EXHIBIT 10.12
THIRD AMENDMENT TO LOAN DOCUMENTS
BUILD-A-BEAR WORKSHOP, INC. ("BABWI"), successor by merger to BUILD-A-BEAR
WORKSHOP, LLC, SHIRTS ILLUSTRATED, LLC ("SHIRTS"), BUILD-A-BEAR WORKSHOP
FRANCHISE HOLDINGS, INC. ("BABWF"), BUILD-A-BEAR ENTERTAINMENT, LLC ("BABE"),
and BUILD-A-BEAR RETAIL MANAGEMENT, INC. ("BABRM"), jointly and severally
(individually and collectively, the "Borrower"), BUILD-A-BEAR WORKSHOP CANADA,
INC. ("Guarantor" or "BABWC") and U.S. BANK NATIONAL ASSOCIATION, formerly known
as FIRSTAR BANK, NATIONAL ASSOCIATION ("Lender"), hereby agree as follows
effective as of May 31, 2004 (the "Effective Date"):
1. RECITALS.
1.1 Lender and Build-A-Bear Workshop, LLC entered into a Loan Agreement
and related loan and security documents dated as of March 1, 2000
pursuant to which the Lender extended a revolving credit facility to
the Borrower (the "Loan");
1.2 Lender, Build-A-Bear Workshop, LLC and Build-A-Bear Workshop, Inc.
entered into an assumption and amendment agreement dated as of April
3, 2000, whereby Build-A-Bear Workshop, Inc. assumed all of the
obligations of its predecessor in interest, Build-A-Bear Workshop,
LLC;
1.3 Lender and Borrower amended the terms of the Loan by the First
Amended and Restated Loan Agreement and related loan and security
documents dated as of June 1, 2001 (the "Prior Loan Agreement");
1.4 Lender and Borrower amended and restated the Prior Loan Agreement by
the Second Amended and Restated Loan Agreement dated as of February
13, 2002 (the "Loan Agreement") and Borrower delivered to Lender in
connection therewith the First Amended and Restated Revolving Credit
Note (the "Note") and the First Amended and Restated Security
Agreement (the "Security Agreement") (the Note, Security Agreement
and Loan Agreement, the Guarantee of BABWC, and all other loan and
security documents executed in connection with the Loan from time to
time are referred to herein as the "Loan Documents");
1.5 Lender and Borrower amended the Loan Documents pursuant to the First
Amendment to Loan Documents effective as of May 30, 2003 to add
additional borrowers to the Loan Documents, to revise certain
financial covenants in the Loan Documents, and to add BABWC as a
guarantor of the obligations under the Loan Documents.
1.6 Lender and Borrower amended the Loan Documents pursuant to the
Second Amendment to Loan Documents effective as of December 31, 2003
to add an additional borrower to the Loan Documents.
1.7 Capitalized terms used herein and not otherwise defined will have
the meanings given such terms in the Loan Agreement.
1.8 Borrower and Lender desire to further amend the Loan Documents
pursuant to this Third Amendment to Loan Documents ("Amendment").
2. AMENDMENTS.
2.1 Section 2.1.2 of the Loan Agreement is hereby deleted and replaced
with the following:
2.1.2 MAXIMUM AMOUNT. The maximum amount that may be outstanding
under the Revolving Credit Note at any particular time may not
exceed the lesser of the following (the "Maximum Amount"): (A) the
Total Facility; or (B) in the event that Lender determines in its
sole discretion to limit the amount to be advanced under the
Revolving Credit Note (after 30 days prior written notice to
Borrower of such determination by Lender), an amount equal to the
sum of (a) up to 75% of Borrower's Eligible Receivables, plus (b) up
to the lesser of: (i) $12,000,000; or (ii) 50% of Borrower's
Eligible Inventory, plus (c) up to 10% of the book value of
Borrower's net fixed assets. Notwithstanding anything to the
contrary contained herein, Lender in its sole discretion may, but
will never be obligated to, increase the amount of the Total
Facility or change or suspend the limits on the Maximum Amount.
2.2 Section 2.1 of the Loan Agreement is hereby amended to add the
following as Section 2.1.5:
2.1.5 COMMITMENT FEE. Borrower will pay to Lender a commitment fee
beginning effective June 1, 2004, computed at the rate of 0.125% per
annum, on the average daily difference between: (i) the outstanding
amount of the Note and (ii) the Maximum Amount, such Commitment Fee
to be payable quarterly in arrears on the last day of each June,
September, December and March and upon the Maturity Date of the Note
and/or the date this Agreement is terminated.
