SIXTH AMENDMENT
This Sixth Amendment (this "Amendment") is entered into as of June 28,
2001 by and among Xxxxxx May Holdings, Inc., a Delaware corporation
("Holdings"), Xxxxxxxxx Xxxxx Corporation, an Illinois corporation, as successor
by merger to FMCAN Acquisition Corp. (the "Company"), and the persons named on
the signature pages hereof (the "Purchasers"), and amends the Securities
Purchase Agreement entered into as of October 30, 1991 among Holdings, the
Company and the Purchasers (as amended by the First Amendment thereto dated as
of September 18, 1992, the Second Amendment thereto dated as of August 12, 1994,
the Third Amendment thereto dated as of July 2, 1997, the Fourth Amendment
thereto dated as of October 31, 1998, and the Fifth Amendment thereto dated as
of May 8, 1999, and as otherwise amended, modified and supplemented prior to the
date hereof, the "Securities Purchase Agreement"). All capitalized terms used
herein and not otherwise defined shall have the respective meanings provided
such terms in the Securities Purchase Agreement.
RECITALS
A. The Company is party to an Amended and Restated Credit Agreement
dated as of July 2, 1997 with Bank One, NA (formerly known as The First National
Bank of Chicago), as agent and a lender thereunder, and Fleet Business Credit
Corporation, as a lender thereunder (as amended, modified and supplemented prior
to the date hereof, the "Existing U.S. Credit Agreement").
X. Xxxxxxxxx Candy (Canada) Corporation, a Canadian corporation
("Xxxxxxxxx Canada") that is a wholly-owned subsidiary of the Company, is party
to a Credit Agreement dated July 30, 1999 with Bank One, NA (formerly known as
First Chicago NBD Bank, Canada) (as amended, modified and supplemented prior to
the date hereof, the "Existing Canadian Credit Agreement"; together with the
Existing U.S. Credit Agreement, the "Existing Credit Agreements").
C. The Company and all of its other subsidiaries are guarantors of
Xxxxxxxxx Canada's obligations under the Existing Canadian Credit Agreement.
D. The Company and Sweet Factory, Inc., a Delaware corporation and
wholly-owned subsidiary of the Company, desire to enter into a new credit
agreement with The CIT Group/Business Credit, Inc. and/or other lenders (as may
be amended, modified or supplemented from time to time, the "New Credit
Facility"), pursuant to which, subject to certain limitations, the Company may
borrow from time to time up to an aggregate amount of $30.0 million and the
proceeds of which may be used, among other things, to (i) refinance the
indebtedness under the Existing Credit Agreements, (ii) provide additional funds
for the working capital and general corporate needs of the Company and its
subsidiaries, and (iii) pay fees and expenses incurred in connection with the
negotiation, documentation and entering into of the New Credit Facility. It is a
condition to the closing of the New Credit Facility that the parties hereto
enter into this Amendment.
E. Holdings desires to enter into an agreement with the holders of
the Seller Preferred Stock substantially in the form of EXHIBIT A hereto (the
"Senior Preferred Amendment
Agreement"), pursuant to which, among other things, such holders will agree to
(i) extend the date for Holdings' mandatory redemption of the Seller Preferred
Stock beyond August 31, 2001, (ii) terminate as of August 31, 2000, the accrual
of dividends on the Seller Preferred Stock and (iii) a redemption in full of the
Seller Preferred Stock by no later than January 15, 2006, with annual
installments in the amounts set forth in the Senior Preferred Amendment
Agreement beginning on January 15, 2002.
F. Holdings, the Company and the Purchasers desire to set forth
herein the Purchasers' consent to Holdings' and the Company's entering into the
Senior Preferred Amendment Agreement and all actions contemplated thereby.
G. Holdings, the Company and the Purchasers desire to amend the
Securities Purchase Agreement to provide the TCW Entities with certain
additional rights in the event that the Junior Preferred Shares and the Common
Shares owned by the TCW Entities are not redeemed in accordance with Section
6.8(a) of the Securities Purchase Agreement.
