Document:

exv10w3

 

Exhibit 10.3

TWELFTH AMENDMENT TO SECOND AMENDED AND RESTATED

SENIOR REVOLVING CREDIT AGREEMENT

     This TWELFTH AMENDMENT TO SECOND AMENDED AND RESTATED SENIOR REVOLVING CREDIT AGREEMENT (this
“Amendment”) is made as of July 19, 2006, by and among ENESCO GROUP, INC., an Illinois corporation
(the “Borrower”), the Borrowing Subsidiaries that may from time to time become a party to the
Second Amended and Restated Senior Revolving Credit Agreement, the Lenders, and BANK OF AMERICA,
N.A. (successor by merger to Fleet National Bank), a national banking association, as Agent.

RECITALS

     The Borrower, the Borrowing Subsidiaries, the Lenders and the Agent are parties to a certain
Second Amended and Restated Senior Revolving Credit Agreement dated as of June 16, 2003, as amended
by a First Amendment dated as of March 5, 2004; a Second Amendment dated as of August 10, 2004; a
Third Amendment dated as of November 2, 2004; a Fourth Amendment dated as of November 22, 2004; a
Fifth Amendment dated as of January 28, 2005, as amended by a letter agreement dated as of February
7, 2005; a Sixth Amendment dated as of March 29, 2005; a Seventh Amendment dated as of May 16,
2005; an Eighth Amendment dated as of July 7, 2005, as amended by a letter agreement dated as of
July 28, 2005; a Ninth Amendment dated as of August 31, 2005; a Tenth Amendment dated as of
December 21, 2005; and an Eleventh Amendment dated as of March 31, 2006 (as the same may be further
amended or restated from time to time, collectively, the “Credit Agreement”), pursuant to which the
Lenders have, subject to the terms and conditions set forth therein, made certain credit facilities
available to the Borrower and the Borrowing Subsidiaries including those evidenced by the Notes
executed and delivered pursuant to the Credit Agreement. The parties hereto have agreed to further
modify the Credit Agreement as set forth herein. All capitalized terms used herein and not
otherwise defined herein shall have their meanings as defined in the Credit Agreement.

     NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties agree as follows:

     1. Upon satisfaction in full, on or prior to July 19, 2006 (i.e. not later than midnight, New
York time, on July 19, 2006), of the conditions precedent set forth in Section 3 below, the Credit
Agreement is amended as follows:

(a) The following definitions in ARTICLE I of the Credit Agreement are amended and restated
in their entirety to read as follows:

“Borrowing Capacity” means the lesser of:

(x) the Maximum Borrowing Amount, and

(y) the sum of (i) eighty-five percent (85%) of Accounts Receivable of

 

 

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the Borrower, Gregg, the Canadian Subsidiary, the Hong Kong Subsidiary and the
U.K. Credit Parties which are not Ineligible Accounts, provided that not
more than $12,000,000 will be included in the Borrowing Capacity pursuant to this
clause (y) with respect to Accounts Receivable of the Canadian Subsidiary, (ii) the
lesser of (A) the sum of thirty-three percent (33%) of the Eligible Inventory of
the Borrower, Gregg, the Canadian Subsidiary and the U.K. Credit Parties other than
Eligible Discontinued Inventory and ten percent (10%) of Eligible Discontinued
Inventory, and (B) $12,500,000, provided that not more than $24,000,000
will be included in the Borrowing Capacity with respect to United Kingdom inventory
and accounts receivable in the aggregate, (iii) during such time as the Borrower
continues to own the real estate owned by the Borrower on the Ninth Amendment Date
and located in Itasca, Illinois seventy percent (70%) of the appraised fair market
value of such real estate, such appraised fair market value to be determined by the
Agent based on an appraisal (or, if updated by the Agent in its sole discretion
from time to time, the most recent appraisal) in form and substance, and by an
appraiser, acceptable to the Agent in its sole discretion, and (iv) between the
Twelfth Amendment Date and September 15, 2006, the Permitted Overadvance Amount
(but this clause (iv) shall be zero after September 15, 2006), minus (v)
the amount of reserves in respect of Canada Preferential Indebtedness, Hong Kong
Preferential Indebtedness, U.K. Preferential Indebtedness and any Unpaid Supplier
Reserve, such amounts under this clause (v) to be determined by the Agent (which
determination may occur from time to time) in its discretion (such discretion to be
exercised in its reasonable business judgment) as a result of conducting a
commercial finance examination or otherwise (such amount to remain at zero in
respect of Hong Kong Preferential Indebtedness so long as the Agent’s lien on Hong
Kong accounts receivable and on each Hong Kong Controlled Account remains a fixed
charge).

     “Default” or “Event of Default” mean an event described in Article VII hereof.

     “Facility Termination Date” means September 15, 2006.

     “Maximum Borrowing Amount” means between the Twelfth Amendment Date and
September 15, 2006, $63,000,000 for Loans (excluding Letters of Credit and Bankers’
Acceptances) and $7,000,000 for Letters of Credit and Bankers’ Acceptances.

     “Obligations” means all unpaid principal of and accrued and unpaid interest on
the Notes, all accrued and unpaid fees and all expenses, reimbursement obligations
pursuant to Letters of Credit issued at the request of any Credit Party,
indemnities and other obligations of the Credit Parties or any of them to the Agent
or any of the Lenders or any indemnified party hereunder arising under the Loan
Documents, including without limitation the Borrowing Subsidiary Obligations, and
all overdraft obligations, fees, costs, charges,

 

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expenses and other obligations of the Credit Parties or any of them to the
Agent or any of the Lenders or any indemnified party hereunder arising under any
cash management agreement (including ACH transactions but excluding contracts or
other arrangements to purchase foreign currency) or operating or deposit account.