2.3 Section 6.1 of the Loan Agreement is hereby deleted and replaced
with the following:
6.1 DEBT. Incur any Indebtedness other than: (a) the Loans and any
subsequent Indebtedness to Lender; (b) open account obligations
incurred in the ordinary course of business having maturities of
less than 150 days; (c) lease payments for real property; (d) lease
and rental payments for personal property whose aggregate annual
rental payments do not exceed $100,000 during any calendar year; and
(e) Indebtedness secured by Permitted Liens.
2.4 Section 6.4 of the Loan Agreement is hereby deleted and replaced
with the following:
6.4 MINIMUM TANGIBLE NET WORTH. Permit the Tangible Net Worth of
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Borrower and Guarantor on a consolidated basis to be less than
$54,000,000 at any time. Such amount shall be increased by the
amount of all equity contributions made to the Borrower from time to
time and shall be reduced by the amount of dividends, share
repurchases, or any other return of capital contributions permitted
under this Agreement; provided however, that such reductions shall
not cause the Tangible Net Worth of Borrower and Guarantor on a
consolidated basis to be less than $44,000,000 at any time.
2.5 Section 6.6 of the Loan Agreement is hereby deleted and replaced
with the following:
6.6 DIVIDENDS. Declare or pay any dividends of any kind other than
dividends payable solely in shares of its capital stock (including
without limitation debt repayment, payment for goods and services);
provided however, that Borrower may do so if such payment would not
violate any of the other terms of this Agreement or the Security
Documents and none of the following conditions exist or will exist
as a result of any such payment: (i) an Event of Default or Default;
and (ii) the difference between the Maximum Amount and the
outstanding amount of the Revolving Credit Note is less than
$5,000,000.
2.6 Section 6.8 of the Loan Agreement is hereby deleted and replaced
with the following:
6.8 REDEMPTIONS. Purchase, retire, redeem or otherwise acquire for
value, directly or indirectly, any shares of its capital stock now
or hereafter outstanding; provided however, that Borrower may do so
if such purchase, redemption or acquisition would not violate any of
the other terms of this Agreement or the Security Documents and none
of the following conditions exist or will exist as a result of any
such purchase, redemption or acquisition: (i) an Event of Default or
Default; and (ii) the difference between the Maximum Amount and the
outstanding amount of the Revolving Credit Note is less than
$5,000,000.
2.7 Section 6.11 of the Loan Agreement is hereby deleted and replaced
with the following:
6.11 ADVANCES AND LOANS. Except as set forth in the Disclosure
Schedule, lend money, give credit or make advances (other than
ordinary, reasonable advances not to exceed $50,000 in the aggregate
at any time) to any person, firm, joint venture or corporation,
including, without limitation, Affiliates; provided however, that
Borrower may make advances to BABWC so long as such advances shall
not exceed $7,000,000 outstanding in the aggregate at any time.
2.8 Notwithstanding the terms of the Loan Agreement requiring the
regular submission of Borrowing Base Certificates to Lender,
Borrower shall no longer be required to submit such Borrowing Base
Certificates to Lender unless and until such time as Lender requires
that Borrower do so by written notice to Borrower.
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2.9 The Maturity Date set forth in Section 3 of the Note is hereby
extended from May 31, 2004 to May 31, 2005.
3. REPRESENTATIONS, WARRANTIES, AND COVENANTS. To induce Lender to enter into
this Amendment, Borrower represents, warrants, and covenants as follows:
3.1 The representations and warranties of Borrower contained in the Loan
Documents are deemed to have been made again on and as of the date
of execution of this Amendment.
3.2 No Event of Default (as such term is defined in the Loan Documents)
or Default exists on the date hereof.
3.3 Each Borrower and Guarantor represents and warrants that it has no
claims, counterclaims, setoffs, actions or causes of actions,
damages or liabilities of any kind or nature whatsoever whether at
law or in equity, in contract or in tort, whether now accrued or
hereafter maturing (collectively, "Claims") against Lender, their
direct or indirect parent corporations or any direct or indirect
Affiliates of such parent corporations, or any of the foregoing's
respective directors, officers, employees, agents, attorneys and
legal representatives, or the heirs, administrators, successors or
assigns of any of them (collectively, "Lender Parties") that
directly or indirectly arise out of, are based upon or are in any
manner connected with any Prior Related Event. As an inducement to
Lender to enter into this Agreement, each Borrower and Guarantor on
behalf of itself, and all of its successors and assigns hereby
knowingly and voluntarily releases and discharges all Lender Parties
from any and all Claims, whether known or unknown, that directly or
indirectly arise out of, are based upon or are in any manner
connected with any Prior Related Event. As used herein, the term
"Prior Related Event" means any transaction, event, circumstance,
action, failure to act, occurrence of any sort or type, whether
known or unknown, which occurred, existed, was taken, permitted or
begun at any time prior to the Effective Date or occurred, existed,
was taken, was permitted or begun in accordance with, pursuant to or
by virtue of any of the terms of the Loan Documents or any documents
executed in connection with the Loan Documents or which was related
to or connected in any manner, directly or indirectly to the
extension of credit represented by the Loan Documents.
