Exhibit 10.5
FIRST AMENDMENT
TO
CREDIT AGREEMENT
THIS FIRST AMENDMENT ("Amendment #1") is entered into as of May 4, 1994, by
and among CELESTIAL SEASONINGS, INC., a Delaware corporation having its
principal place of business at 0000 Xxxxxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx 00000
("Borrower"), FLEET NATIONAL BANK ("FNB") and BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION ("BANTSA") (FNB and BANTSA, individually, a "Lender" and
collectively, "Lenders") and FNB as agent for the Lenders (in such capacity,
"Agent").
BACKGROUND
Borrower, Agent and Lenders are parties to a Credit Agreement dated as of
July 19, 1993 (as amended, supplemented or otherwise modified from time to time,
the "Credit Agreement") pursuant to which each Lender, severally and not
jointly, provided Borrower with certain financial accommodations.
Borrower has requested that Lenders increase the permitted Capital
Expenditures for the Fiscal Years 1994 and 1995 and each Lender is willing to do
so on the terms and conditions hereafter set forth.
NOW, THEREFORE, in consideration of any loan or advance or grant of credit
heretofore or hereafter made to or for the account of Borrower by Lenders and
Agent, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
1. Definitions. All capitalized terms not otherwise defined herein shall
have the meanings given to them in the Credit Agreement.
2. Amendments to Credit Agreement. Subject to satisfaction of the condition
precedent set forth in Section 3 below, the Credit Agreement is hereby amended
as follows:
(a) Section 8.7 of the Credit Agreement is hereby amended by deleting the
permitted amounts set forth therein for Capital Expenditures for the Fiscal
Years of 1994 and 1995 and by inserting the following in lieu thereof:
The Fiscal Year of 1994.............................. $3,500,000
The Fiscal Year of 1995.............................. $3,000,000
39
(b) Section 11.1(a) of the Credit Agreement is hereby amended by deleting
the address set forth therein for "Agent and/or Lenders" and by inserting the
following in lieu thereof:
If to Agent: c/o Fleet Credit Corporation
00 Xxxxx Xxxxxx - 0xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000-0000
Attention: Xxxxx Xxxxxx
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
with a copy to: Xxxx & Hessen
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxx, Esq.
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
If to Lenders: Fleet Credit Corporation
00 Xxxxx Xxxxxx - 0xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000-0000
Attention: Xxxxx Xxxxxx
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
and Bank of America National Trust and
Savings Association
000 Xxxxx Xxxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxxx XxXxxxx-Xxxxx
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
with a copy to: Xxxx & Hessen
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxx, Esq.
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
3. Condition of Effectiveness. This Amendment #1 shall become effective
when Agent shall have received five (5) copies hereof each duly executed by
Borrower and Lenders.
4. Representations and Warranties. Borrower hereby represents and warrants
as follows:
(a) This Amendment #1, and the Credit Agreement
40
as amended hereby, constitute legal, valid and binding obligations of
Borrower and are enforceable against Borrower in accordance with their
respective terms.
(b) Upon the effectiveness of this Amendment #1, Borrower hereby
reaffirms all covenants, representations and warranties made in the Credit
Agreement to the extent the same are not amended hereby and agrees that all
such covenants, representations and warranties shall be deemed to have been
remade as of the effective date of this Amendment #1.
(c) No Event of Default or Incipient Default has occurred and is
continuing or would exist after giving effect to this Amendment #1.
(d) Borrower has no defense, counterclaim or offset with respect to the
Credit Agreement.
5. Effect on the Credit Agreement.
(a) Upon the effectiveness of Section 2 hereof, each reference in the
Credit Agreement to "this Agreement," "hereunder," "hereof," "herein" or words
of like import shall mean and be a reference to the Credit Agreement as amended
hereby.
(b) Except as specifically amended herein, the Credit Agreement, 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) The execution, delivery and effectiveness of this Amendment shall not
operate as a waiver of any right, power or remedy of Lenders, nor constitute a
waiver of any provision of the Credit Agreement, or any other documents,
instruments or agreements executed and/or delivered under or in connection
therewith.
6. Governing Law. This Amendment #1 shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns and
shall be governed by and construed in accordance with the laws of the State of
New York.
