1
EXHIBIT 10.3
AMENDMENT NO. 2
TO
CREDIT AGREEMENT
AMENDMENT NO. 2 TO CREDIT AGREEMENT ("AMENDMENT") dated as of
May 10, 1999, among FLORISTS' TRANSWORLD DELIVERY, INC., a Michigan corporation
(the "BORROWER"), FTD Corporation, the institutions listed on the signature
pages hereof as Lenders (the "LENDERS"), and THE FIRST NATIONAL BANK OF CHICAGO
in its capacity as contractual representative for itself and the other Lenders
(the "AGENT") under that certain Credit Agreement dated as of November 20, 1997,
as amended, by and among the Borrower, the Lenders and the Agent (the "CREDIT
AGREEMENT"). Defined terms used herein and not otherwise defined herein shall
have the meaning given to them in the Credit Agreement.
WHEREAS, the Borrower, the Lenders and the Agent have entered
the Credit Agreement; and
WHEREAS, Borrower, the Lenders and the Agent have agreed to
amend the Credit Agreement on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises set forth
above, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Borrower, the Lenders and the
Agent agree as follows:
1. Amendment to the Credit Agreement. Effective as of the date
first above written and subject to the execution of this Amendment by the
parties hereto and the satisfaction of the conditions precedent set forth in
Section 2 below, the Credit Agreement shall be and hereby is amended as follows:
a) Section 1.1 is hereby amended to insert alphabetically
therein the following definition:
"XXX.XXX INC." means xxx.xxx inc., a Delaware corporation,
together with its successors and assigns.
b) Section 1.1 is hereby amended to delete the period at the
end of the first sentence contained in the definition of "SUBSIDIARY" therefrom
and to substitute the following therefor: "; provided, however, that unless
otherwise expressly indicated, xxx.xxx inc. shall not constitute a Subsidiary of
the Borrower for purposes of the Agreement.
c) Section 6.5(b) is hereby amended to delete therefrom the
word "Subsidiaries" and substitute therefor the phrase "Subsidiaries, including
xxx.xxx inc.,".
2
d) Section 6.8 is hereby amended to delete each occurrence of
the phrases "its Subsidiaries", "each Subsidiary" and "each of the Borrower's
Subsidiaries" therefrom and substitute therefor "its Subsidiaries, including
xxx.xxx inc.,", "each Subsidiary, including xxx.xxx inc.," and "each of the
Borrower's Subsidiaries, including xxx.xxx inc.," respectively.
e) Article VII is hereby amended to insert alphabetically the
following Section 7.3(Q):
"(Q) Equity Interests in xxx.xxx inc. The Borrower shall not
own less than fifty-one percent (51%) of the Equity Interests
of xxx.xxx inc."
f) Section 7.1(A)(i) is hereby amended and restated as
follows:
"(i) Quarterly Reports. As soon as practicable, and in any
event within fifty (50) days after the end of each of the
first three fiscal quarters in each fiscal year, the
consolidated balance sheet of Holdings and its Subsidiaries
and the consolidated and consolidating balance sheets of the
Borrower and its Subsidiaries, including xxx.xxx inc., each as
at the end of such period and the related consolidated
statements of income and cash flows of (i) the Borrower and
its Subsidiaries and (ii) the Borrower and its Subsidiaries,
including xxx.xxx inc., each for each such fiscal quarters and
for the period from the beginning of the then current fiscal
year to the end of such fiscal quarters, certified by the
chief financial officer of the Borrower on behalf of the
Borrower as fairly presenting the consolidated financial
position of (i) the Borrower and its Subsidiaries and (ii) the
Borrower and its Subsidiaries, including xxx.xxx inc., as
applicable, each as at the dates indicated and the results of
their operations and cash flows for the periods indicated in
accordance with Agreement Accounting Principles, subject to
normal year end adjustments."
