Exhibit 10.1






EXHIBIT 10.1




Execution Copy




 





CSS Industries, Inc.




 



Second Amendment

Dated as of March 25, 2009




to


Note Purchase Agreements

Dated as of December 12, 2002




 



Re: $50,000,000 4.48% Senior Notes due December 13, 2009




 




 


 









 





			
	 	 	 
	CSS Industries, Inc.
	 	Second Amendment






Second Amendment to Note Purchase Agreements




This Second Amendment dated as of March 25, 2009 (the or this “Second Amendment”) to
the Note Purchase Agreements dated as of December 12, 2002 is between CSS Industries,
Inc., a Delaware corporation (the “Company”), and each of the institutions which is a
signatory to this Second Amendment (collectively, the “Noteholders”).



R e c i t a l s:




A. The Company and each of Connecticut General Life Insurance Company, Nationwide Life
Insurance Company, Pacific Life Insurance Company, Nationwide Life Insurance Company of America,
and Nationwide Life and Annuity Insurance Company have heretofore entered into separate and several
Note Purchase Agreements each dated as of December 12, 2002, as amended by the First Amendment to
Note Purchase Agreement Dated as of October 27, 2004 (as amended, the “Note Purchase Agreements”).
The Company has heretofore issued $50,000,000 aggregate principal amount of its 4.48% Senior Notes
due December 13, 2009 (the “Notes”) pursuant to the Note Purchase Agreements. The Notes held by
Connecticut General Life Insurance Company were heretofore transferred to Prudential Retirement
Insurance and Annuity Company.



B. The Company and the Noteholders now desire to amend the Note Purchase Agreements in the
respects, but only in the respects, hereinafter set forth.



C. Capitalized terms used herein shall have the respective meanings ascribed thereto in the
Note Purchase Agreements, as amended by this Second Amendment, unless herein defined or the context
shall otherwise require.



D. All requirements of law have been fully complied with and all other acts and things
necessary to make this Second Amendment a valid, legal and binding instrument according to its
terms for the purposes herein expressed have been done or performed.



Now, Therefore, upon the full and complete satisfaction of the conditions precedent
to the effectiveness of this Second Amendment set forth in Section 4.1 hereof, and in consideration
of good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, the
Company and the Noteholders do hereby agree as follows:



Section 1. Amendments.




Section 1.1. Sections 7.1(a) and (b) of the Note Purchase Agreements shall be and is hereby
amended to read in its entirety as follows:




(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




(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


 


 









 





			
	 	 	 
	CSS Industries, Inc.
	 	Second Amendment






(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; provided, that any election by the Company to
measure an item of Indebtedness in such financial statements using
fair value (as permitted by Statement of Financial Accounting
Standards No. 159 or any similar accounting standard) shall be
disregarded and such determination shall be made as if such election
had not been made;




(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; provided, that any election by
the Company to measure an item of Indebtedness in such financial
statements using fair value (as permitted by Statement of Financial
Accounting Standards No. 159 or any similar accounting standard)
shall be disregarded and such determination shall be made as if such
election had not been made;


 


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	CSS Industries, Inc.
	 	Second Amendment





Section 1.2. Section 10.3 of the Note Purchase Agreements shall be and is hereby amended to
read in its entirety as follows:




“Section 10.3. Fixed Charge Coverage Ratio. The Company will
not, at any time, permit the Fixed Charge Coverage Ratio to be less
than 1.15 to 1.”



Section 1.3. The definitions of “Consolidated Net Worth”, “Fixed Charge Coverage Ratio” and
“Leverage Ratio” set forth in Schedule B to the Note Purchase Agreements shall be and are hereby
amended in their entirety to read as follows:




“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; provided, that for purposes of
Section 10.2, determinations of Consolidated Net Worth shall exclude
all non-cash charges resulting from the application of Financial
Accounting Standard No. 142; provided, further, that for purposes of
determinations of Consolidated Net Worth, any election by the
Company to measure an item of Indebtedness using fair value (as
permitted by Statement of Financial Accounting Standards No. 159 or
any similar accounting standard) shall be disregarded and such
determination shall be made as if such election had not been made.




“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


 


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	CSS Industries, Inc.
	 	Second Amendment






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; provided, that
for purposes of determinations of the Fixed Charge Coverage Ratio,
any election by the Company to measure an item of Indebtedness using
fair value (as permitted by Statement of Financial Accounting
Standards No. 159 or any similar accounting standard) shall be
disregarded and such determination shall be made as if such election
had not been made.




“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;
provided, that for purposes of determinations of the Leverage Ratio,
any election by the Company to measure an item of Indebtedness using
fair value (as permitted by Statement of Financial Accounting
Standards No. 159 or any similar accounting standard) shall be
disregarded and such determination shall be made as if such election
had not been made.



Section 2. [Reserved].




Section 3. Representations and Warranties of the Company.