7. Headings. Section headings in this Amendment #1 are included herein for
convenience of reference only and shall not constitute a part of this Amendment
#1 for any other purpose.
8. Counterparts. This Amendment may be executed by the parties hereto in
one or more counterparts, each of which when taken together shall be deemed to
constitute one and the same instrument.
IN WITNESS WHEREOF, this Amendment No. 1 has been duly
41
executed as of the day and year first written above.
CELESTIAL SEASONINGS, INC.
By: /s/ Xxxxx Xxxxxxxxx
-------------------
Name: Xxxxx Xxxxxxxxx
Title: Assistant Treasurer
FLEET NATIONAL BANK,
as Agent and as Lender
By: /s/ Xxxxx Xxxxxx
----------------
Name: Xxxxx Xxxxxx
Title: Vice President
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Lender
By: /s/ Xxxxxxxx XxXxxxx-Xxxxx
--------------------------
Name: Xxxxxxxx XxXxxxx-Xxxxx
Title: Vice President
42
SECOND AMENDMENT
TO
CREDIT AGREEMENT
THIS SECOND AMENDMENT ("Amendment #2") is entered into as of February 25,
1995, by and among CELESTIAL SEASONINGS, INC., a Delaware corporation having its
principal place of business at 0000 Xxxxxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx 00000
("Borrower"), FLEET BANK OF MASSACHUSETTS, N.A. (assignee of Fleet National Bank
by Assignment and Acceptance Agreement effective as of September 27,1994,
"FBMA") and BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION ("BANTSA")
(FBMA and BANTSA, individually, a "Lender" and collectively, "Lenders") and FBMA
as agent for the Lenders (in such capacity, "Agent").
BACKGROUND
Borrower, Agent and Lenders are parties to a Credit Agreement dated as of
July 19, 1993 (as amended, supplemented or otherwise modified from time to time,
including by First Amendment to Credit Agreement dated as of May 4, 1994, the
"Credit Agreement") pursuant to which each Lender, severally and not jointly,
provided Borrower with certain financial accommodations.
Borrower has requested that Lenders amend the Credit Agreement to permit
Borrower to utilize cash-on-hand or the proceeds of Revolving Credit Loans to
repurchase shares of Borrower's common capital stock during the period February
24, 1995 through February 23, 1996, up to an aggregate purchase price to
Borrower of $7,500,000 and each Lender is willing to do so on the terms and
conditions hereafter set forth.
Borrower has also requested that Lenders amend the Credit Agreement to
delete the requirement that Borrower prepay the Reducing Revolving Loans in
amounts equal to 50% of Excess Cash Flow and each Lender is willing to do so on
the terms and conditions hereafter set forth.
NOW, THEREFORE, in consideration of any loan or advance or grant of credit
heretofore or hereafter made to or for the account of Borrower by Lenders and
Agent, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
1. Definitions. All capitalized terms not otherwise defined herein shall
have the meanings given to them in the
43
Credit Agreement.
2. Amendments to Credit Agreement. Subject to satisfaction of the
condition precedent set forth in Section 3 below, the Credit Agreement is hereby
amended as follows:
(a) Section 1.2 of the Credit Agreement is hereby amended by deleting the
definition of the term "Prepayment Amount" and by inserting a new definition for
the term "1995 Stock Repurchase Program" as follows:
"1995 Stock Repurchase Program" shall mean the publicly announced
purchase by Borrower of shares of its own common capital stock in
public markets during the period February 24, 1995 through February 23,
1996, not in excess of an aggregate purchase price of Seven Million
Five Hundred Thousand Dollars ($7,500,000).
(b) Section 2.10(b) of the Credit Agreement is hereby deleted in its
entirety.
(c) Section 5.14 of the Credit Agreement is hereby amended by inserting the
words ", including, but not limited to, the 1995 Stock Repurchase Program"
immediately preceding the period appearing at the end thereof.