     “Prime Rate” means the variable per annum rate of interest designated by Bank
of America, N.A. from time to time as its prime rate or base rate. The Prime Rate
is a reference rate and does not necessarily represent the lowest or best rate
being charged to any customer.

(b) The following definitions are added to ARTICLE I of the Credit Agreement in appropriate
alphabetical order:

     “Additional Collateral Date” means that date that the Borrower has complied
with clauses (a), (b) and (c) of Section 6.31 hereof and Agent has a valid,
perfected first lien on all of the Collateral referred to therein.

     “Dormant Subsidiaries” means Subsidiaries of the Borrower that have less than
$1,000 (valued at the greater of book value or fair market value) in assets and
that conduct no business and are not parties to any contracts or agreements.

     “Eligible Discontinued Inventory” means Eligible Inventory which is designated
on the Borrower’s (or a Subsidiary of the Borrower’s) books and records as
discontinued inventory.

     “Overadvance Amount” means the amount by which (A) the Obligations exceed (B)
the sum of clause (i) plus clause (ii) plus clause (iii) minus clause (v) of clause
(y) of the definition of Borrowing Capacity.

     “Permitted Overadvance Amount” means, as of any date, the amount for such date
shown on the Twelfth Amendment Overadvance Covenant Spreadsheet.

     “Transfer or Business Commencement Action” means any transfer, assignment or
contribution of any asset to any Person that, prior to such transfer, assignment or
contribution, was a Dormant Subsidiary, or any commencement or continuation of any
business by any Person that prior to such commencement or continuation of business
was a Dormant Subsidiary, or the execution of any contract or agreement by any
Person that, prior to such execution was a Dormant Subsidiary.

     “Twelfth Amendment Cash Receipts and Cash Disbursements Projection and
Covenants Spreadsheet” means the spreadsheet delivered by the Borrower to the Agent
on the Twelfth Amendment Date pursuant to clause (xvi) of Section

 

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6.1 hereof.

     “Twelfth Amendment Date “ means the date that the Twelfth Amendment to this
Agreement takes effect.

     “Twelfth Amendment Overadvance Covenant Spreadsheet” means the spreadsheet
attached to the Twelfth Amendment hereto as Exhibit A thereto.

(c) The following sentence is added to the end of sentence of Section 2.10:

     Notwithstanding the foregoing or any provision of Section 2.8 or any other
provision hereof (but subject to Section 2.11), (a) no Loans or other Advances will
be (and no Loans or Advances may be converted to) LIBOR Advances or Cost of Funds
Advances at any time after the Twelfth Amendment Date and all Loans and other
Advances will be Alternate Base Rate Advances on and after the Twelfth Amendment
Date, (b) except as otherwise provided in clause (c) of this sentence or in Section
2.11, the interest rate payable on all Loans and Advances from and after the Twelfth
Amendment Date shall be the sum of the Alternate Base Rate plus 2% per annum, and
(c) at any time during which there is an Overadvance Amount, the interest rate
payable on the Overadvance Amount shall be the Alternate Base Rate plus 3% per annum
and the interest rate payable on the portion of the Loans and Advances other than
the Overadvance Amount shall be the Alternate Base Rate plus 2% per annum.

(d) The last sentence of Section 2.11 is amended and restated in its entirety to read as
follows:

During the continuance of a Default, each Loan and other Advance shall bear interest
at a rate equal to the sum of (a) the rate provided therefor in Section 2.10 or
otherwise applicable thereto, plus (b) 2% per annum (the sum of (a) and (b) being
the “Default Rate”).

(e) Section 2.24 is amended and restated in its entirety to read as follows:

     2.24 Usage Fee and Extension Fees. In addition to the Facility Fee,
Commitment Fee, and all other amounts payable hereunder and previously paid
hereunder, the Borrower shall pay to the Agent for the account of the Lenders, (a)
(i) on the first Business Day in each month, commencing on January 1, 2006 and
continuing through and including May 1, 2006, a fee in the amount of 0.10% (10
basis points) of the highest amount of Loans that were outstanding on any day in
the immediately preceding month, and (ii) on the first Business Day in each month,
commencing on June 1, 2006 and continuing until the Facility Termination Date, a
fee in the amount of 0.20% (20 basis points) of the highest amount of Loans that
were outstanding on any day in the immediately preceding month, (b) on January 1,
2006, a fee in the amount of $75,000, (c) on February 1, 2006, a fee in the amount
of $150,000, (d) on March 1, 2006, a fee in the amount of $250,000 (e) on April 1,
2006, a fee in the amount of $275,000, (f) on

 

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May 1, 2006, a fee in the amount of $750,000, (g) on June 1, 2006, a fee in
the amount of $750,000, and (h) on the earlier of (i) the first date after the
Twelfth Amendment Date that an Event of Default occurs, (ii) the date that the
Obligations are paid in full and all Letters of Credit and Bankers Acceptances
expire, are returned to the Agent for cancellation or are secured by cash
collateral in a manner satisfactory to the Agent and the Commitment hereunder is
terminated and (iii) the Facility Termination Date, a fee (fully earned as of the
Twelfth Amendment Date) in the amount of $2,100,000 provided that, (i) the
fee payable under clause (h) of this paragraph will be reduced to $1,400,000 if, on
or before September 1, 2006 (i.e. not later than midnight, New York time, on
September 1, 2006), the Obligations are paid in full and all Letters of Credit and
Bankers Acceptances expire, are returned to the Agent for cancellation or are
secured with cash collateral in a manner satisfactory to the Agent and the
Commitment hereunder is terminated.

