Exhibit 10.1

 

TWENTIETH AMENDMENT TO LOAN DOCUMENTS

 

THIS TWENTIETH AMENDMENT TO LOAN DOCUMENTS (this “Amendment”) dated as of
September 11, 2019 (the “Effective Date”), by and between: BUILD-A-BEAR
WORKSHOP, INC., a Delaware corporation, BUILD-A-BEAR WORKSHOP FRANCHISE
HOLDINGS, INC., a Delaware corporation (“BABWF”), BUILD-A-BEAR ENTERTAINMENT,
LLC, a Missouri limited liability company (“BABE”), BUILD-A-BEAR RETAIL
MANAGEMENT, INC., a Delaware corporation (“BABRM”), and BUILD-A-BEAR CARD
SERVICES, LLC, a Virginia limited liability company (“BABCS”), jointly and
severally (individually and collectively, “Borrower”); and U.S. BANK NATIONAL
ASSOCIATION, a national banking association (“Lender”), has reference to the
following facts and circumstances (the “Recitals”):

 

A.     Borrower and Lender have executed a Fourth Amended and Restated Loan
Agreement dated effective as of August 11, 2008 (as amended as set forth below,
the “Loan Agreement”; all capitalized terms not otherwise defined herein shall
have the same meanings as ascribed to them in the Agreement), pursuant to which
Borrower have executed a Fourth Amended and Restated Revolving Credit Note dated
as of August 11, 2008, jointly and severally payable by Borrower to Lender in
the original principal amount of $50,000,000 and thereafter reduced to
$35,000,000.00 (as amended as set forth below, the “Note”), both of which have
been amended by a Seventh Amendment to Loan Documents dated effective as of
October 28, 2009, an Eighth Amendment to Loan Documents dated effective as of
December 31, 2010, a Ninth Amendment to Loan Documents dated effective as of
December 30, 2011, a Tenth Amendment to Loan Documents dated effective as of
June 30, 2012, an Eleventh Amendment to Loan Documents dated effective as of
December 31, 2012, a Twelfth Amendment to Loan Documents dated effective as of
February 13, 2013, a Thirteenth Amendment to Loan Documents dated effective as
of April 30, 2013, a Fourteenth Amendment to Loan Documents dated effective as
of January 22, 2014, a Fifteenth Amendment to Loan Documents dated effective as
of December 31, 2014, a Joinder and Sixteenth Amendment to Loan Documents dated
effective as of April 25, 2016, a Seventeenth Amendment to Loan Documents dated
effective as of May 4, 2017, an Eighteenth Amendment to Loan Documents dated
effective as of December 14, 2018, and a Nineteenth Amendment to Loan Documents
dated effective as of April 16, 2019; and

 

B.     The Loan Agreement and the Note are described in and secured by certain
security documents including, but not limited to (i) a Security Agreement dated
as of August 11, 2008, executed by BABWF, BABWF, BABE and BABRM in favor of
Lender, and covering the property as more particularly described therein; (ii)
an Open-End Mortgage, Assignment of Rents and Leases, Security Agreement, and
Fixture Filing dated as of August 11, 2008, executed by BABRM in favor of
Lender, recorded with the Franklin County, Ohio Recorder on August 13, 2008 as
Document No. 200808130123240, and covering the property as more particularly
described therein; (iii) an Intellectual Property Pledge Agreement dated as of
August 11, 2019, executed by BABWF in favor of Lender, and covering the property
as more particularly described; (iv) an Intellectual Property Pledge Agreement
dated as of August 11, 2019, executed by BABRM in favor of Lender, and covering
the property as more particularly described therein; (v) a Pledge Agreement
dated as of December 17, 2008, executed by BABWF in favor of Lender, and
covering certain securities in Build-A-Bear Workshop Canada, Ltd., (vi) a Pledge
Agreement dated as of December 17, 2008, executed by BABWF in favor of Lender,
and covering certain securities in Build-A-Bear Workshop Canada, Ltd.; (vi) a
Pledge Agreement dated as of December 17, 2008, executed by BABWF in favor of
Lender, and covering certain securities in Build-A-Bear Workshop Canada, Ltd.;
(vii) a Charge Over Shares dated as of December 31, 2008, executed by BABWF in
favor of Lender, and covering certain securities in Build-A-Bear Workshop UK
Holdings Limited; and (viii) a Charge Over Shares dated as of December 31, 2008,
executed by BABWF in favor of Lender, and covering certain securities in
Build-A-Bear Workshop Ireland Limited (collectively, as amended, the “Security
Documents”).