I. Holdings, the Company and the Purchasers also desire to amend
the Securities Purchase Agreement and Holdings' certificate of incorporation to
extend the mandatory redemption date for the Junior Preferred Shares and the
Jordan Junior Preferred Stock from November 1, 2001 until March 15, 2006.
J. Holdings desires to enter into an agreement with the holders of
its Junior Class B PIK Preferred Stock substantially in the form of EXHIBIT B
hereto (the "Junior Class B Preferred Amendment Agreement"), pursuant to which,
among other things, such holders will agree to extend the mandatory redemption
date therefor from November 1, 2001 until March 15, 2006.
K. Holdings, the Company and the Purchasers desire to set forth
herein the Purchasers' consent to Holdings' and the Company's entering into the
Junior Class B Preferred Amendment Agreement and all actions contemplated
thereby.
L. Holdings, the Company and the Purchasers also desire to set
forth herein the Purchasers' consent to the May 31, 2001 sale by the Company of
its store located at the intersection of Xxxxxxxx and Wabash Streets in Chicago,
Illinois (the "Sale of Store No. 112").
NOW, THEREFORE, in consideration of the premises and the agreements
contained herein, the undersigned hereby agree as follows:
1. Section 1 of the Securities Purchase Agreement is hereby amended
by amending and restating the definition of "Credit Facility" in its entirety to
read as follows:
"Credit Facility" means the "New Credit Facility" described in the
Recitals to the Sixth Amendment.
2. Section 1 of the Securities Purchase Agreement is hereby further
amended by adding the following definitions:
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"Junior Class B Preferred Amendment Agreement" means the "Junior Class
B Preferred Amendment Agreement" described in the Recitals to the
Sixth Amendment."
"Senior Preferred Amendment Agreement" means the "Senior Preferred
Amendment Agreement" described in the Recitals to the Sixth Amendment.
"Sixth Amendment" means the Sixth Amendment to this Agreement, dated
as of June 28, 2001.
3. Section 6.8(a) of the Securities Purchase Agreement is hereby
amended and restated in its entirety as follows:
"(a) At any time, or from time to time, after the earlier of
(x) June 30, 2003, (y) the date immediately preceding the date of the
consummation of an Exit Event or (z) the first date as of which the
Notes shall have been paid in full and all Junior Preferred Shares
have been redeemed, at the request of a Requesting Holder, Holdings
shall redeem the number of Common Shares and Junior Preferred Shares
held by such Requesting Holder which such Requesting Holder requests
to be redeemed. Any notice of redemption by a Requesting Holder shall
be in writing and shall also state the number of Common Shares and
Junior Preferred Shares to be redeemed. Upon receipt of any such
request by a Requesting Holder, Holdings shall promptly give notice of
such proposed redemption to all other Holders. Each such other Holder
may elect to include its Common Shares and Junior Preferred Shares in
the redemption to be made pursuant to this Section 6.8(a) by so
notifying Holdings within 15 days after receipt of the notice referred
to in the immediately preceding sentence. Holdings shall notify all
Holders in writing of the proposed occurrence of an Exit Event as soon
as reasonably practicable but in no event later than 45 days prior to
the consummation of such Exit Event. In the case of any redemption in
connection with an Exit Event, any Requesting Holder shall notify
Holdings of its desire to cause a redemption under Section 6.8(a) as
soon as it is reasonably practicable but in no event shall such notice
be provided later than 15 days prior to the consummation of such Exit
Event. Notwithstanding the foregoing, Holdings shall not be required
to redeem Common Shares or Junior Preferred Shares pursuant to this
Section 6.8(a) (i) if the request for such redemption is made after
the date on which Holdings shall have consummated one or more
registered public offerings of its equity securities with aggregate
net proceeds to Holdings and the selling shareholders of at least
$15,000,000 or (ii) if any request for redemption occurs within 365
days of any previous request for redemption and Holdings shall have
redeemed all Common Shares and Junior Preferred Shares covered by (or
included with) such previous request."
