Item 1.01 Entry into a Material Definitive Agreement.
Purchase Agreements
On April 29, 2022 (the “Effective
Date”), Blue Apron Holdings, Inc. (the “Company”) entered into a purchase agreement (the “RJB Purchase Agreement”) with RJB Partners LLC (“RJB”),
an affiliate of Joseph N. Sanberg, an existing holder of the Company’s Class A common stock, which provided for, among other things,
the following private placement (the “RJB Private Placement”):
| · | concurrently with the execution of the RJB Purchase Agreement on the Effective Date (the “First
RJB Closing”), Long Live Bruce, LLC (“LLB”) (which was assigned RJB’s rights to purchase the First RJB Closing
Private Placement Shares (as defined herein)) purchased, for an aggregate purchase price of $20.0 million (or $12.00 per share), 1,666,666
shares of Class A common stock (the “First RJB Closing Private Placement Shares”); and |
| · | on May 30, 2022, or such other date as may be agreed to by the Company and RJB (the “Second RJB
Closing”), RJB will purchase, on the same terms as the First RJB Closing, 1,666,667 shares of Class A common stock (the “Second
RJB Closing Private Placement Shares” and together with the First RJB Closing Private Placement Shares, the “RJB Private Placement
Shares). |
The RJB Purchase Agreement
contains customary representations by the Company, on the one hand, and RJB, on the other hand. It also contains certain covenants,
including covenants requiring the Company, on or prior to May 5, 2022 (extended from May 3, 2022 by mutual agreement of the Company
and RJB), to deliver to RJB evidence of, (i) the repayment and discharge all outstanding amounts under the Company’s Financing
Agreement, dated as of October 16, 2020, by and among the Company, Blue Apron, LLC, a wholly-owned subsidiary of the Company,
certain other subsidiaries of the Company party thereto as subsidiary guarantors, the lenders party thereto from time to time and
Blue Torch Finance LLC, as administrative agent and collateral agent for the lenders, as amended, and (ii) the Company’s entry
into the Note Purchase and Guarantee Agreement (the “NPA”) (as defined herein). As described below, under
“Financing Agreement,” these conditions were met on May 5, 2022.
The First RJB Closing closed
concurrently with the execution of the RJB Purchase Agreement on the Effective Date. Pursuant to the terms of the RJB Purchase Agreement,
the Second RJB Closing is expected to close on May 30, 2022, or such other date as may be agreed to by the Company and RJB. Completion
of the Second RJB Closing is subject to customary closing conditions. The RJB Purchase Agreement contains customary termination rights
for each of the Company and RJB, including that it may be terminated, subject to the terms and conditions of the RJB Purchase Agreement,
(i) by mutual written consent of such parties at any time prior to the Second RJB Closing or (ii) by either party upon the other party’s
uncured material breach of any representation, warranty, covenant or agreement under the RJB Purchase Agreement after receipt of 30 days’
notice of such breach by the other party.
In accordance with the terms
of the RJB Purchase Agreement, RJB has also agreed to a customary standstill until September 15, 2024, as well as provisions requiring
RJB to vote all Company securities it beneficially owns, including the RJB Private Placement Shares, and to cause Company securities beneficially
owned by Mr. Sanberg and certain of its or his respective affiliates under common control (including the RJB Private Placement Shares)
to be voted, in each case in excess of 19.9% of the total voting power of the outstanding capital stock of the Company in the aggregate,
in proportion to and in accordance with the vote of all stockholders of the Company.
On the Effective Date, in
a separate private placement (the “Findley Private Placement” and together with the RJB Private Placement, the “Private
Placements”) which closed concurrently with the First RJB Closing, the Company entered into a purchase agreement (the “Findley
Purchase Agreement” and together with the RJB Purchase Agreement, the “Purchase Agreements”) with Linda Findley, a director
and President and Chief Executive Officer of the Company, under which Ms. Findley purchased, for an aggregate purchase price of $500,000
(or $12.00 per share), 41,666 shares of Class A common stock (the “Findley Private Placement Shares” and together with the
RJB Private Placement Shares, the “Private Placement Shares”).
The Findley Purchase Agreement contains customary
representations from the Company, on the one hand, and Ms. Findley, on the other hand.
The foregoing descriptions of the Purchase Agreements
are qualified in their entirety by reference to the full text of the documents, copies of which are filed as Exhibits 10.1 and 10.2, respectively,
to this Current Report on Form 8-K and are incorporated by reference herein.
Registration Rights Agreements
Concurrently with the execution
of the RJB Purchase Agreement, the Company and RJB entered into an amended and restated registration rights agreement (the “Amended
and Restated Registration Rights Agreement”), with respect to the shares purchased in the RJB Private Placement and those securities
purchased by RJB in a private placement which closed on February 14, 2022, as previously disclosed on the Company’s Form 8-K as
filed with the Securities and Exchange Commission (the “SEC”) on February 15, 2022 (the “Prior Private Placement”).
