE 5.4 -- Subsidiaries of the Company and Ownership of Subsidiary Stock
SCHEDULE 5.5 -- Financial Statements
SCHEDULE 5.8 -- Certain Litigation
SCHEDULE 5.10 -- Existing Liens
SCHEDULE 5.11 -- Patents, etc.
SCHEDULE 5.14 -- Use of Proceeds
SCHEDULE 5.15 -- Existing Indebtedness
EXHIBIT 1 -- Form of 4.48% Senior Note due December 13, 2009
EXHIBIT 2 -- Form of Guaranty Agreements
EXHIBIT 3 -- Form of Intercreditor Agreement
EXHIBIT 4.4(a) -- Form of Opinion of Counsel for the Company
EXHIBIT 4.4(b) -- Form of Opinion of Special Counsel for the Guarantors
EXHIBIT 4.4(c) -- Form of Opinion of Special Counsel for the Purchasers
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CSS INDUSTRIES, INC.
0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
4.48% Senior Notes due December 13, 2009
Dated as of
December 12, 2002
TO EACH OF THE PURCHASERS LISTED IN
THE ATTACHED SCHEDULE A:
Ladies and Gentlemen:
CSS INDUSTRIES, INC., a Delaware corporation (the "Company"), agrees
with the Purchasers listed in the attached Schedule A as follows:
SECTION 1. AUTHORIZATION OF NOTES.
The Company will authorize the issue and sale of $50,000,000 aggregate
principal amount of its 4.48% Senior Notes due December 13, 2009 (the "Notes",
such term to include any such notes issued in substitution therefor pursuant to
Section 13 of this Agreement). The Notes shall be substantially in the form set
out in Exhibit 1, with such changes therefrom, if any, as may be approved by
each Purchaser and the Company.
Certain capitalized terms used in this Agreement are defined in
Schedule B; references to a "Schedule" or an "Exhibit" are, unless otherwise
specified, to a Schedule or an Exhibit attached to this Agreement.
SECTION 2. SALE AND PURCHASE OF NOTES; SUBSIDIARY GUARANTIES.
(a) Sale and Purchase of Notes. Subject to the terms and conditions of
this Agreement, the Company will issue and sell to each Purchaser and each
Purchaser will purchase from the Company, at the Closing provided for in Section
3, Notes in the principal amount specified opposite such Purchaser's name in
Schedule A at the purchase price of 100% of the principal amount thereof. The
obligations of each Purchaser hereunder are several and not joint obligations,
and each Purchaser shall have no obligation and no liability to any Person for
the performance or nonperformance by any other Purchaser hereunder.
(b) Subsidiary Guaranties. Pursuant to the Guaranty Agreements entered
into on the date of the Closing, each Guarantor will guarantee the prompt
payment, when due, by acceleration or otherwise, of the principal, interest and
Make-Whole Amount, if any, payable by the Company with respect to any Note or
Notes issued by the Company pursuant to this Agreement, and the prompt
performance and payment of all other indebtedness, indemnities, covenants,
obligations and liabilities of the Company under this Agreement.
CSS Industries, Inc. Note Purchase Agreement
(c) Intercreditor Agreement. The Purchasers and each Bank will enter
into an Intercreditor Agreement dated as of December 13, 2002 (the
"Intercreditor Agreement") providing for the sharing of proceeds received (i) by
the Purchasers under the Guaranty Agreements and (ii) by the Banks under the
guaranties entered into by the Subsidiaries pursuant to the Bank Loan Agreement
in favor of the Banks. The Intercreditor Agreement will be in the form attached
hereto as Exhibit 3.
SECTION 3. CLOSING.
The sale and purchase of the Notes to be purchased by each Purchaser
shall occur at the offices of Xxxxxxx and Xxxxxx, 000 Xxxx Xxxxxx Xxxxxx,
Xxxxxxx, Xxxxxxxx 00000, at 10:00 a.m. Chicago time, at a closing (the
"Closing") on December 13, 2002 or on such other Business Day thereafter on or
prior to December 19, 2002 as may be agreed upon by the Company and the
Purchasers. At the Closing the Company will deliver to each Purchaser the Notes
to be purchased by such Purchaser in the form of a single Note (or such greater
number of Notes in denominations of at least $1,000,000 as such Purchaser may
request) dated the date of the Closing and registered in such Purchaser's name
(or in the name of such Purchaser's nominee), against delivery by such Purchaser
to the Company or its order of immediately available funds in the amount of the
purchase price therefor by wire transfer of immediately available funds for the
account of the Company. If at the Closing the Company shall fail to tender such
Notes to any Purchaser as provided above in this Section 3, or any of the
conditions specified in Section 4 shall not have been fulfilled to any
Purchaser's satisfaction, such Purchaser shall, at such Purchaser's election, be
relieved of all further obligations under this Agreement, without thereby
waiving any rights such Purchaser may have by reason of such failure or such
nonfulfillment.
SECTION 4. CONDITIONS TO CLOSING.
The obligation of each Purchaser to purchase and pay for the Notes to
be sold to such Purchaser at the Closing is subject to the fulfillment to such
Purchaser's satisfaction, prior to or at the Closing, of the following
conditions:
Section 4.1. Representations and Warranties. (a) The representations
and warranties of the Company in this Agreement shall be correct when made and
at the time of the Closing.
(b) The representations and warranties of the Guarantors in the
Guaranty Agreements shall be correct when made and at the time of the Closing.
Section 4.2. Performance; No Default. The Company shall have performed
and complied with all agreements and conditions contained in this Agreement
required to be performed or complied with by it prior to or at the Closing, and
after giving effect to the issue and sale of the Notes (and the application of
the proceeds thereof as contemplated by Schedule 5.14), no Default or Event of
Default shall have occurred and be continuing. The Company shall not have
entered into any transaction since the date of the Memorandum that would have
been prohibited by Section 10 hereof had such Section applied since such date.
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CSS Industries, Inc. Note Purchase Agreement
Section 4.3. Compliance Certificates.
(a) Company Officer's Certificate. The Company shall have delivered to
such Purchaser an Officer's Certificate, dated the date of the Closing,
certifying that the conditions specified in Sections 4.1(a), 4.2 and 4.9 have
been fulfilled.
(b) Guarantor Certificate. The Guarantors shall have delivered to such
Purchaser an Officer's Certificate, dated the date of the Closing, certifying
that the conditions specified in Section 4.1(b) have been fulfilled.
(c) Company Secretary's Certificate. The Company shall have delivered
to such Purchaser a certificate certifying as to the resolutions attached
thereto and other corporate proceedings relating to the authorization, execution
and delivery of the Notes and this Agreement.
(d) Guarantor Secretary's Certificate. Each Guarantor shall have
delivered to such Purchaser a certificate certifying as to the resolutions
attached thereto and other corporate proceedings relating to the authorization,
execution and delivery of the Guaranty Agreements.
(e) ERISA Certificate. If such Purchaser shall have made the
disclosures referred to in Section 6.2(b), (c) or (e), such Purchaser shall have
received the certificate from the Company described in the penultimate paragraph
of Section 6.2 and such certificate shall state that (i) the Company is neither
a "party in interest" nor a "disqualified person" (as defined in Section
4975(e)(2) of the Code), with respect to any plan identified pursuant to Section
6.2(b) or (e) or (ii) with respect to any plan, identified pursuant to Section
6.2(c), neither the Company nor any "affiliate" (as defined in Section V(c) of
the QPAM Exemption) has, at such time or during the immediately preceding one
year, exercised the authority to appoint or terminate the QPAM as manager of the
assets of any plan identified in writing pursuant to Section 6.2(c) or to
negotiate the terms of said QPAM's management agreement on behalf of any such
identified plans.
Section 4.4. Opinions of Counsel. Such Purchaser shall have received
opinions in form and substance reasonably satisfactory to such Purchaser, dated
the date of the Closing (a) from Xxxxxxx X. Santivacsi, Esq., counsel to the
Company and Xxxxxx, Xxxxx & Bockius LLP, counsel for the Company, together
covering the matters set forth in Exhibit 4.4(a) and covering such other matters
incident to the transactions contemplated hereby as such Purchaser or such
Purchaser's counsel may reasonably request (and the Company hereby instructs its
counsel to deliver such opinions to such Purchaser), (b) from special counsel
for each Guarantor, covering the matters set forth in Exhibit 4.4(b) and
covering such other matters incident to the transactions contemplated hereby as
such Purchaser or such Purchaser's counsel may reasonably request (and the
Company hereby instructs such counsel to deliver such opinions to such
Purchaser), and (c) from Xxxxxxx and Xxxxxx, Purchasers' special counsel in
connection with such transactions, substantially in the form set forth in
Exhibit 4.4(c) and covering such other matters incident to such transactions as
such Purchaser may reasonably request.
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Section 4.5. Purchase Permitted by Applicable Law, etc. On the date of
the Closing each purchase of Notes shall (i) be permitted by the laws and
regulations of each jurisdiction to which each Purchaser is subject, without
recourse to provisions (such as Section 1405(a)(8) of the New York Insurance
Law) permitting limited investments by insurance companies without restriction
as to the character of the particular investment, (ii) not violate any
applicable law or regulation (including, without limitation, Regulation T, U or
X of the Board of Governors of the Federal Reserve System) and (iii) not subject
any Purchaser to any tax, penalty or liability under or pursuant to any
applicable law or regulation, which law or regulation was not in effect on the
date hereof. If requested by any Purchaser, such Purchaser shall have received
an Officer's Certificate certifying as to such matters of fact as such Purchaser
may reasonably specify to enable such Purchaser to determine whether such
purchase is so permitted.
Section 4.6. Related Transactions. The Company, contemporaneously
herewith, shall have consummated the sale of the entire principal amount of the
Notes scheduled to be sold on the date of the Closing pursuant to this
Agreement.
Section 4.7. Payment of Special Counsel Fees. Without limiting the
provisions of Section 15.1, the Company shall have paid at the Closing the fees,
charges and disbursements of the Purchasers' special counsel referred to in
Section 4.4 to the extent reflected in a statement of such counsel rendered to
the Company at least one Business Day prior to the Closing.
Section 4.8. Private Placement Number. A Private Placement Number
issued by Standard & Poor's CUSIP Service Bureau (in cooperation with the
Securities Valuation Office of the National Association of Insurance
Commissioners) shall have been obtained for the Notes.
Section 4.9. Changes in Corporate Structure. Except as specified in
Schedule 4.9, the Company shall not have changed its jurisdiction of
incorporation or been a party to any merger or consolidation and shall not have
succeeded to all or any substantial part of the liabilities of any other entity,
at any time following the date of the most recent financial statements referred
to in Schedule 5.5.
Section 4.10. Guaranty Agreements. Such Purchaser shall have received
the Guaranty Agreements duly executed and delivered by the Guarantors party
thereto and such Guaranty Agreements shall be in full force and effect on the
date of the Closing.
Section 4.11. Intercreditor Agreement. Such Purchaser shall have
received the Intercreditor Agreement duly executed and delivered by the parties
thereto and such Intercreditor Agreement shall be in full force and effect on
the date of the Closing.
Section 4.12. Bank Loan Agreement. Such Purchaser shall have received a
copy of the Bank Loan Agreement, certified as true and correct by a appropriate
officer of the Company, which Bank Loan Agreement shall be in full force and
effect on the date of the Closing.
Section 4.13. Funding Instructions. At least three Business Days prior
to the date of the Closing, such Purchaser shall have received written
instructions executed by a Responsible Officer of the Company directing the
manner of the payment of funds and setting forth (i) the name and address of the
transferee bank, (ii) such transferee bank's ABA number, (iii) the account name
and number into which the purchase price for the Notes is to be deposited, and
(iv) the name and telephone number of the account representative responsible for
verifying receipt of such funds.
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CSS Industries, Inc. Note Purchase Agreement
Section 4.14. Proceedings and Documents. All corporate and other
proceedings in connection with the transactions contemplated by this Agreement
and all documents and instruments incident to such transactions shall be
reasonably satisfactory to such Purchaser and such Purchaser's special counsel,
and such Purchaser and such Purchaser's special counsel shall have received all
such counterpart originals or certified or other copies of such documents as
such Purchaser or special counsel may reasonably request.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to each Purchaser that:
Section 5.1. Organization; Power and Authority. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation, and is duly qualified as a foreign
corporation and is in good standing in each jurisdiction in which such
qualification is required by law, other than those jurisdictions as to which the
failure to be so qualified or in good standing could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. The Company
has the corporate power and authority to own or hold under lease the properties
it purports to own or hold under lease, to transact the business it transacts
and proposes to transact, to execute and deliver this Agreement and the Notes
and to perform the provisions hereof and thereof.
Section 5.2. Authorization, etc. This Agreement and the Notes have been
duly authorized by all necessary corporate action on the part of the Company,
and this Agreement constitutes, and upon execution and delivery thereof each
Note will constitute, a legal, valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except as such
enforceability may be limited by (i) applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and (ii) general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
Section 5.3. Disclosure. The Company, through its agent, PNC Capital
Markets, Inc., has delivered to each Purchaser a copy of a Confidential Offering
Memorandum, dated September, 2002 (the "Memorandum"), relating to the
transactions contemplated hereby. The Memorandum fairly describes, in all
material respects, the general nature of the business and principal properties
of the Company and its Subsidiaries. Except as disclosed in Schedule 5.3, this
Agreement, the Memorandum, the documents, certificates or other writings
delivered to each Purchaser by or on behalf of the Company in connection with
the transactions contemplated hereby and the financial statements listed in
Schedule 5.5, taken as a whole, do not contain any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein not misleading in light of the circumstances under which they
were made. Since March 31, 2002, there has been no change in the financial
condition, operations, business, properties or prospects of the Company or any
Subsidiary except changes that individually or in the aggregate could not
reasonably be expected to have a Material Adverse Effect. There is no fact known
to the Company that could reasonably be expected to have a Material Adverse
Effect that has not been set forth herein or in the Memorandum or in the other
documents, certificates and other writings delivered to each Purchaser by or on
behalf of the Company specifically for use in connection with the transactions
contemplated hereby.
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CSS Industries, Inc. Note Purchase Agreement
Section 5.4. Organization and Ownership of Shares of Subsidiaries;
Affiliates. (a) Schedule 5.4 contains (except as noted therein) complete and
correct lists (i) of the Company's Subsidiaries, showing, as to each Subsidiary,
its status (whether a Restricted Subsidiary or an Unrestricted Subsidiary), the
correct name thereof, the jurisdiction of its organization, and the percentage
of shares of each class of its capital stock or similar equity interests
outstanding owned by the Company and each other Subsidiary, (ii) of the
Company's Affiliates, other than Subsidiaries, and (iii) of the Company's
directors and senior officers.
(b) All of the outstanding shares of capital stock or similar equity
interests of each Subsidiary shown in Schedule 5.4 as being owned by the Company
and its Subsidiaries have been validly issued, are fully paid and nonassessable
and are owned by the Company or another Subsidiary free and clear of any Lien
(except as otherwise disclosed in Schedule 5.4).
(c) Each Subsidiary identified in Schedule 5.4 is a corporation or
other legal entity duly organized, validly existing and in good standing under
the laws of its jurisdiction of organization, and is duly qualified as a foreign
corporation or other legal entity and is in good standing in each jurisdiction
in which such qualification is required by law, other than those jurisdictions
as to which the failure to be so qualified or in good standing could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. Each such Subsidiary has the corporate or other power and
authority to own or hold under lease the properties it purports to own or hold
under lease and to transact the business it transacts and proposes to transact.
(d) Other than Funding, no Subsidiary is a party to, or otherwise
subject to any legal restriction or any agreement (other than this Agreement,
the agreements listed on Schedule 5.4 and customary limitations imposed by
corporate law statutes) restricting the ability of such Subsidiary to pay
dividends out of profits or make any other similar distributions of profits to
the Company or any of its Subsidiaries that owns outstanding shares of capital
stock or similar equity interests of such Subsidiary.
Section 5.5. Financial Statements. The Company has delivered to each
Purchaser copies of the financial statements of the Company and its Subsidiaries
listed on Schedule 5.5. All of said financial statements (including in each case
the related schedules and notes) fairly present in all material respects the
consolidated financial position of the Company and its Subsidiaries as of the
respective dates specified in such Schedule and the consolidated results of
their operations and cash flows for the respective periods so specified and have
been prepared in accordance with GAAP consistently applied throughout the
periods involved except as set forth in the notes thereto (subject, in the case
of any interim financial statements, to normal year-end adjustments).
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CSS Industries, Inc. Note Purchase Agreement
Section 5.6. Compliance with Laws, Other Instruments, etc. The
execution, delivery and performance by the Company of this Agreement and the
Notes will not (i) contravene, result in any breach of, or constitute a default
under, or result in the creation of any Lien in respect of any property of the
Company or any Subsidiary under, any indenture, mortgage, deed of trust, loan,
purchase or credit agreement, lease, corporate charter or by-laws, or any other
agreement or instrument to which the Company or any Subsidiary is bound or by
which the Company or any Subsidiary or any of their respective properties may be
bound or affected, (ii) conflict with or result in a breach of any of the terms,
conditions or provisions of any order, judgment, decree, or ruling of any court,
arbitrator or Governmental Authority applicable to the Company or any Subsidiary
or (iii) violate any provision of any statute or other rule or regulation of any
Governmental Authority applicable to the Company or any Subsidiary.
Section 5.7. Governmental Authorizations, etc. No consent, approval or
authorization of, or registration, filing or declaration with, any Governmental
Authority is required in connection with the execution, delivery or performance
by the Company of this Agreement or the Notes.
Section 5.8. Litigation; Observance of Agreements, Statutes and Orders.
(a) Except as disclosed in Schedule 5.8, there are no actions, suits or
proceedings pending or, to the knowledge of the Company, threatened against or
affecting the Company or any Subsidiary or any property of the Company or any
Subsidiary in any court or before any arbitrator of any kind or before or by any
Governmental Authority that, individually or in the aggregate, could reasonably
be expected to have a Material Adverse Effect.
(b) Neither the Company nor any Subsidiary is in default under any term
of any agreement or instrument to which it is a party or by which it is bound,
or any order, judgment, decree or ruling of any court, arbitrator or
Governmental Authority or is in violation of any applicable law, ordinance, rule
or regulation (including without limitation Environmental Laws) of any
Governmental Authority, which default or violation, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.