 

C.     Borrower desires to amend the terms of the Loan Agreement and the Note in
the manner set forth herein; and Lender is willing to agree to said amendments
on the terms and conditions set forth herein.

 

NOW, THEREFORE, in consideration of the premises, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Borrower and Lender hereby agree as follows:

 

1.     Recitals. The Recitals are true and correct, and, with the defined terms
set forth herein, are incorporated by this reference.

 

 

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2.     Amendments to Loan Agreement. As of the Effective Date of this Amendment,
the Loan Agreement is hereby amended as follows:

 

(a)     Section 2.1.1 of the Loan Agreement is hereby deleted in its entirety
and the following substituted in lieu thereof:

 

“2.1.1 Total Facility. Lender will make available to Borrower a line of credit
of up to $20,000,000.00, minus the aggregate amount of Letter of Credit
Obligations at such time (“Total Facility”), subject to the terms and conditions
and made upon the representations and warranties of Borrower set forth in this
Agreement. Amounts outstanding under the line of credit from time to time will
be referred to as the “Revolving Credit Loan.” The Revolving Credit Loan will be
represented by the Fourth Amended and Restated Revolving Credit Note of Borrower
dated as of August 11, 2008 and all amendments, extensions and renewals thereto
and restatements and replacements thereof (the “Revolving Credit Note”). The
Revolving Credit Loan will bear interest and will be payable in the manner set
forth in the Revolving Credit Note, the terms of which are incorporated herein
by reference.”

 

(b)     Section 2.1.4 of the Loan Agreement is hereby deleted in its entirety
and the following substituted in lieu thereof:

 

“2.1.4 Commitment Fee. Borrower will pay to Lender a commitment fee computed at
the rate of 0.25% per annum, on the average daily difference between: (i) the
outstanding amount of the Revolving Credit Note plus the outstanding amount of
any Letters of Credit, and (ii) the Total Facility, 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 Revolving Credit Note and/or the
date this Agreement is terminated.”

 

(c)     Section 5.2 of the Loan Agreement is hereby deleted in its entirety and
the following substituted in lieu thereof:

 

“5.2. Financial Reporting.

 

5.2.1 Weekly Cash Flow Forecast. Commencing September 17, 2019 and continuing
each Tuesday thereafter, furnish Lender with a detailed 13-week cash flow
forecast which shall identify Borrower’s Consolidated North American Cash
Balance as of the end of the preceding week and identify all forecasted sources,
uses and balances of cash for the following 13-week period.

 

5.2.2 Monthly Statements. Furnish Lender (a) within 20 days after the end of
each month preliminary internally prepared financial statements of Borrower with
respect to such month, and (b) within 30 days after the end of each month final
internally prepared financial statements of Borrower with respect to such month,
which financial statements will (a) be in reasonable detail and in form
reasonably satisfactory to Lender, (b) include a balance sheet as of the end of
such month and monthly and year-to-date income statements, (c) include prior
year comparisons, and (d) be on a consolidating and consolidated basis for
Borrower and its Subsidiaries and for any entity in which Borrower’s financial
information is consolidated in accordance with generally accepted accounting
principles.

 

5.2.3 Quarterly Compliance Certificate. Furnish Lender (a) within 20 days after
the end of each fiscal quarter, a preliminary, and (b) within 30 days after the
end of each fiscal quarter, a final, Compliance Certificate in form and
substance acceptable to Lender.”