4. Section 6.8(b) of the Securities Purchase Agreement is hereby
amended by adding the following to the end thereof:
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"The redemption price payable by Holdings upon any redemption of
Junior Preferred Shares pursuant to Section 6.8(a) shall be the
liquidation preference of such Junior Preferred Shares as determined
pursuant to Section 1.3 of the Certificate of Designation for the
Junior Preferred Stock.
5. Section 6.8(d) of the Securities Purchase Agreement is hereby
amended by amending and restating in its entirety the last paragraph thereof as
follows:
"If any Holder which has elected to include any Common Shares or
Junior Preferred Shares held by it in a redemption to be made pursuant
to a redemption notice described in the first sentence of this Section
6.8(d) refuses to permit, or otherwise to participate in, a proposed
Sale, and such proposed Sale was not consummated solely by means of
such refusal, then such Holder shall be deemed to have withdrawn its
election to include its Common Shares or Junior Preferred Shares in
such redemption."
6. Section 6.8(f) of the Securities Purchase Agreement is hereby
amended and restated in its entirety as follows:
"Anything in this Section 6.8 to the contrary notwithstanding,
Holdings shall not be required to redeem Common Shares or Junior
Preferred Shares to the extent that Holdings is prohibited by
applicable statutes relating to insolvency or to the maintenance of
adequate stated or legal capital or transfers for equivalent value
from (i) effecting such a redemption and (ii) revaluing its assets or
otherwise generating or creating surplus sufficient to permit such a
redemption. In the event that Holdings is so prohibited from effecting
such a redemption, Holdings shall use all funds that are legally
available to effect such a purchase ratably from the Holders in
proportion to the aggregate amounts due to them, subject to the
preferential liquidation rights set forth in Holdings' Certificate of
Incorporation. Any Holder may, with respect to all Common Shares or
Junior Preferred Shares proposed to be redeemed but not redeemed by
reason of this Section 6.8(f), elect either (i) to rescind such
Holder's request that Holdings redeem the Common Shares and Junior
Preferred Shares (in which event the Holders shall have no liability
for the expenses of Holdings) or (ii) to leave such request in place,
in which case Holdings shall, as soon as funds are legally available,
pay to such Holder the redemption price for the Common Shares and
Junior Preferred Shares redeemed by such Holder (determined as of the
date redemption would have been required but for this Section 6.8(f)),
together with interest thereon at a rate of 16% per annum, compounded
semi-annually, from the date redemption would have been required but
for this Section 6.8(f) (it being agreed that to the extent necessary
to avoid double counting, such interest on the redemption price for
the Junior Preferred Shares shall be reduced by any dividends thereon
from such date)."
7. Section 6.9 of the Securities Purchase Agreement is hereby amended
by adding the following to the end thereof:
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"In the event that within ninety (90) days of the receipt by Holdings
of a notice of redemption by a TCW Entity in accordance with Section
6.8(a) Holdings has not redeemed in full all Junior Preferred Shares
and Common Shares owned by the TCW Entities with respect to which such
notice of redemption has been given, and paid in full the redemption
price therefore, then (regardless of whether such failure to redeem
and pay is a result of law, statute, or agreement, or the failure to
determine the redemption price or any other factor whatsoever), unless
the holders of the Seller Preferred Stock shall have elected a
director pursuant to Section 1.6 of the Certificate of Designation for
the Seller Preferred Stock and such director shall continue to serve
as a director of Holdings, the holders of Class D Common Shares shall
be entitled to elect a director who shall have 51% of the total voting
power of the Board of Directors of Holdings for the purpose of
pursuing an Exit Event or like transaction; it being understood that
in the event of an Exit Event or like transaction proposed by such
director elected by the holders of Class D Common Shares, the TCW
Entities shall be considered to be a "Proposing Holder" and a
"Proposed Transferor" for all purposes under the Shareholders
Agreement with respect to such transaction; provided, that the right
to elect a director who shall have 51% of the total voting power of
the Board of Directors of Holdings shall terminate on the date that is
one year from the date on which the director so designated takes
office unless the director is diligently pursuing in good faith an
Exit Event or like transaction, in which event, the right to elect
such director shall continue so long as the director is diligently
pursuing in good faith an Exit Event or like transaction."