Section 3.1. To induce the Noteholders to execute and deliver this Second Amendment (which
representations shall survive the execution and delivery of this Second Amendment), the Company
represents and warrants to the Noteholders that:




(a) this Second Amendment has been duly authorized, executed and delivered by it and
this Second Amendment constitutes the legal, valid and binding obligation, contract and
agreement of the Company enforceable against it in accordance with its terms, except as
enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or similar
laws or equitable principles relating to or limiting creditors’ rights generally;




(b) the Note Purchase Agreements, as amended by this Second Amendment, constitute the
legal, valid and binding obligations, contracts and agreements of the Company enforceable
against it in accordance with their respective terms, except as enforcement may be limited
by bankruptcy, insolvency, reorganization, moratorium or similar laws or equitable
principles relating to or limiting creditors’ rights generally;


 


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	CSS Industries, Inc.
	 	Second Amendment






(c) the execution, delivery and performance by the Company of this Second Amendment (i)
has been duly authorized by all requisite corporate action and, if required, shareholder
action, (ii) does not require the consent or approval of any governmental or regulatory body
or agency, and (iii) will not (A) violate (1) any provision of law, statute, rule or
regulation or its certificate of incorporation or bylaws, (2) any order of any court or any
rule, regulation or order of any other agency or government binding upon it, or (3) any
provision of any material indenture, agreement or other instrument to which it is a party or
by which its properties or assets are or may be bound, including, without limitation, the
Bank Loan Agreement or (B) result in a breach or constitute (alone or with due notice or
lapse of time or both) a default under any indenture, agreement or other instrument referred
to in clause (iii)(A)(3) of this Section 3.1(c);




(d) as of the date hereof and after giving effect to this Second Amendment, no Default
or Event of Default has occurred which is continuing; and




(e) (i) all the representations and warranties contained in Section 5 of the Note
Purchase Agreements were true and correct on and as of the date of the Closing, (ii) the
representations and warranties contained in Sections 5.1, 5.2, 5.4(a), 5.4(b), 5.4(c), 5.8,
5.11, 5.12, 5.15(b), 5.17 and 5.18 of the Note Purchase Agreements are true and correct in
all material respects with the same force and effect as if made by the Company on and as of
the date hereof, except for changes in the Schedule of Subsidiaries as set forth in Schedule
5.4 to this Agreement, and (iii) since March 31, 2008, 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.



Section 4. Conditions to Effectiveness of this Second Amendment.




Section 4.1. This Second Amendment shall not become effective until, and shall become
effective when, each and every one of the following conditions shall have been satisfied:




(a) executed counterparts of this Second Amendment, duly executed by the Company and
the holders of at least 51% of the outstanding principal of the Notes, shall have been
delivered to the Noteholders, and the same shall be in full force and effect and shall
constitute the legal, valid and binding obligations of all the parties thereto;




(b) the Noteholders shall have received a copy of the resolutions of the Board of
Directors of the Company authorizing the execution, delivery and performance by the Company
of this Second Amendment, certified by its Secretary or an Assistant Secretary;




(c) the representations and warranties of the Company set forth in Section 3 hereof are
true and correct on and with respect to the date hereof;



 


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	CSS Industries, Inc.
	 	Second Amendment






(d) each holder of the Notes shall have received an amendment fee in an amount equal to
0.25% times the aggregate outstanding principal amount of the Notes held by such holder; and




(e) the Company shall have paid, the reasonable fees and expenses of Chapman and Cutler
LLP, counsel to the Noteholders, in connection with the negotiation, preparation, approval,
execution and delivery of this Second Amendment.



Upon receipt of all of the foregoing, this Second Amendment shall become effective.




Section 5. Miscellaneous.




Section 5.1. This Second Amendment shall be construed in connection with and as part of each
of the Note Purchase Agreements, and except as modified and expressly amended by this Second
Amendment, all terms, conditions and covenants contained in the Note Purchase Agreements and the
Notes are hereby ratified and shall be and remain in full force and effect.



Section 5.2. Any and all notices, requests, certificates and other instruments executed and
delivered after the execution and delivery of this Second Amendment may refer to the Note Purchase
Agreements without making specific reference to this Second Amendment but nevertheless all such
references shall include this Second Amendment unless the context otherwise requires.



Section 5.3. The descriptive headings of the various Sections or parts of this Second
Amendment are for convenience only and shall not affect the meaning or construction of any of the
provisions hereof.



Section 5.4. This Second Amendment shall be governed by and construed in accordance with New
York law.


 


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	CSS Industries, Inc.
	 	Second Amendment





Section 5.5. The execution hereof by you shall constitute a contract between us for the uses
and purposes hereinabove set forth, and this Second Amendment may be executed in any number of
counterparts, each executed counterpart constituting an original, but all together only one
agreement.



	 	 	 	 	 
	 	CSS Industries, Inc.

