Exhibit 10.12
REVOLVING CREDIT NOTE
$8,000,000.00 dated as of August 26, 1998
FOR VALUE RECEIVED, the undersigned, COMMEMORATIVE BRANDS, INC., a
Delaware corporation (the "Borrower"), by this promissory note (hereinafter
called "this Note"), absolutely and unconditionally promises to pay to the
order of BANKBOSTON, N.A., a national banking association organized and
existing under the laws of The United States of America (together with its
successors in title and assigns, the "Lender"), at its head office at ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, on March 31, 1999 (the "Maturity
Date"), the principal sum of EIGHT MILLION DOLLARS (the "Maximum Amount"), or
so much thereof as shall have been advanced by the Lender to the Borrower by
way of loans under this Note and shall remain outstanding, and to pay
interest on the principal sum outstanding hereunder from time to time from
the date hereof until the said principal sum or the unpaid portion thereof
shall have become due and payable as hereinafter provided. This Note
evidences, among other things, the obligation of the Borrower to repay loans
made hereunder by the Lender to the Borrower.
From time to time prior to the maturity of this Note (whether upon
demand, acceleration or otherwise) the Lender shall, upon request by the
Borrower, make loans to the Borrower subsequent to the date hereof, and the
Borrower may borrow, repay and reborrow the funds available hereunder,
PROVIDED that (a) the aggregate principal amount of all loans outstanding
hereunder shall in no event exceed the Maximum Amount, (b) payments may only
be made to the extent that they do not violate the provisions of the Credit
Agreement (as hereinafter defined) and (c) the Lender shall have no
obligation to make any loans if an Event of Default (as hereinafter defined)
has occurred, other than an Event of Default which is cured by using the
proceeds borrowed under this Note to make a payment of the obligations under
the Credit Agreement. All loans made by the Lender to the Borrower pursuant
to this Note and all repayments of principal made hereunder shall be recorded
by the Lender on the schedule annexed hereto.
The entire unpaid principal (not at the time overdue) of this Note
outstanding shall bear interest at an annual rate which shall at all times be
equal to the Base Rate (as hereinafter defined) in effect from time to time
during the period beginning on the date hereof and ending on the date on
which the entire unpaid principal amount of this Note shall be paid in full.
Interest shall be payable monthly in arrears on the first day of each
calendar month for the immediately preceding calendar month commencing on the
first such day following the date of this Note, and with a final payment on
the Maturity Date. Notwithstanding the foregoing, and so long as an Event of
Default has not occurred, the Borrower may elect to have a portion of the
outstanding principal amount of this Note bear interest at the Eurodollar
Rate (as defined in the Credit
Agreement) PLUS 0.75% for Interest Periods (as defined in the Credit
Agreement) of 1, 2 or 3 months. The Borrower will follow the procedures for
requesting Eurodollar Loans under the Credit Agreement if it wishes to have a
portion of the principal under this Note bear interest based upon the
Eurodollar Rate. The Borrower agrees that the provisions of the Credit
Agreement relating to Eurodollar Rate Loans would govern the portions of
principal under this Note which bear interest based upon the Eurodollar Rate.
On the Maturity Date, there shall become absolutely due and payable
by the Borrower hereunder, and the Borrower hereby promises to pay to the
holder hereof, a payment in an amount equal to the outstanding Obligations
(as hereinafter defined) under this Note, plus any and all accrued and unpaid
interest and all other amounts owing to the Lender; PROVIDED, HOWEVER,
without any way limiting the Lender's rights to call on the Guaranty (as
hereinafter defined), payments may only be made by the Borrower on this Note
to the extent that they do not violate the provisions of the Credit Agreement.
The Obligations of the Borrower hereunder are guaranteed by ▇▇▇▇▇▇
▇▇▇▇▇▇ Partners II, L.P. ("CHP") pursuant to the terms of a guaranty dated as
of the date hereof (as amended and in effect from time to time, the
"Guaranty"). Except for the rights of the Lender to call on the Guaranty and
any collateral securing the Guaranty, this Note shall be unsecured with
regards to the assets of the Borrower and shall have no claim to the
Collateral (as defined in the Credit Agreement).
