Exhibit 10.21
FIRST AMENDMENT TO CREDIT AGREEMENT, WAIVER AND CONSENT
This FIRST AMENDMENT TO CREDIT AGREEMENT, WAIVER AND CONSENT (this
"FIRST AMENDMENT") is entered into as of May 20, 1999 among 0-000-XXXXXXX.XXX,
INC., formerly known as 1-800-Flowers, Inc., a Delaware corporation (the
"COMPANY"), and THE CHASE MANHATTAN BANK, a New York banking corporation (the
"LENDER").
WHEREAS, the Company and the Lender entered into a Credit Agreement
dated as of March 19, 1999 (the "CREDIT AGREEMENT"), pursuant to which the
Lender agreed to make available to the Company a term loan and revolving credit
facility;
WHEREAS, the Company anticipates the consummation of a private
placement of equity securities and an initial public offering of the Company's
common stock pursuant to an effective registration statement filed by the
Company under the Securities Act of 1933, as amended (collectively, the
"Transactions");
WHEREAS, in contemplation of the consummation of such Transactions
and in connection with certain changes in the Company's accounting policies that
have been implemented in preparation for such Transactions, the Company has
requested that the Lender agree to certain amendments to the Credit Agreement,
and provide certain waivers and consents in connection therewith, and the Lender
has agreed to such request, subject to the terms and conditions of this First
Amendment.
NOW, THEREFORE, the parties hereto agree as follows:
1. DEFINITIONS; REFERENCES; INTERPRETATION.
(a) Unless otherwise specifically defined herein, each term used
herein (including in the Recitals hereof and in the Consent and Agreement of
Guarantors attached hereto) which is defined in the Credit Agreement shall have
the meaning assigned to such term in the Credit Agreement.
(b) Each reference to "this First Amendment," "hereof," "hereunder,"
"herein" and "hereby" and each other similar reference contained in the Credit
Agreement, and each reference to "the Credit Agreement" and each other similar
reference in the other Loan Documents, shall from and after the First Amendment
Effective Date refer to the Credit Agreement as amended hereby.
(c) The rules of interpretation set forth in Section 1.02 of the
Credit Agreement shall be applicable to this First Amendment.
2. AMENDMENTS AND ADDITIONS TO THE CREDIT AGREEMENT. Subject to the terms and
conditions hereof, the Credit Agreement is amended as
follows, effective as of the First Amendment Effective Date (as defined in
Section 6):
(a) AMENDMENTS TO SECTION 1.01 OF THE CREDIT AGREEMENT. The
definitions set forth in Section 1.01 of the Credit Agreement are amended as
follows:
(i) The second sentence of the definition of "Consolidated
EBITDA" is amended so as to read in full as follows:
All of the foregoing categories shall be calculated with respect to
the Company and its Subsidiaries and shall be calculated (without
duplication) over the four fiscal quarters next preceding the date
of calculation thereof other than the calculation of Consolidated
EBITDA pursuant to Section 7.13 which shall be calculated for the
fiscal quarter of the Company ending most recently prior to the date
of determination thereof.
(ii) The definition of "P&H Acquisition Agreement" is amended
so as to read in full as follows:
"`P&H Acquisition Agreement' shall mean, collectively, the Stock
Purchase Agreement dated March 9, 1998, by and among the Company,
P&H and the shareholders of P&H identified therein, and the Purchase
Agreement dated March 9, 1998, by and among the limited partners of
the P&H Partnership, the Company, P&H Partnership, 1-800-Flowers
Acquisition Corp. and Xxxxx X. Xxxx, in each case as amended by the
P&H Amendment Agreements."
(iii) The definition of "Revolving Credit Commitment" is
amended such that the reference therein to the figure $12,000,000 is replaced
with a reference to the figure $5,000,000.
(iv) The definition of "Revolving Credit Commitment
Termination Date" is amended so as to read in full as follows.
"`Revolving Credit Commitment Termination Date' shall mean the
earlier of (i) the date of the closing of the Initial Public
Offering or (ii) July 3, 2000."