(d) Section 8.6 of the Credit Agreement is hereby amended by deleting the
words "Date and (M)" appearing in subsection (ii) thereof and by inserting the
following in lieu thereof:
Date, (M) shares of its own common capital stock pursuant to the 1995
Stock Repurchase Program and (N)
(e) Section 8.11 of the Credit Agreement is hereby amended by inserting the
following immediately preceding the colon appearing therein:
minus, with respect to each fiscal quarter commencing on or after
January 1, 1995, a sum equal to the aggregate amount then expended by
Borrower pursuant to the 0000 Xxxxx Xxxxxxxxxx Program
3. Condition of Effectiveness. This Amendment #2 shall become effective
when Agent shall have received five (5) copies hereof each duly executed by
Borrower and Lenders.
4. Representations and Warranties. Borrower hereby represents and warrants
as follows:
(a) This Amendment #2, and the Credit Agreement
44
as amended hereby, constitute legal, valid and binding obligations of
Borrower and are enforceable against Borrower in accordance with their
respective terms.
(b) Upon the effectiveness of this Amendment #2, Borrower hereby
reaffirms all covenants, representations and warranties made in the Credit
Agreement to the extent the same are not amended hereby and agrees that all
such covenants, representations and warranties shall be deemed to have been
remade as of the effective date of this Amendment #2.
(c) No Event of Default or Incipient Default has occurred and is
continuing or would exist after giving effect to this Amendment #2.
(d) Borrower has no defense, counterclaim or offset with respect to the
Credit Agreement.
5. Effect on the Credit Agreement.
(a) Upon the effectiveness of Section 2 hereof, each reference in the
Credit Agreement to "this Agreement," "hereunder," "hereof," "herein" or words
of like import shall mean and be a reference to the Credit Agreement as amended
hereby.
(b) Except as specifically amended herein, the Credit Agreement, 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) The execution, delivery and effectiveness of this Amendment shall not
operate as a waiver of any right, power or remedy of Lenders, nor constitute a
waiver of any provision of the Credit Agreement, or any other documents,
instruments or agreements executed and/or delivered under or in connection
therewith.
6. Governing Law. This Amendment #2 shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns and
shall be governed by and construed in accordance with the laws of the State of
New York.
7. Headings. Section headings in this Amendment #2 are included herein for
convenience of reference only and shall not constitute a part of this Amendment
#2 for any other purpose.
8. Counterparts; Telecopied Signatures. This Amendment #2 may be executed
by the parties hereto in one or more counterparts, each of which when taken
together shall be deemed to constitute one and the same instrument. Any
signature delivered by a party hereto by facsimile transmission shall be deemed
an original signature hereto.
45
IN WITNESS WHEREOF, this Amendment #2 has been duly executed as of the day
and year first written above.
CELESTIAL SEASONINGS, INC.
By: /s/ Xxxxxx X. Xxxxxxxxxx
------------------------
Name: Xxxxxx X. Xxxxxxxxxx
Title: Vice President and CFO
FLEET BANK OF MASSACHUSETTS, N.A.,
as Agent and as Lender
By: /s/ Xxxxxxxx X. Xxxxxxx
-----------------------
Name: Xxxxxxxx X. Xxxxxxx
Title: Assistant Vice President
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Lender
By: /s/ Xxxx X. Xxxxxx
------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
46
THIRD AMENDMENT
TO
CREDIT AGREEMENT
THIS THIRD AMENDMENT ("Amendment #3") is entered into as of April 19, 1995,
by and among CELESTIAL SEASONINGS, INC., a Delaware corporation having its
principal place of business at 0000 Xxxxxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx 00000
("Borrower"), FLEET BANK OF MASSACHUSETTS, N.A. (assignee of Fleet National Bank
by Assignment and Acceptance Agreement effective as of September 27,1994,
"FBMA") and BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION ("BANTSA")
(FBMA and BANTSA, individually, a "Lender" and collectively, "Lenders") and FBMA
as agent for the Lenders (in such capacity, "Agent").
BACKGROUND
Borrower, Agent and Lenders are parties to a Credit Agreement dated as of
July 19, 1993 (as amended, supplemented or otherwise modified from time to time,
including by First Amendment to Credit Agreement dated as of May 4, 1994 and
Second Amendment to Credit Agreement dated as of February 25, 1995, the "Credit
Agreement") pursuant to which each Lender, severally and not jointly, provided
Borrower with certain financial accommodations.