Section 5.9. Taxes. The Company and its Subsidiaries have filed all tax
returns that are required to have been filed in any jurisdiction, and have paid
all taxes shown to be due and payable on such returns and all other taxes and
assessments levied upon them or their properties, assets, income or franchises,
to the extent such taxes and assessments have become due and payable and before
they have become delinquent, except for any taxes and assessments (i) the amount
of which is not individually or in the aggregate Material or (ii) the amount,
applicability or validity of which is currently being contested in good faith by
appropriate proceedings and with respect to which the Company or a Subsidiary,
as the case may be, has established adequate reserves in accordance with GAAP.
The Company knows of no basis for any other tax or assessment that could
reasonably be expected to have a Material Adverse Effect. The charges, accruals
and reserves on the books of the Company and its Subsidiaries in respect of
Federal, state or other taxes for all fiscal periods are adequate. The Federal
income tax liabilities of the Company and its Subsidiaries have been determined
by the Internal Revenue Service and paid for all fiscal years up to and
including the fiscal year ended December 31, 1994.
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CSS Industries, Inc. Note Purchase Agreement
Section 5.10. Title to Property; Leases. The Company and its
Subsidiaries have good and sufficient title to their respective properties,
including all such properties reflected in the most recent audited balance sheet
referred to in Section 5.5 or purported to have been acquired by the Company or
any Subsidiary after said date (except as sold or otherwise disposed of in the
ordinary course of business), in each case free and clear of Liens, other than
Liens disclosed in Schedule 5.10 and other Permitted Liens. All leases that
individually or in the aggregate are Material are valid and subsisting and are
in full force and effect in all material respects.
Section 5.11. Licenses, Permits, etc. Except as disclosed in Schedule
5.11,
(a) the Company and its Subsidiaries own or possess all licenses,
permits, franchises, authorizations, patents, copyrights, service marks,
trademarks and trade names, or rights thereto, that individually or in the
aggregate are Material, without known conflict with the rights of others;
(b) to the best knowledge of the Company, no product of the Company
infringes in any Material respect any license, permit, franchise, authorization,
patent, copyright, service xxxx, trademark, trade name or other right owned by
any other Person; and
(c) to the best knowledge of the Company, there is no Material
violation by any Person of any right of the Company or any of its Subsidiaries
with respect to any patent, copyright, service xxxx, trademark, trade name or
other right owned or used by the Company or any of its Subsidiaries.
Section 5.12. Compliance with ERISA. (a) The Company and each ERISA
Affiliate have operated and administered each Plan in compliance with all
applicable laws except for such instances of noncompliance as have not resulted
in and could not reasonably be expected to result in a Material Adverse Effect.
Neither the Company nor any ERISA Affiliate has incurred any liability pursuant
to Title I or IV of ERISA or the penalty or excise tax provisions of the Code
relating to employee benefit plans (as defined in section 3 of ERISA), and no
event, transaction or condition has occurred or exists that could reasonably be
expected to result in the incurrence of any such liability by the Company or any
ERISA Affiliate, or in the imposition of any Lien on any of the rights,
properties or assets of the Company or any ERISA Affiliate, in either case
pursuant to Title I or IV of ERISA or to such penalty or excise tax provisions
or to section 401(a)(29) or 412 of the Code, other than such liabilities or
Liens as would not be individually or in the aggregate Material.
(b) The present value of the aggregate benefit liabilities under each
of the Plans (other than Multiemployer Plans), determined as of the end of such
Plan's most recently ended plan year on the basis of the actuarial assumptions
specified for funding purposes in such Plan's most recent actuarial valuation
report, did not exceed the aggregate current value of the assets of such Plan
allocable to such benefit liabilities. The term "benefit liabilities" has the
meaning specified in section 4001 of ERISA and the terms "current value" and
"present value" have the meanings specified in section 3 of ERISA.
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CSS Industries, Inc. Note Purchase Agreement
(c) The Company and its ERISA Affiliates have not incurred withdrawal
liabilities (and are not subject to contingent withdrawal liabilities) under
section 4201 or 4204 of ERISA in respect of Multiemployer Plans that
individually or in the aggregate are Material.
(d) The expected post-retirement benefit obligation (determined as of
the last day of the Company's most recently ended fiscal year in accordance with
Financial Accounting Standards Board Statement No. 106, without regard to
liabilities attributable to continuation coverage mandated by section 4980B of
the Code) of the Company and its Subsidiaries is not Material.
(e) The execution and delivery of this Agreement and the issuance and
sale of the Notes hereunder will not involve any transaction that is subject to
the prohibitions of section 406 of ERISA or in connection with which a tax could
be imposed pursuant to section 4975(c)(1)(A)-(D) of the Code. The representation
by the Company in the first sentence of this Section 5.12(e) is made in reliance
upon and subject to the accuracy of the Purchasers' representations in Section
6.2 as to the sources of the funds used to pay the purchase price of the Notes
to be purchased by such Purchaser.
Section 5.13. Private Offering by the Company. Neither the Company nor
anyone acting on its behalf has offered the Notes or any similar securities for
sale to, or solicited any offer to buy any of the same from, or otherwise
approached or negotiated in respect thereof with, any Person other than the
Purchasers and not more than twenty (20) other Institutional Investors, each of
which has been offered the Notes at a private sale for investment. Neither the
Company nor anyone acting on its behalf has taken, or will take, any action that
would subject the issuance or sale of the Notes to the registration requirements
of Section 5 of the Securities Act.
Section 5.14. Use of Proceeds; Margin Regulations. The Company will
apply the proceeds of the sale of the Notes as set forth in Schedule 5.14. No
part of the proceeds from the sale of the Notes hereunder will be used, directly
or indirectly, for the purpose of buying or carrying any margin stock within the
meaning of Regulation U of the Board of Governors of the Federal Reserve System
(12 CFR 221), or for the purpose of buying or carrying or trading in any
securities under such circumstances as to involve the Company in a violation of
Regulation X of said Board (12 CFR 224) or to involve any broker or dealer in a
violation of Regulation T of said Board (12 CFR 220). Margin stock does not
constitute more than 0% of the value of the consolidated assets of the Company
and its Subsidiaries and the Company does not have any present intention that
margin stock will constitute more than 0% of the value of such assets. As used
in this Section, the terms "margin stock" and "purpose of buying or carrying"
shall have the meanings assigned to them in said Regulation U.
Section 5.15. Existing Indebtedness; Future Liens. (a) Schedule 5.15
sets forth a complete and correct list of all outstanding Indebtedness of the
Company and its Subsidiaries as of September 30, 2002, since which date there
has been no Material change in the amounts, interest rates, sinking funds,
installment payments or maturities of the Indebtedness of the Company or its
Subsidiaries. Neither the Company nor any Subsidiary is in default and no waiver
of default is currently in effect, in the payment of any principal or interest
on any Indebtedness of the Company or any Subsidiary and no event or condition
exists with respect to any Indebtedness of the Company or any Subsidiary that
would permit (or that with notice or the lapse of time, or both, would permit)
one or more Persons to cause such Indebtedness to become due and payable before
its stated maturity or before its regularly scheduled dates of payment.
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CSS Industries, Inc. Note Purchase Agreement
(b) Except as disclosed in Schedule 5.15, neither the Company nor any
Subsidiary has agreed or consented to cause or permit in the future (upon the
happening of a contingency or otherwise) any of its property, whether now owned
or hereafter acquired, to be subject to a Lien not permitted by Section 10.6.
Section 5.16. Foreign Assets Control Regulations, etc. Neither the sale
of the Notes by the Company hereunder nor its use of the proceeds thereof will
violate the Trading with the Enemy Act, as amended, or any of the foreign assets
control regulations of the United States Treasury Department (31 CFR, Subtitle
B, Chapter V, as amended) or any enabling legislation or executive order
relating thereto, and without limiting the foregoing, neither the Company nor
any Subsidiary (i) is or will become a person whose property or interests in
property are blocked pursuant to Section 1 of Executive Order 13224 of September
23, 2001, Blocking Property and Prohibiting Transactions With Persons Who
Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079 (2001)) or
(ii) to the knowledge of any Responsible Officer of the Company, engages or will
engage in any dealings or transactions, or be otherwise associated, with any
such person.
Section 5.17. Status under Certain Statutes. Neither the Company nor any
Subsidiary is subject to regulation under the Investment Company Act of 1940, as
amended, the Public Utility Holding Company Act of 1935, as amended, the ICC
Termination Act of 1995, as amended, or the Federal Power Act, as amended.
Section 5.18. Environmental Matters. Neither the Company nor any
Subsidiary has knowledge of any claim or has received any notice of any claim,
and no proceeding has been instituted raising any claim against the Company or
any of its Subsidiaries or any of their respective real properties now or
formerly owned, leased or operated by any of them or other assets, alleging any
damage to the environment or violation of any Environmental Laws, except, in
each case, such as could not reasonably be expected to result in a Material
Adverse Effect. Except as otherwise disclosed to each Purchaser in writing:
(a) neither the Company nor any of its Subsidiaries has
knowledge of any facts which would give rise to any claim, public or
private, of violation of Environmental Laws or damage to the
environment emanating from, occurring on or in any way related to real
properties now or formerly owned, leased or operated by it or to other
assets or their use, except, in each case, such as could not reasonably
be expected to result in a Material Adverse Effect;
(b) to the knowledge of the Company and its Subsidiaries,
neither the Company nor any of its Subsidiaries has stored any
Hazardous Materials on real properties now or formerly owned, leased or
operated by any of them and has not disposed of any Hazardous Materials
in a manner contrary to any Environmental Laws in each case in any
manner that could reasonably be expected to result in a Material
Adverse Effect; and
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CSS Industries, Inc. Note Purchase Agreement
(c) to the knowledge of the Company and its Subsidiaries, all
buildings on all real properties now owned, leased or operated by the
Company or any of its Subsidiaries are in compliance with applicable
Environmental Laws, except where failure to comply could not reasonably
be expected to result in a Material Adverse Effect.
SECTION 6. REPRESENTATIONS OF THE PURCHASERS.
Section 6.1. Purchase for Investment. Each Purchaser represents that it
is purchasing the Notes for its own account or for one or more separate accounts
maintained by such Purchaser or for the account of one or more pension or trust
funds and not with a view to the distribution thereof, provided that the
disposition of such Purchaser's or such account's property shall at all times be
within such Purchaser's or such account's control, as applicable. Each Purchaser
understands that the Notes have not been registered under the Securities Act and
may be resold only if registered pursuant to the provisions of the Securities
Act or if an exemption from registration is available, except under
circumstances where neither such registration nor such an exemption is required
by law, and that the Company is not required to register the Notes.
Section 6.2. Source of Funds. Each Purchaser represents that at least
one of the following statements is an accurate representation as to each source
of funds (a "Source") to be used by such Purchaser to pay the purchase price of
the Notes to be purchased by it hereunder:
(a) the Source is an "insurance company general account"
within the meaning of Department of Labor Prohibited Transaction
Exemption ("PTE") 95-60 (issued July 12, 1995) and there is no employee
benefit plan, treating as a single plan, all plans maintained by the
same employer or employee organization, with respect to which the
amount of the general account reserves and liabilities for all
contracts held by or on behalf of such plan, exceed ten percent (10%)
of the total reserves and liabilities of such general account
(exclusive of separate account liabilities) plus surplus, as set forth
in the NAIC Annual Statement filed with such Purchaser's state of
domicile; or
(b) the Source is either (i) an insurance company pooled
separate account, within the meaning of PTE 90-1 (issued January 29,
1990), or (ii) a bank collective investment fund, within the meaning of
the PTE 91-38 (issued July 12, 1991) and, except as such Purchaser has
disclosed to the Company in writing pursuant to this paragraph (b), no
employee benefit plan or group of plans maintained by the same employer
or employee organization beneficially owns more than 10% of all assets
allocated to such pooled separate account or collective investment
fund; or
(c) the Source constitutes assets of an "investment fund"
(within the meaning of Part V of the QPAM Exemption) managed by a
"qualified professional asset manager" or "QPAM" (within the meaning of
Part V of the QPAM Exemption), no employee benefit plan's assets that
are included in such investment fund, when combined with the assets of
all other employee benefit plans established or maintained by the same
employer or by an affiliate (within the meaning of Section V(c)(1) of
the QPAM Exemption) of such employer or by the same employee
organization and managed by such QPAM, exceed 20% of the total client
assets managed by such QPAM, the conditions of Part I(c) and (g) of the
QPAM Exemption are satisfied, neither the QPAM nor a person controlling
or controlled by the QPAM (applying the definition of "control" in
Section V(e) of the QPAM Exemption) owns a 5% or more interest in the
Company and (i) the identity of such QPAM and (ii) the names of all
employee benefit plans whose assets are included in such investment
fund have been disclosed to the Company in writing pursuant to this
paragraph (c); or
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CSS Industries, Inc. Note Purchase Agreement
(d) the Source is a governmental plan; or
(e) the Source is one or more employee benefit plans, or a
separate account or trust fund comprised of one or more employee
benefit plans, each of which has been identified to the Company in
writing pursuant to this paragraph (e); or
(f) the Source does not include assets of any employee
benefit plan, other than a plan exempt from the coverage of ERISA.
If any Purchaser or any subsequent transferee of the Notes indicates
that such Purchaser or such transferee is relying on any representation
contained in paragraph (b), (c) or (e) above, the Company shall deliver on the
date of Closing and on the date of any applicable transfer a certificate, which
shall either state that (i) it is neither a party in interest nor a
"disqualified person" (as defined in section 4975(e)(2) of the Code), with
respect to any plan identified pursuant to paragraphs (b) or (e) above, or (ii)
with respect to any plan, identified pursuant to paragraph (c) above, neither it
nor any "affiliate" (as defined in Section V(c) of the QPAM Exemption) has at
such time, and during the immediately preceding one year, exercised the
authority to appoint or terminate said QPAM as manager of any plan identified in
writing pursuant to paragraph (c) above or to negotiate the terms of said QPAM's
management agreement on behalf of any such identified plan; provided, however,
that if the Company cannot truthfully make the required statement in clause (i)
or (ii), as applicable, in connection with a transfer of any Note, the Company
shall deliver a certificate to such Purchaser so stating and the Company shall
not be required to register such transfer under Section 13.1 or execute and
deliver new Notes to the transferee thereof under Section 13.2.
As used in this Section 6.2, the terms "employee benefit plan",
"governmental plan", "party in interest" and "separate account" shall have the
respective meanings assigned to such terms in section 3 of ERISA.
SECTION 7. INFORMATION AS TO COMPANY.
Section 7.1. Financial and Business Information. The Company shall
deliver to each holder of Notes that is an Institutional Investor:
(a) Quarterly Statements -- promptly, and in any event within
forty-five (45) days (or such shorter period as the SEC may require)
after the end of each of the first three quarterly fiscal periods in
each fiscal year of the Company, as at the end of such quarterly fiscal
period setting forth, in each case, in comparative form the
corresponding figures for the corresponding periods of the previous
fiscal year, duplicate copies of
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CSS Industries, Inc. Note Purchase Agreement
(i) a balance sheet and a statement of income, in
each case, on a consolidated and consolidating basis for the
Company and its Subsidiaries, and
(ii) a cash flow statement on a consolidated basis
for the Company and its Subsidiaries,
all in reasonable detail and certified by the chief financial officer,
treasurer or vice president of finance of the Company to have been
prepared in accordance with GAAP (without footnotes) and as fairly
presenting, in all material respects, the financial position of the
companies being reported on and their results of operations and cash
flows, subject to changes resulting from year-end adjustments;
(b) Annual Statements -- promptly, and in any event within
ninety (90) days (or such shorter period as the SEC may require) after
the end of each fiscal year of the Company, as at the end of such
fiscal year, setting forth, in each case, in comparative form the
corresponding figures as at the end of the previous fiscal year,
duplicate copies of
(i) a balance sheet and a statement of income, in
each case, on a consolidated and consolidating basis for the
Company and its Subsidiaries, and,
(ii) a cash flow statement and a retained earnings
statement, in each case, on a consolidated basis for the
Company and its Subsidiaries,
all in reasonable detail, audited and certified without qualifications
or limitations as to scope, except those which are acceptable to the
Required Holders, (as to the consolidated statements) by independent
public accountants of recognized standing, selected by the Company and
satisfactory to the Required Holders, to have been prepared in
accordance with GAAP and shall state that such financial statements
present fairly in all material respects, the financial position of the
companies being reported upon and their results of operations and cash
flows;
(c) SEC and Other Reports -- promptly upon their becoming
available, one copy of (i) each financial statement, report, notice or
information statement sent by the Company or any Subsidiary to public
securities holders generally (including, without limitation, proxy
materials), and (iii) each regular or periodic report (including,
without limitation, any report of the Company on Form 8-K), each
registration statement (without exhibits except as expressly requested
by such holder), and each prospectus and all amendments thereto filed
by the Company or any Subsidiary with the SEC and of all press releases
by the Company or any Subsidiary to the public concerning developments
that are Material;
(d) Notice of Default or Event of Default -- promptly, and in
any event within five Business Days, after a Responsible Officer
becoming aware of the existence of any Default or Event of Default or
that any Person has given any notice to the Company or taken any action
with respect to a claimed default hereunder or that any Person has
given any notice to the Company or taken any action with respect to a
claimed default of the type referred to in Section 11(f), a written
notice specifying the nature and period of existence thereof and what
action the Company is taking or proposes to take with respect thereto;
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CSS Industries, Inc. Note Purchase Agreement
(e) ERISA Matters -- (i) promptly, and in any event within
thirty days after a Responsible Officer becoming aware of any of the
following, a written notice setting forth the nature thereof and the
action, if any, that the Company or an ERISA Affiliate proposes to take
with respect thereto:
(A) with respect to any Plan, any reportable event,
as defined in section 4043(b) of ERISA and the regulations
thereunder, for which notice thereof has not been waived
pursuant to such regulations as in effect on the date hereof;
or
(B) the taking by the PBGC of steps to institute, or
the threatening by the PBGC of the institution of, proceedings
under section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Plan, or the
receipt by the Company or any ERISA Affiliate of a notice from
a Multiemployer Plan that such action has been taken by the
PBGC with respect to such Multiemployer Plan; or
(C) any event, transaction or condition that could
result in the incurrence of any liability by the Company or
any ERISA Affiliate pursuant to Title I or IV of ERISA or the
penalty or excise tax provisions of the Code relating to
employee benefit plans, or in the imposition of any Lien on
any of the rights, properties or assets of the Company or any
ERISA Affiliate pursuant to Title I or IV of ERISA or such
penalty or excise tax provisions, if such liability or Lien,
taken together with any other such liabilities or Liens then
existing, could reasonably be expected to have a Material
Adverse Effect; and
(ii) promptly after receipt thereof by the Company or an ERISA
Affiliate or the administrator of any Plan, a copy of any notice from
the PBGC that the PBGC is taking steps to institute proceedings under
section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Plan;
(f) Notices from Governmental Authority -- promptly, and in
any event within 30 days of receipt thereof, copies of any notice to
the Company or any Subsidiary from any Federal or state Governmental
Authority relating to any order, ruling, statute or other law or
regulation that could reasonably be expected to have a Material Adverse
Effect; and
(g) Litigation or Other Proceedings -- promptly, and in any
event within five Business Days, written notice of any pending or, to
the knowledge of the Company, threatened claim in writing of, any
action, suit, proceeding (whether administrative, judicial or
otherwise), governmental investigation or arbitration against or
affecting the Company or any of its Subsidiaries or any property of the
Company or any of its Subsidiaries, that, individually or in the
aggregate, could reasonably be expected to have a Material Adverse
Effect;
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CSS Industries, Inc. Note Purchase Agreement
(h) Budget -- promptly, and in any event within 60 days after
the end of each fiscal year of the Company, a copy of the
internally-prepared budget of projected expenses and revenues of the
Company and its Subsidiaries for the next succeeding fiscal year of the
Company;
(i) Accountant's Certificate -- promptly, and in any event
within ninety (90) days after the end of each fiscal year of the
Company, a copy of the certification of the Company's independent
public accountants, delivered to the Bank under Section 5.6(a)(ii) of
the Bank Loan Agreement with respect to the review by such accountants
of such Bank Loan Agreement; and
(j) Requested Information -- with reasonable promptness, such
other data and information relating to the business, operations,
affairs, financial condition, assets or properties of the Company or
any of its Subsidiaries or relating to the ability of the Company to
perform its obligations hereunder and under the Notes as from time to
time may be reasonably requested by any such holder of Notes.