g) Section 7.1(A)(ii) is hereby amended to delete clause (a)
therefrom and substitute the following clause (a) therefor:
"(a) the consolidated balance sheet of Holdings and its
Subsidiaries and the consolidated and consolidating balance
sheets of the Borrower and its Subsidiaries, including xxx.xxx
inc., each as at the end of such fiscal year and the related
consolidated statements of income, stockholders' equity and
cash flows of (i) the Borrower and its Subsidiaries and (ii)
the Borrower and its Subsidiaries, including xxx.xxx inc.,
each for such fiscal year, and in comparative form the
corresponding figures for the previous fiscal year along with
schedules in form and substance sufficient to calculate the
financial covenants set forth in Section 7.4, and"
h) Section 7.2(J) is hereby amended to delete therefrom the
period at the end of clause (iii) therein and substitute therefor the following:
3
"and (iv) make loans to xxx.xxx inc. for working capital
purposes under the terms of a promissory note in form and
substance satisfactory to the Agent, which loans in the
aggregate shall not exceed $5,000,000 and shall constitute an
Investment for purposes of Section 7.3(D)(xiii)."
i) Section 7.3(B)(iv) is hereby amended and restated as
follows:
"(iv) the sale or issuance of any of the Capital Stock of a
Subsidiary of the Borrower, including xxx.xxx inc., to the
Borrower or the Borrower's Subsidiaries which have executed
and delivered a guaranty and security agreement satisfactory
in form and substance to the Agent; provided, however, that
xxx.xxx inc. shall not be required to execute such a guaranty
or security agreement;"
j) Section 7.3(B)(vi) is hereby amended and restated as
follows:
"(vi) licenses or sublicenses of intellectual property and
general intangibles and licenses, leases or subleases or other
property in the ordinary course of business which do not
materially interfere with the Borrower's business, including,
without limitation, those trademarks licensed under the terms
of a trademark license agreement between the Borrower and
xxx.xxx inc. dated as of a date no later than June 1, 1999;"
k) Section 7.3(B)(x) is hereby amended and restated as
follows:
"(x) sale or other disposition of assets to a Subsidiary,
including xxx.xxx inc., that has executed and delivered a
guaranty and security agreement satisfactory in form and
substance to the Agent; provided, however, that the Borrower
may engage in a one-time sale or other disposition of assets
to xxx.xxx inc. without xxx.xxx inc. having executed such a
guaranty or security agreement, so long as such sale or
disposition occurs prior to June 1, 1999 and only includes
those assets set forth on the balance sheet attached to
Amendment No. 2 to this Agreement as Exhibit A thereto and the
business associated therewith,"
l) Section 7.3(D) is hereby amended to insert immediately at
the end thereof the following:
(xiii) Investments by the Borrower or any of its Subsidiaries
in xxx.xxx inc., including, without limitation, the loans
described in clause (iv) of Section 7.2(J), which, in the
aggregate, do not exceed $15,000,000.
m) Section 7.3(E) is hereby amended to delete therefrom the
amount "$1,000,000" and substitute therefor the amount "$2,000,000".
4
n) Section 7.3(F)(viii) is hereby amended to delete therefrom
the phrase "any Subsidiary of the Borrower" and to substitute therefor "any
Subsidiary of the Borrower, including xxx.xxx inc.,".
o) The fourth sentence of Section 7.3(G) is hereby amended and
restated as follows:
"The Borrower shall not create, capitalize, acquire or own any
Subsidiary after the date hereof, other than xxx.xxx inc.,
unless such Subsidiary executes a guaranty and security
agreement satisfactory in form and substance to the Agent."
p) Schedules 6.8 and 6.16 to the Credit Agreement are hereby
deleted therefrom and the attached Schedules 6.8 and 6.16 are substituted
therefor.
2. Conditions Precedent. This Amendment shall become effective
as of the date above written, if, and only if, the Agent has received (i) duly
executed originals of this Amendment from the Borrower, the Required Lenders and
the Agent and (ii) amendment fees paid to it in immediately available funds for
the account of each Required Lender that executes this Amendment equal to 0.05%
of each such Required Lender's Commitment; provided, however, that the
effectiveness of this Amendment shall terminate ninety (90) days from the date
hereof if the Agent has not received (x) articles of incorporation and a good
standing certificate for xxx.xxx inc. certified by the Secretary of State of
Delaware by June 1, 1999 and (y) a copy of the Amended and Restated Pledge
Agreement attached hereto as Exhibit B executed by the Borrower pursuant to
which the Borrower shall have pledged 100% of its interests in xxx.xxx inc. to
the Agent and delivered to the Agent its xxx.xxx inc. stock certificates and
related stock powers.