     (f) Clause (xv) of Section 6.1 is amended and restated in its entirety to read as follows:

     (xv) On or before Wednesday of every week, commencing on the next Wednesday
after the Twelfth Amendment Date, (A) a Borrowing Base Certificate in the form of
Exhibit C-1 hereto showing the calculations necessary to determine Borrowing
Capacity, which certificates shall have been signed by the Borrower’s Chief
Financial Officer or Treasurer, provided that, even though the amount of Accounts
Receivable set forth on such Exhibit C-1 shall in each case be as of the end of the
week preceding the date that such Borrowing Base Certificate is delivered
hereunder, the amount of Inventory reflected in such Exhibit C-1 shall in each case
be the amount of Inventory as of the end of the month most recently ended prior to
the end of the week preceding the date of delivery of such Borrowing Base
Certificate (e.g., the Borrowing Base Certificate delivered on February 16, 2005
shall set forth Accounts Receivable as of February 11, 2005 and Inventory as of
January 31, 2005), and (B) a report signed by the Borrower’s Chief Financial
Officer or Treasurer setting forth (1) as of the end of the week preceding the
delivery of such report, the amount of the Obligations and the amount of the
Overadvance Amount, (2) the amount of cumulative cash disbursements made by the
Borrower and its Subsidiaries and of cash received by the Borrower in payment of
accounts, dividends and other transfers from its Subsidiaries, interest in respect
of its bank deposits and from its account debtors, royalties in respect of its
license arrangements, and sales taxes in respect of its customers during the two
weeks ended at the end of the week preceding the delivery of such report, and (3) a
comparison of each of the amounts set forth in clauses (1) and (2) of this clause
(xv) with the amounts projected as of the end of the week preceding the delivery of
such report (with respect to clause (1)) and for the applicable period (with
respect to clause (2)) by the Borrower in the Twelfth Amendment Overadvance
Covenant Spreadsheet (with respect to clause (1)) and the Twelfth Amendment Cash
Receipts and Cash Disbursements Projection and Covenants Spreadsheet delivered by
the Borrower

 

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to the Agent pursuant to clause (xvi) of this Section 6.1 (with respect to
clause (2)).

(g) The following clause (xvi) is added to the end of Section 6.1 after clause (xv) thereof:

     (xvi) On the Twelfth Amendment Date, the Borrower shall deliver to the Agent,
in form and content satisfactory to the Agent and the Lenders, the Twelfth
Amendment Cash Receipts and Cash Disbursements Projection and Covenants
Spreadsheet, which shall be signed by the Borrower’s Chief Financial Officer or
Treasurer.

(h) Sections 6.12.1 and 6.12.3 are deleted and shall be referred to in the Credit Agreement
as “Intentionally Deleted”.

(i) Section 6.24 is amended and restated in its entirety to read as follows:

     6.24 Retention of Investment Banker; Obtaining of Commitment. (a)
Without limiting the continuing obligations of the Borrower under Section 6.26
hereof, on or before the Twelfth Amendment Date the Borrower shall have retained
Jeffries & Company, Inc. or another investment banker acceptable to the Agent for
the purpose of (i) seeking to find a buyer or buyers for the Borrower and each of
its Subsidiaries or all or substantially all of their assets, (ii) seeking to find
a replacement credit facility to pay the Obligations in full in cash, (iii) seeking
to find an investor for an equity investment in conjunction with which the
Obligations would be paid in full in cash, or (iv) seeking to pursue a
recapitalization in conjunction with which the Obligations would be paid in full in
cash. The Borrower shall continue to retain such investment banker acceptable to
the Agent, through September 15, 2006, and the Borrower shall authorize and direct
such investment banker to update the Agent as and when requested by the Agent, and
in any event not less frequently than weekly (which weekly updates may, unless
otherwise requested by the Agent, be by telephone) regarding the status (including,
without limitation, the Persons contacted), projected timing, and projected terms
with respect to any transaction referred to in clauses (i) through (iv) of the
preceding sentence. Promptly upon the Agent’s request from time to time, the
Borrower shall deliver to the Agent a written report describing in reasonable
detail the status (including, without limitation, the Persons contacted) of the
efforts by the Borrower to arrange any such transaction and all material actions
taken in pursuit of any such transaction since the last such report was delivered
to the Agent.

     (b) The Borrower will obtain and provide to the Agent on or before August 7,
2006 a binding written commitment or offer, executed subject only to customary
conditions (but executed after completion of due diligence and therefore not
subject to any due diligence condition), executed by a Person that is not an
Affiliate of the Borrower and which at the time of such commitment or offer
demonstrates to the satisfaction of the Agent that such Person has the

 

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financial resources available to consummate the transaction that is the
subject of the commitment or offer, which commitment or offer sets forth such
Person’s commitment or offer to consummate a transaction referred to in clause (i),
(ii), (iii), or (iv) of subsection (a) of this Section 6.24 that would result in
the payment in full in cash of the Obligations.

(j) The following Section 6.31 is added after Section 6.30:

     6.31 Additional Collateral and Guarantor. The Borrower and each
Subsidiary of the Borrower shall execute and deliver, and shall cause all of its
Subsidiaries (other than Dormant Subsidiaries) to execute and deliver, to the Agent
such documents and shall take and cause its Subsidiaries to take, such actions, as
are requested by the Agent in order for the Agent to have, as security for all of
the Obligations and the guaranties of the Guarantors, (a) on the Twelfth Amendment
Date (to the extent not already in effect), a valid, enforceable and perfected
first lien on all assets of each of such Persons that are organized in the United
States, whether such assets are now owned or hereafter acquired, wherever located,
including without limitation all inventory, accounts, equipment, general
intangibles (including all intellectual property), deposit accounts, and investment
property (including a pledge and control of all of the stock of each of the direct
Subsidiaries of the Borrower and each of its Subsidiaries organized in the United
States), subject only to such exceptions as may be approved by the Agent in its
discretion, (b) within seven days after the Twelfth Amendment Date (to the extent
not already in effect), filings with the United States Patent and Trademark Office
with respect to such of their intellectual property assets as the Agent may desire
to have such filings, and (c) within 15 days after the Twelfth Amendment Date (to
the extent not already in effect), with respect to Subsidiaries not organized in
the United States except for Enesco France S.A., a valid, enforceable and perfected
first lien on all assets of each of such Persons that are not organized in the
United States, to the extent permitted by the laws of the jursidiction of such
Subsidiary, whether such assets are now owned or hereafter acquired, wherever
located, including without limitation all inventory, accounts, equipment, general
intangibles (including all intellectual property), deposit accounts, and investment
property (including a pledge and control of all of the stock of each of its
Subsidiaries not organized in the United States, including Enesco France S.A., but
excluding the real estate known as Old Bank Building, Langholm, Dumfriesshire,
Scotland), subject only to such exceptions as may be approved by the Agent in its
discretion. Notwithstanding any other provision of this Agreement, the Borrower
shall not form or acquire or permit to be formed or acquired any Subsidiary, and
shall not take or permit to occur any Transfer or Business Commencement Action with
respect to any Dormant Subsidiary unless, prior to forming, acquiring, or
permitting to be formed or acquired any such Subsidiary, or taking or permitting to
occur such Transfer or Business Commencement Action, the Borrower causes such
Subsidiary to become a Guarantor of the Obligations and to grant to the Agent
valid, enforceable and perfected first liens on all assets of such

 

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Subsidiary. In addition to the foregoing, within 21 days after the Twelfth
Amendment Date, the Borrower shall cause Enesco France S.A. to become a Guarantor
and a Credit Party hereunder to the extent permitted by the laws of France.

(k) The introductory language of Article VII is amended and restated in its entirety to read
as follows:

The occurrence of any one or more of the following events shall constitute a
Default and an Event of Default:

(l) Section 7.4 is amended and restated in its entirety to read as follows:

     7.4 The breach by the Borrower (other than a breach which constitutes a Default
under Section 7.1, 7.2 or 7.3) of any of the terms or provisions of this Agreement.

(m) The following Section 7.17 is added to the end of Article VII of the Credit Agreement:

     7.17 The occurrence of any one or more of the following: (a) the actual cash
received by the Borrower in payment of accounts, dividends and other transfers from
its Subsidiaries, interest in respect of its bank deposits and from its account
debtors, royalties in respect of its license arrangements, and sales taxes in
respect of its customers during any two week period ending after the Twelfth
Amendment Date is more than 15% less than the amount of cash projected to be
received by the Twelfth Amendment Cash Receipts and Cash Disbursments Projection and
Covenants Spreadsheet, (b) the actual cumulative cash disbursements made by the
Borrower and its Subsidiaries between the Twelfth Amendment Date and any date listed
in the Twelfth Amendment Cash Receipts and Cash Disbursements Projection and
Covenants Spreadsheet shall be more than 10% greater than the amount of cash
disbursements projected to be made between such dates by the Twelfth Amendment Cash
Receipts and Cash Disbursements Projection and Covenants Spreadsheet, or (c) the
Overadvance Amount at the end of any week is greater than the amount for the end of
such week shown on the Twelfth Amendment Overadvance Covenant Spreadsheet.

(n) The references to “Loans” in Section 11.2 are deleted and replaced with “Obligations”.

(o) The form of Exhibit C-1 (Borrowing Base Certificate) is deleted in its entirety and is
replaced with the form of Exhibit C-1 (Borrowing Base Certificate) attached to this
Amendment as Exhibit B.

     2. Subject to the satisfaction of the conditions set forth in Section 3 hereof, effective as
of the Amendment Effective Date, the Lenders waive the Events of Default as of and

 

 

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including the Twelfth Amendment Date under Sections 2.1, 6.12.1 and 6.12.3 of the Credit
Agreement or in any notice sent by the Agent to Borrower prior to the Twelfth Amendment Date,
including that certain notice dated June 8, 2006 (the “Specified Defaults”). The waiver set forth
in this Section 2 does not waive any Event of Default other than the Specified Defaults and does
not waive any Specified Default that continues or reoccurs after the Amendment Effective Date, and
such waiver shall not entitle the Borrower to any future waiver in similar or other circumstances.

     3. The amendments set forth in Section 1 hereof and the waiver set forth in Section 2 hereof
shall become effective as of the date that the following conditions shall have been satisfied (the
date that such amendments take effect being the “Amendment Effective Date”), provided,
however, that the amendments set forth in Section 1 hereof and the waiver set forth in Section 2
hereof shall not take effect unless such conditions have been satisfied on or before July 19, 2006
(i.e. not later than midnight, New York time, on July 19, 2006):

(a) The Lenders shall have executed this Amendment and shall have received a copy of this
Amendment duly executed by the Borrower, the Borrowing Subsidiaries and the Guarantors.

(b) The Borrower shall have paid to counsel for the Agent the amount of their reasonable
fees and disbursements owed to such counsel in connection with the Credit Agreement, this
Amendment and matters related hereto and thereto, and the Borrower shall have paid the fees
and disbursements owed or paid to any appraisers and consultants retained by the Agent in
connection with the Credit Agreement and the Loans.

(c) The Borrower and each Subsidiary of the Borrower shall have executed such documents and
taken such actions as are required by Section 6.31 and by clause (xvi) of Section 6.1 of the
Credit Agreement (each as added by this Amendment) to be executed and taken on the Twelfth
Amendment Date.

(d) The Agent shall have received a Uniform Commercial Code search report with respect to
assets of the Borrower and Subsidiaries organized in the United States and such reports as
may be required by the Agent with respect to Subsidiaries that are not organized in the
United States, in each case confirming that the security interest and lien of the Agent in
the additional Collateral granted by the Borrower and its Subsidiaries to the Agent as
required by Sections 6.31 of the Credit Agreement are not subject to any prior liens of
record.