Section 7.2. Officer's Certificate. Each set of financial statements
delivered to a holder of Notes pursuant to Section 7.1(a) or Section 7.1(b)
hereof shall be accompanied by a certificate of a Senior Financial Officer
setting forth:
(a) Covenant Compliance -- the information (including
detailed calculations) required in order to establish whether the
Company was in compliance with the requirements of Section 10.2 through
Section 10.8 hereof, inclusive, during the quarterly or annual period
covered by the statements then being furnished (including with respect
to each such Section, where applicable, the calculations of the maximum
or minimum amount, ratio or percentage, as the case may be, permissible
under the terms of such Sections, and the calculation of the amount,
ratio or percentage then in existence); and
(b) Event of Default -- a statement that such officer has
reviewed the relevant terms hereof and has made, or caused to be made,
under his or her supervision, a review of the transactions and
conditions of the Company and its Subsidiaries from the beginning of
the quarterly or annual period covered by the statements then being
furnished to the date of the certificate and that such review shall not
have disclosed the existence during such period of any condition or
event that constitutes a Default or an Event of Default or, if any such
condition or event existed or exists (including, without limitation,
any such event or condition resulting from the failure of the Company
or any Subsidiary to comply with any Environmental Law), specifying the
nature and period of existence thereof and what action the Company
shall have taken or proposes to take with respect thereto.
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CSS Industries, Inc. Note Purchase Agreement
Section 7.3. Inspection. The Company shall permit the representatives
of each holder of Notes that is an Institutional Investor:
(a) No Default -- if no Default or Event of Default then
exists, at the expense of such holder and upon reasonable prior notice
to the Company, to visit the principal executive office of the Company,
to discuss the affairs, finances and accounts of the Company and its
Subsidiaries with the Company's officers, and (with the consent of the
Company, which consent will not be unreasonably withheld) its
independent public accountants, and (with the consent of the Company,
which consent will not be unreasonably withheld) to visit the other
offices and properties of the Company and each Subsidiary, all at such
reasonable times and as often as may be reasonably requested in
writing; and
(b) Default -- if a Default or Event of Default then exists,
at the expense of the Company, to visit and inspect any of the offices
or properties of the Company or any Subsidiary, to examine all their
respective books of account, records, reports and other papers, to make
copies and extracts therefrom, and to discuss their respective affairs,
finances and accounts with their respective officers and independent
public accountants (and by this provision the Company authorizes said
accountants to discuss the affairs, finances and accounts of the
Company and its Subsidiaries), all at such times and as often as may be
requested.
SECTION 8. PREPAYMENT OF THE NOTES.
Section 8.1. Required Prepayments. On December 13, 2005 and on each
December 13 thereafter to and including December 13, 2008, the Company will
prepay $10,000,000 principal amount (or such lesser principal amount as shall
then be outstanding) of the Notes at par and without payment of the Make-Whole
Amount or any premium, provided that upon any partial prepayment of the Notes
pursuant to Section 8.2 or 8.3 or purchase of the Notes permitted by Section 8.6
the principal amount of each required prepayment of the Notes becoming due under
this Section 8.1 on and after the date of such prepayment or purchase shall be
reduced in the same proportion as the aggregate unpaid principal amount of the
Notes is reduced as a result of such prepayment or purchase.
Section 8.2. Optional Prepayments with Make-Whole Amount. The Company
may, at its option, upon notice as provided below, prepay at any time all, or
from time to time any part of, the Notes, in an amount not less than 10% of the
aggregate principal amount of the Notes then outstanding in the case of a
partial prepayment, at 100% of the principal amount so prepaid, together with
interest accrued thereon to the date of such prepayment, plus the Make-Whole
Amount determined for the prepayment date with respect to such principal amount.
The Company will give each holder of Notes written notice of each optional
prepayment under this Section 8.2 not less than 15 days and not more than 60
days prior to the date fixed for such prepayment. Each such notice shall specify
such date, the aggregate principal amount of the Notes to be prepaid on such
date, the principal amount of each Note held by such holder to be prepaid
(determined in accordance with Section 8.4), and the interest to be paid on the
prepayment date with respect to such principal amount being prepaid, and shall
be accompanied by a certificate of a Senior Financial Officer as to the
estimated Make-Whole Amount due in connection with such prepayment (calculated
as if the date of such notice were the date of the prepayment), setting forth
the details of such computation. Two Business Days prior to such prepayment, the
Company shall deliver to each holder of Notes a certificate of a Senior
Financial Officer specifying the calculation of such Make-Whole Amount as of the
specified prepayment date.
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CSS Industries, Inc. Note Purchase Agreement
Section 8.3. Change in Control.
(a) Notice of Change in Control or Control Event. The Company will,
within five Business Days after any Responsible Officer has knowledge of the
occurrence of any Change in Control or Control Event, give written notice of
such Change in Control or Control Event to each holder of Notes unless notice in
respect of such Change in Control (or the Change in Control contemplated by such
Control Event) shall have been given pursuant to subparagraph (b) of this
Section 8.3. If a Change in Control has occurred, such notice shall contain and
constitute an offer to prepay Notes as described in subparagraph (c) of this
Section 8.3 and shall be accompanied by the certificate described in
subparagraph (g) of this Section 8.3.
(b) Condition to Company Action. The Company will not take any action
that consummates or finalizes a Change in Control unless (i) at least 30 days
prior to such action it shall have given to each holder of Notes written notice
containing and constituting an offer to prepay Notes as described in
subparagraph (c) of this Section 8.3, accompanied by the certificate described
in subparagraph (g) of this Section 8.3, and (ii) contemporaneously with such
action, it prepays all Notes required to be prepaid in accordance with this
Section 8.3.
(c) Offer to Prepay Notes. The offer to prepay Notes contemplated by
subparagraphs (a) and (b) of this Section 8.3 shall be an offer to prepay, in
accordance with and subject to this Section 8.3, all, but not less than all, the
Notes held by each holder (in this case only, "holder" in respect of any Note
registered in the name of a nominee for a disclosed beneficial owner shall mean
such beneficial owner) on a date specified in such offer (the "Proposed
Prepayment Date"). If such Proposed Prepayment Date is in connection with an
offer contemplated by subparagraph (a) of this Section 8.3, such date shall be
not less than 30 days and not more than 60 days after the date of such offer (if
the Proposed Prepayment Date shall not be specified in such offer, the Proposed
Prepayment Date shall be the 30th day after the date of such offer).
(d) Acceptance. A holder of Notes may accept the offer to prepay made
pursuant to this Section 8.3 by causing a notice of such acceptance to be
delivered to the Company not more than 15 days after such holder receives the
offer to prepay under subparagraph (c) of this Section 8.3. If the offer is so
accepted by any holder of Notes, the Company, not more than 10 days after
receipt of the notice of acceptance from such holder, shall give written notice
to each holder of Notes that has not so accepted the offer, in which notice the
Company shall (i) state the aggregate outstanding principal amount of Notes in
respect of which the offer has been accepted and (ii) renew the offer and extend
the time for acceptance by stating that any holder of Notes may yet accept the
offer, whether theretofore rejected or not, by causing a notice of such
acceptance to be delivered to the Company not more than five days after receipt
of the Company's notice under this subparagraph (d). A failure by a holder of
Notes to respond to an offer to prepay made pursuant to this Section 8.3 shall
be deemed to constitute a rejection of such offer by such holder.
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CSS Industries, Inc. Note Purchase Agreement
(e) Prepayment. Prepayment of the Notes to be prepaid pursuant to this
Section 8.3 shall be at 100% of the principal amount of such Notes, together
with interest on such Notes accrued to the date of prepayment. The prepayment
shall be made on the Proposed Prepayment Date except as provided in subparagraph
(f) of this Section 8.3.
(f) Deferral Pending Change in Control. The obligation of the Company
to prepay Notes pursuant to the offers required by subparagraph (b) and accepted
in accordance with subparagraph (d) of this Section 8.3 is subject to the
occurrence of the Change in Control in respect of which such offers and
acceptances shall have been made. In the event that such Change in Control does
not occur on the Proposed Prepayment Date in respect thereof, the prepayment
shall be deferred until, shall be due and payable on, and shall be made on the
date on which such Change in Control occurs. The Company shall keep each holder
of Notes reasonably and timely informed of (i) any such deferral of the date of
prepayment, (ii) the date on which such Change in Control and the prepayment are
expected to occur, and (iii) any determination by the Company that efforts to
effect such Change in Control have ceased or been abandoned (in which case the
offers and acceptances made pursuant to this Section 8.3 in respect of such
Change in Control shall be deemed rescinded).
(g) Officer's Certificate. Each offer to prepay the Notes pursuant to
this Section 8.3 shall be accompanied by a certificate, executed by a Senior
Financial Officer of the Company and dated the date of such offer, specifying:
(i) the Proposed Prepayment Date; (ii) that such offer is made pursuant to this
Section 8.3; (iii) the principal amount of each Note offered to be prepaid; (iv)
the interest that would be due on each Note offered to be prepaid, accrued to
the Proposed Prepayment Date; (v) that the conditions of this Section 8.3 have
been fulfilled; and (vi) in reasonable detail, the nature and date or proposed
date of the Change in Control.
(h) Effect on Required Payments. The amount of each payment of the
principal of the Notes made pursuant to this Section 8.3 shall be applied
against and reduce each of the then remaining principal payments due pursuant to
Section 8.1 by a percentage equal to the aggregate principal amount of the Notes
so paid divided by the aggregate principal amount of the Notes outstanding
immediately prior to such payment.
(i) "Change in Control" Defined. "Change in Control" means any of the
following events or circumstances:
(i) any Person (as such term is used in section 13(d) and
section 14(d)(2) of the Exchange Act as in effect on the date of the
Closing), or related persons constituting a group (as such term is used
in Rule 13d-5 under the Exchange Act), other than Xxxx Xxxxxx, any
member of his Family or any Family Trust of Xxxx Xxxxxx, are or become
the "beneficial owners" (as such term is used in Rules 13d-3 and 13d-15
under the Exchange Act as in effect on the date of the Closing, except
that a Person shall be deemed to have "beneficial ownership" of all
Securities that such Person has the right to acquire whether such right
is exercisable immediately or only after the passage of time), directly
or indirectly, of more than 50% of the total voting power of all
classes then outstanding of the Company's voting stock normally
entitled to vote in the election of directors of the Company; or
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CSS Industries, Inc. Note Purchase Agreement
(ii) individuals who, at the beginning of any period of two
consecutive years, constitute the Company's board of directors
(together with any new director whose election by the Company's board
of directors or whose nomination for election by the Company's
stockholders was approved by a vote of a majority of the directors then
still in office who either were directors at the beginning of such
period or whose election or nomination for election was previously so
approved) cease for any reason (other than death or disability) to
constitute a majority of the Company's board of directors then in
office.
(j) "Control Event" Defined. "Control Event" means:
(i) the execution by the Company or any of its Subsidiaries
or Affiliates of any agreement or letter of intent with respect to any
proposed transaction or event or series of transactions or events
which, individually or in the aggregate, may reasonably be expected to
result in a Change in Control,
(ii) the execution of any written agreement which, when fully
performed by the parties thereto, would result in a Change in Control,
or
(iii) the making of any written offer by any person (as such
term is used in section 13(d) and section 14(d)(2) of the Exchange Act
as in effect on the date of the Closing) or related persons
constituting a group (as such term is used in Rule 13d-5 under the
Exchange Act as in effect on the date of the Closing) to the holders of
the common stock of the Company, which offer, if accepted by the
requisite number of holders, would result in a Change in Control.
(k) "Family" Defined. "Family" means, in respect of any individual, the
parents of such individual and the lineal descendants of such individual to the
second degree of consanguinity.
(l) "Family Trusts" Defined. "Family Trusts" means, in respect of any
individual, any trusts for the exclusive benefit of one or more of such
individual and any member of such individual's Family, so long as such
individual or a member or members of such individual's Family has the exclusive
right to control each such trust.
Section 8.4. Allocation of Partial Prepayments. In the case of each
partial prepayment of the Notes (other than partial payment under Section 8.3),
the principal amount of the Notes to be prepaid shall be allocated among all of
the Notes at the time outstanding in proportion, as nearly as practicable, to
the respective unpaid principal amounts thereof.
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CSS Industries, Inc. Note Purchase Agreement
Section 8.5. Maturity; Surrender, etc. In the case of each prepayment
of Notes pursuant to this Section 8, the principal amount of each Note to be
prepaid shall mature and become due and payable on the date fixed for such
prepayment, together with interest on such principal amount accrued to such date
and the applicable Make-Whole Amount, if any. From and after such date, unless
the Company shall fail to pay such principal amount when so due and payable,
together with the interest and Make-Whole Amount, if any, as aforesaid, interest
on such principal amount shall cease to accrue. Any Note paid or prepaid in full
shall be surrendered to the Company and cancelled and shall not be reissued, and
no Note shall be issued in lieu of any prepaid principal amount of any Note.
Section 8.6. Purchase of Notes. The Company will not and will not
permit any Affiliate to purchase, redeem, prepay or otherwise acquire, directly
or indirectly, any of the outstanding Notes except upon the payment or
prepayment of the Notes in accordance with the terms of this Agreement and the
Notes. The Company will promptly cancel all Notes acquired by it or any
Affiliate pursuant to any payment, prepayment or purchase of Notes pursuant to
any provision of this Agreement and no Notes may be issued in substitution or
exchange for any such Notes.
Section 8.7. Make-Whole Amount. The term "Make-Whole Amount" means,
with respect to any Note, an amount equal to the excess, if any, of the
Discounted Value of the Remaining Scheduled Payments with respect to the Called
Principal of such Note over the amount of such Called Principal, provided that
the Make-Whole Amount may in no event be less than zero. For the purposes of
determining the Make-Whole Amount, the following terms have the following
meanings:
"Called Principal" means, with respect to any Note, the
principal of such Note that is to be prepaid pursuant to Section 8.2 or
has become or is declared to be immediately due and payable pursuant to
Section 12.1, as the context requires.
"Discounted Value" means, with respect to the Called Principal
of any Note, the amount obtained by discounting all Remaining Scheduled
Payments with respect to such Called Principal from their respective
scheduled due dates to the Settlement Date with respect to such Called
Principal, in accordance with accepted financial practice and at a
discount factor (applied on the same periodic basis as that on which
interest on the Notes is payable) equal to the Reinvestment Yield with
respect to such Called Principal.
"Reinvestment Yield" means, with respect to the Called
Principal of any Note, 0.50% over the yield to maturity implied by (i)
the yields reported, as of 10:00 A.M. (New York City time) on the
second Business Day preceding the Settlement Date with respect to such
Called Principal, on the display designated as "Page PX1" on the
Bloomberg Financial Services Screen (or such other display as may
replace Page PX1 on the Bloomberg Financial Services Screen) for
actively traded U.S. Treasury securities having a maturity equal to the
Remaining Average Life of such Called Principal as of such Settlement
Date, or (ii) if such yields are not reported as of such time or the
yields reported as of such time are not ascertainable, the Treasury
Constant Maturity Series Yields reported, for the latest day for which
such yields have been so reported as of the second Business Day
preceding the Settlement Date with respect to such Called Principal, in
Federal Reserve Statistical Release H.15 (519) (or any comparable
successor publication) for actively traded U.S. Treasury securities
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CSS Industries, Inc. Note Purchase Agreement
having a constant maturity equal to the Remaining Average Life of such
Called Principal as of such Settlement Date. Such implied yield will be
determined, if necessary, by (i) converting U.S. Treasury xxxx
quotations to bond-equivalent yields in accordance with accepted
financial practice and (ii) interpolating linearly between (A) the
actively traded U.S. Treasury security with the maturity closest to and
greater than the Remaining Average Life and (B) the actively traded
U.S. Treasury security with the maturity closest to and less than the
Remaining Average Life.
"Remaining Average Life" means, with respect to any Called
Principal, the number of years (calculated to the nearest one-twelfth
year) obtained by dividing (i) such Called Principal into (ii) the sum
of the products obtained by multiplying (a) the principal component of
each Remaining Scheduled Payment with respect to such Called Principal
by (b) the number of years (calculated to the nearest one-twelfth year)
that will elapse between the Settlement Date with respect to such
Called Principal and the scheduled due date of such Remaining Scheduled
Payment.