 	 
	 	By:  	/s/  Clifford E. Pietrafitta
 	 
	 	 	Its: Vice President — Finance 	 



[Noteholder Signature Pages to Follow]





 


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Accepted and Agreed to:



	 	 	 	 	 
	 	Prudential Retirement Insurance

and Annuity Company

 	 
	 	By:  	Prudential Investment Management, Inc.,

 as investment manager
 	 
	 	 	 
	 	By:  	                                                       /s/  Yvonne M. Guajardo
 	 
	 	 	Name:  	Yvonne M. Guajardo 	 
	 	 	Title:  	Vice President 	 




CSS Industries, Inc. — Second Amendment


 


 









 





	 	 	 	 	 
	 	Nationwide Life Insurance Company

Nationwide Life Insurance Company of
America

Nationwide Life and Annuity Insurance
Company

 	 
	 	By:  	/s/  Mary Beth Cadle
 	 
	 	 	Name:  	Mary Beth Cadle 	 
	 	 	Title:  	Authorized Signatory 	 


CSS Industries, Inc. — Second Amendment



 


 









 





	 	 	 	 	 



	 	 	 	 	 
	 	Pacific Life Insurance Company

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 


CSS Industries, Inc. — Second Amendment



 


 









 





Each of the undersigned hereby confirms its continued guaranty of the obligations of the
Company under the Note Purchase Agreements, as amended hereby, pursuant to the terms of its
respective Subsidiary Guaranty Agreement dated as of December 13, 2002, on this 25th day of March,
2009.



	 	 	 	 	 
	 	Paper Magic Group, Inc., 
a Pennsylvania
corporation

 	 
	 	By:  	/s/  Clifford E. Pietrafitta
 	 
	 	 	Name:  	Clifford E. Pietrafitta 	 
	 	 	Title:  	Vice President 	 
	 
	 	Berwick Delaware, Inc.

 	 
	 	By:  	/s/  Clifford E. Pietrafitta
 	 
	 	 	Name:  	Clifford E. Pietrafitta 	 
	 	 	Title:  	President 	 
	 
	 	Berwick Offray LLC

 	 
	 	By:  	/s/  Clifford E. Pietrafitta
 	 
	 	 	Name:  	Clifford E. Pietrafitta 	 
	 	 	Title:  	Vice President 	 
	 
	 	Cleo Inc.

 	 
	 	By:  	/s/  Clifford E. Pietrafitta
 	 
	 	 	Name:  	Clifford E. Pietrafitta 	 
	 	 	Title:  	Vice President 	 


CSS Industries, Inc. — Second Amendment



 


 









 





	 	 	 	 	 



	 	 	 	 	 
	 	Cleo Delaware, Inc.

 	 
	 	By:  	/s/  Clifford E. Pietrafitta
 	 
	 	 	Name:  	Clifford E. Pietrafitta 	 
	 	 	Title:  	President 	 
	 
	 	Philadelphia Industries, Inc.

 	 
	 	By:  	/s/  Clifford E. Pietrafitta
 	 
	 	 	Name:  	Clifford E. Pietrafitta 	 
	 	 	Title:  	President 	 
	 
	 	LLM Holdings, Inc.

 	 
	 	By:  	/s/  Clifford E. Pietrafitta
 	 
	 	 	Name:  	Clifford E. Pietrafitta 	 
	 	 	Title:  	President 	 
	 
	 	The Paper Magic Group, Inc., 
a Delaware
corporation

 	 
	 	By:  	/s/  Clifford E. Pietrafitta
 	 
	 	 	Name:  	Clifford E. Pietrafitta 	 
	 	 	Title:  	President 	 
	 
	 	Don Post Studios, Inc.

 	 
	 	By:  	/s/  Clifford E. Pietrafitta
 	 
	 	 	Name:  	Clifford E. Pietrafitta 	 
	 	 	Title:  	Vice President 	 



 


 









 





	 	 	 	 	 



	 	 	 	 	 
	 	Crystal Creative Products, Inc.

 	 
	 	By:  	/s/  Clifford E. Pietrafitta
 	 
	 	 	Name:  	Clifford E. Pietrafitta 	 
	 	 	Title:  	Vice President 	 
	 
	 	CSS Management LLC

 	 
	 	By:  	/s/  Clifford E. Pietrafitta
 	 
	 	 	Name:  	Clifford E. Pietrafitta 	 
	 	 	Title:  	Vice President 	 
	 
	 	Lion Ribbon Company, Inc.

 	 
	 	By:  	/s/  Clifford E. Pietrafitta
 	 
	 	 	Name:  	Clifford E. Pietrafitta 	 
	 	 	Title:  	Vice President 	 
	 
	 	C.R. Gibson, LLC

 	 
	 	By:  	/s/  Clifford E. Pietrafitta
 	 
	 	 	Name:  	Clifford E. Pietrafitta 	 
	 	 	Title:  	Vice President