Document:

exv10w1

 

Exhibit 10.1

THIRD AMENDMENT TO LOAN AND SECURITY AGREEMENT

     This Third Amendment to Loan and Security Agreement (the “Third
Amendment”) is made as of this 27th day of October, 2004 by and among:

     Fleet Retail Group, Inc. (formerly known as Fleet Retail Finance Inc.)
(the “Agent”), a Delaware corporation with its principal executive offices at
40 Broad Street, Boston, Massachusetts, for the Revolving Credit Lenders party
to the Agreement (defined below), and

     The CIT Group/Business Credit, Inc. (the “Co-Agent”), a New York
Corporation with offices at 300 S. Grand Avenue, 3rd Floor, Los Angeles,
California 90071, and

     The Revolving Credit Lenders party to the Agreement, and

     Hastings Entertainment, Inc. (the “Borrower”), a Texas corporation with
its principal executive offices at 3601 Plains Boulevard, Amarillo, Texas 79102
in consideration of the mutual covenants herein contained and benefits to be
derived herefrom.

WITNESSETH:

     WHEREAS, on August 29, 2000, the Agent, the Co-Agent, the Revolving Credit
Lenders and the Borrower entered in a certain Loan and Security Agreement which
was amended pursuant to a certain First Amendment to Loan and Security
Agreement dated August 23, 2002, and pursuant to a certain Second Amendment to
Loan and Security Agreement dated December 9, 2003 (as the same may have
further been amended from time to time, collectively, the “Agreement”); and

     WHEREAS, the Agent, the Co-Agent, the Revolving Credit Lenders and the
Borrower desire to modify certain provisions of the Agreement as set forth herein.

     NOW, THEREFORE, it is hereby agreed among the Agent, the Co-Agent, the Revolving
Credit Lenders and the Borrower as follows:

	1.	 	Capitalized Terms. All capitalized terms used herein and not
otherwise defined shall have the same meaning herein as in the
Agreement.
	 
	2.	 	Amendment to Article 1. The provisions of Article 1 of the
Agreement are hereby amended by adding the following new definition
thereto:

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     "Third
Amendment Effective Date”: Shall mean October 27, 2004, the effective
date of that certain Third Amendment to Loan and Security Agreement by and
among the Borrower, the Agent, the Co-Agent and the Revolving Credit Lenders.

	3.	 	Amendment to Article 5. Section 5-11 of the Agreement is hereby amended
by inserting the following provision at the end thereof:

     “Notwithstanding the foregoing, for the period commencing as of the Third
Amendment Effective Date through and including December 15,
2004, only, the
Borrower shall maintain Availability of not less than $5 Million at all times:

	4.	 	Ratification of Loan Documents. Except as provided herein, all terms and
conditions of the Agreement and the other Loan Documents remain in full
force and effect. The Borrower hereby ratifies, confirms, and reaffirms
all representations, warranties, and covenants contained therein and
hereby represents that no Events of Default exist under the Loan
Documents. The Borrower further ratifies and confirms that any and all
Collateral previously granted to the Agent for the ratable benefits of the
Revolving Credit Lenders continues to secure the existing Liabilities as
well as the Liabilities as amended hereby, and any future Liabilities.
	 
	5.	 	Conditions to Effectiveness. This Third Amendment shall be become
effective upon the satisfaction of the following conditions precedent:

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	 	a.	 	This Third Amendment shall have been duly executed and delivered
by each of the Borrower, the Revolving Credit Lenders and the
Agent and shall be in full force and effect.
	 
	 	b.	 	The Borrower shall have delivered to the Agent its
Secretary’s Certificate with certified copies of (i) Incumbency
Certificate; (ii) Specimen Signatures; and (iii) Resolutions.
	 
	 	c.	 	All proceedings in connection with the transactions
contemplated by this Third Amendment and all documents incident
thereto shall be reasonably satisfactory in substance and form
to the Agent, and the Agent shall have received all information
and such counterpart originals or certified or other copies of
such documents as the Agent may reasonable request. Further, the
Borrower shall have delivered to the Agent such additional
documents which the Agent may reasonably request, including,
without limitation, a ratification by each guarantor of their
respective guaranties.
	 
	 	d.	 	The Borrower shall have paid all reasonable costs and
expenses of the Agent including, without limitation, all
attorney’s fees and expenses incurred by the Agent in connection
with the Agreement, the Loan Documents, and the preparation,
negotiation and execution of this Third Amendment.

	6.	 	Miscellaneous.

     (a) This Third Amendment may be executed
in several counterparts and by each party on a separate
counterpart, each of which when so executed and
delivered shall be an original, and all of which
together shall constitute one instrument.