"Remaining Scheduled Payments" means, with respect to the
Called Principal of any Note, all payments of such Called Principal and
interest thereon that would be due after the Settlement Date with
respect to such Called Principal if no payment of such Called Principal
were made prior to its scheduled due date, provided that if such
Settlement Date is not a date on which interest payments are due to be
made under the terms of the Notes, then the amount of the next
succeeding scheduled interest payment will be reduced by the amount of
interest accrued to such Settlement Date and required to be paid on
such Settlement Date pursuant to Section 8.2 or 12.1.
"Settlement Date" means, with respect to the Called Principal
of any Note, the date on which such Called Principal is to be prepaid
pursuant to Section 8.2 or has become or is declared to be immediately
due and payable pursuant to Section 12.1, as the context requires.
SECTION 9. AFFIRMATIVE COVENANTS.
The Company covenants that so long as any of the Notes are outstanding:
Section 9.1. Compliance with Law. The Company will, and will cause each
of its Subsidiaries to, comply with all laws, ordinances or governmental rules
or regulations to which each of them is subject, including, without limitation,
Environmental Laws, and will obtain and maintain in effect all licenses,
certificates, permits, franchises and other governmental authorizations
necessary to the ownership of their respective properties or to the conduct of
their respective businesses, in each case to the extent necessary to ensure that
non-compliance with such laws, ordinances or governmental rules or regulations
or failures to obtain or maintain in effect such licenses, certificates,
permits, franchises and other governmental authorizations could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
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CSS Industries, Inc. Note Purchase Agreement
Section 9.2. Insurance. The Company will, and will cause each of its
Subsidiaries to, maintain, with financially sound and reputable insurers,
insurance with respect to their respective properties and businesses against
such casualties and contingencies, of such types, on such terms and in such
amounts (including deductibles, co-insurance and self-insurance, if adequate
reserves are maintained with respect thereto) as is customary in the case of
entities of established reputations engaged in the same or a similar business
and similarly situated.
Section 9.3. Maintenance of Properties. The Company will, and will
cause each of its Subsidiaries to, maintain and keep, or cause to be maintained
and kept, their respective properties in good repair, working order and
condition (other than ordinary wear and tear), so that the business carried on
in connection therewith may be properly conducted at all times, provided that
this Section shall not prevent the Company or any Subsidiary from discontinuing
the operation and the maintenance of any of its properties if such
discontinuance is desirable in the conduct of its business and the Company has
concluded that such discontinuance could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
Section 9.4. Payment of Taxes and Claims. The Company will, and will
cause each of its Subsidiaries to, file all tax returns required to be filed in
any jurisdiction and to pay and discharge all taxes shown to be due and payable
on such returns and all other taxes, assessments, governmental charges, or
levies imposed on them or any of their properties, assets, income or franchises,
to the extent such taxes and assessments have become due and payable and before
they have become delinquent and all claims for which sums have become due and
payable that have or might become a Lien on properties or assets of the Company
or any Subsidiary, provided that neither the Company nor any Subsidiary need pay
any such tax or assessment or claims if (i) the amount, applicability or
validity thereof is contested by the Company or such Subsidiary on a timely
basis in good faith and in appropriate proceedings, and the Company or a
Subsidiary has established adequate reserves therefor if and to the extent
required in accordance with GAAP on the books of the Company or such Subsidiary
or (ii) the nonpayment of all such taxes, assessments and claims in the
aggregate could not reasonably be expected to have a Material Adverse Effect.
Section 9.5. Corporate Existence, etc. The Company will at all times
preserve and keep in full force and effect its corporate existence. Subject to
Section 10.5, the Company will at all times preserve and keep in full force and
effect the corporate existence of each of its Subsidiaries and all rights and
franchises of the Company and its Subsidiaries unless, in the good faith
judgment of the Company, the termination of or failure to preserve and keep in
full force and effect the corporate existence of any Subsidiary or any right or
franchise could not, individually or in the aggregate, have a Material Adverse
Effect.
Section 9.6. Notes to Rank Pari Passu. The Notes of the Company are and
shall at all times rank at least pari passu as against the assets of the Company
with all other present and future unsecured Indebtedness (actual or contingent)
of the Company (including, without limitation, any Indebtedness outstanding
under the Bank Loan Agreement) which is not expressed to be subordinate or
junior in rank to any other unsecured Indebtedness of the Company.
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CSS Industries, Inc. Note Purchase Agreement
Section 9.7. Changes in Status of Subsidiaries. (a) So long as no
Default or Event of Default shall have occurred and be continuing, the board of
directors of the Company may at any time and from time to time, upon not less
than 30 days' prior written notice given to each holder of Notes, designate a
previously Unrestricted Subsidiary as a Restricted Subsidiary, provided that
immediately after such designation and after giving effect thereto (i) no
Default or Event of Default shall have occurred and be continuing and (ii) the
Company and its Restricted Subsidiaries would be in compliance with the
provisions of Sections 10.2, 10.3, 10.4, 10.5, 10.6, 10.7 and 10.8 hereof,
assuming, for purposes of determining such compliance, such previously
Unrestricted Subsidiary was a Restricted Subsidiary for the period of four
consecutive fiscal quarters of the Company ending on or most recently ended
prior to the date of such designation, and provided, further, that the status of
such Subsidiary had not previously been changed more than once.
(b) So long as no Default or Event of Default shall have occurred and
be continuing, the Board of Directors of the Company may at any time and from
time to time, upon not less than 30 days' prior written notice given to each
holder of Notes, designate a previously Restricted Subsidiary (other than (x) a
Guarantor which is organized under the laws of the United States or any State
thereof and (y) Paper Magic Group (Hong Kong) Limited, a Hong Kong limited
company), or a new Subsidiary (other than a new Guarantor which is organized
under the laws of the United States or any State thereof) on the date of its
formation, as an Unrestricted Subsidiary, provided that such designation is
treated as a sale of assets subject to the provisions of Section 10.8 and
immediately after such designation and after giving effect thereto (i) no
Default or Event of Default shall have occurred and be continuing, (ii) such
previously Restricted Subsidiary does not own, directly or indirectly, any
Indebtedness, shares of capital stock or any other Securities of the Company or
any Restricted Subsidiary and (iii) the Company and its Restricted Subsidiaries
would be in compliance with the provisions of Sections 10.2, 10.3, 10.4, 10.5,
10.6, 10.7 and 10.8 hereof, assuming, for purposes of determining such
compliance, such previously Restricted Subsidiary was an Unrestricted Subsidiary
for the period of four consecutive fiscal quarters of the Company ending on or
most recently ended prior to the date of such designation, and provided,
further, that the status of such Subsidiary had not previously been changed more
than once.
(c) Any notice of designation pursuant to this Section 9.7 shall be
accompanied by a certificate signed by a Responsible Officer of the Company
stating that the provisions of this Section 9.7 have been complied with in
connection with such designation and setting forth the name of each other
Subsidiary (if any) which has or will become a Restricted Subsidiary or an
Unrestricted Subsidiary as a result of such designation.
Section 9.8. Additional Guarantors. The Company will cause each
Subsidiary that delivers a guarantee, or otherwise becomes obligated (including,
without limitation, as a co-obligor with the Company) to any holder of any
Indebtedness of the Company outstanding under the Bank Loan Agreement (or under
any credit facility or other Indebtedness instrument replacing all or part of
the Bank Loan Agreement) to concurrently enter into a Guaranty Agreement in the
form of Exhibit 2 hereto, and within three Business Days thereafter the Company
shall deliver to each of the holders of the Notes the following items:
(a) an executed counterpart of such Guaranty Agreement;
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CSS Industries, Inc. Note Purchase Agreement
(b) such documents and evidence with respect to such
Subsidiary as any holder of the Notes may reasonably request in order
to establish the existence and good standing of such Subsidiary and the
authorization of the transactions contemplated by such Guaranty
Agreement; and
(c) an opinion of counsel satisfactory to the Required
Holders to the effect that such Guaranty Agreement has been duly
authorized, executed and delivered and constitutes the legal, valid and
binding contract and agreement of such Subsidiary enforceable in
accordance with its terms, except as an enforcement of such terms may
be limited by bankruptcy, insolvency, reorganization, moratorium and
similar laws affecting the enforcement of creditors' rights generally
and by general equitable principles.
SECTION 10. NEGATIVE COVENANTS.
The Company covenants that so long as any of the Notes are outstanding:
Section 10.1. Transactions with Affiliates. The Company will not, and
will not permit any Restricted Subsidiary to, enter into directly or indirectly
any transaction or group of related transactions (including without limitation
the purchase, lease, sale or exchange of properties of any kind or the rendering
of any service) with any Affiliate (other than the Company or another Restricted
Subsidiary), except (i) in the ordinary course and pursuant to the reasonable
requirements of the Company's or such Restricted Subsidiary's business and upon
fair and reasonable terms no less favorable to the Company or such Restricted
Subsidiary than would be obtainable in a comparable arm's-length transaction
with a Person not an Affiliate, (ii) the transfer of assets of de minimus value
to Unrestricted Subsidiaries, (iii) as permitted by Section 10.5(c) and pursuant
to the reasonable requirements of the Company's or such Restricted Subsidiary's
business and upon fair and reasonable terms no less favorable to the Company or
such Restricted Subsidiary than would be obtainable in a comparable arm's-length
transaction with a Person not an Affiliate, and (iv) as permitted by Section
10.5(a) and Section 10.5(b)(iii).
Section 10.2. Minimum Net Worth. The Company will not, at any time,
permit Consolidated Net Worth to be less than the sum of (a) $150,000,000, plus
(b) an aggregate amount equal to 50% of its year-to-date Consolidated Net Income
(but, in each case, only if a positive number) for all completed fiscal quarters
of the Company during the three fiscal quarter period beginning with the fiscal
quarter ended September 30, 2002 and ending with the fiscal quarter ended March
31, 2003, plus (c) an aggregate amount equal to 50% of its Consolidated Net
Income (but, in each case, only if a positive number) for each completed fiscal
year of the Company beginning with the fiscal year ended March 31, 2004, plus
(d) an aggregate amount equal to 50% of its year-to-date Consolidated Net Income
(but, in each case, only if a positive number) for all completed fiscal quarters
of the Company during any uncompleted fiscal year of the Company beginning with
the fiscal quarter ended June 30, 2003.
Section 10.3. Fixed Charge Coverage Ratio. The Company will not, at any
time, permit the Fixed Charge Coverage Ratio to be less than 1.25 to 1.
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CSS Industries, Inc. Note Purchase Agreement
Section 10.4. Leverage Ratio. The Company will not, at any time, permit
the Leverage Ratio to exceed (i) 0.55 to 1, from the date of the Closing through
December 31, 2002, and (ii) 0.50 to 1, thereafter.
Section 10.5. Mergers, Consolidations and Sales of Assets. (a) The
Company will not, and will not permit any Restricted Subsidiary to, consolidate
with or be a party to a merger with any other Person, or sell, lease or
otherwise dispose of all or substantially all of its assets in any single
transaction or series of transactions to any Person; provided that:
(i) any Subsidiary may merge or consolidate with or into, or
transfer all or substantially all of its assets to, the Company or any
Restricted Subsidiary so long as in (1) any merger or consolidation
involving the Company, the Company shall be the surviving or continuing
corporation, (2) any merger or consolidation involving a Restricted
Subsidiary (other than a merger or consolidation with the Company), a
Restricted Subsidiary shall be the surviving or continuing corporation,
(3) any merger, consolidation or transfer involving a Guarantor (other
than a merger or consolidation with the Company), a Guarantor shall be
the surviving, continuing or acquiring corporation and (4) at the time
of such consolidation or merger and immediately after giving effect
thereto, no Default or Event of Default would exist;
(ii) the Company may consolidate or merge with or into any
other corporation if (1) the corporation which results from such
consolidation or merger (the "surviving corporation") is organized
under the laws of any state of the United States or the District of
Columbia, (2) if the Company is not the surviving corporation, the due
and punctual performance and observation of all of the covenants in
this Agreement to be performed or observed by the Company are expressly
assumed in writing by the surviving corporation in form and substance
satisfactory to the holders of the Notes and the surviving corporation
shall furnish to the holders of the Notes an opinion of counsel
satisfactory to such holders to the effect that the instrument of
assumption has been duly authorized, executed and delivered and
constitutes the legal, valid and binding contract and agreement of the
surviving corporation enforceable in accordance with its terms, except
as enforcement of such terms may be limited by bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting the enforcement
of creditors' rights generally and by general equitable principles, and
(3) at the time of such consolidation or merger and immediately after
giving effect thereto, no Default or Event of Default would exist; and
(iii) the Company may sell, lease or otherwise dispose of all
or substantially all of its assets (provided that any sale, lease or
other disposition of Subsidiary Stock of any Restricted Subsidiary must
also be permitted under Section 10.5(c)) to any Person for
consideration which represents the fair market value of such assets (as
determined in good faith by the board of directors of the Company) at
the time of such sale or other disposition if (1) the acquiring Person
is a corporation organized under the laws of any state of the United
States or the District of Columbia, (2) the due and punctual
performance and observance of all of the covenants in this Agreement to
be performed or observed by the Company are expressly assumed in
writing by the acquiring corporation in form and substance satisfactory
to the holders of the Notes and the acquiring corporation shall furnish
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CSS Industries, Inc. Note Purchase Agreement
to the holders of the Notes an opinion of counsel satisfactory to such
holders to the effect that the instrument of assumption has been duly
authorized, executed and delivered and constitutes the legal, valid and
binding contract and agreement of such acquiring corporation
enforceable in accordance with its terms, except as enforcement of such
terms may be limited by bankruptcy, insolvency, reorganization,
moratorium and similar laws affecting the enforcement of creditors'
rights generally and by general equitable principles, and (3) at the
time of such sale, lease or disposition and immediately after giving
effect thereto, no Default or Event of Default would exist.
(b) The Company will not, and will not permit any Restricted Subsidiary
to, sell, lease, transfer, abandon or otherwise dispose of assets; provided that
the foregoing restrictions do not apply to:
(i) the sale, lease, transfer or other disposition of assets
of the Company or a Restricted Subsidiary to the Company or another
Restricted Subsidiary; or
(ii) the sale, lease, transfer or other disposition of assets
in the ordinary course of business for an amount at least substantially
equal to the fair market value thereof; or
(iii) the sale or other transfer of Trade Receivables to a
Special Purpose Company pursuant to one or more of the Accounts
Receivable Securitization and any other Qualifying Securitization
Transactions, to the extent that the sum of (A) the aggregate Capital
(as such term is defined in the Accounts Receivable Securitization
Documents) relating to the Accounts Receivable Securitization and (B)
the aggregate amount outstanding under all financing facilities
relating to such other Qualifying Securitization Transactions shall not
exceed $100,000,000 at any time of determination; or
(iv) the sale, lease or other disposition of all or
substantially all of the assets of the Company or a Restricted
Subsidiary as provided in Section 10.5(a) hereof; or
(v) the sale of assets (including Subsidiary Stock disposed
of pursuant to Section 10.5(c)) for cash or other property to a Person
or Persons other than an Affiliate if all of the following conditions
are met:
(1) such assets (valued at net book value) do not,
together with all other assets of the Company and its
Restricted Subsidiaries previously disposed of during the
fiscal year in which such sale occurs (other than as permitted
by paragraphs (i), (ii), (iii) and (iv) of this Section 10.5),
exceed 10% of Consolidated Total Assets determined as of the
end of the immediately preceding fiscal year;
(2) except in the case of the transfer of assets of
de minimus value to Unrestricted Subsidiaries, in the opinion
of the Company's Board of Directors, the sale is for an amount
at least substantially equal to the fair value thereof and is
in the best interests of the Company; and
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CSS Industries, Inc. Note Purchase Agreement
(3) immediately after the consummation of the
transaction and after giving effect thereto no Default or
Event of Default would exist;
provided, however, that for purposes of the foregoing calculation,
there shall not be included any assets the proceeds of which were or
are applied within twelve months of the date of sale of such assets to
either (A) the acquisition of assets useful and intended to be used in
the operation of the business of the Company and its Restricted
Subsidiaries and having a fair market value and earning power (as
determined in good faith by the Board of Directors of the Company) at
least equal to that of the assets so disposed of or (B) the prepayment
at any applicable prepayment premium, on a pro rata basis, of Senior
Funded Indebtedness of the Company then outstanding, provided that the
Company may prepay any secured Senior Funded Indebtedness of the
Company then outstanding prior to unsecured Senior Funded Indebtedness
of the Company. It is understood and agreed by the Company that any
such proceeds paid and applied to the prepayment of the Notes as
hereinabove provided shall be prepaid as and to the extent provided in
Section 8.2
For the avoidance of doubt, the Company and the Purchasers hereby acknowledge
that this Section 10.5(b) does not apply to or restrict (x) the declaration or
payment of dividends or return of capital by the Company or any Restricted
Subsidiary to any shareholder thereof or the repurchase, redemption or
retirement of any capital stock of the Company or any Restricted Subsidiary or
(y) any Investments made by the Company or any Restricted Subsidiary, except
that, in either case, this Section 10.5(b) shall apply to and restrict any sale,
lease, transfer or other disposition thereof.
(c) The Company and its Restricted Subsidiaries will not sell, transfer
or otherwise dispose of any Subsidiary Stock the issuer of which is a Restricted
Subsidiary (except (w) to the Company or a Wholly-Owned Restricted Subsidiary,
(x) to qualify directors, (y) in connection with a merger or consolidation
permitted under Section 10.5(a)(i) or (z) in connection with sale, transfer or
other disposition of Subsidiary Stock whereby the Company maintains its same
direct or indirect proportionate interest in the Subsidiary Stock of such
Restricted Subsidiary subject to such sale, transfer or other disposition) or
any Indebtedness of any Restricted Subsidiary, unless:
(i) simultaneously with such sale, transfer or disposition,
all shares of Subsidiary Stock and all Indebtedness of such Restricted
Subsidiary at the time owned by the Company and by every other
Restricted Subsidiary shall be sold, transferred or disposed of as an
entirety;
(ii) the Board of Directors of the Company shall have
determined, as evidenced by a resolution thereof, that the proposed
sale, transfer or disposition of said shares of Subsidiary Stock and
Indebtedness is in the best interest of the Company;
(iii) said shares of Subsidiary Stock and Indebtedness are
sold, transferred or otherwise disposed of to a Person on terms
reasonably deemed by the Board of Directors of the Company to be
adequate and satisfactory;
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CSS Industries, Inc. Note Purchase Agreement
(iv) the Restricted Subsidiary being disposed of shall not
have any continuing investment in the Company or any other Restricted
Subsidiary not being simultaneously disposed of; and
(v) such sale, transfer or other disposition shall be treated
as a disposition under and shall satisfy the requirements of Section
10.5(b) hereof.
