Exhibit 99.1
Execution Version
AMENDMENT NO. 4 TO CREDIT AGREEMENT
THIS
AMENDMENT
NO. 4
TO CREDIT
AGREEMENT
(this
"Amendment No. 4")
is
made this 9th day
of
July, 2018 by
and among CSS
INDUSTRIES
,
INC.,
a
Delaware
corporation (together
with its
successors and/or assigns,
"Borrower"),
the
banks
and other
financial institutions
signatory
hereto
(together
with their
successors and/or assigns, collectively,
the
"Lenders";
and
each
individually,
a
"Lender"),
and
WELLS FARGO BANK, NATIONAL ASSOCIATION,
a
national banking
association, as administrative agent for
the Lenders hereunder
(in such capacity,
together
with
its
s
uccessors
and/or a
s
signs
in
such
capacity, the
"Administrative Agent")
.
BACKGROUND
The
Borrower, Guarantors, Administrative
Agent and
Lenders are parties to that
certain
Credit Agreement dated March 17,
2011, as amended
by that
certain Amendment
No. 1
to Credit
Agreement
("Amendment
No. 1")
dated as
of
December 17,
2013,
by that certain Amendment No. 2 to Credit Agreement
("Amendment
No. 2")
dated
as
of March 24,
2015, and by that certain Amendment No. 3 to Credit Agreement
("Amendment
No. 3")
dated as of October 17, 2017
(a
s
amended hereby
and as
may be
further amended or otherwise
modified
from time
to time, the
"Credit Agreement")
.
The Borrower has requested,
and
the
Administrative
Agent
and
Lenders have
agreed, subject
to the terms
and
conditions hereof,
to amend
the
Credit Agreement
in
certain
respects
as set forth
herein.
In consideration
of
the
foregoing
premises
and
the agreements hereinafter
set forth, and
intending
to
be legally bound hereby, the parties hereto
agree as follow
s:
A.
Definitions
.
Except as
expressly
set forth
herein,
all capitalized
terms
used and
not
otherwise
defined herein have the respective meanings
ascribed thereto
in the
Credit
Agreement (including defined terms added
or
modified hereby).
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B.
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Amendments to Credit Agreement
.
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1.
New Defined Terms
. The
following
terms
are
hereby added to
the Credit Agreement in alphabetical order
in Section 1.1
(and
used
with such
meanings
in
this
Amendment
No. 3):
"Amendment No.
4"
means that
certain
Amendment No. 4 to
Credit
Agreement
among
Borrower, Lenders
and Administrative Agent
dated
as
of July 9, 2018.
"Amendment No.
4 Effective
Date"
shall
have the meaning
set forth
in
Amendment
No. 4.
“McCall’s Integration Costs” shall mean
one-time costs and expenses, including fees and expenses of consultants, for severance, systems integrations and other quantifiable costs incurred in connection with the integration and consolidation of operations of The McCall Pattern Company and certain of its affiliated companies with Borrower.
“Simplicity Acquisition and Integration Costs” shall mean nonrecurring cash expenses for investment banking, legal, accounting and similar expenses incurred in connection with the Borrower’s acquisition of substantially all of the assets and business of Simplicity Creative Group from Wilton Brands LLC on November 3, 2017 and one-time costs and expenses, including fees and expenses of consultants, for severance, systems integrations and other quantifiable costs incurred in connection with the integration and consolidation of operations of Simplicity Creative Group with Borrower.
2.