(v) The definition of "Stock Option Plan" is amended so as to
read in full as follows:
"`Stock Option Plan' shall mean the P&H Non-Qualified Stock Option
Agreement dated as of February 28, 1998 between P&H and the option
holders named therein, as amended by the P&H Amendment Agreements."
(vi) The definition of "Stockholders Agreement" is amended so
as to read in full as follows:
"`Stockholders Agreement' shall mean the Stockholders Agreement
dated April 3, 1998 by and among P&H, the Company, Xxxxx X. Xxxx and
other individuals set forth on Schedule A thereto, as amended by the
P&H Amendment Agreements."
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(vii) The definition of "Term Loan Maturity Date" is amended
so as to read in full as follows:
"`Term Loan Maturity Date' shall mean the earlier of (i) the date of
the closing of the Initial Public Offering or (ii) July 3, 2000."
(viii) The definition of "Interest Rate Margin" is hereby
amended to delete the text "the fifth Business Day following the day of delivery
of the financial statements to the Lender for the third fiscal quarter ending
March 28, 1999" and to substitute the date "August 31, 1999" in place thereof.
(ix) The definition of "LC Margin" is hereby amended to delete
the text "the fifth Business Day following the date of delivery of the financial
statements for the third fiscal quarter ending March 28, 1999" and to insert the
date "August 31, 1999" in place thereof.
(x) The definition of "Unused Fee Rate" is hereby amended to
delete the text "the fifth Business Day following the date of the delivery of
the financial statements for the third fiscal quarter ending March 28, 1999" and
to insert the date "August 31, 1999" in place thereof.
(b) ADDITIONS TO SECTION 1.01 OF THE CREDIT AGREEMENT. Section 1.01
of the Credit Agreement is amended by the addition of the following terms:
(i) "First Amendment" shall mean the First Amendment to Credit
Agreement dated as of May 20, 1999 by and between the Company and the Lender.
(ii) "First Amendment Effective Date" has the meaning set
forth in Section 6 of the First Amendment.
(iii) "Initial Public Offering" shall mean the Company's
initial sale of its common stock in a firm commitment underwritten public
offering pursuant to an effective registration statement filed by the Company
under the Securities Act of 1933, as amended, in which the aggregate gross
proceeds to the Company (prior to deduction of offering expenses but after
deductions of underwriting discounts and commissions) are at least $25,000,000.
(iv) "Liquidity Account" shall mean one or more accounts
maintained by the Company with the Lender or an Affiliate of the Lender the
contents of which are comprised of cash deposits or Eligible Investments.
(v) "P&H Amendment Agreements" shall mean (a) the First
Amendment to Stockholders' Agreement dated as of March 27, 1999 by and among
P&H, the Company and the Persons listed on the signature pages thereto; (b) the
Second Amendment to Stockholders' Agreement dated as of May 17, 1999 by and
among P&H, the Company and the Persons listed on the signature pages thereto,
(c) the First Master Amendment to the Plow & Hearth, Inc. Nonqualified Stock
Option Agreements dated as of March 27, 1999 by and among P&H and the Persons
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listed on the signature pages thereto; (d) the Second Master Amendment to the
Plow & Hearth, Inc. Nonqualified Stock Option Agreements dated May 17, 1999 by
and among P&H and the Persons listed on the signature pages thereto; and (e) the
Master Amendment to the Plow & Hearth, Inc. Incentive Stock Option Agreements
dated as of May 17, 1999 by and among P&H and the Persons listed on the
signature pages thereto.
(vi) "Recapitalization" shall mean the consummation of the
transactions contemplated in the Recapitalization Consent.
(vii) "Recapitalization Consent" shall mean the Consent and
Amendment No. 1 to Investment Agreement dated as of May 20, 1999 among Chase
Venture Capital Associates, the Company and Xx. Xxxxx X. XxXxxx.
(viii) "Restated Financial Statements" has the meaning set
forth in Section 6 of the First Amendment.