(d) The Company will not permit any Restricted Subsidiary to issue any
Subsidiary Stock of such Restricted Subsidiary to any Person other than the
Company or a Wholly-Owned Restricted Subsidiary, except (i) to qualify
directors, (ii) stock issued to comply with local laws requiring multiple
shareholders or (iii) in connection with an issuance of Subsidiary Stock whereby
the Company maintains its same direct or indirect proportionate interest in the
Subsidiary Stock of such Restricted Subsidiary.
Section 10.6. Liens and Encumbrances. (a) The Company will not, and will
not cause or permit any Restricted Subsidiary to, create or cause or authorize
or agree or consent to cause or permit, assume or suffer to exist or remain in
effect (upon the happening of a contingency or otherwise), any Lien or claim on
its or their Property, whether now owned or hereafter acquired, except for the
following (the "Permitted Liens"):
(i) Liens securing taxes, assessments or governmental charges
or levies or the claims or demands of materialmen, mechanics, carriers,
warehousemen, landlords, and other like Persons, or Liens evidencing
consignment or bailment arrangements with the Company or any Restricted
Subsidiary as consignee or bailee, provided the payment thereof is not
at the time required by Section 9.4;
(ii) Liens (other than any Lien imposed by ERISA) incurred or
deposits made in the ordinary course of business in connection with
workers' compensation, unemployment insurance, social security and
other like laws and in connection with leases or trade contracts;
(iii) purchase money security interests (attaching solely to
the fixed asset purchased and securing only the Indebtedness incurred
to finance such purchase) from the Company or any Restricted Subsidiary
to Persons providing financing for permitted Consolidated Capital
Expenditures of the Company or such Restricted Subsidiary, provided
that the Indebtedness incurred by the Company or such Restricted
Subsidiary with respect to each such asset so purchased shall not
exceed the lesser of (A) the cost to the Company or such Restricted
Subsidiary of such asset so purchased and (B) the appraised fair market
value of such asset at the time of such purchase;
(iv) Liens existing on the date of this Agreement and
disclosed in Schedule 5.10;
(v) any Lien existing on any property (other than on accounts
receivable and inventory) acquired by the Company or any Restricted
Subsidiary at the time such property is so acquired (whether or not the
Indebtedness secured thereby shall have been assumed), provided that
each such Lien shall extend solely to the item or items of property so
acquired and, if required by the terms of the instrument originally
creating such Lien, other property which is an improvement to or is
acquired for specific use in connection with such acquired property;
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CSS Industries, Inc. Note Purchase Agreement
(vi) Liens in connection with sales of assets permitted under
Section 10.5(b)(iii); and
(vii) other Liens not otherwise permitted by paragraphs (i)
through (vi), provided that the Indebtedness secured by such Liens
shall not exceed $1,000,000 in the aggregate outstanding at any one
time.
(b) If the Company or any Subsidiary shall create or assume any Lien
upon any of its Property or income or profits therefrom, other than Permitted
Liens, it shall make or cause to be made effective provision, in form and
substance satisfactory to the Required Holders, whereby the Notes will be
secured by such Lien equally and ratably with any and all other indebtedness
secured thereby, provided that such provision shall not be deemed for any
purpose to represent a consent by any holder of the Notes to such Lien.
Section 10.7. Sale and Leaseback Transactions. The Company will not, and
will not permit any Restricted Subsidiary to, enter into any Sale-and-Leaseback
Transaction unless, immediately after giving effect thereto, the aggregate
amount of all Attributable Debt of the Company and its Subsidiaries does not
exceed 20% of Consolidated Net Worth.
Section 10.8. Investments. The Company will not and will not permit any
Restricted Subsidiary to, make or have outstanding any Investments, other than:
(a) property to be used in the ordinary course of business of
the Company and its Restricted Subsidiaries;
(b) current assets arising from the sale of goods and
services in the ordinary course of business of the Company and its
Restricted Subsidiaries;
(c) Investments by the Company and its Restricted
Subsidiaries in and to Subsidiaries (other than loans, guarantees or
advances to any Unrestricted Subsidiary), including any Investment in a
corporation or other Person which, after giving effect to such
Investment, will become a Subsidiary or a division of the Company or a
Subsidiary;
(d) Investments of the Company and its Restricted
Subsidiaries existing as of the date of the Closing and described on
Schedule 10.5 hereto;
(e) Investments in commercial paper maturing in 365 days or
less from the date of issuance which, at the time of acquisition by the
Company or such Restricted Subsidiary, is accorded a rating of "A-1" by
S&P, "P-1" by Xxxxx'x or an equivalent rating by any other credit
rating agency of recognized national standing;
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(f) Investments in direct obligations of the United States of
America or any agency or instrumentality of the United States of
America, the payment or guarantee of which constitutes a full faith and
credit obligation of the United States of America, in either case,
maturing within one (1) year from the date of acquisition thereof;
(g) Investments in mutual funds which invest only in either
money market securities or direct obligations of the United States of
America or any agency or instrumentality of the United States of
America, the payment or guarantee of which constitutes a full faith and
credit obligation of the United States of America, in either case,
maturing within one (1) year from the date of acquisition thereof;
(h) Investments in negotiable certificates of deposit
maturing within one year from the date of acquisition thereof, issued
by a bank or trust company organized under the laws of the United
States or any State thereof, having capital, surplus and undivided
profits aggregating at least $100,000,000 and whose long-term unsecured
debt obligations (or the long-term unsecured debt obligations of the
bank holding company owning all of the capital stock of such bank or
trust company) shall have been given a rating of "A-" or better by S&P
or "A3 or better by Xxxxx'x;
(i) Investments in repurchase agreements with respect to any
Security described in clause (f) of this Section 10.8 entered into with
a depository institution or trust company acting as principal described
in clause (h) of this definition if such repurchase agreements are by
their terms to be performed by the repurchase obligor and such
repurchase agreements are deposited with a bank or trust company of the
type described in clause (h) of this definition;
(j) Investments in cash equivalent short term investments
maturing within one year from the date of acquisition thereof;
(k) Investments in the same or Related Industries (other than
loans, guarantees or advances to Affiliates), provided that such
Investments are in furtherance of the reasonable business purposes of
the Company and its Restricted Subsidiaries and are not speculative in
nature; and
(l) Investments of the Company and its Restricted
Subsidiaries not otherwise permitted in the foregoing clauses (a)
through (k); provided that the aggregate amount of all such Investments
shall not at any time exceed 10% of Consolidated Net Worth.
Section 10.9. Line of Business. The Company will not, and will not
permit any Restricted Subsidiary to, engage to any substantial extent in any
business substantially different from the businesses in which the Company and
its Restricted Subsidiaries are engaged on the date of this Agreement as
described in the Memorandum.
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CSS Industries, Inc. Note Purchase Agreement
SECTION 11. EVENTS OF DEFAULT.
An "Event of Default" shall exist if any of the following conditions or
events shall occur and be continuing:
(a) the Company defaults in the payment of any principal or
Make-Whole Amount, if any, on any Note when the same becomes due and
payable, whether at maturity or at a date fixed for prepayment or by
declaration or otherwise; or
(b) the Company defaults in the payment of any interest on
any Note for more than five Business Days after the same becomes due
and payable; or
(c) the Company defaults in the performance of or compliance
with any term contained in Section 7.1(d), 10.2, 10.3, 10.4, 10.5, 10.6
or 10.7; or
(d) the Company defaults in the performance of or compliance
with any term contained herein (other than those referred to in
paragraphs (a), (b) and (c) of this Section 11) and such default is not
remedied within 30 days after the earlier of (i) a Responsible Officer
obtaining actual knowledge of such default and (ii) the Company
receiving written notice of such default from any holder of a Note (any
such written notice to be identified as a "notice of default" and to
refer specifically to this paragraph (d) of Section 11); or
(e) any representation, warranty or other statement made in
writing by or on behalf of the Company or any Guarantor or by any
officer of the Company or any Guarantor in this Agreement, in any
Guaranty Agreement or in any document, certificate, instrument or other
writing furnished in connection with the transactions contemplated
hereby proves to have been false or incorrect in any material respect
on the date as of which made; or
(f) (i) the Company, any Guarantor, any Restricted Subsidiary
or any Significant Subsidiary is in default (as principal or as
guarantor or other surety) in the payment of any principal of or
premium or make-whole amount or interest on any Indebtedness that is
outstanding in an aggregate principal amount of at least $10,000,000
beyond any period of grace provided with respect thereto, or (ii) the
Company, any Guarantor, any Restricted Subsidiary or any Significant
Subsidiary is in default in the performance of or compliance with any
term of any evidence of any Indebtedness in an aggregate outstanding
principal amount of at least $10,000,000 or of any mortgage, indenture
or other agreement relating thereto or any other condition exists, and
as a consequence of such default or condition such Indebtedness has
become, or has been declared (or one or more Persons are entitled to
declare such Indebtedness to be), due and payable before its stated
maturity or before its regularly scheduled dates of payment, or (iii)
as a consequence of the occurrence or continuation of any event or
condition (other than the passage of time, the right of the holder of
Indebtedness to convert such Indebtedness into equity interests or the
giving of notice by the Company, any Guarantor, any Restricted
Subsidiary or any Significant Subsidiary of a voluntary prepayment of
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CSS Industries, Inc. Note Purchase Agreement
such Indebtedness), (x) the Company, any Guarantor, any Restricted
Subsidiary or any Significant Subsidiary has become obligated to
purchase or repay Indebtedness before its regular maturity or before
its regularly scheduled dates of payment in an aggregate outstanding
principal amount of at least $10,000,000, or (y) one or more Persons
have the right to require the Company, any Guarantor, any Restricted
Subsidiary or any Significant Subsidiary so to purchase or repay
Indebtedness in an aggregate outstanding principal amount of at least
$10,000,000; or
(g) the Company, any Guarantor, any Restricted Subsidiary or
any Significant Subsidiary (i) is generally not paying, or admits in
writing its inability to pay, its debts as they become due, (ii) files,
or consents by answer or otherwise to the filing against it of, a
petition for relief or reorganization or arrangement or any other
petition in bankruptcy, for liquidation or to take advantage of any
bankruptcy, insolvency, reorganization, moratorium or other similar law
of any jurisdiction, (iii) makes an assignment for the benefit of its
creditors, (iv) consents to the appointment of a custodian, receiver,
trustee or other officer with similar powers with respect to it or with
respect to any substantial part of its property, (v) is adjudicated as
insolvent or to be liquidated, or (vi) takes corporate or other action
for the purpose of any of the foregoing; or
(h) a court or governmental authority of competent
jurisdiction enters an order appointing, without consent by the
Company, any Guarantor, any Restricted Subsidiary or any Significant
Subsidiary, a custodian, receiver, trustee or other officer with
similar powers with respect to it or with respect to any substantial
part of its property, or constituting an order for relief or approving
a petition for relief or reorganization or any other petition in
bankruptcy or for liquidation or to take advantage of any bankruptcy or
insolvency law of any jurisdiction, or ordering the dissolution,
winding-up or liquidation of the Company, any Restricted Subsidiary,
any Significant Subsidiary or any Guarantor, or any such petition shall
be filed against the Company, any Restricted Subsidiary, any
Significant Subsidiary or any Guarantor and such petition shall not be
dismissed within 60 days; or
(i) a final judgment or judgments for the payment of money
aggregating in excess of $5,000,000 (excluding for purposes of such
determination such amount of such judgment or judgments as has been
acknowledged in writing by a reputable insurance company of the Company
or the applicable Guarantor or Restricted Subsidiary as unconditionally
covered by insurance) are rendered against one or more of the Company,
its Restricted Subsidiaries and the Guarantors and which judgments are
not, within 60 days after entry thereof, bonded, discharged or stayed
pending appeal, or are not discharged in full within 60 days after the
expiration of such stay; or
(j) if (i) any Plan shall fail to satisfy the minimum funding
standards of ERISA or the Code for any plan year or part thereof or a
waiver of such standards or extension of any amortization period is
sought or granted under section 412 of the Code, (ii) a notice of
intent to terminate any Plan shall have been or is reasonably expected
to be filed with the PBGC or the PBGC shall have instituted proceedings
under ERISA section 4042 to terminate or appoint a trustee to
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CSS Industries, Inc. Note Purchase Agreement
administer any Plan or the PBGC shall have notified the Company or any
ERISA Affiliate that a Plan may become a subject of any such
proceedings, (iii) the aggregate "amount of unfunded benefit
liabilities" (within the meaning of section 4001(a)(18) of ERISA) under
all Plans, determined in accordance with Title IV of ERISA, shall
exceed $5,000,000, (iv) the Company or any ERISA Affiliate shall have
incurred or is reasonably expected to incur any liability pursuant to
Title I or IV of ERISA or the penalty or excise tax provisions of the
Code relating to employee benefit plans, (v) the Company or any ERISA
Affiliate withdraws from any Multiemployer Plan, or (vi) the Company,
any Guarantor or any Subsidiary establishes or amends any employee
welfare benefit plan that provides post-employment welfare benefits in
a manner that would increase the liability of the Company, any
Guarantor or any Subsidiary thereunder; and any such event or events
described in clauses (i) through (vi) above, either individually or
together with any other such event or events, could reasonably be
expected to have a Material Adverse Effect; or
(k) any Guarantor shall breach any of its obligations under
the Guaranty Agreement to which it is a party or such Guaranty
Agreement shall cease to be in full force and effect for any reason
whatsoever, including, without limitation, a determination by a
Governmental Authority of competent jurisdiction that such Guaranty
Agreement is invalid, void or unenforceable or any Guarantor shall
contest or deny in writing the validity or enforceability of any of its
obligations under such Guaranty Agreement.
As used in Section 11(j), the terms "employee benefit plan" and "employee
welfare benefit plan" shall have the respective meanings assigned to such terms
in section 3 of ERISA.
SECTION 12. REMEDIES ON DEFAULT, ETC.
Section 12.1. Acceleration. (a) If an Event of Default with respect to
the Company described in paragraph (g) or (h) of Section 11 (other than an Event
of Default described in clause (i) of paragraph (g) or described in clause (vi)
of paragraph (g) by virtue of the fact that such clause encompasses clause (i)
of paragraph (g)) has occurred, all the Notes then outstanding shall
automatically become immediately due and payable.
(b) If any other Event of Default has occurred and is continuing, any
holder or holders of not less than 51% in principal amount of the Notes at the
time outstanding may at any time at its or their option, by notice or notices to
the Company, declare all the Notes then outstanding to be immediately due and
payable.
(c) If any Event of Default described in paragraph (a) or (b) of
Section 11 has occurred and is continuing, any holder or holders of Notes at the
time outstanding affected by such Event of Default may at any time, at its or
their option, by notice or notices to the Company, declare all the Notes held by
it or them to be immediately due and payable.
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CSS Industries, Inc. Note Purchase Agreement
Upon any Note's becoming due and payable under this Section 12.1,
whether automatically or by declaration, such Note will forthwith mature and the
entire unpaid principal amount of such Note, plus (i) all accrued and unpaid
interest thereon and (ii) the Make-Whole Amount determined in respect of such
principal amount (to the full extent permitted by applicable law), shall all be
immediately due and payable, in each and every case without presentment, demand,
protest or further notice, all of which are hereby waived. The Company
acknowledges, and the parties hereto agree, that each holder of a Note has the
right to maintain its investment in the Notes free from repayment by the Company
(except as herein specifically provided for), and that the provision for payment
of a Make-Whole Amount by the Company in the event that the Notes are prepaid or
are accelerated as a result of an Event of Default, is intended to provide
compensation for the deprivation of such right under such circumstances.
Section 12.2. Other Remedies. If any Default or Event of Default has
occurred and is continuing, and irrespective of whether any Notes have become or
have been declared immediately due and payable under Section 12.1, the holder of
any Note at the time outstanding may proceed to protect and enforce the rights
of such holder by an action at law, suit in equity or other appropriate
proceeding, whether for the specific performance of any agreement contained
herein or in any Note, or for an injunction against a violation of any of the
terms hereof or thereof, or in aid of the exercise of any power granted hereby
or thereby or by law or otherwise.
Section 12.3. Rescission. At any time after any Notes have been declared
due and payable pursuant to clause (b) or (c) of Section 12.1, the holders of
not less than 66-2/3% in principal amount of the Notes then outstanding, by
written notice to the Company, may rescind and annul any such declaration and
its consequences if (a) the Company has paid all overdue interest on the Notes,
all principal of and Make-Whole Amount, if any, on any Notes that are due and
payable and are unpaid other than by reason of such declaration, and all
interest on such overdue principal and Make-Whole Amount, if any, and (to the
extent permitted by applicable law) any overdue interest in respect of the
Notes, at the Default Rate, (b) all Events of Default and Defaults, other than
non-payment of amounts that have become due solely by reason of such
declaration, have been cured or have been waived pursuant to Section 17, and (c)
no judgment or decree has been entered for the payment of any monies due
pursuant hereto or to the Notes. No rescission and annulment under this Section
12.3 will extend to or affect any subsequent Event of Default or Default or
impair any right consequent thereon.
Section 12.4. No Waivers or Election of Remedies, Expenses, etc. No
course of dealing and no delay on the part of any holder of any Note in
exercising any right, power or remedy shall operate as a waiver thereof or
otherwise prejudice such holder's rights, powers or remedies. No right, power or
remedy conferred by this Agreement or by any Note upon any holder thereof shall
be exclusive of any other right, power or remedy referred to herein or therein
or now or hereafter available at law, in equity, by statute or otherwise.
Without limiting the obligations of the Company under Section 15, the Company
will pay to the holder of each Note on demand such further amount as shall be
sufficient to cover all costs and expenses of such holder incurred in any
enforcement or collection under this Section 12, including, without limitation,
reasonable attorneys' fees, expenses and disbursements.
SECTION 13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.
Section 13.1. Registration of Notes. The Company shall keep at its
principal executive office a register for the registration and registration of
transfers of Notes. The name and address of each holder of one or more Notes,
each transfer thereof and the name and address of each transferee of one or more
Notes shall be registered in such register. Prior to due presentment for
registration of transfer, the Person in whose name any Note shall be registered
shall be deemed and treated as the owner and holder thereof for all purposes
hereof, and the Company shall not be affected by any notice or knowledge to the
contrary. The Company shall give to any holder of a Note that is an
Institutional Investor promptly upon request therefor, a complete and correct
copy of the names and addresses of all registered holders of Notes.