Amended and
Re
stated
Defined Term
. The following definition
se
t
forth in Section 1.1 of the Credit Agreement is
hereby
amended
a
nd
restated in its entirety to read as fo
ll
ows:
"Consolidated EBIT"
means
,
for any period
,
t
he
amount of (all as
determined in
accordance with GAAP)
:
(a)
Consolidated Net Income for
s
uch period
,
plu
s
(b)
an amount
that
,
in the
determination
of Consolidated
Net
Income for
suc
h
period,
has
been
deducted
for
(wit
hout
duplication)
(and
in the
case of clauses (iii), (iv), (vi), (vii) and (viii), only to the extent such non-cash charges or losses are
not
reserved for future cash charges or losses and are otherwise not
reasonably
expected
to become
cash charges or losses in a
lat
er
period):
(i)
Consolidated Interest Expense;
(ii)
total federal,
state
and
local
income, business privilege
an
d
s
imilar
tax expense;
(iii)
any non
-
cash impairment charges relating
to intangible
assets;
(iv)
any
non
-cas
h impairment
charges relating to tangible fixed assets;
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(v)
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Consolidated Stock Compensation Expense;
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(vi)
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a
ny
non-cash restructuring charges;
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(vii)
the non-cash component of the cost of goods sold resulting from any inventory fair value adjustment made in
connection with the consummation of any Permitted Acquisition;
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(viii)
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any other non-cash
lo
ss; and
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(ix)
for any four-quarter period ending on or after June 30, 2018 and on or before December 31, 2018, Simplicity Acquisition and Integration Costs and McCall’s Integration Costs;
minus
(c)
an amount that,
in the
determination of Consolidated Net Income for such period, has been included for
(wit
hout duplication
):
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(i)
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federal,
state
and
local
income
and
s
imilar tax benefit
s;
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(ii)
any aggregate
net
gain arising from
the
sa
le,
exchange or other
dispo
s
iti
o
n
of capital assets (including any fixed assets, whether
tangible
or
intangible
,
all
inventory
so
ld in
conjunction
with the di
s
position
of
fixed
assets and all
sec
urities) by th
e
Borrow
e
r and it
s
Sub
s
idiarie
s;
and
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(iii)
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any
other
non
-cas
h
gain.
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3.
Amend
e
d Defined Term
s
.
The following
defini
t
ion
set
forth
in
Section
1
.
1
of
the
Credit Agreement is amended
as
follows:
(a)
Clause (a) of
the defin
e
d term
"Permitted
Acquisition
"
i
s
amended to read as
follow
s
:
(a) (i) consideration for all such acquisitions from the Amendment No. 4 Effective Date until December 31, 2018 shall not exceed $20,000,000, (ii) consideration for any one such acquisition on or after January 1, 2019 shall not exceed $40,000,000, (iii) consideration for all such acquisitions on or after January 1, 2019 shall not exceed $50,000,000 during any fiscal year and (iv) consideration for all such acquisitions during the term of this Agreement shall not exceed $250,000,000 in the aggregate.
C.
Representations and Warranties
.
The Borrower hereby
represents and warrants to
the
Lenders, as to themselves and their
Subsidiaries,
as follows:
1.
Repre
se
ntation
s
.
As of the
Amendment No.
4 Effective
Date
(defined
below)
and after giving effect
thereto
,
the Borrower represent
s
and warrants as follows: (i)
the representations
and warranties
se
t forth in
Article
III
of the Credit Agreement are true and correct
in
all
material re
spec
ts
,
except for any representation or warranty
made
as of an earlier
date
,
which representation and
warranty
s
hall remain true
and correct as of such earlier date; (ii) there
is no
Event of
Default
or
Default under
the Credit Agreement, as amended
hereby,
which
has
not
been
cured or waived; and (iii)
no Material
Adverse Effect
ha
s
occurred or
is
continuing.
2.
Power
and
Authority.
The Borrower has the power and
authority under
the laws
of
its juri
s
diction
of formation and
under its
formation
documents
to
e
nter into
and
perform this
Amendment
No.
4 and
the other documents
and agreements required
hereunder
(collectively,
the
"Amendment Documents");
all
necessary
actions (corporate or otherwise) for the execution and
performance by the Borrower
of
the
Amendment
Documents have been
taken; and each of
the
Amendment
Document
s
and the Credit Agreement,
as
amended, constitute
the
valid and
binding
obligations of
the Borrower,
enforceable
in accordance with
its respective
terms.
3.
No Violations of
Law
or Agreements
. The
execution
and
performance
of the Amendment
Document
s
by
the Borrower and
the
Guarantor
s
party
thereto
will not: (i) violate any provisions of any
law
or
regulation,
federal, state,
local,
or foreign, or any formation
document
of
the
Borrower or (ii) result
in
any
breach
or violation of, or constitute a
default
or
require
the obtaining of any
con
se
nt under
,
any material agreement or
in
s
trument by
which the
Borrower
or
it
s
property may be bound.
D.
Conditions
to the
Effectiveness
of
Amendment No.
4.
