Item 1.01. Entry into a Material Definitive Agreement.
As previously disclosed, Boxed, Inc. (the "Company") is party to that certain
Credit Agreement, dated as of August 4, 2021, as amended by the First Amendment
to Credit Agreement, dated as of January 20, 2023, by and among Boxed, LLC, a
Delaware limited liability company (the "Borrower"), the Company and its
subsidiaries (collectively with the Company, the "Guarantors" and, the
Guarantors together with the Borrower, the "Obligors"), the BlackRock affiliated
lenders thereunder (the "Lenders") and Alter Domus (US) LLC, as agent for the
lenders (the "Administrative Agent") (as further amended, restated, supplemented
or modified, the "Credit Agreement"). Capitalized terms used below, which are
undefined, shall have the meaning ascribed to them in the Credit Agreement.
Pursuant to the terms of the Credit Agreement, the Borrower was required to
deliver to the Lenders on or before March 1, 2023, an executed effective letter
of intent or signed term sheet by a bona fide third party pursuant to which such
third party agreed to purchase more than 50% of the aggregate equity interests
or assets of the Borrower and its Subsidiaries for cash consideration (an
"Executed Sale LOI"). The Borrower delivered to the Lenders an executed letter
of intent (the "Letter of Intent") on March 1, 2023 that the Company believes
constituted an Executed Sale LOI and satisfied its obligation under the Credit
Agreement. However, the Lenders disagreed that the Letter of Intent constituted
an Executed Sale LOI pursuant to the terms of the Credit Agreement.
As a result, on March 1, 2023, the Obligors entered into a forbearance agreement
regarding the Credit Agreement (the "Forbearance Agreement") with the Lenders
and Administrative Agent, pursuant to which the Lenders agreed to forbear any
rights or remedies under the Credit Agreement and other Loan Documents and
applicable law to which they would otherwise be entitled related to the delivery
of an Executed Sale LOI, as well as any rights or remedies arising from a
failure to comply with obligations of the Borrower to deliver an executed sale
agreement by March 15, 2023, to satisfy the minimum liquidity covenant under
6.10(c) of the Credit Agreement or any cross-default arising from a failure of
the Borrower to comply with comparable provisions under the Company's certain
Second Lien Credit Agreement, dated as of January 20, 2023 (the "Second Lien
Credit Agreement," and any default arising from such failures a "Forbearance
Default").
Pursuant to the Forbearance Agreement, the Lenders and the Administrative Agent
will provide a limited forbearance from the exercise of all rights or remedies
under the Credit Agreement and the other Loan Documents and applicable law
(including initiating any proceedings to collect on the obligations or
initiating, repossessing or commencing a foreclosure of any Collateral), in each
case, due to the Lenders as a result of a Forbearance Default.
The Forbearance Agreement requires the Borrower to satisfy certain milestones,
including that: (i) the Borrower deliver to the Administrative Agent and the
Lenders, on or before March 6, 2023 (a) a debtor-in-possession budget prepared
by the Borrower that is reasonably acceptable to the Required Lenders and (b) a
certificate from the Borrower that the debtor-in-possession budget has been
prepared on a reasonable basis, in good faith and on assumptions the Borrower
believes to be reasonable at the time such assumptions were made; (ii) the
Borrower and each other Obligor enter into a binding debt commitment letter and
term sheet on or before March 6, 2023 with the Lenders for a
debtor-in-possession financing facility satisfactory to the Administrative Agent
and Required Lenders, and, if necessary, the final, binding agreement would be
required to be entered into on or before March 18, 2023; and (iii) the Borrower
prepay, with cash maintained in deposit accounts subject to an Account Control
Agreement, the Loans in principal amount equal to at least $5,000,000 together
with accrued interest and the Early Prepayment Fee, on or before March 7, 2023.
The Forbearance Agreement will terminate on the earliest of (i) 11:59 p.m. (New
York time) on March 19, 2023, (ii) the occurrence of any other Event of Default
under any Loan Document, and (iii) any breach by the Borrower, Company or any
other Guarantor of any representation, warranty, term, covenant or agreement in
the Forbearance Agreement.
The foregoing description of the Forbearance Agreement does not purport to be
complete and is qualified in its entirety by the terms and conditions of the
Forbearance Agreement, which will be filed as an exhibit to the Company's Annual
Report on Form 10-K for the period ended December 31, 2022.
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