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CSS Industries, Inc. Note Purchase Agreement
Section 13.2. No Transfers of Notes to Competitors; Transfer and
Exchange of Notes. (a) Without the consent of the Company, which consent shall
not be unreasonably withheld, no holder of a Note may transfer such Note to a
Competitor.
(b) Upon surrender of any Note at the principal executive office of the
Company for registration of transfer or exchange (and in the case of a surrender
for registration of transfer, duly endorsed or accompanied by a written
instrument of transfer duly executed by the registered holder of such Note or
its attorney duly authorized in writing and accompanied by the address for
notices of each transferee of such Note or part thereof), the Company shall
execute and deliver, at the Company's expense (except as provided below), one or
more new Notes (as requested by the holder thereof) in exchange therefor, in an
aggregate principal amount equal to the unpaid principal amount of the
surrendered Note. Each such new Note shall be payable to such Person as such
holder may request and shall be substantially in the form of Exhibit 1. Each
such new Note shall be dated and bear interest from the date to which interest
shall have been paid on the surrendered Note or dated the date of the
surrendered Note if no interest shall have been paid thereon. The Company may
require payment of a sum sufficient to cover any stamp tax or governmental
charge imposed in respect of any such transfer of Notes. Notes shall not be
transferred in denominations of less than $1,000,000, provided that if necessary
to enable the registration of transfer by a holder of its entire holding of
Notes, one Note may be in a denomination of less than $1,000,000. Any transferee
of a Note, or purchaser of a participation therein, shall, by its acceptance of
such Note be deemed to make the same representations to the Company regarding
the Note or participation as such holder made pursuant to Section 6.2, provided
that such entity may (in reliance upon information provided by the Company,
which shall not be unreasonably withheld) make a representation to the effect
that the purchase by such entity of any Note will not constitute a non-exempt
prohibited transaction under section 406(a) of ERISA.
Section 13.3. Replacement of Notes. Upon receipt by the Company of
evidence reasonably satisfactory to it of the ownership of and the loss, theft,
destruction or mutilation of any Note (which evidence shall be, in the case of
an Institutional Investor, notice from such Institutional Investor of such
ownership and such loss, theft, destruction or mutilation), and
(a) in the case of loss, theft or destruction, of indemnity
reasonably satisfactory to it (provided that if the holder of such Note
is, or is a nominee for, an original Purchaser or another holder of a
Note with a minimum net worth of at least $50,000,000, such Person's
own unsecured agreement of indemnity shall be deemed to be
satisfactory), or
(b) in the case of mutilation, upon surrender and
cancellation thereof,
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the Company at its own expense shall execute and deliver within five Business
Days of receipt of said evidence, in lieu thereof, a new Note, dated and bearing
interest from the date to which interest shall have been paid on such lost,
stolen, destroyed or mutilated Note or dated the date of such lost, stolen,
destroyed or mutilated Note if no interest shall have been paid thereon.
SECTION 14. PAYMENTS ON NOTES.
Section 14.1. Place of Payment. Subject to Section 14.2, payments of
principal, Make-Whole Amount, if any, and interest becoming due and payable on
the Notes shall be made in Philadelphia, Pennsylvania at the principal office of
the Company in such jurisdiction. The Company may at any time, by notice to each
holder of a Note, change the place of payment of the Notes so long as such place
of payment shall be either the principal office of the Company in such
jurisdiction or the principal office of a bank or trust company in such
jurisdiction.
Section 14.2. Home Office Payment. So long as any Purchaser or any
Purchaser's nominee shall be the holder of any Note, and notwithstanding
anything contained in Section 14.1 or in such Note to the contrary, the Company
will pay all sums becoming due on such Note for principal, Make-Whole Amount, if
any, and interest by the method and at the address specified for such purpose
for such Purchaser in Schedule A, or by such other method or at such other
address as such Purchaser shall have from time to time specified to the Company
in writing for such purpose, without the presentation or surrender of such Note
or the making of any notation thereon, except that upon written request of the
Company made concurrently with or reasonably promptly after payment or
prepayment in full of any Note, such Purchaser shall surrender such Note for
cancellation, reasonably promptly after any such request, to the Company at its
principal executive office or at the place of payment most recently designated
by the Company pursuant to Section 14.1. The Company will afford the benefits of
this Section 14.2 to any Institutional Investor that is the direct or indirect
transferee of any Note purchased by any Purchaser under this Agreement and that
has made the same agreement relating to such Note as such Purchaser has made in
this Section 14.2.
SECTION 15. EXPENSES, ETC.
Section 15.1. Transaction Expenses. Whether or not the transactions
contemplated hereby are consummated, the Company will pay all costs and expenses
(including reasonable attorneys' fees of a special counsel and, if reasonably
required, local or other counsel) incurred by each Purchaser or holder of a Note
in connection with such transactions and in connection with any amendments,
waivers or consents under or in respect of this Agreement, any Guaranty
Agreement, the Intercreditor Agreement or the Notes (whether or not such
amendment, waiver or consent becomes effective), including, without limitation:
(a) the costs and expenses incurred in enforcing or defending (or determining
whether or how to enforce or defend) any rights under this Agreement, any
Guaranty Agreement, the Intercreditor Agreement or the Notes or in responding to
any subpoena or other legal process or informal investigative demand issued in
connection with this Agreement, any Guaranty Agreement, the Intercreditor
Agreement or the Notes, or by reason of being a holder of any Note, and (b) the
costs and expenses, including financial advisors' fees, incurred in connection
with the insolvency or bankruptcy of the Company, any Subsidiary or any
Guarantor or in connection with any work-out or restructuring of the
transactions contemplated hereby and by the Notes. The Company will pay, and
will save each Purchaser and each other holder of a Note harmless from, all
claims in respect of any fees, costs or expenses, if any, of brokers and finders
(other than those retained by such Purchaser or holder).
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CSS Industries, Inc. Note Purchase Agreement
Section 15.2. Survival. The obligations of the Company under this
Section 15 will survive the payment or transfer of any Note, the enforcement,
amendment or waiver of any provision of this Agreement or the Notes, and the
termination of this Agreement.
SECTION 16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.
All representations and warranties contained herein shall survive the
execution and delivery of this Agreement and the Notes, the purchase or transfer
by any Purchaser of any Note or portion thereof or interest therein and the
payment of any Note, and may be relied upon by any subsequent holder of a Note,
regardless of any investigation made at any time by or on behalf of such
Purchaser or any other holder of a Note. All statements contained in any
certificate or other instrument delivered by or on behalf of the Company
pursuant to this Agreement shall be deemed representations and warranties of the
Company under this Agreement. Subject to the preceding sentence, this Agreement
and the Notes embody the entire agreement and understanding between each
Purchaser and the Company and supersede all prior agreements and understandings
relating to the subject matter hereof.
SECTION 17. AMENDMENT AND WAIVER.
Section 17.1. Requirements. This Agreement and the Notes may be amended,
and the observance of any term hereof or of the Notes may be waived (either
retroactively or prospectively), with (and only with) the written consent of the
Company and the Required Holders, except that (a) no amendment or waiver of any
of the provisions of Section 1, 2, 3, 4, 5, 6 or 21 hereof, or any defined term
(as it is used therein), will be effective as to any Purchaser unless consented
to by such Purchaser in writing, and (b) no such amendment or waiver may,
without the written consent of the holder of each Note at the time outstanding
affected thereby, (i) subject to the provisions of Section 12 relating to
acceleration or rescission, change the amount or time of any prepayment or
payment of principal of, or reduce the rate or change the time of payment or
method of computation of interest or of the Make-Whole Amount on, the Notes,
(ii) change the percentage of the principal amount of the Notes the holders of
which are required to consent to any such amendment or waiver, or (iii) amend
any of Sections 8, 11(a), 11(b), 12, 17 or 20.
Section 17.2. Solicitation of Holders of Notes.
(a) Solicitation. The Company will provide each holder of the Notes
(irrespective of the amount of Notes then owned by it) with sufficient
information, sufficiently far in advance of the date a decision is required, to
enable such holder to make an informed and considered decision with respect to
any proposed amendment, waiver or consent in respect of any of the provisions
hereof or of the Notes. The Company will deliver executed or true and correct
copies of each amendment, waiver or consent effected pursuant to the provisions
of this Section 17 to each holder of outstanding Notes promptly following the
date on which it is executed and delivered by, or receives the consent or
approval of, the requisite holders of Notes.
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CSS Industries, Inc. Note Purchase Agreement
(b) Payment. The Company will not directly or indirectly pay or cause
to be paid any remuneration, whether by way of supplemental or additional
interest, fee or otherwise, or grant any security, to any holder of Notes as
consideration for or as an inducement to the entering into by any holder of
Notes of any waiver or amendment of any of the terms and provisions hereof or of
the Notes unless such remuneration is concurrently paid, or security is
concurrently granted, on the same terms, ratably to each holder of Notes then
outstanding whether or not such holder consented to such waiver or amendment.
Section 17.3. Binding Effect, etc. Any amendment or waiver consented to
as provided in this Section 17 applies equally to all holders of Notes and is
binding upon them and upon each future holder of any Note and upon the Company
without regard to whether such Note has been marked to indicate such amendment
or waiver. No such amendment or waiver will extend to or affect any obligation,
covenant, agreement, Default or Event of Default not expressly amended or waived
or impair any right consequent thereon. No course of dealing between the Company
and the holder of any Note nor any delay in exercising any rights hereunder or
under any Note shall operate as a waiver of any rights of any holder of such
Note. As used herein, the term "this Agreement" and references thereto shall
mean this Agreement as it may from time to time be amended or supplemented.
Section 17.4. Notes Held by Company, etc. Solely for the purpose of
determining whether the holders of the requisite percentage of the aggregate
principal amount of Notes then outstanding approved or consented to any
amendment, waiver or consent to be given under this Agreement, any Guaranty
Agreement, the Intercreditor Agreement or the Notes, or have directed the taking
of any action provided herein, therein or in the Notes to be taken upon the
direction of the holders of a specified percentage of the aggregate principal
amount of Notes then outstanding, Notes directly or indirectly owned by the
Company, any Guarantor or any of their respective Affiliates shall be deemed not
to be outstanding.
SECTION 18. NOTICES.
All notices and communications provided for hereunder shall be in
writing and sent (a) by telefacsimile if the sender on the same day sends a
confirming copy of such notice by a recognized overnight delivery service
(charges prepaid), or (b) by registered or certified mail with return receipt
requested (postage prepaid), or (c) by a recognized overnight delivery service
(with charges prepaid). Any such notice must be sent:
(i) if to a Purchaser or such Purchaser's nominee, to such
Purchaser or such Purchaser's nominee at the address specified for such
communications in Schedule A, or at such other address as such
Purchaser or such Purchaser's nominee shall have specified to the
Company in writing,
(ii) if to any other holder of any Note, to such holder at
such address as such other holder shall have specified to the Company
in writing, or
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CSS Industries, Inc. Note Purchase Agreement
(iii) if to the Company, to the Company at its address set
forth at the beginning hereof to the attention of Vice President of
Finance, or at such other address as the Company shall have specified
to the holder of each Note in writing.
Notices under this Section 18 will be deemed given only when actually received.
SECTION 19. REPRODUCTION OF DOCUMENTS.
This Agreement and all documents relating thereto, including, without
limitation, (a) consents, waivers and modifications that may hereafter be
executed, (b) documents received by each Purchaser at the Closing (except the
Notes themselves), and (c) financial statements, certificates and other
information previously or hereafter furnished to each Purchaser, may be
reproduced by such Purchaser by any photographic, photostatic, microfilm,
microcard, miniature photographic or other similar process and such Purchaser
may destroy any original document so reproduced. The Company agrees and
stipulates that, to the extent permitted by applicable law, any such
reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made by such Purchaser in the
regular course of business) and any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence. This
Section 19 shall not prohibit the Company or any other holder of Notes from
contesting any such reproduction to the same extent that it could contest the
original, or from introducing evidence to demonstrate the inaccuracy of any such
reproduction.
SECTION 20. CONFIDENTIAL INFORMATION.
For the purposes of this Section 20, "Confidential Information" means
information delivered to any holder of any Note by or on behalf of the Company
or any Subsidiary in connection with the transactions contemplated by or
otherwise pursuant to this Agreement that was clearly marked or labeled or
otherwise adequately identified when received by such holder as being
confidential information of the Company or such Subsidiary, provided that such
term does not include information that (a) was publicly known or otherwise known
to such holder on a non-confidential basis prior to the time of such disclosure,
(b) subsequently becomes publicly known through no act or omission by such
holder or any Person acting on such holder's behalf, (c) otherwise becomes known
to such holder on a non-confidential basis other than through disclosure by the
Company, any Subsidiary or another holder of a Note or (d) constitutes financial
statements delivered to such holder under Section 7.1 that are otherwise
publicly available. Each holder of a Note will maintain the confidentiality of
such Confidential Information in accordance with procedures adopted by such
holder in good faith to protect confidential information of third parties
delivered to such holder, provided that such holder may deliver or disclose
Confidential Information to (i) such holder's directors, trustees, officers,
employees, agents, attorneys and affiliates (to the extent such disclosure
reasonably relates to the administration of the investment represented by such
holder's Notes), (ii) such holder's financial advisors and other professional
advisors who agree to hold confidential the Confidential Information
substantially in accordance with the terms of this Section 20, (iii) any other
holder of any Note, (iv) any Institutional Investor to which such holder sells
or offers to sell such Note or any part thereof or any participation therein (if
-39-
CSS Industries, Inc. Note Purchase Agreement
such Person has agreed in writing prior to its receipt of such Confidential
Information to be bound by the provisions of this Section 20), (v) any Person
from which such holder offers to purchase any security of the Company (if such
Person has agreed in writing prior to its receipt of such Confidential
Information to be bound by the provisions of this Section 20), (vi) any federal
or state regulatory authority having jurisdiction over such holder, (vii) the
National Association of Insurance Commissioners or any similar organization, or
any nationally recognized rating agency that requires access to information
about such holder's investment portfolio, or (viii) any other Person to which
such delivery or disclosure may be necessary or appropriate (w) to effect
compliance with any law, rule, regulation or order applicable to such holder,
(x) in response to any subpoena or other legal process, (y) in connection with
any litigation to which such holder is a party or (z) if an Event of Default has
occurred and is continuing, to the extent such holder may reasonably determine
such delivery and disclosure to be necessary or appropriate in the enforcement
or for the protection of the rights and remedies under such holder's Notes or
this Agreement. Each holder of a Note, by its acceptance of a Note, will be
deemed to have agreed to be bound by and to be entitled to the benefits of this
Section 20 as though it were a party to this Agreement. On reasonable request by
the Company in connection with the delivery to any holder of a Note of
information required to be delivered to such holder under this Agreement or
requested by such holder (other than a holder that is a party to this Agreement
or its nominee or any other holder that shall have previously delivered such a
confirmation), such holder will confirm in writing that it is bound by the
provisions of this Section 20.
SECTION 21. SUBSTITUTION OF PURCHASER.
Each Purchaser shall have the right to substitute any one of its
Affiliates as the purchaser of the Notes that such Purchaser has agreed to
purchase hereunder, by written notice to the Company, which notice shall be
signed by both such Purchaser and such Affiliate, shall contain such Affiliate's
agreement to be bound by this Agreement and shall contain a confirmation by such
Affiliate of the accuracy with respect to it of the representations set forth in
Section 6. Upon receipt of such notice, wherever the word "Purchaser" is used in
this Agreement (other than in this Section 21), such word shall be deemed to
refer to such Affiliate in lieu of such Purchaser. In the event that such
Affiliate is so substituted as a purchaser hereunder and such Affiliate
thereafter transfers to such Purchaser all of the Notes then held by such
Affiliate, upon receipt by the Company of notice of such transfer, wherever the
word "Purchaser" is used in this Agreement (other than in this Section 21), such
word shall no longer be deemed to refer to such Affiliate, but shall refer to
such Purchaser, and such Purchaser shall have all the rights of an original
holder of the Notes under this Agreement.
SECTION 22. MISCELLANEOUS.
Section 22.1. Successors and Assigns. All covenants and other agreements
contained in this Agreement by or on behalf of any of the parties hereto bind
and inure to the benefit of their respective successors and assigns (including,
without limitation, any subsequent holder of a Note) whether so expressed or
not.
-40-
CSS Industries, Inc. Note Purchase Agreement
Section 22.2. Payments Due on Non-Business Days. Anything in this
Agreement or the Notes to the contrary notwithstanding, any payment of principal
of or Make-Whole Amount or interest on any Note that is due on a date other than
a Business Day shall be made on the next succeeding Business Day without
including the additional days elapsed in the computation of the interest payable
on such next succeeding Business Day.
Section 22.3. Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall (to the full extent permitted by law)
not invalidate or render unenforceable such provision in any other jurisdiction.
Section 22.4. Construction. Each covenant contained herein shall be
construed (absent express provision to the contrary) as being independent of
each other covenant contained herein, so that compliance with any one covenant
shall not (absent such an express contrary provision) be deemed to excuse
compliance with any other covenant. Where any provision herein refers to action
to be taken by any Person, or which such Person is prohibited from taking, such
provision shall be applicable whether such action is taken directly or
indirectly by such Person.
Section 22.5. Counterparts. This 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 fewer than all, but together signed by all, of the
parties hereto.
SECTION 22.6. GOVERNING LAW. THIS 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 SUCH STATE.
Section 22.7. Consent to Jurisdiction and Service of Process. (a) To the
extent permitted by applicable law, the Company (i) hereby irrevocably submits
to the nonexclusive jurisdiction of the Supreme Court of the State of New York,
New York County (without prejudice to the rights of any holder of a Note to
remove to the United States District Court for the Southern District of New
York) and to the nonexclusive jurisdiction of the United States District Court
for the Southern District of New York, for the purposes of any suit, action or
other proceeding arising out of this Agreement, or the subject matter hereof or
any of the transactions contemplated hereby or thereby brought by any holder of
the Notes, (ii) hereby irrevocably agrees that all claims in respect of such
action or proceeding may be heard and determined in such New York State court
or, to the fullest extent permitted by applicable law, in such federal court,
and (iii) hereby irrevocably waives, and agrees not to assert, by way of motion,
as a defense, or otherwise, in any such suit, action or proceeding any claim
that is not personally subject to the jurisdiction of the above-named courts,
that the suit, action or proceeding is improper or that this Agreement, or the
subject matter hereof may not be enforced in or by such court.