3.4 Each Borrower and Guarantor has the full right, power and authority
to enter into this Amendment and perform its obligations hereunder,
and no information or material submitted to Lender in connection
with this Amendment contains any material misstatement or
misrepresentation nor omits to state any material fact or
circumstance.
4. CONDITIONS PRECEDENT. The consent of Lender to this Amendment is subject
to the satisfaction of the following conditions precedent:
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4.1 Lender will have been furnished copies, certified by the Secretary
of Borrower and Guarantor, of resolutions of the Board of Directors
of Borrower and Guarantor authorizing the execution of this
Amendment and any related documentation.
4.2 The representations and warranties of Borrower in Section 3 herein
will be true.
4.3 Lender will have received an updated schedule of all locations of
Borrower and of each Borrower's intellectual property, along with an
executed pledge agreement of such intellectual property in form
acceptable to Lender.
5. GENERAL.
5.1 Except as expressly modified herein, the Loan Documents, as amended,
are and remain in full force and effect. Nothing contained herein
will be construed as waiving any Default or Event of Default under
the Loan Documents or will affect or impair any right, power or
remedy of Lender under or with respect to the Loan Documents, as
amended, or any agreement or instrument guaranteeing, securing or
otherwise relating to any of the Advances.
5.2 All representations and warranties made by Borrower herein will
survive the execution and delivery of this Amendment.
5.3 This Amendment will be binding upon and inure to the benefit of
Borrower and Lender and their respective successors and assigns.
5.4 Borrower will pay attorneys' fees and expenses of Lender incurred in
connection with this Amendment and related documentation. Such fees,
expenses may be charged to Borrower by Lender as a Revolving
Advance.
5.5 This Amendment will in all respects be governed and construed in
accordance with the laws of the State of Ohio.
5.6 A copy of this Amendment may be attached to the Note as an allonge.
5.7 This Amendment and the documents and instruments to be executed
hereunder constitute the entire agreement among the parties with
respect to the subject matter hereof and shall not be amended,
modified or terminated except by a writing signed by the party to be
charged therewith.
5.8 Borrower agrees to execute such other instruments and documents and
provide Lender with such further assurances as Lender may reasonably
request to more fully carry out the intent of this Amendment.
5.9 This Amendment may be executed in a number of identical
counterparts. If so, each such counterpart shall collectively
constitute one agreement. Any signature delivered by a party by
facsimile transmission shall be deemed to be an original signature
hereto.
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5.10 No provision of this Amendment is intended or shall be construed to
be for the benefit of any third party.
Executed as of the Effective Date.
BUILD-A-BEAR WORKSHOP, INC. U.S. BANK NATIONAL
ASSOCIATION
BORROWER LENDER
By: /s/ Maxine Clark By: /s/ Charles L. Thomas
-------------------------- --------------------------
Print Name: Maxine Clark Print Name: Charles L. Thomas
Title: Chief Executive Bear Title: Vice President
BUILD-A-BEAR BUILD-A-BEAR WORKSHOP
ENTERTAINMENT, LLC FRANCHISE HOLDINGS, INC.
BORROWER BORROWER
By: /s/ Maxine Clark By: /s/ Maxine Clark
-------------------------- --------------------------
Print Name: Maxine Clark Print Name: Maxine Clark
Title: Manager Title: Chief Executive Bear
BUILD-A-BEAR RETAIL SHIRTS ILLUSTRATED, LLC
MANAGEMENT, INC.
BORROWER BORROWER
By: Build-A-Bear Workshop, LLC,
its Managing Member
By: /s/ Maxine Clark By: /s/ Maxine Clark
-------------------------- --------------------------
Print Name: Maxine Clark Print Name: Maxine Clark
Title: Chief Executive Bear Title: Manager
BUILD-A-BEAR WORKSHOP
CANADA, INC.
GUARANTOR
By: /s/ Maxine Clark
--------------------------
Print Name: Maxine Clark
Title: Chief Executive Bear
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