At the option of the holder, this Note shall become immediately due
and payable, without notice, presentment or demand, upon the occurrence of
any of the following "Events of Default":
1. if the Borrower shall fail to pay any installment of principal
due with respect to this Note on or before the due date thereof;
2. if the Borrower shall fail to pay any interest or other amounts
due with respect to this Note within one Business Day of the due
date thereof;
3. any "Event of Default" shall occur under and as defined in the
Revolving Credit, Term Loan and Gold Consignment Agreement dated
December 16, 1996 by and between the Borrower, the Lender and
other parties thereto (as amended and in effect from time to
time, or if terminated as in effect immediately prior to
termination, the "Credit Agreement"), or CHP fails to perform
any term, covenant or agreement contained in the Guaranty;
4. if the Borrower shall fail to deliver to the Lender the financial
statements required to be delivered by the Borrower to the
lenders under the Credit Agreement on the dates so required;
5. if the Borrower makes or made any material representation or
warranty, statement or information in any documents or financial
statements delivered to the Lender for the purpose of inducing
the Lender to make or
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maintain the loan under this Note, and such representation,
warranty, statement or information shall prove to have been
false in any material respect on the date when made or deemed
to have been made.
Each overdue amount (whether of principal, interest or otherwise)
payable on or in respect of this Note or the indebtedness evidenced hereby
shall (to the extent permitted by applicable law) bear interest, from the
date on which such amount shall have first become due and payable in
accordance with the terms hereof to the date on which such amount shall be
paid to the holder of this Note (whether before or after judgment), at the
annual rate of interest which shall (to the extent permitted by applicable
law) at all times be two percent (2%) above the Base Rate (as hereinafter
defined) in effect from time to time. The unpaid interest accrued on each
overdue amount in accordance with the foregoing terms of this paragraph shall
become absolutely due and payable by the Borrower to the holder hereof on
demand by the holder of this Note at any time. Interest on each overdue
amount will continue to accrue, as provided by the foregoing terms of this
paragraph, and will (to the extent permitted by applicable law) be compounded
monthly until the obligations of the Borrower in respect of the payment of
such overdue amount shall be discharged (whether before or after judgment).
The Borrower further agrees to pay to the Lender a commitment fee
calculated at one-fourth of one percent (1/4%) per annum on the average daily
amount during each calendar month or portion thereof from the date of this
Note to the Maturity Date by which the Maximum Amount exceeds the outstanding
principal amount of loans outstanding under this Note. The commitment fee
shall be payable monthly in arrears on the first day of each calendar month
for the immediately preceding calendar month commencing on the first such day
following the date of this Note, and with a final payment on the Maturity
Date.
The Borrower agrees to reimburse the Lender, on demand, whether or
not all or any of the transactions contemplated by the Note are ultimately
consummated, for all its reasonable out-of-pocket expenses, including but not
limited to (a) the reasonable attorney's fees and disbursements of the
Lender's Special Counsel (as hereinafter defined) and disbursements, incurred
or expended in connection with the preparation, negotiation and
interpretation of this Note or any ancillary documentation contemplated
thereby, or any amendment thereof, or the making of loans under this Note and
(b) all attorneys' fees relating to the enforcement of any obligations under
this Note or the satisfaction of any indebtedness of the Borrower hereunder,
or in connection with any litigation proceeding or dispute hereunder in any
way related to the credit.
Each payment of principal, interest or other sums payable on or in
respect of this Note or the indebtedness evidenced hereby shall be made by
the Borrower directly to the Lender in U.S. Dollars, for the account of the
holder of this Note, at the Lender's Head Office, not later than 3:00 p.m.,
Boston time, on the due date of such payment, and in immediately available
and freely transferable funds.
All payments on or in respect of this Note or the indebtedness
evidenced hereby shall be made to the holder of this Note without set-off or
counterclaim.
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This Note evidences the obligations of the Borrower (a) to repay
the principal amount of all loans made by the Lender to the Borrower
hereunder, (b) to pay interest, as herein provided, on the principal amount
hereof remaining unpaid from time to time and (c) other amounts which may
become due and payable hereunder as herein provided (the "Obligations").
For all purposes of this Note, the following terms shall have the
respective meanings set forth below:
(a) "Base Rate" means the greater of (i) annual rate of interest from
time to time announced by BankBoston, N.A. at its head office as
its base rate or (ii) the rate equal to the weighted average of
the published rates on overnight Federal Funds transactions with
members of the Federal Reserve System plus 1/2%.
(b) "Business Day" means a day on which banks are open for business
in Boston, Massachusetts.
(c) "holder" means the Lender in possession of this Note or any other
person who is at the time the lawful holder in possession of this
Note.
(d) "Lender's Head Office" means the head office of the Lender
located at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
(e) "Lender's Special Counsel" means ▇▇▇▇▇▇▇ ▇▇▇▇ LLP.
To the extent permitted by the terms of the Credit Agreement, the
Borrower will have the right to prepay at any time the unpaid principal of
this Note in full or in part.