     4. (a) The Borrower represents and warrants to the Agent and the Lenders that (a) as of the
Twelfth Amendment Date, each of the Subsidiaries of the Borrower, except for Dormant Subsidiaries
and Enesco France S.A., are Guarantors of the Obligations, and (b) as of the Twelfth Amendment
Date, the following Persons are the only Dormant Subsidiaries: Lilliput Lane Ltd, Border Fine Arts
Co. Ltd, Chiltern Collection (1985) Ltd, Fine Ceramic Transfers Ltd, Battersea Enamels Ltd, Bilston
Enamels Ltd, Masterpiece Enamels Ltd, Enesco Enamels Ltd, The Enamel Collection Ltd, Enamel
Distributors Ltd, Bilston & Battersea Enamels (London) Ltd, Dartington Crystal Ltd, Devon Crystal
Ltd, Dartington Glass Ltd, Stanley Home Productos de Limpeza Ltd. and Enesco Import GmbH.

 

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     (b) Each of the Credit Parties and Lenders acknowledges and agrees that any reference in a
Guarantee, Security Agreement or other Loan Document to a guaranty of the Obligations or security
for the Obligations being made to or granted in favor of the Agent (or the Agent as agent for the
Lenders) shall mean and include a guaranty of and security for the Obligations owed to the Lenders
for Loans and Advances made under this Agreement and Letters of Credit and Bankers Acceptances
issued under this Agreement and all other Obligations owed to such Lenders or their indemnified
parties that are included within the definition herein of “Obligations”.

     5. Except as amended, modified or supplemented by this Amendment, all of the terms,
conditions, covenants, provisions, representations, warranties and conditions of the Credit
Agreement shall remain in full force and effect and are hereby acknowledged, ratified, confirmed
and continued as if fully restated hereby.

     6. The invalidity or unenforceability of any term or provision hereof shall not affect the
validity or enforceability of any other term or provision hereof or contained in the Credit
Agreement.

     7. It is the intention of the parties hereto that this Amendment shall not constitute a
novation and shall in no way adversely affect or impair performance of the obligations of the
Borrower, the Borrowing Subsidiaries or the Guarantors under the Credit Agreement and the other
Loan Documents.

     8. Regardless of whether the conditions in Section 3 hereof are satisfied and whether or not
the amendments in Section 1 and the waiver in Section 2 take effect, each of the Borrower, the
Borrowing Subsidiaries and the Guarantors hereby (a) confirms and ratifies the Obligations incurred
by it under the Credit Agreement and the other Loan Documents, (b) acknowledges that, as of the
date hereof, neither the Borrower, the Borrowing Subsidiaries nor any of the Guarantors has any
defense, offset, counterclaim, or right of recoupment against the Agent or any Lender with respect
to any of such Obligations or any other matter, and (c) on its own behalf and on behalf of its
directors, officers, shareholders, employees, successors and assigns jointly and severally waives,
releases and discharges the Lenders, the Agent, their parent companies, subsidiaries, affiliates,
officers, directors, employees, agents, attorneys, predecessors, successors and assigns, from any
and all claims, demands, actions or causes of action arising out of or in any way relating to the
Credit Agreement, the other Loan Documents or otherwise, and/or any documents, agreements, dealings
or other matters connected with the Credit Agreement or the other Loan Documents or otherwise, and
including without limitation all known and unknown matters, claims, transactions or things
occurring prior to the date of this Amendment relating to the Credit Agreement, the other Loan
Documents or otherwise.

     9. This Amendment is to be governed and construed in accordance with the laws of the
Commonwealth of Massachusetts (without regard to the conflict of laws or choice of law principles
of the Commonwealth of Massachusetts).

     10. This Amendment may be executed in any number of counterparts, all of which taken together
shall constitute one agreement, and any of the parties thereto may execute this Agreement by
signing any such counterpart. This Amendment shall be effective when it has been

 

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executed by the Borrower, each of the Borrowing Subsidiaries, the Guarantors, the Agent and
the each of the Lenders, and the amendments set forth in Section 1 hereof shall take effect on the
Amendment Effective Date.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK;

SIGNATURES PAGES FOLLOW]

 

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     IN WITNESS WHEREOF, the foregoing has been executed as an instrument under seal as of the date
first above written.

	 	 	 	 	 	 	 
	 	 	ENESCO GROUP, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Marie Meisenbach Graul
 

	 	 
	 	 	Name: Marie Meisenbach Graul	 	 
	 	 	Title: Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Charles E. Sanders
 

	 	 
	 	 	Name: Charles E. Sanders	 	 
	 	 	Title: Treasurer	 	 
	 
	 	 	 	 	 	 
	 	 	BANK OF AMERICA, N.A., as Agent and as	 	 
	 	 	lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ C. Christopher Smith
 

	 	 
	 	 	Name: C. Christopher Smith	 	 
	 	 	Title: Senior Vice President	 	 
	 
	 	 	 	 	 	 
	 	 	LASALLE BANK NATIONAL

ASSOCIATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ David C. Shapiro
 

	 	 
	 	 	Name: David C. Shapiro	 	 
	 	 	Title: Senior Vice President	 	 
	 
	 	 	 	 	 	 
	 	 	N.C. CAMERON & SONS LIMITED	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Charles E. Sanders
 

	 	 
	 	 	Name: Charles E. Sanders	 	 
	 	 	Title: Treasurer	 	 

[Signature Page to Twelfth Amendment to Credit Agreement ]

 

-13-

	 	 	 	 	 	 	 
	 	 	THE COMMON SEAL of	 	 
	 	 	ENESCO INTERNATIONAL	 	 
	 	 	(H.K.) LIMITED	 	 
	 	 	Executed under the seal of Enesco International	 	 
	 	 	(H.K.) Limited:	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Charles E. Sanders
 