-41-
CSS Industries, Inc. Note Purchase Agreement
(b) A final judgment obtained in respect of any action, suit or
proceeding referred to in this Section 22.7 shall be conclusive and may be
enforced in other jurisdictions by suit or judgment or in any manner as provided
by applicable law. The Company hereby consents to service of process by
registered mail, Federal Express, or similar courier at its address set forth in
Section 18, it being agreed that service in such manner shall constitute valid
service upon or its respective successors or assigns in connection with any such
action or proceeding only; provided, however, that nothing in this Section 22.7
shall affect the right of any holder of the Notes to serve legal process in any
other manner permitted by applicable law.
* * * * *
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CSS Industries, Inc. Note Purchase Agreement
The execution hereof by the Purchasers shall constitute a contract
among the Company and the Purchasers for the uses and purposes hereinabove set
forth.
Very truly yours,
CSS INDUSTRIES, INC.
By _________________________________
Name:
Title:
Accepted as of December __, 2002
CONNECTICUT GENERAL LIFE INSURANCE
COMPANY
By: CIGNA Investment, Inc.
(authorized agent)
By: ______________________________
Name:
Title:
NATIONWIDE LIFE INSURANCE COMPANY
By: ________________________________
Name:
Title:
NATIONWIDE LIFE INSURANCE COMPANY OF
AMERICA
By: ________________________________
Name:
Title:
-43-
CSS Industries, Inc. Note Purchase Agreement
NATIONWIDE LIFE AND ANNUITY
INSURANCE COMPANY
By: ________________________________
Name:
Title:
PACIFIC LIFE INSURANCE COMPANY
By: ________________________________
Name:
Title:
By: ________________________________
Name:
Title:
-44-
INFORMATION RELATING TO PURCHASERS
NAME AND ADDRESS PRINCIPAL AMOUNT OF NOTES
OF PURCHASER TO BE PURCHASED
CONNECTICUT GENERAL LIFE INSURANCE COMPANY $25,000,000
c/o CIGNA Retirement & Investment Services (Seven Notes: $9,000,000,
000 Xxxxxxxx Xxxxxx $6,100,000, $3,100,000,
Xxxxxxxx, Xxxxxxxxxxx 00000 $3,000,000, $1,800,000,
Attention: Private and Alternative Investments, H16B $1,000,000, 1,000,000)
Fax: 000-000-0000
Payments
All payments on or in respect of the Notes to be by Federal Funds Wire Transfer
to:
X. X. Xxxxxx Xxxxx Bank
BNF=CIGNA Private Placements/AC=9009001802
ABA #000000000
OBI=CSS Industries, Inc.; 4.48% Senior Notes due 2009; 125906 A* 8;
[due date and application (as among principal, premium and interest of
the payment being made); contact name and phone].
Address for Notices Related to Payments:
CIG & Co.
c/o Cigna Investments, Inc.
Attention: Securities Processing, H05P
000 Xxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
CIG & Co.
c/o Cigna Retirement & Investment Services
Attention: Private and Alternative Investments, H16B
000 Xxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Fax: 000-000-0000
with a copy to:
X. X. Xxxxxx Xxxxx Bank
Private Placement Servicing
P. O. Box 0000
Xxxxxxx Xxxxx Xxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Cigna Private Placements
Fax: 000-000-0000/1005
SCHEDULE A
(to Note Purchase Agreement)
Address for All Other Notices:
CIG & Co.
c/o Cigna Retirement & Investment Services
Attention: Private and Alternative Investments, H16B
000 Xxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Fax: 000-000-0000
Name of Nominee in which Notes are to be issued: CIG & Co.
Taxpayer I.D. Number for CIG & Co.: 00-0000000
A-2
INFORMATION RELATING TO PURCHASERS
NAME AND ADDRESS PRINCIPAL AMOUNT OF NOTES
OF PURCHASER TO BE PURCHASED
NATIONWIDE LIFE INSURANCE COMPANY $6,000,000
Xxx Xxxxxxxxxx Xxxxx (0-00-00)
Xxxxxxxx, Xxxx 00000-0000
Attention: Corporate Fixed-Income Securities
Facsimile: (000) 000-0000
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as "CSS
Industries, Inc., 4.48% Senior Notes due 2009, PPN 125906 A* 8, principal,
premium or interest") to:
The Bank of New York
ABA #000-000-000
BNF: IOC566
F/A/O Nationwide Life Insurance Company
Attention: P&I Department
PPN #125906 A* 8
Security Description: ______________________
Notices
All notices of payment on or in respect of the Notes and written confirmation of
each such payment to:
Nationwide Life Insurance Company
x/x Xxx Xxxx xx Xxx Xxxx
P. O. Xxx 00000
Xxxxxx, Xxx Xxxxxx 00000
Attention: P&I Department
With a copy to:
Nationwide Life Insurance Company
Xxx Xxxxxxxxxx Xxxxx (0-00-00)
Xxxxxxxx, Xxxx 00000-0000
Attention: Investment Accounting
All notices and communications other than those in respect to payments to be
addressed as first provided above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 00-0000000
A-3
INFORMATION RELATING TO PURCHASERS
NAME AND ADDRESS PRINCIPAL AMOUNT OF NOTES
OF PURCHASER TO BE PURCHASED
NATIONWIDE LIFE INSURANCE COMPANY OF AMERICA $2,000,000
Xxx Xxxxxxxxxx Xxxxx (0-00-00)
Xxxxxxxx, Xxxx 00000-0000
Attention: Corporate Fixed-Income Securities
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as "CSS
Industries, Inc., 4.48% Senior Notes due 2009, PPN 125906 A* 8, principal,
premium or interest") to:
The Bank of New York
ABA #000-000-000
BNF: IOC566
F/A/O Nationwide Life Insurance Company of America
Attention: P&I Department
PPN #125906 A* 8
Security Description: ______________________
Notices
All notices of payment on or in respect of the Notes and written confirmation of
each such payment to:
Nationwide Life Insurance Company of America
x/x Xxx Xxxx xx Xxx Xxxx
P. O. Xxx 00000
Xxxxxx, Xxx Xxxxxx 00000
Attention: P&I Department
With a copy to:
Nationwide Life Insurance Company of America
Xxx Xxxxxxxxxx Xxxxx (0-00-00)
Xxxxxxxx, Xxxx 00000-0000
Attention: Investment Accounting
All notices and communications other than those in respect to payments to be
addressed as first provided above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 00-0000000
A-4
INFORMATION RELATING TO PURCHASERS
NAME AND ADDRESS PRINCIPAL AMOUNT OF NOTES
OF PURCHASER TO BE PURCHASED
NATIONWIDE LIFE AND ANNUITY INSURANCE COMPANY $7,000,000
Xxx Xxxxxxxxxx Xxxxx (0-00-00)
Xxxxxxxx, Xxxx 00000-0000
Attention: Corporate Fixed-Income Securities
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as "CSS
Industries, Inc., 4.48% Senior Notes due 2009, PPN 125906 A* 8, principal,
premium or interest") to:
The Bank of New York
ABA #000-000-000
BNF: IOC566
F/A/O Nationwide Life and Annuity Insurance Company
Attention: P&I Department
PPN #125906 A* 8
Security Description: __________________
Notices
All notices of payment on or in respect of the Notes and written confirmation of
each such payment to:
Nationwide Life and Annuity Insurance Company
x/x Xxx Xxxx xx Xxx Xxxx
P. O. Xxx 00000
Xxxxxx, Xxx Xxxxxx 00000
Attention: P&I Department
With a copy to:
Nationwide Life and Annuity Insurance Company
Xxx Xxxxxxxxxx Xxxxx (0-00-00)
Xxxxxxxx, Xxxx 00000-0000
Attention: Investment Accounting
All notices and communications other than those in respect to payments to be
addressed as first provided above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 00-0000000
A-5
NAME AND ADDRESS PRINCIPAL AMOUNT OF NOTES
OF PURCHASER TO BE PURCHASED
PACIFIC LIFE INSURANCE COMPANY $10,000,000
000 Xxxxxxx Xxxxxx Xxxxx (Six Notes: $5,000,000,
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000-0000 $1,000,000, $1,000,000,
Attention: Securities Department $1,000,000, $1,000,000,
Telefacsimile: (000) 000-0000 $1,000,000)
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as "CSS
Industries, Inc., 4.48% Senior Notes due 2009, PPN 125906 A* 8, principal,
premium or interest") to:
Boston Safe Deposit and Trust Company
ABA #0000-0000-0/BOS SAFE DEP
DDA 125261
Attention: MBS Income CC: 1253
A/C Name: Pacific Life General Account/PLCF1810132
Regarding: CSS Industries, Inc., 4.48% Senior Notes due 2009,
PPN 125906 A* 8
Notices
All notices and communications to be addressed as first provided above, except
notices with respect to payments and written confirmation of each such payment,
to be addressed:
Mellon Trust
Attention: Pacific Life Accounting Team
Three Mellon Bank Center
AIM #153-3610
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Telefacsimile: (000) 000-0000
and
Pacific Life Insurance Company
Attention: Securities Administration - Cash Team
000 Xxxxxxx Xxxxxx Xxxxx
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000-0000
Telefacsimile: (000) 000-0000
Name of Nominee in which Notes are to be issued: Mac & Co.
General Taxpayer I.D. Number: 00-0000000
A-6
GENERAL PROVISIONS
Where the character or amount of any asset or liability or item of
income or expense is required to be determined or any consolidation or other
accounting computation is required to be made for the purposes of this
Agreement, the same shall be done in accordance with GAAP, to the extent
applicable, except where such principles are inconsistent with the express
requirements of this Agreement.
DEFINITIONS
As used herein, the following terms have the respective meanings set
forth below or set forth in the Section hereof following such term:
"Accounts Receivable Securitization" means the trade receivables
purchase facility between the Company and Market Street Funding Corporation on
terms pursuant to which the Company and certain of its Subsidiaries will sell or
grant a security interest in its Trade Receivables or an undivided interest
therein.
"Accounts Receivable Securitization Documents" means the Receivables
Purchase Agreement among the Company, Funding, Market Street Funding Corporation
and PNC Bank, National Association and any other documents executed in
connection with the Accounts Receivable Securitization as modified, amended or
restated from time to time.
"Affiliate" means, at any time, and with respect to any Person, (a) any
other Person that at such time directly or indirectly through one or more
intermediaries Controls, or is Controlled by, or is under common Control with,
such first Person, and (b) any Person beneficially owning or holding, directly
or indirectly, 10% or more of any class of voting or equity interests of the
Company or any Subsidiary or any corporation of which the Company and its
Subsidiaries beneficially own or hold, in the aggregate, directly or indirectly,
10% or more of any class of voting or equity interests. As used in this
definition, "Control" means the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract or otherwise.
Unless the context otherwise clearly requires, any reference to an "Affiliate"
is a reference to an Affiliate of the Company.
"Attributable Debt" means, as to any particular lease relating to a
Sale-and-Leaseback Transaction, the present value of all Lease Rentals required
to be paid by the Company or any Subsidiary under such lease during the
remaining term thereof (determined in accordance with generally accepted
financial practice using a discount factor equal to the interest rate implicit
in such lease if known or, if not known, of 10% per annum).
"Bank Loan Agreement" means that certain Loan Agreement dated as of
April 30, 2001 by and among the Company, as borrower, PNC Bank, National
Association, as administrative agent, PNC Capital Markets, Inc., as lead
arranger, Fleet National Bank and First Union National Bank, as co-documentation
agents, and the lending institutions listed therein, as the same may be further
amended, supplemented, modified, renewed or replaced from time to time, and any
agreements entered into in connection with any replacement facility.
EXHIBIT 4.4(c)
(to Note Purchase Agreement)
A-7
"Banks" means each of the banks and other financial institutions which
are parties to the Bank Loan Agreement from time to time.
"Business Day" means (a) for the purposes of Section 8.7 only, any day
other than a Saturday, a Sunday or a day on which commercial banks in New York
City are required or authorized to be closed, and (b) for the purposes of any
other provision of this Agreement, any day other than a Saturday, a Sunday or a
day on which commercial banks in New York, New York or Philadelphia,
Pennsylvania are required or authorized to be closed.
"Capital Lease" means, at any time, a lease with respect to which the
lessee is required concurrently to recognize the acquisition of an asset and the
incurrence of a liability in accordance with GAAP.
"Change of Control" is defined in Section 8.3(i).
"Closing" is defined in Section 3.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and the rules and regulations promulgated thereunder from time to time.
"Company" means CSS Industries, Inc., a Delaware corporation.
"Competitor" shall mean any Person directly or indirectly through its
Affiliates has substantial operations related to the design, manufacture,
procurement and sale to mass market retailers of seasonal, social expression
products, including any of the following: gift wrap, gift bags, boxed greeting
cards, gift tags, tissue paper, paper and vinyl decorations, classroom exchange
Valentines, decorative ribbons and bows, Halloween masks, costumes, make-ups and
novelties, Easter egg dyes and novelties and educational products, provided
that:
(a) the provision of investment advisory services by a Person
(an "Advisor") to a Plan which is owned or controlled by a Person which
would otherwise be a Competitor shall not of itself cause such Advisor
providing such services to be deemed to be a Competitor; and
(b) in no event shall an Institutional Investor be deemed a
Competitor unless such Institutional Investor controls, or is
controlled by, or is under common control with, a Person that is
substantially engaged in the design, manufacture, procurement and sale
to mass market retailers of seasonal, social expression products,
including any of the following: gift wrap, gift bags, boxed greeting
cards, gift tags, tissue paper, paper and vinyl decorations, classroom
exchange Valentines, decorative ribbons and bows, Halloween masks,
costumes, make-ups and novelties, Easter egg dyes and novelties and
educational products.
E-4.4(c)-2
"Confidential Information" is defined in Section 20.
"Consolidated Amortization Expense" means, for any Person, for any
period, the consolidated amortization expense of such Person for such period,
determined on a consolidated basis for such Person and its consolidated
Subsidiaries.
"Consolidated Capital Expenditures" means, for any Person, for any
period, the aggregate gross increase during that period in the property, plant
or equipment reflected in the consolidated balance sheet of such Person and its
consolidated Subsidiaries, but excluding expenditures made in connection with
the replacement, substitution or restoration of assets (a) to the extent
financed from insurance proceeds paid on account of the loss of or damage to the
assets being replaced or restored or (b) with awards of compensation arising
from the taking by eminent domain or condemnation of the assets being replaced;
provided, however, that "Consolidated Capital Expenditures" shall in any event
exclude the purchase price paid in connection with the acquisition of any other
Person (including through the purchase of all of the capital stock or other
ownership interests of such Person or through merger or consolidation) to the
extent allocable to property, plant and equipment.
"Consolidated Capitalization" means, for any Person, at any time, the
sum of such Person's (a) Consolidated Funded Debt plus (b) Consolidated Net
Worth, determined on a consolidated basis for such Person and its consolidated
Subsidiaries.
"Consolidated Depreciation Expense" means, for any Person, for any
period, the consolidated depreciation expense of such Person for such period,
determined on a consolidated basis for such Person and its consolidated
Subsidiaries.
"Consolidated EBITDA" means, for any Person, for any period, the
difference between (a) the sum of the amounts for such period of (i)
Consolidated Net Income, (ii) Consolidated Tax Expense, (iii) Consolidated
Interest Expense, (iv) Consolidated Amortization Expense, (v) Consolidated
Depreciation Expense and (vi) all non-cash charges resulting from the
application of Financial Accounting Standard No. 142 (with respect to clauses
(ii) through (v) of this definition, to the extent such amounts were deducted in
computing Consolidated Net Income) and (b) the amounts for such period of
after-tax net gains on sales of fixed assets and other after-tax extraordinary
gains to the extent included in Consolidated Net Income, excluding sales in the
ordinary course of business not to exceed $300,000 in the aggregate for any
fiscal year, all as determined on a consolidated basis for such Person and its
consolidated Subsidiaries.
"Consolidated Funded Debt" means, for any Person, on any date, without
duplication, the aggregate outstanding principal amount of (i) Indebtedness
recorded on a consolidated balance sheet of such Person prepared in accordance
with GAAP, (ii) the items described in clause (c) of the definition of
"Indebtedness" whether or not recorded on a consolidated balance sheet of such
Person and (iii) all Capital (as that term is defined in the Accounts Receivable
Securitization Documents) under the Accounts Receivable Securitization and all
amounts outstanding under all financing facilities relating to any other
Qualifying Securitization Transactions; in each case of such Person and its
consolidated Subsidiaries, all determined on a consolidated basis after
elimination of all intercompany items.
E-4.4(c)-3
"Consolidated Interest Expense" means, for any Person, for any period,
the total interest expense of such Person and its consolidated Subsidiaries, as
would be shown on an income statement prepared in accordance with GAAP, and in
any event including interest in respect of the Revolving Credit Loan, Discount
(as such term is defined in the Accounts Receivable Securitization Documents)
payable in respect of the Accounts Receivable Securitization and interest and
discount in respect of amounts outstanding under all financing facilities
relating to any other Qualifying Securitization Transactions whether or not such
interest is shown on such income statement.
"Consolidated Net Income" means, for any Person, for any period, the
net income (or loss) of such Person and its Subsidiaries on a consolidated basis
for such period taken as a single accounting period determined on a consolidated
basis in accordance with GAAP for such Person and its consolidated Subsidiaries;
provided, however, that there shall be excluded:
(a) the income (or loss) of any other Person (other than
Subsidiaries of such Person) in which any third Person (other than such
Person or any of its Subsidiaries) has a joint interest with such
Person, except to the extent of the amount of cash dividends or other
cash distributions actually paid to such Person or any of its
Subsidiaries by such other Person during such period (subject to clause
(c) below),
(b) the income (or loss) of any other Person accrued prior to
the date it becomes a consolidated Subsidiary of such Person or is
merged into or consolidated with such Person or any of its consolidated
Subsidiaries or all or substantially all of such other Person's assets
are acquired by such Person or any of its consolidated Subsidiaries,
except (with respect to a Subsidiary previously accounted for on the
equity basis of accounting) to the extent of the income (or loss)
actually paid to such Person or any of its Subsidiaries by such other
Person relating to such period in cash, and
(c) the income of any consolidated Subsidiary of such Person
to the extent that the declaration or payment of dividends or similar
distributions by that consolidated Subsidiary of that income is not at
the time permitted by operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that consolidated Subsidiary,
except to the extent of the cash dividends or cash distributions
actually paid to such Person or any of its other Subsidiaries by such
consolidated Subsidiary during such period.