Any partial payment of the indebtedness evidenced by this Note
shall be applied by the holder hereof (a) first, to the payment of all of the
interest due and payable on the unpaid principal of this Note at the time of
such partial payment, (b) then, to the payment of all (if any) other amounts
(except principal) due and payable at the time of such partial payment on or
in respect of this Note or the indebtedness evidenced by this Note, and (c)
finally, to the repayment or (as the case may be) the prepayment of the
unpaid principal of this Note due and payable at the time of such partial
payment.
On the Maturity Date or such earlier date as this Note may mature
(whether upon demand, acceleration or otherwise), all of the interest accrued
on the unpaid principal of this Note and all (if any) other amounts payable
on or in respect of this Note or the indebtedness evidenced hereby (without
regard to the length of any interest period in effect), the entire unpaid
principal of this Note, all of the interest accrued on the unpaid principal
of this Note and all (if any) other amounts payable on or in respect of this
Note or the indebtedness evidenced hereby (without regard to the length of
any interest period in effect), shall forthwith become and be due and payable
to the holder of this Note without presentment, further demand, protest,
notice of protest or any other formalities of any kind, all of which are
hereby expressly and irrevocably waived by the Borrower.
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All computations of interest payable as provided in this Note shall
be made by the holder hereof on the basis of the actual number of days
elapsed divided by 360. The holder of this Note shall determine the Base Rate
in effect from time to time. Any change in the Base Rate shall, for all
purposes of this Note, become effective on, and from the beginning of, the
day on which such change shall first be made public by the Lender in
accordance with the Lender's usual practice.
If any sum would, but for the provisions of this paragraph, become
due and payable on or in respect of this Note or the indebtedness evidenced
hereby on a day which is not a Business Day, then such sum shall become due
and payable on the Business Day next succeeding the day on which such sum
would otherwise have become due and payable hereunder, and interest payable
hereunder to the holder hereof shall be adjusted by the holder hereof
accordingly.
The failure of the holder of this Note to exercise all or any of
its rights, remedies, powers or privileges hereunder in any instance shall
not constitute a waiver thereof in that or in any other instance.
The Borrower hereby irrevocably waives notice of acceptance,
presentment, notice of nonpayment, protest, notice of protest, suit and all
other conditions precedent in connection with the delivery, acceptance,
collection and/or enforcement of this Note or any collateral or security
therefor. The Borrower hereby absolutely and irrevocably consents and submits
to the jurisdiction of the Courts of the Commonwealth of Massachusetts and of
any Federal Court located in the said Commonwealth in connection with any
actions or proceedings brought against the Borrower by the holder hereof
arising out of or relating to this Note.
The Borrower represents and warrants to the Lender that: (a) the
Borrower is a corporation duly organized, validly existing and in good
standing under the laws of State of Delaware; (b) the Borrower has adequate
corporate power and authority and full legal right to carry on the business
in which it is presently engaged and will be engaged upon consummation of the
transactions contemplated hereby; and (c) all necessary corporate action has
been taken to execute and deliver this Note and to make the borrowings
hereunder.
The Borrower hereby agrees, at the Borrower's own expense, to
execute and deliver, from time to time, any and all further, or other,
instruments, and to perform such acts, as the Lender may reasonably request
to effect the transactions contemplated by this Note and to provide to the
Lender the benefits of all rights, authorities and remedies conferred upon
the Lender by the terms of this Note.
The Borrower shall use the proceeds of the loans made by the Lender
to the Borrower pursuant to this Note (a) to repay existing indebtedness of
the Borrower and (b) for working capital purposes of the Borrower.
This Note may be assigned by the Lender upon the prior written
consent of the Borrower, which consent shall not be unreasonably withheld.
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The indebtedness evidenced by this Note constitutes, and the
Borrower hereby specifically designates such indebtedness as, Designated
Senior Indebtedness for purposes of the Indenture dated as of December 16,
1996, between the Borrower and Marine Midland Bank, N.A., as trustee, with
respect to the 11% Senior Subordinated Notes due 2007.
THIS NOTE IS INTENDED TO TAKE EFFECT AS A SEALED INSTRUMENT. THIS
NOTE AND THE OBLIGATIONS OF THE BORROWER HEREUNDER SHALL BE GOVERNED BY AND
INTERPRETED AND DETERMINED IN ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF
MASSACHUSETTS.
IN WITNESS WHEREOF, this PROMISSORY NOTE has been duly executed by
the undersigned, COMMEMORATIVE BRANDS, INC., as of the day and in the year
first above written.
The Borrower:
COMMEMORATIVE BRANDS, INC.
Witness: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇. ▇. ▇▇▇▇▇
August 26, 1998 Title: Treasurer
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