	 	 
	 	 	Name: Charles E. Sanders	 	 
	 	 	Director/Secretary: Director	 	 
	 
	 	 	 	 	 	 
	 	 	GREGG MANUFACTURING, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Charles E. Sanders
 

	 	 
	 	 	Name: Charles E. Sanders	 	 
	 	 	Title: CFO, Treasurer and Secretary	 	 
	 
	 	 	 	 	 	 
	 	 	ENESCO INTERNATIONAL LTD.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Charles E. Sanders
 

	 	 
	 	 	Name: Charles E. Sanders	 	 
	 	 	Title: Treasurer	 	 
	 
	 	 	 	 	 	 
	 	 	ENESCO HOLDINGS LIMITED	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Charles E. Sanders
 

	 	 
	 	 	Name: Charles E. Sanders	 	 
	 	 	Title: Secretary	 	 
	 
	 	 	 	 	 	 
	 	 	ENESCO LIMITED	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Charles E. Sanders
 

	 	 
	 	 	Name: Charles E. Sanders	 	 
	 	 	Title: Secretary	 	 

[Signature Page to Twelfth Amendment to Credit Agreement ]

 

-14-

	 	 	 	 	 
	 	BILSTON & BATTERSEA ENAMELS PLC

 	 
	 	By:  	/s/
Charles E. Sanders
 	 
	 	Name:  
Charles E. Sanders 	 
	 	Title:  
Director 	 
	 

[Signature Page to Twelfth Amendment to Credit Agreement ]exv4w6

 

EXHIBIT 4.6

Technology Solutions Company

Non-Statutory

Inducement Stock Option Agreement

          Technology Solutions Company, a Delaware corporation (the “Company”), hereby grants to the
employee whose name appears below (the “Employee”), an option to purchase from the Company (the
“Option”) such number of shares of its Common Stock, $0.01 par value (“Stock”), as set forth below,
at the price per share set forth below, and subject to the other terms and conditions set forth
herein and in Annex I hereto (“Annex I”). The Option is not granted pursuant to the Technology
Solutions Company 1996 Stock Incentive Plan (as amended, the “Plan”) however, except to the extent
otherwise set forth herein or in Annex I, the terms and conditions of the Plan applicable to stock
options are incorporated herein by reference and shall apply as though the Option was granted
pursuant to the Plan. All capitalized terms used in this Agreement and not otherwise defined
herein shall have the respective meanings assigned to them in Annex I or the Plan. The Option
shall become null and void unless the Employee shall accept this Agreement by executing it in the
space provided and returning it to the Company.

	 	 	 	 	 	 	 
	 

	 	Employee Name:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	Number of Shares
Subject to Option:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	Exercise Price Per Share:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	Exercise Provisions:	 	 	 	 
	 

	 	 	 	 

	 	 

          (a) The Option shall become exercisable (i) on the first anniversary of the Option Date with
respect to one-third of the number of shares subject to the Option on the Option Date, (ii) on the
last day of each calendar month for 24 months thereafter, beginning the month following the first
anniversary of the Option Date, with respect to an additional 1/36 of the number of shares subject
to the Option on the Option Date, and (iii) as otherwise provided pursuant to paragraphs (b)
through (g) of this Agreement or Section 6.8 of the Plan.

          (b) If, prior to the first anniversary of the Option Date, the Employee’s employment by the
Company terminates for any reason whatsoever (including, without limitation, involuntary
termination by the Company) other than death or Disability, the Option shall terminate in its
entirety upon the effective date of Employee’s termination of employment.

          (c) If, on or after the first anniversary of the Option Date, the Employee’s employment by
the Company terminates for any reason whatsoever (including, without limitation,
involuntary termination by the Company) other than death, Disability, or Retirement,

 

 

the
Option shall remain exercisable with respect to the number of shares subject to the Option that are
exercisable upon the effective date of the Employee’s termination of employment and may thereafter
be exercised for a period of 90 days from the effective date of the Employee’s termination of
employment or until the Expiration Date, whichever period is shorter, after which the Option shall
terminate in its entirety.

          (d) If the Employee’s employment by the Company terminates by reason of the Employee’s death,
the Option shall become exercisable as of the date of death with respect to any or all of the
shares subject to the Option on the Option Date and may thereafter be exercised for a period of one
year from the date of death or until the Expiration Date, whichever period is shorter, after which
the Option shall terminate in its entirety.

          (e) If the Employee’s employment by the Company terminates by reason of the Employee’s
Disability, the Option shall become exercisable with respect to any or all of the shares subject to
the Option on the Option Date and may thereafter be exercised for a period of 90 days from the
effective date of the Employee’s termination of employment or until the Expiration Date, whichever
period is shorter, after which the Option shall terminate in its entirety. For purposes of this
Agreement, “Disability” shall mean the inability of an individual to fully perform the duties
pertaining to his or her employment for a continuous period in excess of 360 days, as determined by
the Board in its sole discretion.

          (f) If the Employee’s employment by the Company terminates by reason of the Employee’s
retirement after the Employee has completed five years of service as an Employee of the Company and
is at least 55 years of age (“Retirement”), the Option shall remain exercisable with respect to the
number of shares subject to the Option that are exercisable upon the effective date of Employee’s
Retirement, and may thereafter be exercised for a period of two years from the effective date of
the Employee’s Retirement or until the Expiration Date, whichever period is shorter, after which
the Option shall terminate in its entirety.

          (g) If the Employee dies following the termination of the Employee’s employment by the
Company, the Option shall be exercisable only to the extent that it is exercisable on the date of
the Employee’s death and may thereafter be exercised only for that period of time for which the
Option is exercisable immediately prior to the Employee’s death.