8. Section 7.1 of the Securities Purchase Agreement is hereby
amended by adding the following new clause (iv) to the end thereof and deleting
the word "and" where it appears immediately preceding "(iii)":
"; and (iv) FMCAN may make distributions, dividends and/or payments to
Holdings in order to allow Holdings to (and Holdings may) redeem the
Seller Preferred Stock in accordance with its terms as in effect on
the date of the Sixth Amendment, after giving effect to the
transactions contemplated by the Senior Preferred Amendment Agreement"
9. Section 7.4(b) of the Securities Purchase Agreement is hereby
amended to read "30,000,000" rather than "25,000,000".
10. Section 7.8(d) of the Securities Purchase Agreement is hereby
amended and restated in its entirety to read as follows:
"(d) sales of assets at a price not less than the fair market value
that, in the aggregate, do not constitute a Significant Portion of the
assets of Holdings or any of its Subsidiaries."
11. The TCW Entities hereby give notice pursuant to Section 7.2 of
the Securities Purchase Agreement that they are requiring the accrual and
deferral of the payments to be made pursuant to the terms of the TJC Agreement.
Holdings, the Company and the Purchasers
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agree that no payments due and payable under the TJC Agreement, including any
accrued and deferred payments, shall be made unless and until the TCW Entities
have received in cash (i) with respect to each Junior Preferred Share
beneficially owned by the TCW Entities, the liquidation preference, together
with all accrued and unpaid dividends thereon, and (ii) with respect to each
Common Share beneficially owned by the TCW Entities, the Preferred Return in
respect of such Common Share. The parties hereto agree that no payments made
pursuant to the terms of the Tax Sharing Agreement shall be made to any entity
other than Holdings or a wholly-owned subsidiary of Holdings.
12. In consideration of the representations, warranties, covenants
and agreements of Holdings and the Company set forth in this Amendment, the
Purchasers hereby:
(a) consent to each of the following:
(i) the execution, delivery and performance of, and the
consummation of the transactions contemplated by, the New
Credit Facility (including the incurrence of indebtedness,
the granting of security interests, the creation of Liens
and the payment of fees and expenses related thereto) and
the repayment of all outstanding indebtedness under the
Existing Credit Agreements;
(ii) Holdings' and the Company's entering into the Senior
Preferred Amendment Agreement and all actions contemplated
thereby;
(iii) Holdings' and the Company's entering into the Junior Class
B Preferred Amendment Agreement and all actions
contemplated thereby;
(iv) the amendment of Section 1.5(b) of the Certificate of
Designation for the Junior Preferred Shares to change the
date set forth therein from "November, 2001" to "March 15,
2006"; and
(v) the Sale of Store No. 112.
(b) consent to, and waive any requirement set forth in the
Certificate of Designation for the Junior Preferred Shares for a
separate written consent, or a vote at a meeting, of holders of Junior
Preferred Shares with respect to the amendment of the Certificate of
Designation for the Junior Preferred Shares as set forth herein and as
reflected in EXHIBIT C hereto;
(c) acknowledge that they have not made any request for redemption
pursuant to Section 6.8 of the Securities Purchase Agreement; and
(d) waive any Event of Default under the provisions of the
Securities Purchase Agreement that would be deemed to result
exclusively from such
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execution, delivery, performance and consummation of the transactions
described in clause (a) of this paragraph 12.
13. To induce the Purchasers to enter into this Amendment, Holdings
and the Company, jointly and severally, represent and warrant to each Purchaser
that the following statements are true, correct and complete as of the date
hereof:
(a) Each of Holdings and the Company has all requisite corporate
power and authority to enter into this Amendment and to perform its
obligations under the Securities Purchase Agreement as amended by this
Amendment (the "Amended Agreement").
(b) The execution and delivery of this Amendment has been duly
authorized by all necessary corporate action by Holdings and the
Company.