3. Representations and Warranties of the Borrower. The
Borrower hereby represents and warrants as follows:
(a) This Amendment and the Credit Agreement, as amended
hereby, constitute legal, valid and binding obligations of the Borrower and are
enforceable against the Borrower in accordance with their terms.
(b) Upon the effectiveness of this Amendment, the Borrower
hereby reaffirms all representations and warranties made in the Credit
Agreement, and to the extent the same are not amended hereby, agrees that all
such representations and warranties shall be deemed to have been remade as of
the date of delivery of this Amendment, unless and to the extent that any such
representation and warranty is stated to relate solely to an earlier date, in
which case such representation and warranty shall be true and correct as of such
earlier date.
4. Reference to and Effect on the Credit Agreement.
(a) Upon the effectiveness of Section 1 hereof, on and after
the date hereof, each reference in the Credit Agreement to "this Credit
Agreement," "hereunder,"
5
"hereof," "herein" or words of like import shall mean and be a reference to the
Credit Agreement as amended hereby.
(b) The Credit Agreement, as amended hereby, and all other
documents, instruments and agreements executed and/or delivered in connection
therewith, shall remain in full force and effect, and are hereby ratified and
confirmed.
(c) Except as expressly provided herein, the execution,
delivery and effectiveness of this Amendment shall not operate as a waiver of
any right, power or remedy of the Agent or the Lenders, nor constitute a waiver
of any provision of the Credit Agreement or any other documents, instruments and
agreements executed and/or delivered in connection therewith.
5. Governing Law. This Amendment shall be governed by and
construed in accordance with the internal laws (as opposed to the conflict of
law provisions) of the State of Illinois.
6. Headings. Section headings in this Amendment are included
herein for convenience of reference only and shall not constitute a part of this
Amendment for any other purpose.
7. Counterparts. This Amendment may be executed by one or more
of the parties to the Amendment on any number of separate counterparts and all
of said counterparts taken together shall be deemed to constitute one and the
same instrument.
[the remainder of this page remains intentionally blank]
6
IN WITNESS WHEREOF, this Amendment has been duly executed and
delivered on the date first above written.
----------------------------------------------------------- --------------------------------------------------------
FLORISTS' TRANSWORLD DELIVERY, INC. FTD CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxxxxx By: /s/ Xxxxxxx X. Xxxxxxxxxx
---------------------------------- -----------------------------------
Name: Xxxxxxx X. Xxxxxxxxxx Name: Xxxxxxx X. Xxxxxxxxxx
Title: Chief Financial Officer Title: Treasurer
----------------------------------------------------------- --------------------------------------------------------
THE FIRST NATIONAL BANK OF CHICAGO, individually and as MICHIGAN NATIONAL BANK
Agent
By: /s/ Xxxxxx X. Xxxxx By: /s/ Xxxxxxx Xxxxxx
---------------------------------- -----------------------------------
Name: Xxxxxx X. Xxxxx Name: Xxxxxxx Xxxxxx
Title: Vice President Title: Commercial Relationship Manager
----------------------------------------------------------- --------------------------------------------------------
KEYBANK NATIONAL ASSOCIATION XXXXXX TRUST AND SAVINGS BANK
By: /s/ Xxxxx X. Xxxxxx By: /s/ Xxxxx X. Law
---------------------------------- -----------------------------------
Name: Xxxxx X. Xxxxxx Name: Xxxxx X. Law
Title: Vice President Title: Vice President
----------------------------------------------------------- --------------------------------------------------------
MERCANTILE BANK NATIONAL ASSOCIATION HUNTINGTON NATIONAL BANK
By: /s/ Xxxxxx X. Xxxx By: /s/ Xxxx X. Xxxxxx
---------------------------------- -----------------------------------
Name: Xxxxxx X. Xxxx Name: Xxxx X. Xxxxxx
Title: Assistant Vice President Title: Vice President
----------------------------------------------------------- --------------------------------------------------------
7
EXHIBIT A
Balance Sheet
(Attached)
8
EXHIBIT B
Amended and Restated Pledge Agreement
(Attached)