(ix) "Second Restated Certificate" shall mean the Second
Amended and Restated Certificate of Incorporation of the Company.
(x) The definition of "Total Commitment" is amended so as to
read as follows:
"`Total Commitment' shall mean, at any time after the First
Amendment Effective Date, the aggregate of the Commitments in effect
at such time, which, as of the First Amendment Effective Date, shall
be $23,000,000."
(c) AMENDMENT TO SECTION 2.02 OF THE CREDIT AGREEMENT. The first
sentence of Section 2.02 of the Credit Agreement is amended such that the
reference therein to EXHIBIT A is replaced with a reference to EXHIBIT A to the
First Amendment.
(d) AMENDMENT TO SECTION 2.04 OF THE CREDIT AGREEMENT. Section 2.04
of the Credit Agreement is amended as follows:
(i) The first sentence of Section 2.04 of the Credit Agreement
is amended such that the reference therein to EXHIBIT B is replaced with a
reference to EXHIBIT B to the First Amendment.
(ii) The fourth sentence of Section 2.04 of the Credit
Agreement is amended so as to read in full as follows:
"The Term Note shall (a) be dated the Closing Date, (b) be stated to
mature on the Term Loan Maturity Date and (c) be payable as to
principal in full on the Term Loan Maturity Date."
(e) AMENDMENT TO SECTION 2.05 OF THE CREDIT AGREEMENT. Section 2.05
of the Credit Agreement is amended by the addition of a new subsection (e)
thereto, to read in full as follows:
"(e) LETTERS OF CREDIT OUTSTANDING ON REVOLVING CREDIT COMMITMENT
TERMINATION DATE. If Letter of Credit shall remain outstanding on
the Revolving Credit Commitment Termination Date, then on the
Revolving Credit Commitment Termination Date the Company shall
provide Cash Collateral to the Lender, pursuant to a cash collateral
agreement having
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terms that are reasonably satisfactory to the Lender and the
Company, in the face amount remaining undrawn on the Revolving
Credit Commitment Termination Date of such outstanding Letter of
Credit.
(f) AMENDMENT TO SECTION 7.10 OF THE CREDIT AGREEMENT. Section 7.10
of the Credit Agreement is amended by the addition of the following sentence at
the end thereof:
Notwithstanding the foregoing provisions of this Section 7.10, the
Company or any of its Subsidiaries may make such changes in its
accounting policies and procedures which underlie or are reflected
in the Restated Financial Statements, provided such changes are
permitted by and in accordance with GAAP.
(g) AMENDMENT TO SECTION 7.13 OF THE CREDIT AGREEMENT. Section 7.13
of the Credit Agreement is amended so as to read in full as follows:
"SECTION 7.13. FINANCIAL CONDITION COVENANT.
(a) CONSOLIDATED EBITDA. Permit, on any date of determination, the
aggregate balance in the Liquidity Account to be less than $40,000,000,
unless the Consolidated EBITDA for the fiscal quarter of the Company
ending most recently prior to such date of determination shall have
exceeded the amount set forth below in reference to such fiscal quarter
(in which case it shall not be required that any minimum Liquidity Account
balance be maintained) (bracketed amount ([ ]) is negative):
FISCAL QUARTER MINIMUM CONSOLIDATED
EBITDA
-------------- --------------------
June 27, 1999 $4,000,000
September 26, 1999 [$2,800,000]
December 26, 1999 $4,000,000
March 26, 2000 $950,000
July 2, 2000 $8,100,000
(b) MAXIMUM UNFUNDED CONSOLIDATED CAPITAL EXPENDITURES. Permit
Unfunded Consolidated Capital Expenditures of the Company and its
Subsidiaries to exceed $5,000,000 in the aggregate during the period
commencing March 28, 1999 through July 2, 2000; provided, however, the
Company shall not be subject to the foregoing limitation so long as the
aggregate balance in the Liquidity Account is $40,000,000 or greater.