 

(d)     Section 6.4 of the Loan Agreement is hereby deleted and the following
substituted in lieu thereof:

 

“6.4 Minimum EBITDA. Permit EBITDA to be less than $4,000,000 for the
year-to-date 9-month period ending November 2, 2019.”

 

(e)     Section 6.5 of the Loan Agreement is hereby deleted and the following
substituted in lieu thereof:

 

“6.5 Funded Debt Ratio. Commencing with the fiscal quarter ending February 1,
2020 and continuing for each quarter-end thereafter, permit the ratio of: (i)
Funded Debt to (ii) EBITDA calculated on a rolling historical 12-month basis,
all for Borrower on a consolidated basis to be greater than 1.50:1 as of the end
of each fiscal quarter.”

 

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(f)     Section 6.6 of the Loan Agreement is hereby deleted and the following
substituted in lieu thereof:

 

“6.6 Fixed Charge Coverage Ratio. Permit the ratio of (A) the sum of (i) EBITDA,
plus operating lease payments, minus the sum of (ii) cash actually expended for
taxes and dividends, plus maintenance capital expenditures equal to $8,000,000,
to (B) the sum of scheduled principal payments on Indebtedness including
capitalized lease payments, plus cash actually expended for interest and
operating lease payments, all for Borrower on a consolidated basis (the “FCC
Ratio”), (A) as of the fiscal-quarter ending February 1, 2020 on a trailing
12-month basis, to be less than 1.10 to 1.00, and (ii) as of each fiscal
quarter-end thereafter on a trailing 12-month basis, to be less than 1.20 to
1.00.

 

(g)     Section 6.15 of the Loan Agreement is hereby deleted and the following
substituted in lieu thereof:

 

“6.15 Minimum Liquidity. Fail to maintain Liquidity of at least $5,000,000 at
all times. As used herein, the term “Liquidity” means Borrower’s Consolidated
North American Cash Balance, plus the maximum amount available to be drawn under
the Revolving Credit Loan without violating Section 6.5 (Funded Debt Ratio), if
applicable.”

 

(h)     The following new Section 6.16 is hereby added to the Loan Agreement:

 

“6.16 Maintain aggregate cash or Cash Equivalents either (A) outside North
America, or (B) on-hand in stores within North America in excess of
$5,000,000.00.”

 

(i)     Section 13 of the Loan Agreement is hereby amended to add the following
definitions in alphabetical order:

 

““Consolidated North American Cash Balance” means, at any time, the aggregate
amount of cash or Cash Equivalents held or owned by Borrower within North
America (excluding cash on-hand in stores, but including cash in-transit).

 

“Letter of Credit Obligations” shall mean, as at the time of any determination
thereof, the sum of (a) the aggregate undrawn face amount of all Letters of
Credit outstanding at such time plus (b) the Letter of Credit Reimbursement
Obligations at such time.

 

“Letter of Credit Reimbursement Obligations” shall mean, at any time, the
aggregate amount then owed by the Borrower to the Lender for or in respect of
all payments or disbursements made by the Lender under or in respect of draws
made under one or more of the Letters of Credit.

 

“Unadjusted EBITDA” means, EBITDA not adjusted for non-cash charges or
extraordinary items of any kind.”

 

3.     Amendments to Note. As of the Effective Date of this Amendment, the Note
is hereby amended as follows:

 

(a)     The reference to the maximum principal sum of “THIRTY FIVE MILLION
DOLLARS ($35,000,000.00)” in the first paragraph of the Note is hereby deleted
and replaced with “TWENTY MILLION DOLLARS ($20,000,000.00);” the reference to
“$35,000,000.00” at the top the first page of the Note is hereby deleted and
replace with “$20,000,000.00;” and any and any other references in the Note of
similar import are hereby amended from “$35,000,000.00” to “$20,000,000.00.”