Borrower has requested that Lenders amend the Credit Agreement to reduce
the interest rates and fees provided for therein based upon the performance by
Borrower of certain financial benchmarks and each Lender is willing to do so on
the terms and conditions hereafter set forth.
NOW, THEREFORE, in consideration of any loan or advance or grant of credit
heretofore or hereafter made to or for the account of Borrower by Lenders and
Agent, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
1. Definitions. All capitalized terms not otherwise defined herein shall
have the meanings given to them in the Credit Agreement.
2. Amendments to Credit Agreement. Subject to satisfaction of the
condition precedent set forth in Section 3 below, the Credit Agreement is hereby
amended as follows:
(a) Section 1.2 of the Credit Agreement is hereby
47
amended by deleting the definition for the term "Interest Reduction Certificate"
and by inserting new definitions for the terms "Operating Cash Flow/Interest
Ratio" and "Ratio Certificate" as follows:
"Operating Cash Flow/Interest Ratio" for any period shall mean (x) (1)
EBITDA for the fiscal quarter period then most recently ended minus (2)
Capital Expenditures made during such period over (y) Cash Interest
Expense during such fiscal quarter period.
"Ratio Certificate" shall mean a certificate executed on behalf of
Borrower by its chief financial officer and delivered to Agent
certifying, as of the end of the fiscal quarter most recently ended
prior to receipt by Agent of such certificate, the Operating Cash
Flow/Interest Ratio for the most recently ended four (4) fiscal quarter
period and a reasonably detailed calculation thereof (based upon
Borrower's Consolidated income statement for such period to be delivered
pursuant to Section 7.5, as applicable, a copy of which shall be
attached to such certificate).
(b) Section 2.6 of the Credit Agreement is hereby amended and restated in
its entirety as follows:
SECTION 2.6. Interest on Loans. (a) Subject to the provisions of
Section 2.9 and Subsection 2.6(d), each Base Rate Loan shall bear interest
at a rate per annum equal to the Base Rate plus one-half of one percent
(.50%) (the "Base Rate Margin").
(b) Subject to the provisions of Section 2.9 and Subsection 2.6(d),
each Eurodollar Loan shall bear interest at a rate per annum equal to the
Adjusted LIBO Rate plus one and three-quarters percent (1.75%) (the "LIBO
Rate Margin").
(c) Each Bond Letter of Credit Loan shall bear interest at a rate per
annum equal to the Base Rate plus one percent (1.00%) ("BLC Margin").
(d) If as of the end of any four fiscal quarter period Borrower has
achieved an Operating Cash Flow/Interest Ratio of 5.0 or more for the
preceding rolling four fiscal quarter period as set forth in the Ratio
Certificate for such period (absent any error in such certificate) (and
provided that no Event of Default shall have occurred and be continuing),
the Base Rate Margin shall be reduced to one-quarter of one percent (.25%)
and the LIBO Rate Margin shall be
48
reduced to one and one-half percent (1.50%). If as of the end of any four
fiscal quarter period Borrower has achieved an Operating Cash Flow/Interest
Ratio of 6.0 or more for the preceding rolling four fiscal quarter period
as set forth in the Ratio Certificate for such period (absent any error in
such certificate) (and provided that no Event of Default shall have
occurred and be continuing), the Base Rate Margin shall be reduced to zero
(0) and the LIBO Rate Margin shall be reduced to one and one-quarter
percent (1.25%). If as of the end of any four fiscal quarter period
Borrower has achieved an Operating Cash Flow/Interest Ratio of 7.0 or more
for the preceding rolling four fiscal quarter period as set forth in the
Ratio Certificate for such period (absent any error in such certificate)
(and provided that no Event of Default shall have occurred and be
continuing), the Base Rate Margin shall be zero (0) and the LIBO Rate
Margin shall be reduced to one percent (1.0%). Each of the foregoing
interest rate reductions shall be effective upon the date Agent receives
the appropriate Ratio Certificate. In the event, subsequent to receipt of
any Ratio Certificate, actual Operating Cash Flow/Interest Ratio for any
period is less than the applicable benchmark set forth above to achieve the
interest rate reduction then in effect, such reduction shall be reversed by
Agent effective upon receipt of such information and upon the occurrence
and during the continuation of a Material Default (as defined in Section
4.7) no such interest rate reduction shall be applicable.