(h) AMENDMENT TO SECTION 7.15 OF THE CREDIT AGREEMENT. Section 7.15
of the Credit Agreement is amended by the addition of the following sentence at
the end thereof:
Notwithstanding the foregoing provisions of this Section 7.15, this
Section
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7.15 shall not (x) restrict the Company or any Subsidiary of the
Company from consummating any redemption, repurchase of, or payment
or other distribution in respect of, any capital stock of the
Company or any such Subsidiary (or any warrant or option for the
purchase thereof) provided for in Section 2.1 of the
Recapitalization Consent as in effect on the date hereof or (y)
restrict the Company from declaring or paying any dividend or
distribution or otherwise making any payment or distribution on
account of any capital stock of the Company to the extent provided
in Article IV of the Second Restated Certificate as in effect on the
date hereof.
(i) AMENDMENT TO SECTION 7.16 OF THE CREDIT AGREEMENT. Section 7.16
is amended by the addition of the following sentence at the end thereof:
Notwithstanding the foregoing provisions of this Section 7.16,
nothing contained in this Section shall restrict the Company from
(x) entering into that certain Investors' Rights Agreement dated as
of May 20, 1999 with Xx. Xxxxx X. XxXxxx and Xx. Xxxxxxxxxxx X.
XxXxxx and the persons designated as Investors on the signature
pages thereto or (y) consummating the transactions contemplated in
Section 2.1 of the Recapitalization Consent or the First Amendment.
3. WAIVERS UNDER LOAN DOCUMENTS. Subject to the terms and conditions set forth
herein, the Lender hereby irrevocably grants the following waivers in respect of
the Loan Documents:
(a) The Lender hereby irrevocably waives any noncompliance prior to
the First Amendment Effective Date with the covenants set forth in Section 7.13
of the Credit Agreement and any Default or Event of Default arising as a result
of any such noncompliance; provided, however that (i) Consolidated Net Income
for the nine month period ended March 28, 1999 was not less than [$7,600,000]
(excluding the Company's redeemable Class C Common Stock dividends) and (ii)
Consolidated Net Worth (calculated inclusive of the Company's Class C Common
Stock) at March 28, 1999 was not less than $10,900,000 (bracketed amount ([ ])
is negative).
(b) The Lender hereby irrevocably waives any breach of or
noncompliance with any representation, warranty, covenant or other provision of
any Loan Document and any Default or Event of Default in each case otherwise
arising at any time prior to or on or after the First Amendment Effective Date
as a result of the restatement of the financial statements of the Company and
its Subsidiaries reflected in the Restated Financial Statements or as a result
of the implementation of the changes in accounting policies and procedures
underlying or reflected in such restatement.
4. CONSENTS. Notwithstanding the terms and any provisions in the Loan Documents
to the contrary, the Lender hereby consents to the consummation of the
transactions contemplated in Section 2.1 of the Recapitalization Consent.
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5. REPRESENTATIONS AND WARRANTIES. The Company hereby represents and warrants to
the Lender as follows:
(a) No Default or Event of Default has occurred and is continuing
after giving effect to Sections 2, 3 and 4 of the First Amendment.
(b) The execution, delivery and performance by the Company of this
First Amendment and the Credit Agreement, as amended by this First Amendment,
have been duly authorized by all necessary corporate and other action and do not
and will not require any registration with, consent or approval of, or notice to
or action by, any Person (including any Governmental Authority) in order to be
effective and enforceable.
(c) This First Amendment and the Credit Agreement, as amended by
this First Amendment, constitute the legal, valid and binding obligations of the
Company, enforceable against it in accordance with their respective terms.
(d) The Restated Financial Statements were prepared in conformity
with Generally Accepted Accounting Principles, applied on a consistent basis
(after giving effect to the changes in accounting policies and procedures
underlying or reflected in the Restated Financial Statements), and present
fairly the consolidated financial condition and consolidated results of
operations of the Company and its Subsidiaries as of the dates of such financial
statements and for the periods to which they relate.