          General:

          Notwithstanding the fact that the Option is not granted pursuant to the Plan, the terms and
conditions of the Plan applicable to stock options are incorporated herein by reference and shall
apply as though the Option was granted pursuant to the Plan. A copy of the Plan is available upon
request by contacting the Company’s Legal Department in the Chicago office. Employee acknowledges
that the grant of the Option is an inducement material to the Employee’s entering into employment
with the Company. This Agreement may be executed in two counterparts each of which shall
constitute one and the same instrument.

- 2 -

 

          IN WITNESS WHEREOF, this Agreement has been executed this       day of ,                     200___(the
“Option Date”).

	 	 	 	 	 	 	 	 	 
	Accepted and agreed this

               day of                              , 200     
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	EMPLOYEE	 	 	 	TECHNOLOGY SOLUTIONS COMPANY
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	Name:	 	 	 	Name:

Title:	 	 

- 3 -

 

Annex I

to

Inducement Stock Option Agreement

          1. Meaning of Certain Terms. As used herein, the following terms shall have the
meanings set forth below. “Board” shall mean the Board of Directors of the Company. “Code” shall
mean the Internal Revenue Code of 1986, as amended, together with the rules and regulations
thereunder. “Committee” shall mean the Committee designated by the Board, consisting of two or
more members of the Board, each of whom shall be a “Non-Employee Director” within the meaning of
Rule 16b-3 under the Exchange Act and an “outside director” within the meaning of section 162(m) of
the Code. “Securities Act” shall mean the Securities Act of 1933, as amended, together with the
rules and regulations thereunder. References to this “Agreement,” the “Option” and “herein” shall
be deemed to include the Inducement Stock Option Agreement and this Annex I to Inducement Stock
Option Agreement taken as a whole. This Annex I and the Inducement Stock Option Agreement shall be
deemed to be one and the same instrument. References herein to sections of the Code shall be
deemed to refer to any successor section of the Code or any successor internal revenue law.

          2. Time and Manner of Exercise of Option.

          2.1. Term and Termination of Option. The maximum term of the Option shall be the date
which is 10 years after the Option Date (the “Expiration Date”). The Option shall terminate, to
the extent not exercised or earlier terminated pursuant to the terms of this Agreement, on its
Expiration Date. In no event may the Option be exercised, in whole or in part, after it
terminates.

          2.2. Exercisability of Option. The Option shall become exercisable on the date or
dates as set forth in this Agreement.

          2.3. Procedure for Exercise; Payment of Purchase Price. Subject to the limitations
set forth in this Agreement, the Option may be exercised by delivery of written notice to the
Company specifying the number of shares to be purchased, accompanied by payment in full of the
purchase price for such number of shares. The purchase price shall be payable either (A) in cash,
(B) by delivery of Mature Shares having an aggregate Fair Market Value, determined as of the date
of exercise, equal to the aggregate purchase price payable by reason of such exercise, (C) in cash
by a broker-dealer acceptable to the Company to whom the Employee has submitted an irrevocable
notice of exercise or (D) a combination of (A) and (B). The Company shall have sole discretion to
disapprove of an election pursuant to any of clauses (B)-(D) and if the Employee is subject to
Section 16 of the Exchange Act, the Company may require that the method of making such payment be
in compliance with Section 16 and the rules and regulations thereunder. Any fraction of a share of
Stock which would be required to pay such purchase price shall be disregarded and the remaining
amount due shall be paid in cash by the Employee. No certificate representing Stock shall be
delivered until the full purchase price therefor has been paid (or arrangement made for such
payment to the Company’s satisfaction).

 

 

          3. Additional Terms and Conditions of Option.

          3.1. Nontransferability of Option. Neither the Option nor any right under this
Agreement may be transferred by the Employee other than (i) by will or the laws of descent and
distribution or (ii) to a Permitted Transferee, as hereinafter defined. During the Employee’s
lifetime the Option is exercisable only by the Employee or a Permitted Transferee. Upon the
Employee’s death, the Option may be exercised by the Employee’s successor in interest in accordance
with the terms and conditions of this Agreement. Any other transfer or any attempted assignment,
pledge or hypothecation, whether or not by operation of law, shall be void. The Option shall not
be subject to execution, attachment or other process, and no person shall be entitled to exercise
any rights of the Employee hereunder or possess any rights hereunder by virtue of any attempted
execution, attachment or other process. For purposes of this Agreement, a “Permitted Transferee”
shall mean (i) the Employee’s spouse, (ii) any of the Employee’s lineal descendants, (iii) a trust
or similar arrangement of which such spouse, a lineal descendant of the Employee, or one or more of
such persons are the only current beneficiaries, or (iv) a charitable organization described in
Section 170(c) of the Code, provided that such transferee has entered into a written agreement with
the Company authorizing the Company to withhold shares of Stock which would otherwise be delivered
to such person upon an exercise of the Option to pay any federal, state, local or other taxes which
may be required to be withheld or paid in connection with such exercise in the event that the
Employee does not provide for an arrangement satisfactory to the Company to assure that such taxes
will be paid.

          3.2. Investment Representation. The Employee hereby represents and covenants that (a)
any share of Stock purchased upon exercise of the Option will be purchased for investment and not
with a view to the distribution thereof within the meaning of the Securities Act unless such
purchase has been registered under the Securities Act or applicable state securities law; (b) any
subsequent resale of any such shares shall be made either pursuant to an effective registration
statement under the Securities Act and any applicable state securities laws, or pursuant to an
exemption from registration under the Securities Act and such state securities laws; and (c) if
requested by the Company, the Employee shall submit a written statement, in form satisfactory to
counsel for the Company, to the effect that either representation (a) above is true and correct as
of the date of purchase of any shares hereunder, or representation (b) above is true and correct as
of the date of any resale of any such shares, as applicable. As a further condition precedent to
any exercise of the Option, the Employee shall comply with all regulations and requirements of
regulatory authority having control of or supervision over the issuance of the shares and, in
connection therewith, shall execute any documents which the Company shall in its sole discretion
deem necessary or advisable. Unless covered by an effective registration statement filed with the
U.S. Securities and Exchange Commission, all certificates representing shares of Stock acquired
pursuant to the exercise of the Option shall bear the following legend:

The shares represented by this certificate have been acquired for
investment and have not been registered under the Securities Act of
1933, as amended. The shares may not be sold or transferred in the
absence of such registration or exemption therefrom under said Act.