"Consolidated Net Worth" means, as of the date of determination, all
items which, in accordance with GAAP, would be included under shareholders'
equity on a consolidated balance sheet of the Company and its Subsidiaries, as
of the end of the immediately preceding fiscal quarter of the Company.
"Consolidated Rental Payments" means, for any period, the aggregate
amount of all rents paid or to be incurred under all operating leases of the
Company and the Subsidiaries of the Company as lessees (net of sublease income)
during such period.
E-4.4(c)-4
"Consolidated Tax Expense" means, for any Person, for any period, the
consolidated income tax expense and/or benefit of such Person for such period,
determined on a consolidated basis for such Person and its consolidated
Subsidiaries, less any tax expense associated with gains on sales (excluding
sales in the ordinary course of business) of fixed assets and other
extraordinary gains to the extent such gains are included in Consolidated Net
Income.
"Consolidated Total Assets" means, for any Person, all of the assets of
such Person as would be shown on such Person's balance sheet prepared in
accordance with GAAP, determined on a consolidated basis for such Person and its
consolidated Subsidiaries.
"Control Event" is defined in Section 8.3(j).
"Current Maturities of Funded Indebtedness" means, at any time and with
respect to any item of Funded Indebtedness, the portion of such Funded
Indebtedness outstanding at such time which by the terms of such Funded
Indebtedness or the terms of any instrument or agreement relating thereto is due
on demand or within one year from such time (whether by sinking fund, other
required prepayment or final payment at maturity) and is not directly or
indirectly renewable, extendible or refundable at the option of the obligor
under an agreement or firm commitment in effect at such time to a date one year
or more from such time.
"Default" means an event or condition the occurrence or existence of
which would, with the lapse of time or the giving of notice or both, become an
Event of Default.
"Default Rate" means that rate of interest that is the greater of (i)
2% per annum above the rate of interest stated in clause (a) of the first
paragraph of the Notes or (ii) 2% over the rate of interest publicly announced
by Citibank, N.A. in New York, New York as its "base" or "prime" rate.
"Environmental Laws" means any and all federal, state, local, and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or
governmental restrictions relating to pollution and the protection of the
environment or the release of any materials into the environment, including but
not limited to those related to hazardous substances or wastes, air emissions
and discharges to waste or public systems.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the rules and regulations promulgated thereunder
from time to time in effect.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that is treated as a single employer together with the Company
under section 414 of the Code.
"Event of Default" is defined in Section 11.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
E-4.4(c)-5
"Fixed Charge Coverage Ratio" means, at any time, the ratio of (a) the
sum of the Company's (i) Consolidated EBITDA for the period of four consecutive
fiscal quarters ending on, or most recently ended prior to, such time, less (ii)
Consolidated Capital Expenditures for such period, plus (iii) Consolidated
Rental Payments for such period to (b) the sum of (i) the current portion of
principal on all long-term Indebtedness of the Company and its Subsidiaries
(excluding the Revolving Credit Loan, the Accounts Receivable Securitization and
any other Qualifying Securitization Transactions) for such period, plus (ii)
Consolidated Interest Expense of the Company (including interest in respect of
the Revolving Credit Loan, Discount (as defined in the Accounts Receivable
Securitization Documents) payable in respect of the Accounts Receivable
Securitization and interest in respect of amounts outstanding under all
financing facilities relating to any other Qualifying Securitization
Transactions) for such period, plus (iii) Consolidated Tax Expense of the
Company for such period, plus (iv) Consolidated Rental Payments for such period.
"Funded Indebtedness" means, with respect to any Person, all
Indebtedness of such Person which by its terms or by the terms of any instrument
or agreement relating thereto matures, or which is otherwise payable or unpaid,
one year or more from, or is directly or indirectly renewable or extendible at
the option of the obligor in respect thereof to a date one year or more
(including, without limitation, an option of such obligor under a revolving
credit or similar agreement obligating the lender or lenders to extend credit
over a period of one year or more) from, the date of the creation thereof,
provided that Funded Indebtedness shall include, as at any date of
determination, Current Maturities of Funded Indebtedness.
"Funding" means CSS Funding LLC, a Delaware limited liability company
and a wholly-owned, indirect, bankruptcy-remote Subsidiary of the Company.
"GAAP" means generally accepted accounting principles as in effect from
time to time in the United States of America.
"Governmental Authority" means
(a) the government of
(i) the United States of America or any State or
other political subdivision thereof, or
(ii) any jurisdiction in which the Company or any
Subsidiary conducts all or any part of its business, or which
asserts jurisdiction over any properties of the Company or any
Subsidiary, or
(b) any entity exercising executive, legislative, judicial,
regulatory or administrative functions of, or pertaining to, any such
government.
E-4.4(c)-6
"Guarantors" means each of (i) The Paper Magic Group, Inc., a
Pennsylvania corporation, (ii) Berwick Delaware, Inc., a Delaware corporation,
(iii) Berwick Offray LLC, a Pennsylvania limited liability company, (iv) Xxxx,
Inc., a Tennessee corporation, (v) Xxxx Delaware, Inc., a Delaware corporation,
(vi) Lion Ribbon Company, Inc., a Delaware corporation, (vii) Philadelphia
Industries, Inc., a Delaware corporation, (viii) LLM Holdings, Inc., a Delaware
corporation, (ix) The Paper Magic Group, Inc., a Delaware corporation, (x) Don
Post Studios, Inc., a Delaware corporation, (xi) Paper Magic Group (Hong Kong)
Limited, a Hong Kong limited company, (xii) Crystal Creative Products, Inc., an
Ohio corporation, and any Person that is required to execute and deliver a
Guaranty Agreement pursuant to Section 9.8 after the date of the Closing.
"Guaranty Agreements" means the Subsidiary Guaranty Agreements of the
Guarantors in favor of the Noteholders, each in the form attached hereto as
Exhibit 2, including, without limitation, Subsidiary Guaranty Agreements
executed and delivered pursuant to Section 9.8 after the date of the Closing.
"Hazardous Material" means any and all pollutants, toxic or hazardous
wastes or any other substances that might pose a hazard to health or safety, the
removal of which may be required or the generation, manufacture, refining,
production, processing, treatment, storage, handling, transportation, transfer,
use, disposal, release, discharge, spillage, seepage, or filtration of which is
or shall be restricted, prohibited or penalized by any applicable law
(including, without limitation, asbestos, urea formaldehyde foam insulation and
polychlorinated biphenyls).
"Hedge Agreement" means any contract or agreement providing for any
rate swap transaction, basis swap, forward rate transaction, commodity swap,
commodity option, equity or equity index swap, equity or equity index option,
bond option, interest rate option, foreign exchange transaction, cap
transaction, floor transaction, collar transaction, currency swap transaction,
cross-currency rate swap, currency swap or any other similar transaction entered
into to protect against the risk of fluctuation in interest rates or foreign
exchange rates.
"holder" means, with respect to any Note, the Person in whose name such
Note is registered in the register maintained by the Company pursuant to Section
13.1.
"Indebtedness" means, with respect to any Person, without duplication:
(a) all indebtedness of such Person for borrowed money,
(b) the deferred purchase price of assets or services which
in accordance with GAAP would be shown as a liability on the balance
sheet of such Person,
(c) the face amount of all outstanding letters of credit
issued for the account of such Person and, without duplication, all
drafts drawn thereunder,
(d) all Indebtedness of a second Person secured by any Lien
on any Property owned by such first Person, whether or not such
Indebtedness has been assumed by such first Person, limited to the fair
market value of the Property subject to such Lien,
(e) all capitalized lease obligations of such Person,
E-4.4(c)-7
(f) all obligations of such Person to pay a specified
purchase price for goods or services whether or not delivered or
accepted (i.e., take-or-pay and similar obligations),
(g) all obligations of such Person under interest rate
agreements,
(h) without duplication, all contingent obligations of such
Person required to be reflected as a liability on the balance sheet of
such Person prepared in accordance with GAAP,
(i) all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments required to be reflected
as a liability on the balance sheet of such Person prepared in
accordance with GAAP,
(j) all obligations of such Person upon which interest
charges are customarily paid, and
(k) current obligations of such Person to purchase, redeem,
retire, defease or otherwise acquire for value any capital stock of
such Person or any warrants, rights or options to acquire such capital
stock (with redeemable preferred stock being valued at the greater of
its voluntary or involuntary liquidation preference plus accrued and
unpaid dividends);
provided, however, that Indebtedness shall not include trade payables, accrued
expenses, accrued dividends, deferred compensation, accrued income taxes,
deferred income taxes and minority interests in Subsidiaries.
"Institutional Investor" means (a) any original purchaser of a Note,
(b) any holder of a Note holding more than 10% of the aggregate principal amount
of the Notes then outstanding, and (c) any bank, trust company, savings and loan
association or other financial institution, any pension plan, any investment
company, any insurance company, any broker or dealer, or any other similar
financial institution or entity, regardless of legal form.
"Intercreditor Agreement" is defined in Section 2(c).
"Investment" means any investment, made in cash or by delivery of
property, by the Company or any of its Subsidiaries (i) in any Person, whether
by acquisition of stock, Indebtedness or other obligation or Security, or by
loan, guarantee, advance, capital contribution or otherwise, or (ii) in any
property; provided, however, that non-speculative Hedge Agreements of the
Company or any of its Subsidiaries shall not be considered "Investments."
"Lease Rentals" means, with respect to any period, the sum of the
rental and other obligations required to be paid during such period by the
Company or any Subsidiary as lessee under all leases of real or personal
property (other than Capital Leases), excluding any amount required to be paid
by the lessee (whether or not therein designated as rental or additional rental)
on account of maintenance and repairs, insurance, taxes, assessments, water
rates and similar charges, provided that, if at the date of determination, any
such rental or other obligations (or portion thereof) are contingent or not
otherwise definitely determinable by the terms of the related lease, the amount
of such obligations (or such portion thereof) (i) shall be assumed to be equal
to the amount of such obligations for the period of 12 consecutive calendar
months immediately preceding the date of determination or (ii) if the related
lease was not in effect during such preceding 12-month period, shall be the
amount estimated by a Senior Financial Officer of the Company on a reasonable
basis and in good faith.
E-4.4(c)-8
"Leverage Ratio" means, at any time, the ratio of (a) Consolidated
Funded Debt of the Company as of the end of the immediately preceding fiscal
quarter to (b) Consolidated Capitalization of the Company as of the end of such
immediately preceding fiscal quarter.
"Lien" means, with respect to any Person, any mortgage, lien, pledge,
charge, security interest or other encumbrance, or any interest or title of any
vendor, lessor, lender or other secured party to or of such Person under any
conditional sale or other title retention agreement or Capital Lease, upon or
with respect to any property or asset of such Person (including in the case of
stock, stockholder agreements, voting trust agreements and all similar
arrangements).
"Make-Whole Amount" is defined in Section 8.7.
"Material" means material in relation to the business, operations,
affairs, financial condition, assets, properties, or prospects of the Company
and its Subsidiaries taken as a whole.
"Material Adverse Effect" means a material adverse effect on (a) the
business, operations, affairs, financial condition, assets or properties of the
Company and its Subsidiaries taken as a whole, or (b) the ability of the Company
to perform its obligations under this Agreement and the Notes, or (c) the
validity or enforceability of this Agreement, any Guaranty Agreement, the
Intercreditor Agreement or the Notes.
"Memorandum" is defined in Section 5.3.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Multiemployer Plan" means any Plan that is a "multiemployer plan" (as
such term is defined in section 4001(a)(3) of ERISA).
"Notes" is defined in Section 1.
"Officer's Certificate" means a certificate of a Senior Financial
Officer or of any other officer of the Company whose responsibilities extend to
the subject matter of such certificate.
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA or any successor thereto.
"Permitted Liens" is defined in Section 10.6(a).
E-4.4(c)-9
"Person" means an individual, partnership, corporation, limited
liability company, association, trust, unincorporated organization, or a
government or agency or political subdivision thereof.
"Plan" means an "employee benefit plan" (as defined in section 3(3) of
ERISA) that is or, within the preceding five years, has been established or
maintained, or to which contributions are or, within the preceding five years,
have been made or required to be made, by the Company or any ERISA Affiliate or
with respect to which the Company or any ERISA Affiliate may have any liability.
"property" or "properties" means, unless otherwise specifically
limited, real, personal or mixed property of any kind, tangible or intangible,
xxxxxx or inchoate.
"QPAM Exemption" means Prohibited Transaction Class Exemption 84-14
issued by the United States Department of Labor.
"Qualifying Securitization Transaction" means a bona fide
securitization transaction effected under terms and conditions customary in the
capital markets and consisting of sales of Trade Receivables by the Company or a
Restricted Subsidiary to a Special Purpose Company which in turn sells and/or
pledges such Trade Receivables (or undivided interests therein) to a commercial
paper conduit or other financing source (whether with or without recourse to the
Special Purpose Company), and as to which each of the following conditions shall
be satisfied: (i) such sales to the Special Purpose Company are not accounted
for under GAAP as secured loans, (ii) such transactions are, in the good faith
opinion of a Senior Financial Officer of the Company, for fair value and in the
best interests of the Company and its Restricted Subsidiaries, and (iii)
recourse to the Company or any Restricted Subsidiary in connection with any such
sale of Trade Receivables is limited to repurchase, substitution or
indemnification obligations customarily provided for in asset securitization
transactions and arising from breaches of representations or warranties made by
the Company or such Restricted Subsidiary in connection with such sale.
"Related Industries" means businesses and industries fundamentally
related to the business of the Company and its Restricted Subsidiaries as
described in the Memorandum.
"Required Holders" means, at any time, the holders of at least 51% in
principal amount of the Notes at the time outstanding (exclusive of Notes then
owned by the Company or any of its Affiliates).
"Responsible Officer" means any Senior Financial Officer and any other
officer of the Company with responsibility for the administration of the
relevant portion of this Agreement.
"Restricted Subsidiary" means, at any time, any of (a) the Guarantors
which are organized under the laws of the United States or any State thereof,
(b) Paper Magic Group (Hong Kong) Limited, a Hong Kong limited company, and (c)
any other Subsidiary of the Company (i) which is organized under the laws of the
United States or any State thereof, (ii) which conducts the major portion of its
business in, and makes the major portion of its sales to Persons located in, the
United States, and (iii) which is either (A) not designated as an Unrestricted
Subsidiary on the date of the Closing in Schedule 5.4 or in the most recent
notice with respect thereto delivered pursuant to Section 9.7(b), or (B)
designated a Restricted Subsidiary in the most recent notice with respect
thereto delivered pursuant to Section 9.7(a).
E-4.4(c)-10
"Revolving Credit Loan" means the revolving line of credit established
for the benefit of the Company under the Bank Loan Agreement.
"Sale-and-Leaseback Transaction" means a transaction or series of
transactions pursuant to which the Company or any Subsidiary shall sell or
transfer to any Person (other than the Company or a Subsidiary) any property,
whether now owned or hereafter acquired, and, as part of the same transaction or
series of transactions, the Company or any Subsidiary shall rent or lease as
lessee (other than pursuant to a Capital Lease), or similarly acquire the right
to possession or use of, such property or one or more properties which it
intends to use for the same purpose or purposes as such property.
"S&P" means Standard & Poor's Ratings Group, a division of McGraw Hill,
Inc.
"SEC" means the Securities and Exchange Commission or any Governmental
Authority succeeding to any of its functions.
"Security" has the meaning set forth in Section 2(l) of the Securities
Act of 1933, as amended.
"Securities Act" means the Securities Act of 1933, as amended from time
to time.
"Senior Financial Officer" means the chief financial officer,
treasurer, chief accounting officer or vice president of finance of the Company.
"Senior Funded Indebtedness" means all Funded Indebtedness of the
Company which is not expressed to be subordinate to or junior in rank to any
other Indebtedness of the Company.
"Significant Subsidiary" means at any time any Subsidiary that would at
such time constitute a "significant subsidiary" (as such term is defined in
Regulation S-X of the SEC in effect on the date of the Closing) of the Company.
"Special Purpose Company" means any Person created in connection with a
Qualifying Securitization Transaction, provided, that any Special Purpose
Company shall not own any property or conduct any activities other than those
properties and activities which are reasonably required to be owned and
conducted in connection with the involvement of such Person in Qualifying
Securitization Transactions.
E-4.4(c)-11
"Subsidiary" means, as to any Person, any corporation, association or
other business entity in which such Person or one or more of its Subsidiaries or
such Person and one or more of its Subsidiaries owns sufficient equity or voting
interests to enable it or them (as a group) ordinarily, in the absence of
contingencies, to elect a majority of the directors (or Persons performing
similar functions) of such entity, and any partnership or joint venture if more
than a 50% interest in the profits or capital thereof is owned by such Person or
one or more of its Subsidiaries or such Person and one or more of its
Subsidiaries (unless such partnership can and does ordinarily take major
business actions without the prior approval of such Person or one or more of its
Subsidiaries). Unless the context otherwise clearly requires, any reference to a
"Subsidiary" is a reference to a Subsidiary of the Company.
"Subsidiary Stock" means, with respect to any Person, the stock (or any
options or warrants to purchase stock or other Securities exchangeable for or
convertible into stock) of any Subsidiary of such Person.
"Trade Receivables" means indebtedness and other obligations owed to
the Company or any Subsidiary, whether constituting accounts, chattel paper,
instruments or general intangibles, arising in connection with the sale of goods
and services by the Company or such Subsidiary to commercial customers,
including, without limitation, the obligation to pay any finance charges or fees
with respect thereto, and agreements relating thereto, collateral securing the
foregoing, books and records relating thereto and all proceeds thereof.
"Unrestricted Subsidiary" means any Subsidiary which is not a
Restricted Subsidiary.
"Voting Stock" means Securities of any class or classes, the holders of
which are ordinarily, in the absence of contingencies, entitled to elect a
majority of the corporate directors (or Persons performing similar functions).
"Wholly-Owned Restricted Subsidiary" means, at any time, any Restricted
Subsidiary one hundred percent (100%) of all of the equity interests (except
directors' qualifying shares) and voting interests of which are owned by any one
or more of the Company and the Company's other Wholly-Owned Restricted
Subsidiaries at such time.
E-4.4(c)-12