6. CONDITIONS OF EFFECTIVENESS.
(a) The effectiveness of Sections 2, 3 and 4 of this First Amendment
shall be subject to the satisfaction or waiver of each of the following
conditions precedent on or prior to May 20, 1999, the date on which all such
conditions shall have been satisfied or waived being the "First Amendment
Effective Date":
(i) The Company shall have executed and delivered to the
Lender an Amended and Restated Revolving Credit Note, substantially in the form
of EXHIBIT A hereto, in exchange for the existing Revolving Credit Note,
endorsed to reflect cancellation thereof, which Lender shall promptly deliver to
the Company after the First Amendment Effective Date.
(ii) The Company shall have executed and delivered to the
Lender an Amended and Restated Term Note, substantially in the form of EXHIBIT B
hereto, in exchange for the existing Term Note, endorsed to reflect cancellation
thereof, which Lender shall promptly deliver to the Company after the First
Amendment Effective Date.
(iii) The Lender shall have received from each Guarantor an
executed counterpart of the attached Consent and Agreement of Guarantor.
(iv) The Lender shall have received the following
(collectively the "Restated Financial Statements"): (i) the audited restated
consolidated balance sheet of the Company and its Subsidiaries and the related
restated consolidated statement of income, retained earnings and cash flow of
the Company and its Subsidiaries for the fiscal year ended June 28, 1998, which
shall have been
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audited by Ernst & Young, independent certified public accountants, as reflected
in an audit report dated on or about the First Amendment Effective Date and (ii)
the audited restated consolidated balance sheet of the Company and its
Subsidiaries and the related restated consolidated statement of income, retained
earnings and cash flow of the Company and its Subsidiaries for the nine-month
fiscal period ended March 28, 1999, which shall have been audited by Ernst &
Young, independent certified public accountants, as reflected in an audit report
dated on or about the First Amendment Effective Date and which nine month
statements shall indicate that (i) Consolidated Net Income for the nine month
period ended March 28, 1999, was not less than [$7,600,000] (excluding the
Company's redeemable Class C Common Stock dividends) and (ii) Consolidated Net
Worth (calculated inclusive of the Company's Class C Common Stock) at March 28,
1999, was not less than $10,900,000 (bracketed amount ([ ]) is negative).
(v) The Lender shall have received a certificate of the Chief
Executive Officer or Chief Financial Officer of the Company dated the First
Amendment Effective Date certifying that the representations and warranties in
Section 5 hereto are true and correct as of the First Amendment Effective Date.
(vi) The representations and warranties by the Company and
each of its Subsidiaries pursuant to the Credit Agreement and the other Loan
Documents to which each is a party shall be true and correct in all material
respects on and as of the First Amendment Effective Date, after giving effect to
Sections 2, 3 and 4 of the First Amendment, with the same effect as though such
representations and warranties had been made on and as of such date unless such
representation is as of a specific date, in which case, as of such date.
(b) From and after the First Amendment Effective Date, each of the
outstanding Term Note and the outstanding Revolving Credit Note shall be
superseded and replaced by each of the Amended and Restated Term Note and the
Amended and Restated Revolving Credit Note, respectively, both being delivered
pursuant to Section 6(a) of this First Amendment. Both the previously
outstanding Term Note and previously outstanding Revolving Credit Note will be
deemed cancelled upon the occurrence of the First Amendment Effective Date.
Except as expressly amended or otherwise modified pursuant hereto, the Credit
Agreement and each other Loan Document shall remain unchanged and in full force
and effect and is hereby ratified and confirmed in all respects.
(c) The Lender will notify the Company of the occurrence of the
First Amendment Effective Date.
7. MISCELLANEOUS.
(a) The Company acknowledges and agrees that the execution and
delivery by the Lender of this First Amendment shall not be deemed to create a
course of dealing or an obligation to execute similar waivers or amendments
under the same or similar circumstances in the future.
(b) This First Amendment shall be binding upon and inure to the
benefit of the parties hereto and thereto and their respective successors and
assigns, except that the Company may not assign or transfer any of its rights
and obligations under this First Amendment without the prior written consent of
the Lender.