 

(b)     Section 1 of the Note is hereby deleted in its entirety and the
following substituted in lieu thereof:

 

“1. Rates of Interest. Interest on each advance hereunder shall accrue at an
annual rate equal to 3.25% plus the one-month LIBOR rate quoted by Lender from
Reuters Screen LIBOR01 Page or any successor thereto, which shall be that
one-month LIBOR rate in effect and reset each New York Banking Day, adjusted for
any reserve requirement and any subsequent costs arising from a change in
government regulation, such rate rounded up to the nearest one-sixteenth of one
percent (a “LIBOR Rate Loan”). The term “New York Banking Day” means any day
(other than a Saturday or Sunday) on which commercial banks are open for
business in New York, New York. Lender’s internal records of applicable interest
rates shall be determinative in the absence of manifest error.”

 

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(c)     The following new Section 3.3 is hereby added to the Note:

 

“3.3     If, at the end of any business day on which there is any amount
outstanding under the Note, the Borrower’s Consolidated North American Cash
Balance, after giving effect to Borrowers’ projected use and receipt of cash
within three (3) business days thereof, exceeds $5,000,000.00, Borrower shall
report the amount of such Consolidated North American Cash Balance to Lender and
shall repay to Lender the lesser of (i) the amount outstanding under the Note,
and (ii) the amount of Borrower’s Consolidated North American Cash Balance in
excess of $5,000,000.

 

(d)     Section 5.1 of the Note is hereby deleted in its entirety and the
following substituted in lieu thereof:

 

“5.1     Borrower may borrow, repay and re-borrow under this Note subject to the
terms, conditions, and limits set forth herein and in the Loan Agreement. Lender
is authorized to record in its books and records the date and amount of each
advance and payment hereunder, and other information related thereto, which
books and records will constitute prima facie evidence of the accuracy of the
information so recorded; provided, however, that failure of Lender to record, or
any error in recording, any such information will not relieve Borrower of any of
its obligations under this Note or any of the other Loan Documents.
Notwithstanding the foregoing, (a) Borrower may not request, and Lender will not
make, any advance under this Note which would cause the outstanding principal
balance under this Note to exceed $10,000,000.00 unless at the time of and
immediately after giving effect to such advance (i) the ratio of Funded Debt to
Unadjusted EBITDA as of the most recent month-end on a trailing 12-month basis
is less than 1.50:1, and (ii) Borrowers’ FCC Ratio (calculated using Unadjusted
EBITDA) as of the most recent month-end on a trailing 12-month basis is greater
than 1.20:1; (b) Borrower may not request, and Lender will not make, any advance
under this Note which would result in Borrower’s Consolidated North American
Cash Balance, after giving effect to the advance and the use of the proceeds
therefrom within three (3) business days thereof, exceeding $5,000,000.00; and
(c) at no time, may Borrower request, or will Lender make, any advance under
this Note which would cause the outstanding principal balance under this Note to
exceed the Total Facility.”

 

(e)     Section 5.2 of the Note is hereby deleted in its entirety and the
following substituted in lieu thereof:

 

“5.2     Any request By Borrower for a LIBOR Rate Loan must be (a) received by
Lender not later than 11:00 a.m. (St. Louis time) on a day that is at least two
(2) New York Banking Days prior to the proposed borrowing date (which must be a
Business Day), and (b) accompanied by a certificate (i) stating that no Event of
Default has occurred and is continuing as of the date thereof, (i) setting forth
the ratio of Funded Debt to Unadjusted EBITDA as of the most recent month-end on
a trailing 12-month basis, (iii) setting forth the Borrower’s FCC Ratio,
calculated using Unadjusted EBITDA, as of the most recent month-end on a
trailing 12-month basis, and (iii) setting forth the Borrower’s Consolidated
North American Cash Balance, after giving effect to the draw and the use of the
proceeds therefrom within three (3) business days thereof.”

 

4.     Letter of Credit Modifications. Notwithstanding anything contained in any
of the Loan Documents to the contrary, (a) from and after the Effective Date of
this Agreement, Lender shall have no obligation to issue any additional Letters
of Credit for or on account of Borrower, and (b) commencing October 1, 2019,
Borrower shall pay Lender a fee of 3.25% per annum on the aggregate undrawn face
amount of any existing Letters of Credit, to be paid quarterly in advance.