     (b) This Third Amendment expresses the
entire understanding of the parties with respect to the
transactions contemplated hereby. No prior negotiations
or discussions shall limit, modify, or otherwise affect
the provisions hereof.

     (c) Any determination that any provision
of this Third Amendment or any application hereof is
invalid, illegal or unenforceable in any respect and in
any instance shall not effect the validity, legality, or
enforceability of such provision in any other instance,
or the validity, legality or enforceability of any other
provisions of this Third Amendment.

     (d) The Borrower shall pay on demand all
costs and expenses of the Agent, including, without
limitation, reasonable attorneys’ fees in connection
with the preparation,
negotiation, execution and delivery of this Third
Amendment.

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     (e) The Borrower warrants and represents that the Borrower has consulted with
independent legal counsel of the Borrower’s selection in connection with this
Third Amendment and is not relying on any representations or warranties of any
Revolving Credit Lender or the Agent or their respective counsel in entering
into this Third Amendment.

     (f) The Borrower acknowledges and agrees that the Borrower does not have any
claims, counterclaims, offsets, or defenses against any Revolving Credit Lender
or the Agent directly or indirectly relating to the Borrower’s relationship
with and/or the Borrower’s Liabilities, and to the extent that the Borrower has
or ever had any such claims, counterclaims offsets, or defenses against any of
the Revolving Credit Lenders or the Agent, the Borrower affirmatively WAIVES
the same. The Borrower, and for its representatives, successors and assigns,
hereby RELEASES, and forever discharges the Revolving Credit Lenders and the
Agent and their respective officers, directors, agents servants, attorneys, and
employees, and their respective representatives, successors and assigns, of,
to, and from all known debts, demands, actions, suits, accounts, covenants,
contracts, agreements, damages, and any and all claims, demands, or liabilities
whatsoever, of every name and nature, both at law and in equity through the
date hereof.

[remainder of page left intentionally blank]

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     IN WITNESS WHEREOF, the parties have hereunto caused this Third
Amendment to be executed and their seals to be hereto affixed as of the date
first above written.

	 	 	 	 	 
	

	 	HASTINGS ENTERTAINMENT, INC.

(“Borrower”)
	 
	 	 	 	 
	

	 	By:	 	/s/ John H. Marmaduke
	

	 	 	 	
 
	

	 	Name:
	 	John H. Marmaduke
	

	 	 	 	
 
	

	 	Title:
	 	President & CEO
	

	 	 	 	
 
	 
	 	 	 	 
	

	 	FLEET RETAIL GROUP, INC.
	

	 	(“Agent”)
	 
	 	 	 	 
	

	 	By:	 	/s/ Keith Vercauteren
	

	 	 	 	
 
	

	 	Name:
	 	Keith Vercauteren
	

	 	 	 	
 
	

	 	Title:
	 	Director
	

	 	 	 	
 
	 
	 	 	 	 
	

	 	THE CIT GROUP/BUSINESS CREDIT,
	

	 	INC.
	

	 	(“Co-Agent”)
	 
	 	 	 	 
	

	 	By:	 	/s/ Mike Richman
	

	 	 	 	
 
	

	 	Name:
	 	Mike Richman
	

	 	 	 	
 
	

	 	Title:
	 	Vice President
	

	 	 	 	
 

5exv10w15

 

Exhibit 10.15

The Yankee Candle Company, Inc.

MANAGEMENT INCENTIVE PLAN

For the 2004 Fiscal Year

For Executive Committee Members — Corporate

Overview

The Yankee Candle Company, Inc. (“Yankee” or the “Company”) believes in
providing financial incentives to management employees who have significant
responsibility for sales, profit and operations. Pursuant to this philosophy,
Yankee has established a Management Incentive Plan (“The Plan”) for the 2004
fiscal year in order to meet the following objectives:

	•	 	Maintain a total compensation program which motivates and rewards high levels of performance.
	 
	•	 	Recognize and reward efforts and contributions made to the Company’s success.
	 
	•	 	Recognize and reward the achievement of team and/or individual goals.
	 
	•	 	Recognize and reward the achievement of the Company’s overall goals.

Administration

The Plan is administered by the Company’s Salary Committee. Any amendment,
exception, interpretation, etc. must be approved in writing by the Salary
Committee and the Compensation Committee of the Board of Directors. The
current Salary Committee members are:

	 	 	 
	Craig W. Rydin

	 	Chairman and Chief Executive Officer
	Robert R. Spellman

	 	Senior Vice President and Chief Financial Officer
	Martha S. LaCroix

	 	Senior Vice President, Human Resources

The Plan, Company financial objective(s) and key performance objective(s) (if
any) are established at the beginning of the fiscal year and provided to
participants after approval by the Salary Committee in its sole discretion.