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(c) This First Amendment shall be governed by and construed in
accordance with the law of the State of New York without regard to principles of
conflicts or choice of law.
(d) This First Amendment may be executed in any number of
counterparts, each of which shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument. Each of
the parties hereto understands and agrees that this document (and any other
document required herein) may be delivered by any party thereto either in the
form of an executed original or an executed original sent by facsimile
transmission to be followed promptly by mailing of a hard copy original, and
that receipt by the Lender or the Company of a facsimile transmitted document
purportedly bearing the signature of the Lender or the Company shall bind the
Lender or the Company, respectively, with the same force and effect as the
delivery of a hard copy original. Any failure by the Lender to receive the hard
copy executed original of such document shall not diminish the binding effect of
receipt of the facsimile transmitted executed original of such document of the
party whose hard copy page was not received by the Lender.
(e) This First Amendment contains the entire and exclusive agreement
of the parties hereto with reference to the matters discussed herein. This First
Amendment supersedes all prior drafts and communications with respect hereto or
thereto. This First Amendment may not be amended except in accordance with the
Credit Agreement.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, the parties hereto have caused this First
Amendment to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written.
0-000-XXXXXXX.XXX, INC.
By:
----------------------------------------
Title: Treasurer and Vice President-Finance
THE CHASE MANHATTAN BANK
By:
----------------------------------------
Title:
-------------------------------------
CONSENT AND AGREEMENT OF GUARANTORS
Each of the undersigned, in its capacity as a Guarantor,
acknowledges that its consent to the foregoing First Amendment to Credit
Agreement (the "FIRST AMENDMENT") is not required, but each of the undersigned
nevertheless does hereby consent to the foregoing First Amendment and to the
documents and agreements referred to therein. Nothing herein shall in any way
limit any of the terms or provisions of the Guaranty of the undersigned or the
each of the Pledge Agreements executed by the undersigned in the Lender's favor,
or any other Loan Document executed by the undersigned (as the same may be
amended from time to time), all of which are hereby ratified and affirmed in all
respects.
GUARANTORS:
800-FLOWERS, INC.
By:
-----------------------------------------
Title: Treasurer and Vice President-Finance
1-800-FLOWERS RETAIL INC.
By:
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Title: Treasurer and Vice President-Finance
FRESH INTELLECTUAL PROPERTIES, INC.
By:
-----------------------------------------
Title: Treasurer and Vice President-Finance
800-GIFTHOUSE, INC.
By:
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Title: Treasurer and Vice President-Finance
1-800-FLOWERS TEAM SERVICES, INC.
By:
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Title: Treasurer and Vice President-Finance
TELEWAY, INC.
By:
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Title: Treasurer and Vice President-Finance
BLOOMLINK SYSTEMS, INC.
By:
-----------------------------------------
Title: Treasurer and Vice President-Finance
1-800-FLOWERS ACQUISITION CORP.
By:
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Title: Treasurer and Vice President-Finance
ST. CLAIRE FLORAL CO., INC.
By:
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Title: Treasurer and Vice President-Finance
FLORAL WORKS, INC.
By:
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Title: Treasurer and Vice President-Finance
AMALGAMATED CONSOLIDATED ENTERPRISES, INC.
By:
-----------------------------------------
Title: Treasurer and Vice President-Finance
THE PLOW & HEARTH, INC.
By:
-----------------------------------------
Title: Treasurer and Vice President-Finance
X.X. XXXXXX COMPANY, INC.
By:
-----------------------------------------
Title: Treasurer and Vice President-Finance
XXXXXX'X ACQUISITION CORPORATION
By:
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Title: Treasurer and Vice President-Finance
XXXXXX'X, INC.
By:
-----------------------------------------
Title: Treasurer and Vice President-Finance
FLORISTS' CAPITAL CORPORATION
By:
-----------------------------------------
Title: Treasurer and Vice President-Finance