 

5.     Updated Intellectual Property Schedules. By no later than the Effective
Date of this Amendment, Borrower shall furnish Lender with updated schedules to
the Intellectual Property Security Agreements that are among the Security
Documents (the “Updated IP Schedules”). The Updated IP Schedules shall identify
any and all trademarks, patents, copyrights, trade secrets or licenses in which
Borrower maintains an interest that are not currently described on the schedules
to the Intellectual Property Security Agreements. Lender is hereby authorized to
modify and supplement each of the Intellectual Property Security Agreements by
attaching the Updated IP Schedules as Exhibit B thereto (as described in
Sections 8.6 of the Intellectual Property Security Agreements) and the
provisions of the Intellectual Property Security Agreements shall automatically
apply to the intellectual property descried in the Updated IP Schedules.

 

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6.     Deposit Account Control Agreements. By no later than December 15, 2019,
Borrower shall furnish Lender with Deposit Account Control Agreements, in form
and substance acceptable to Lender and duly executed by an authorized
representative of the depository bank, for deposit accounts identified on
Exhibit A hereto holding at least 80% of the aggregate balance of such accounts.
All references to the term “Loan Documents” in the Agreement, the Note and/or
the Security Documents, shall hereafter be deemed to include such Deposit
Account Control Agreements.

 

7.     Engagement of Financial Consultant. Within forty-five (45) days of Bank’s
written request following the occurrence of any default by Borrower under the
Agreement, the Note or the Security Documents, as amended hereby, Borrower will
engage the services of an independent financial consultant acceptable to Bank,
at Borrower’s expense, in accordance with the terms of a written engagement
agreement that includes a scope of services and other terms acceptable to Bank
and that authorizes the consultant to provide verbal and written reports to Bank
from time to time, as requested by Bank.

 

8.     Amendment Fee. in order to induce Lender to enter into this Agreement,
Borrower shall pay to Lender an amendment fee in the amount of $75,000.00 (the
“Amendment Fee”), which Forbearance Fee shall be fully earned and paid to Lender
on or before the Effective Date.

 

9.     Continuing Security. The Agreement and the Note, as hereby amended is,
shall continue to be, secured by the Security Documents, and any reference to
the Agreement and the Note in the Security Documents shall hereafter be deemed
to include the Agreement as hereby amended.

 

10.     Binding Obligations. The Agreement, the Note and the Security Documents,
are, and shall remain, the binding obligations of Borrower and/or other third
parties, and all of the provisions, terms, stipulations, conditions, covenants
and powers contained therein shall stand and remain in full force and effect,
except only as the same are herein and hereby expressly and specifically varied
or amended, and the same are hereby ratified and confirmed, and Lender reserves
unto itself all rights and privileges granted thereunder.

 

11.     Reaffirmation; Authority. Borrower hereby reaffirms all representations,
warranties, covenants and agreements recited in the Agreement, the Note, and the
Security Documents as of the date hereof, and the same are hereby adopted as
representations, warranties, covenants and agreements of Borrower herein.
Borrower further represents and warrants that it is not in default under any of
its obligations under the Agreement, the Note, and the Security Documents, and
that it has full power and authority to execute and deliver this Amendment, and
that the execution and delivery hereof has been duly authorized, and that all
necessary and proper acts have been performed or taken.

 

12.     Release. Borrower hereby releases Lender and its successors, assigns,
directors, officers, agents, employees, representatives and attorneys from any
and all claims, demands, causes of action, liabilities or damages, whether now
existing or hereafter arising or contingent or noncontingent, or actions in law
or equity of any type or matter, relating to or in connection with any
statements, agreements, action or inaction on the part of Lender occurring at
any time prior to the execution of this Amendment, with respect to Borrower, the
Agreement, the Note, the Security Documents and any related Loan Documents.