This Amendment
No.
4 shall
be
effective
upon
the
date
of the Administrative
Agent's
receipt of
the
following in form and
s
ubstance reasonably
satisfactory
to the
Administrative Agent (the “
Amendment
No.
4 Effective Date"):
1.
Amendment No.
4
. This Amendment No. 4
duly
executed and
delivered by
each of
the Borrower,
the
Lender
s,
and the Administrative Agent.
2.
Acknowledgement
of Guarantors.
The Consent and
Reaffirmation
,
duly
executed and delivered
by
each of
the Guarantors, in the
form attached
hereto
as
Exhibit
A
3.
Payment of fee.
Payment by Borrower to administrative Agent for the benefit of Lenders of an Amendment fee in the amount of Thirty Thousand Dollars ($30,000).
4.
Payment of
the
Administrative Agent's Legal and Other Fees
. Payment by
Borrower
of all
rea
so
nable
fees and expenses (including without
limitation reasonable
fees and expenses of counsel)
incurr
ed
by
the Administrative Agent in connection with the preparation
,
execution and delivery of this Amendment
No.
4.
5.
Other
Documents
.
Such additional
document
s
as the Administrative Agent may reasonably request.
E.
Miscellaneous
.
1.
The Borrower
hereby
(i) affirms all the provisions of the Credit Agreement, as amended by this Amendment
No.
4; and (ii)
agrees
that
the terms and conditions of the Credit Agreement
sha
ll
continue in full force and effect, as amended
hereby
.
2.
The Borrower agrees to
pay
the Administrative Agent for all reasonable fees and expenses (including without
limitation
reasonable fees
an
d
expenses of counsel) incurred by the Administrative Agent and
it
s
counsel
in
connection with the
due diligence
review, the preparation, execution and
delivery
of this
Amendment No.
4, and the future administration by the Administrative Agent of this Amendment
No.
4 and the transactions contemplated hereby.
3.
This Amendment No. 4
sha
ll
be governed by and construed
in
accordance with
the laws
of the Commonwealth of Pennsylvania, without regard to conflicts of
law
or
choice of
law
principles.
4.
This Amendment No. 4
may
be executed
in
any number of counterparts and
by
different
parties h
ereto
in
separate
counterparts
,
each of which when
so
executed
sha
ll
be deemed to
be
an original and
s
hall
be binding upon all parties, their
s
ucce
ssors
and assigns, and all of which taken together shall constitute one and the same agreement.
5.
This Amendment No. 4, together with the Amendment No. 1,
Amendment No. 2, Amendment No. 3,
the
Credit Agreement, and the other Loan
Document
s,
represents the entire agreement of the parties hereto and thereto, and supersedes all prior agreements
and
und
erstandings,
oral and written, if any,
including
any commitment
letter
s
or correspondence relating to
the
Amendment No. 4, the other Loan Documents or the transactions contemplated
herein
or therein.
6.
The execution,
delivery
and
performance
of this Amendment
No
.
4
s
hall not
operate as a waiver of any
right, power
or
remedy
of the Administrative Agent, any Issuing Lender, or
Lenders
under the Credit Agreement and the agreements and documents executed in connection
therewith
or constitute a waiver of any
provi
s
ion
thereof.
(Signature Pages to
Follow)
IN WITNESS WHEREOF, the
undersigned
have executed this Amendment No. 4 the day and year first written above
.