(c) The execution and delivery by each of Holdings and the Company
of this Amendment and the performance by Holdings and the Company of
their respective obligations under the Amended Agreement do not and
will not (i) violate any provision of any law, rule or regulation
applicable to Holdings, the Company or any of their respective
Subsidiaries, the organizational documents of Holdings, the Company or
any of their respective Subsidiaries or any order, judgment or decree
of any court or any agency or government binding on Holdings, the
Company or any of their respective Subsidiaries, (ii) conflict with,
result in a breach of, or constitute a default under, any contractual
obligation of Holdings, the Company or any of their respective
Subsidiaries, (iii) result in or require the creation or imposition of
any Lien upon any of their properties or assets (other than Liens
created pursuant to the Senior Financing Documents or the Indenture),
or (iv) require any approval of stockholders or any approval or
consent of any Person under any contractual obligation of Holdings,
the Company or any of their respective Subsidiaries, except approvals
and consents which have been obtained on or before the date hereof.
(d) This Amendment and the Amended Agreement are the legally valid
and binding obligations of each of Holdings and the Company
enforceable against such entity in accordance with their respective
terms.
(e) No event has occurred and is continuing which would constitute
an Event of Default.
14. Promptly following the date hereof, Holdings shall file a copy of
the Amendment of the Certificate of Designation for the Junior Preferred Shares
in the form set forth in EXHIBIT C hereto with the Secretary of State of the
State of Delaware.
15. Except as specifically amended by this Amendment, the Securities
Purchase Agreement shall remain in full force and effect and is hereby ratified
and confirmed. The execution, delivery and performance of this Amendment shall
not, except as expressly provided herein, constitute a waiver of any provisions
of, or operate as a waiver of any right, power or remedy of the Purchasers
under, the Securities Purchase Agreement.
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16. This Amendment may be executed in any number of counterparts and
by the different parties hereto in separate counterparts, each of which
counterparts when executed and delivered shall be an original, but all of which
together shall constitute one and the same instrument.
17. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE
STATE OF NEW YORK.
[signature pages follow]
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IN WITNESS WHEREOF, the parties hereto have executed this Sixth
Amendment to the Securities Purchase Agreement as of the date first above
written.
XXXXXX MAY HOLDINGS, INC.
By: /s/ Xxx X. Xxxxxxxx
--------------------------------------
Title: President, Chief Operating Officer
XXXXXXXXX XXXXX CORPORATION
By: /s/ Xxx X. Xxxxxxxx
--------------------------------------
Title: President, Chief Operating Officer
TCW SPECIAL PLACEMENTS FUND III
By: TCW Capital
Its: Managing General Partner
By: TCW Asset Management Company
Its: Managing General Partner
By: /s/ Xxxxxxx X. Xxxxx
----------------------------
Title: Group Managing Director
TCW CAPITAL, as Investment Manager
pursuant to an Investment Management
Agreement dated as of June 19, 1989
By: TCW Asset Management Company
Its: Managing General Partner
By: /s/ Xxxxxxx X. Xxxxx
----------------------------------
Title: Group Managing Director
[signature page to Sixth Amendment to Securities Purchase Agreement]
TCW CAPITAL, as Investment Manager
pursuant to an Investment Management
Agreement dated as of April 18, 1990
By: TCW Asset Management Company
Its: Managing General Partner
By: /s/ Xxxxxxx X. Xxxxx
---------------------------------
Title: Group Managing Director
MEZZANINE CAPITAL
By: TCW Asset Management Company
Its: Managing General Partner
By: /s/ Xxxxxxx X. Xxxxx
----------------------------------
Title: Group Managing Director
JZ EQUITY PARTNERS PLC
(f/k/a MCIT (EXISTING POOL) LIMITED)
By: /s/
---------------------------------------
Title: Investment Adviser
WCT INVESTMENT PTE. LTD
By: /s/ Xxxxx X. Xxxxxx
---------------------------------------
Title: Director
JORDAN INDUSTRIES, INC.
By: /s/ Xxxx X. Xxxxxx XX
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Title:
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[signature page to Sixth Amendment to Securities Purchase Agreement]