 

13.     Further Assurances. Following the Effective Date of this Amendment,
Borrower agrees to execute and deliver to Lender at any time and from time to
time any and all further conveyances, assignments, confirmations, satisfactions,
releases, instruments of further assurance, approvals, consents and any and all
such further instruments and documents as may be reasonably necessary,
appropriate, expedient or proper in the opinion of Lender or its counsel in
order to effectuate, complete, perfect or protect the transactions described
herein or in the Agreement, the Note, the Security Documents or any other
documents executed in connection therewith or contemplated thereby.

 

14.     Expenses. Borrower agrees to pay all reasonable expenses incurred by
Lender in connection with this Amendment, including, but not limited to,
Lender’s legal and recording fees. Said sums are payable on demand and are
secured by the Security Documents.

 

15.     Applicable Law. This Amendment shall be governed by and construed in
accordance with the substantive laws of the State of Ohio (without reference to
conflict of law principles) but giving effect to federal laws applicable to
national banks.

 

16.     Counterparts; Electronic Images. This Amendment may be executed in any
number of counterparts (including telecopy counterparts), each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument. Borrower hereby acknowledges the receipt of a copy of this Amendment
and all other Loan Documents. Lender may, on behalf of Borrower, create a
microfilm or optical disk or other electronic image of this Amendment and any or
all of the Loan Documents. Lender may store the electronic images of this
Amendment and any other loan document in its electronic form and then destroy
the paper original as part of Lender’s normal business practices, with the
electronic image deemed to be an original.

 

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17.       Closing Conditions. Notwithstanding any provision contained in this
Amendment to the contrary, this Amendment shall not be effective unless and
until Lender shall have received the following, all in form acceptable to
Lender:

 

 

(a)

this Amendment, duly executed by Borrower;

 

 

(b)

Borrowing Resolutions of the Board of Directors of each of the Borrowers, duly
executed by the Secretary of Borrower;

 

 

(c)

the Updated IP Schedules described in Section 5 of this Amendment;

 

 

(d)

the Amendment Fee described in Section 8 of this Amendment; and

 

 

(e)

such other documents and information as required by Lender.

 

Borrower and Lender have executed this Amendment as of the Effective Date.

 

 

 

[SIGNATURES ON FOLLOWING PAGE]

 

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SIGNATURE PAGE-

TWENTIETH AMENDMENT TO LOAN DOCUMENTS dated September 11, 2019

 

 

 

 

Borrowers:

 

BUILD-A-BEAR WORKSHOP, INC.

   

 

 

   

 

 

   

By:

/s/ Vojin Todorovic

   

Name:

Vojin Todorovic

   

Title:

Chief Financial Officer

            BUILD-A-BEAR WORKSHOP FRANCHISE HOLDINGS, INC.                

By:

/s/ Vojin Todorovic

   

Name:

Vojin Todorovic

   

Title:

Chief Financial Officer

                    BUILD-A-BEAR RETAIL MANAGEMENT, INC.                

By:

/s/ Vojin Todorovic

   

Name:

Vojin Todorovic

   

Title:

Chief Financial Officer

 

 

 

 

 

 

 

 

BUILD-A-BEAR ENTERTAINMENT, LLC

 

     

 

By:

Build-A-Bear Retail Management, Inc.,

It’s Sole Member

 

 

 

 

 

 

 

 

By:

/s/ Vojin Todorovic

 

 

 

Name:

Vojin Todorovic

 

 

 

Title:

Chief Financial Officer

 

     

 

BUILD-A-BEAR CARD SERVICES, LLC

 

     

 

By:

Build-A-Bear Workshop, Inc.,

It’s Sole Member

 

 

 

 

 

 

 

 

By:

/s/ Vojin Todorovic

 

 

 

Name:

Vojin Todorovic

 

 

 

Title:

Chief Financial Officer

 

 

 

 

Lender:

 

        U.S. BANK NATIONAL ASSOCIATION   

 

 

 

 

 

 

 

 

 

By:

/s/ Roger Gross

 

 

Name:

Roger Gross

 

 

Title:

Senior Vice President

 

 

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