BORROWER
:
CSS INDUSTRIES, INC.,
a Delaware corporation
By:
/s/ John M. Roselli
Name: John M. Roselli
Title: Executive Vice President- Finance and Chief Financial Officer
LENDERS
:
WELLS FARGO BANK, NATIONAL ASSOCIATION,
as Lender
By
:
/s/ Stephen T. Dorosh
Name
: Stephen T. Dorosh
Title
: Senior Vice President
CITIZENS BANK OF PENNSYLVANIA,
as
Lender
By
:
/s/ Pamela L. Hansen
Name
:
Pamela L. Hansen
Title: Senior Vice President
ADMINISTRATIVE AGENT
:
WELLS FARGO BANK, NATIONAL ASSOCIATION,
as Administrative Agent
By
:
/s/ Stephen T. Dorosh
Name: Stephen T. Dorosh
Title
:
Senior Vice President
EXHIBIT A
CONSENT AND REAFFIRMATION
Each of
the under
sig
ned hereby
(i)
acknowledge
s
receipt
of a copy
of the foregoing
Amendment
No. 4 to
Credit
Agreement
(the
"Amendment");
(ii)
consents
to the Borrower's
execution
and delivery
of
the Amendment;
(iii) agrees
to be bound by the Amendment
;
(iv)
affirms
that nothing
contained
in
the
Amendment
s
hall modify in
any
respect whatsoever
any
Loan Document to which it is a party except
as
expressly
se
t forth in the Amendment; and
(v)
reaffirms that
such
Loan Documents
shall continue
to
remain
in full
force
and
effect. Although each of
the under
s
igned has been informed
of
the matters
se
t
forth
herein and ha
s
acknowledged and agreed to
s
ame
,
each of
the under
s
igned understand
s
that
Administrative Agent
and the Lenders have no
obligation
to inform
s
uch undersigned
of
s
uch matters in the future
or
to
seek
the under
s
igned's acknowledgement or agreement to
future amendments, waivers
or con
se
nts,
and
nothing herein
shall
create
such a
duty.
Capitalized terms
have the meanings as
s
igned to them in the Amendment.
IN WITNESS WHEREOF, each of the undersigned has duly executed this Consent and Reaffirmation on and as of the date of the Amendment.
GUARANTORS
:
PAPER MAGIC GROUP, INC.
a Pennsylvania corporation
By:
/s/ John M. Roselli
Name: John M. Roselli
Title: Executive Vice President- Finance
BERWICK OFFRAY
LLC,
a
Pennsylvania limited liability company
By:
/s/ John M. Roselli
Name: John M. Roselli
Title: Executive Vice President- Finance
CLEO INC,
a Tennessee corporation
By:
/s/ John M. Roselli
Name: John M. Roselli
Title: Executive Vice President- Finance
PHILADELPHIA INDUSTRIES
,
INC
.
,
a Delaware corporation
By:
/s/ Steven W. Eck
Name: Steven W. Eck
Title: Vice President - Finance
LION RIBBON COMPANY, LLC
a
Delaware limited liability company
By:
/s/ John M. Roselli
Name: John M. Roselli
Title: Executive Vice President- Finance
Signature Page to Consent and Reaffirmation
C.R. GIBSON, LLC,
a Delaware limited
liability
company
By:
/s/ John M. Roselli
Name: John M. Roselli
Title: Executive Vice President- Finance
W.J.S. FURNITURE, INC.,
a Delaware corporation
By:
/s/ John M. Roselli
Name: John M. Roselli
Title: Executive Vice President- Finance
PAPER MAGIC DISTRIBUTION, Inc.
a Delaware corporation
By:
/s/ John M. Roselli
Name: John M. Roselli
Title: Executive Vice President- Finance
CRG DISTRIBUTION, INC.,
a Delaware corporation
By:
/s/ John M. Roselli
Name: John M. Roselli
Title: Executive Vice President- Finance
LR TEXAS CORP.,
a Texas corporation
By:
/s/ John M. Roselli
Name: John M. Roselli
Title: Executive Vice President- Finance
Signature Page to Consent and Reaffirmation
BOC DISTRIBUTION, INC.,
a Delaware corporation
By:
/s/ John M. Roselli
Name: John M. Roselli
Title: Executive Vice President- Finance
BERWICK MANAGEMENT LLC,
a Pennsylvania limited liability company
By: Berwick Offray LLC
By:
/s/ John M. Roselli
Name: John M. Roselli
Title: Executive Vice President- Finance
THE MCCALL PATTERN COMPANY, INC.,
a Delaware corporation
By:
/s/ John M. Roselli
Name: John M. Roselli
Title: Executive Vice President- Finance
MCCALL DISTRIBUTION, INC.,
a Delaware corporation
By:
/s/ John M. Roselli
Name: John M. Roselli
Title: Executive Vice President- Finance
SIMPLICITY CREATIVE CORP (f/k/a STITCH ACQUISITION CORP.),
a Delaware corporation
By:
/s/ John M. Roselli
Name: John M. Roselli
Title: Executive Vice President- Finance
Signature Page to Consent and Reaffirmation