(e) Interest on Base Rate Loans and Eurodollar Loans shall be payable
in arrears on each applicable Interest Payment Date. Interest on each Loan
shall be computed based on the actual number of days elapsed over a year of
360 days. Agent shall determine each interest rate applicable to the Loans
and shall promptly advise Borrower and the Lenders of the interest rate so
determined.
(c) Section 2.7(a) of the Credit Agreement is hereby amended by adding the
following immediately after the end of the first sentence thereof:
Notwithstanding the foregoing, if as of the end of any four fiscal quarter
period Borrower has achieved an Operating Cash Flow/Interest Ratio of 6.0
or more for the preceding rolling four fiscal quarter period as set forth
in the Ratio Certificate for such period (absent any error in such
certificate) (and provided that no Event of Default shall have occurred and
be continuing), the Revolving Loan Commitment Fee shall be reduced to
three-eighths of one percent (.375%) effective upon the date Agent receives
the appropriate
49
Ratio Certificate. In the event, subsequent to receipt of any Ratio
Certificate, actual Operating Cash Flow/Interest Ratio for any period is
less than 6.0, such reduction shall be reversed by Agent effective upon
receipt of such information and upon the occurrence and during the
continuation of a Material Default (as defined in Section 4.7) no such
Revolving Loan Commitment Fee reduction shall be applicable.
3. Condition of Effectiveness. This Amendment #3 shall become effective
when Agent shall have received five (5) copies hereof each duly executed by
Borrower and Lenders. In the event Agent has not receive five copies hereof duly
executed by Borrower and Lenders on or prior to April 28, 1995 then this
Amendment #3 shall be of no further force and effect and be deemed null and void
ab initio.
4. Representations and Warranties. Borrower hereby represents and warrants
as follows:
(a) This Amendment #3, and the Credit Agreement as amended hereby,
constitute legal, valid and binding obligations of Borrower and are
enforceable against Borrower in accordance with their respective terms.
(b) Upon the effectiveness of this Amendment #3, Borrower hereby
reaffirms all covenants, representations and warranties made in the Credit
Agreement to the extent the same are not amended hereby and agrees that all
such covenants, representations and warranties shall be deemed to have been
remade as of the effective date of this Amendment #3.
(c) No Event of Default or Incipient Default has occurred and is
continuing or would exist after giving effect to this Amendment #3.
(d) Borrower has no defense, counterclaim or offset with respect to
the Credit Agreement.
5. Effect on the Credit Agreement.
(a) Upon the effectiveness of Section 2 hereof, each reference in the
Credit Agreement to "this Agreement," "hereunder," "hereof," "herein" or words
of like import shall mean and be a reference to the Credit Agreement as amended
hereby.
(b) Except as specifically amended herein, the Credit Agreement, 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) The execution, delivery and effectiveness of this
50
Amendment shall not operate as a waiver of any right, power or remedy of
Lenders, nor constitute a waiver of any provision of the Credit Agreement, or
any other documents, instruments or agreements executed and/or delivered under
or in connection therewith.
6. Governing Law. This Amendment #3 shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns and
shall be governed by and construed in accordance with the laws of the State of
New York.
7. Headings. Section headings in this Amendment #3 are included herein for
convenience of reference only and shall not constitute a part of this Amendment
#3 for any other purpose.
8. Counterparts; Telecopied Signatures. This Amendment #3 may be executed
by the parties hereto in one or more counterparts, each of which when taken
together shall be deemed to constitute one and the same instrument. Any
signature delivered by a party hereto by facsimile transmission shall be deemed
an original signature hereto.
IN WITNESS WHEREOF, this Amendment #3 has been duly executed as of the day
and year first written above.
CELESTIAL SEASONINGS, INC.
By: /s/ Xxxxx Xxxxxxxxx
-------------------
Name: Xxxxx Xxxxxxxxx
Title: Assistant Treasurer
FLEET BANK OF MASSACHUSETTS, N.A.,
as Agent and as Lender
By: /s/ Xxxxxxxx X. Xxxxxxx
-----------------------
Name: Xxxxxxxx X. Xxxxxxx
Title: Assistant Vice President
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Lender
By: /s/ Xxxx X. Xxxxxx
------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
51