- 2 -

 

          3.3. Withholding Taxes. As a condition precedent to any exercise of the Option, the
Employee shall, upon request by the Company, pay to the Company in addition to the purchase price
of the Stock, such amount of cash as the Company may be required, under all applicable federal,
state or local laws or regulations, to withhold and pay over as income or other withholding taxes
(the “Required Tax Payments”) with respect to such exercise of the Option. If the Employee shall
fail to advance such Required Tax Payments after request by the Company, the Company may, in its
discretion, deduct any such Required Tax Payments from the amount to be paid hereunder, whether in
Stock or in cash, or from any other amount then or thereafter payable by the Company to the
Employee.

          3.4. Adjustments in the Event of Capitalization Changes. In the event of any stock
split, stock dividend, recapitalization, reorganization, merger, consolidation, combination,
exchange of shares, liquidation, spin-off or other similar change in capitalization or event, or
any distribution to holders of Stock other than a regular cash dividend, the number and class of
securities subject to the Option and the purchase price per security, shall be appropriately
adjusted by the Committee. The Committee may adjust the Option using any method which it deems
appropriate, which may be the same as or different than the method used to adjust other options
granted by the Company, including options granted under the Plan, with respect to such change in
capitalization or event. The decision of the Committee regarding any such adjustment shall be
final, binding and conclusive. If any such adjustment would result in a fractional security being
subject to the Option, the Company shall pay the Employee, in connection with the first exercise of
the Option in whole or in part occurring after such adjustment, an amount in cash determined by
multiplying (i) the fraction of such security (rounded to the nearest hundredth) by (ii) the
excess, if any, of (A) the Fair Market Value on the exercise date over (B) the exercise price of
the Option.

          3.5. Compliance with Applicable Law. The Option is subject to the requirement that
if at any time the Company determines that the listing, registration or qualification of the shares
of Stock subject to the Option upon any securities exchange or under any law, or the consent or
approval of any governmental body, or the taking of any other action is necessary or desirable as a
condition of, or in connection with, the delivery of shares hereunder, such shares shall not be
delivered unless such listing, registration, qualification, consent, approval or other action shall
have been effected or obtained, free of any conditions not acceptable to the Company. The Company
may require that certificates evidencing shares of Stock delivered pursuant to the Option bear a
legend indicating that the sale, transfer or other disposition thereof by the holder is prohibited
except in compliance with the Securities Act.

          3.6. Indemnification. The Employee hereby covenants and agrees to indemnify and hold
harmless the Company, its officers, directors, employees and agents from and against any loss,
claim, damage and expense (including, without limitation, reasonable attorneys’ fees) arising out
of or based upon any breach or failure by the Employee to comply with any representation, warranty,
covenant or agreement made by the Employee herein or in any other document furnished by the
Employee in connection with this transaction.

- 3 -

 

          3.7. Delivery of Certificates. Upon the exercise of the Option in whole or in part,
the Company shall deliver one or more certificates representing the number of shares purchased
against full payment therefor. The Company shall pay all original issue or transfer taxes and all
fees and expenses incident to such delivery, except as otherwise provided in paragraph 3.3.

          3.8. Option Confers No Rights as Stockholder. The Employee shall have no rights as a
stockholder of the Company with respect to any shares of Stock or other equity security of the
Company which is subject to the Option hereunder unless and until the Employee becomes a
stockholder of record with respect to such shares of Stock or equity security.

          3.9. Option Confers No Rights to Continued Employment. In no event shall the
granting of the Option or its acceptance by the Employee confer upon the Employee any right to
continued employment by the Company or any of its subsidiaries or affiliates or affect in any
manner the right of the Company or any of its subsidiaries or affiliates to terminate the
employment of the Employee at any time without liability hereunder.

          3.10. Decisions of Committee. The Committee shall have the right to resolve all
questions which may arise in connection with the Option or its exercise. Any interpretation,
determination or other action made or taken by the Committee regarding this Agreement including any
of the terms or conditions of the Plan that are incorporated herein by reference, shall be final,
binding and conclusive.

          3.11. Company to Reserve Shares. The Company shall at all times prior to the
expiration or termination of the Option reserve and keep available, either in its treasury or out
of its authorized but unissued shares of Stock, the full number of shares subject to the Option
from time to time.

          4. Miscellaneous Provisions.

          4.1. Designation as Nonqualified Stock Option. The Option is hereby designated as
not constituting an “incentive stock option” within the meaning of section 422A of the Code; this
Agreement shall be interpreted and treated consistently with such designation.

          4.2. Successors. This Agreement shall be binding upon and inure to the benefit of
any successor or successors of the Company and any person or persons who shall acquire any rights
under paragraph 3.1.

          4.3. Notices. All notices, requests or other communications provided for in this
Agreement shall be made in writing either (1) by actual delivery to the party entitled thereto, or
(2) by mailing in the U.S. mails to the last known address of the party entitled thereto, via
certified or registered mail, return receipt requested. The notice shall be deemed to be received
in case (1) on the date of its actual receipt by the party entitled thereto, and in case (2) on the
date of its mailing.

          4.4. Governing Law. This Agreement, and all determinations made and actions taken
pursuant thereto, to the extent not otherwise governed by the Code or the laws of the

- 4 -

 

United
States, shall be governed by the laws of the State of Delaware and construed in accordance
therewith without giving effect to the principles of conflicts of laws.

- 5 -

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