Each participant will have an assigned incentive award target equal to a
specific percentage of salary during the fiscal year. For this purpose, salary
is defined as actual base pay paid by the Company to the participant during the
fiscal year. Each participant will be informed of his or her percentage, which
is generally assigned based on the individual’s job classification and
responsibilities, but is in all instances subject to the discretion of the
Salary Committee.

Incentive payments will be calculated based on actual results achieved compared
to objective(s) for fiscal 2004. The Company intends that incentive payments
for fiscal 2004 will be paid by March 31, 2005.

Being a participant in the Plan is not a contract for, nor offer of employment
for any particular time period, nor any other agreement on the part of
management of the Company for such employment and shall in no event alter the
“at will” nature of employment with the Company.

The Plan is subject to applicable Government and economic controls in effect
during its operation; therefore, payments may be subject to limitations.

Yankee reserves the right to amend, modify and/or discontinue The Plan in whole
or in part whenever it is considered necessary with or without notice.

Eligibility

The Salary Committee is responsible in its sole discretion for identifying and
approving positions eligible to participate. Eligibility is subject to the
following additional criteria:

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	•	 	Active employment in an eligible position during fiscal 2004; and the
employee must be actively employed by the Company through the end of
fiscal 2004.
	 
	•	 	Employees who transfer into or out of an eligible position during the
fiscal year will receive a prorated incentive award based on the
number of days of active employment in an eligible position.
	 
	•	 	Employees who are hired into an eligible position during the fiscal
year will receive a prorated incentive award based on the number of
days of active employment in the eligible position.
	 
	•	 	Employees who cease employment due to death or permanent disability
will receive a prorated incentive award based on the number of days of
active employment in an eligible position.
	 
	•	 	Incentive awards are not vested. Notwithstanding anything to the
contrary contained herein, employees whose employment is terminated,
voluntarily or involuntarily, for any reason other than permanent
disability or death prior to the end of the fiscal year are not
eligible to receive an award.
	 
	•	 	Employees whose employment is terminated “for cause” prior to payment
of the 2004 fiscal year incentive are not eligible. For purposes of
this plan, the term “Cause” shall include any of the following events:

	 	(a)	 	Gross negligence, willful failure to perform or willful malfeasance in
performance of the employee’s duties and responsibilities, including those
referenced hereunder;
	 
	 	(b)	 	Conviction of a felony or of a lesser crime involving moral turpitude
or acts of dishonesty;
	 
	 	(c)	 	Breach of a fiduciary duty of loyalty to the Company or the diversion
by the employee of any corporate assets, commitments, service or opportunities
for his or her personal gain;
	 
	 	(d)	 	Fraud, misrepresentation, theft or embezzlement of Company
assets or the intentional violation of law or Company policy;
	 
	 	(e)	 	Insubordination or willful failure to follow reasonable
instructions from supervisors; or
	 
	 	(f)	 	Other conduct that is materially harmful to the business,
interests or reputation of the Company.

Fiscal 2004 Provisions

For fiscal 2004, 100% of your incentive award target is tied to the Company’s
diluted earnings per share (the “Company Portion”).

	1.	 	Attainment of Diluted Earnings Per Share Objective (All references to
“diluted earnings per share” shall refer to diluted earnings per share for
the 2004 fiscal year as reported by the Company without giving effect to
any impact on such diluted earnings per share resulting from any
repurchase by the Company in 2004 of any shares of its common stock.)
	 
	 	 	The participant will receive 100% of the Company Portion incentive award
target if diluted earnings per share of (REDACTED) for fiscal year 2004 are
achieved.
	 
	 	 	The participant will receive 20% of the Company Portion incentive award
target if the Company achieves diluted earnings per share of (REDACTED) .
	 
	 	 	The participant will receive an additional predetermined percentage of the
Company Portion incentive award target for each one (1) cent increase in
actual diluted earnings per share between (REDACTED) up to the target of
(REDACTED).
	 
	 	 	The participant will receive an additional 5 percentage points of the Company
Portion incentive award target for each one (1) cent increase in actual
diluted earnings per share of (REDACTED) and above.
	 
	 	 	If actual results fall below diluted earnings per share of (REDACTED) there
will be no incentive award for either the Company Portion or the Individual
Portion of your incentive award target.

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