Pursuant to the Amended and Restated Registration Rights Agreement, the Company agreed, among other things, to file a registration statement
(the “Shelf Registration Statement”) with the SEC (i) within thirty (30) days of the date requested by RJB, and (ii) on such
other date as mutually agreed upon by the Company and RJB, covering the resale of the shares of Class A common stock purchased by RJB
and its Permitted Transferees (as defined in the Amended and Restated Registration Rights Agreement) in the RJB Private Placement and
the shares of Class A common stock and shares of Class A common stock underlying the warrants issued to RJB in the Prior Private Placement
(collectively, the “RJB Registrable Securities”). Further, at any time the Shelf Registration Statement is not effective,
subject to the terms and conditions of the Amended and Restated Registration Rights Agreement, the Company is required upon a demand by
RJB, to file and cause to be declared effective a shelf registration statement registering the resale of the RJB Registrable Securities;
provided that RJB and its affiliates are entitled under the Amended and Restated Registration Rights Agreement to a total of (i) five
demands in the aggregate or (ii) two demands in any 12-month period. In addition, the Amended and Restated Registration Rights Agreement
provides certain piggyback registration rights to RJB; however, so long as a Shelf Registration Statement is effective, then, subject
to the terms and conditions of the Amended and Restated Registration Rights Agreement, the Company shall have no obligation to allow RJB
to exercise its piggyback registration rights and include RJB Registrable Securities in another registration statement being filed by
the Company.
Concurrently with the execution
of the Findley Purchase Agreement, the Company and Ms. Findley entered into a registration rights agreement (the “Findley Registration
Rights Agreement” and together with the Amended and Restated Registration Rights Agreement, the “Registration Rights Agreements”)
with respect to the shares purchased in the Findley Private Placement, pursuant to which the Company agreed, among other things, to file
a registration statement (the “Findley Shelf Registration Statement”) with the SEC (i) within thirty (30) days of the date
requested by Ms. Findley and (ii) on such other date as mutually agreed upon by the Company and Ms. Findley, covering the resale of the
shares of Class A common stock purchased by Ms. Findley in the Findley Private Placement (the “Findley Registrable Securities”).
Further, at any time that the Findley Shelf Registration Statement is not effective, subject to the terms and conditions of the Findley
Registration Rights Agreement, the Company is required upon a demand by Ms. Findley to file and cause to be declared effective a shelf
registration statement registration the resale of the Findley Registrable Securities. In addition, the Findley Registration Rights Agreement
provides certain piggyback registration rights to Ms. Findley; however, so long as a Findley Shelf Registration Statement is effective
then, subject to the terms and conditions of the Findley Registration Rights Agreement, the Company shall have no obligation to allow
Ms. Findley to exercise her piggyback registration rights and include Findley Registrable Securities in another registration statement
being filed by the Company.
The Registration Rights Agreements
contain customary covenants and indemnification provisions that the parties made to, and solely for the benefit of, each other in the
context of the terms and conditions of the Registration Rights Agreements, the Purchase Agreements (and for purposes of the Amended and
Restated Registration Rights Agreement, the purchase agreement entered into in connection with the Prior Private Placement), and the transactions
contemplated thereunder. The provisions of the Registration Rights Agreements, including any representations, warranties and covenants
contained therein, were made solely for the benefit of the parties thereto and may be subject to limitations agreed upon by the contracting
parties.
The foregoing descriptions
of the Registration Rights Agreements are qualified in their entirety by reference to the full text of the documents, copies of which
are filed as Exhibits 10.3 and 10.4, respectively, to this Current Report on Form 8-K and are incorporated by reference herein.
Financing Agreements
On May 5, 2022, the
Company entered into a Note Purchase and Guarantee Agreement (the “NPA”) among itself as parent guarantor,
Blue Apron, LLC, a wholly-owned subsidiary of the Company (the “Issuer”) as issuer, certain other subsidiaries of the Company
party thereto as subsidiary guarantors (the “Subsidiary Guarantors” and, together with the Company, the “Guarantors”),
the purchasers party thereto (the “Purchasers”) and The Bank of New York Mellon Trust Company, N.A., as collateral agent (the
“Agent”) for the holders of the Notes (as defined below). The NPA provides for, among other things, the issuance of $30.0
million in aggregate principal amount of secured notes due May 5, 2027 (the “Notes”) at a purchase price equal to 94.00% thereof.
The proceeds of the Notes were used, together with cash on hand, to repay the Company’s Existing Financing Agreement (as defined
in Item 1.02 below) and pay fees and expenses in connection with the transactions contemplated by the NPA.
Subject to the terms of the NPA, the Notes bear
interest at a rate equal to 8.875% per annum, payable in arrears on June 30 and December 31 of each calendar year, with a step-up to 11.875%
in the event the Notes are rated below “B3” from Moody’s, “B(low) from DBRS, or “B-” from S&P
or Fitch. In addition, if the Notes are rated below “B3” from Moody’s, “B(low) from DBRS, or “B-”
from S&P or Fitch lower after the issue date, the Issuer will be required to pay a true-up fee equal to 3.00% per annum from the issue
date to the next succeeding interest payment date. The Notes will amortize semi-annually in equal installments of $1,500,000 beginning
December 31, 2025, with the remaining unpaid principal amount of the Notes repayable on May 5, 2027.
The NPA provides for a guarantee by the Guarantors
of all of the obligations of the Issuer, including the payment when due of all principal, interest, premiums and all other amounts owing
from time to time under the NPA (collectively, the “Obligations”). In connection with the NPA, the Issuer and the Guarantors
entered into a Pledge and Security Agreement with the Agent, pursuant to which they each granted to Agent, for the benefit of the Agent
and the holders of the Notes, a first priority security interest in, and lien upon, substantially all of the assets and properties now
owned or hereinafter acquired by the Issuer and the Guarantors to secure the Obligations, subject to certain customary exceptions.
The NPA contains customary representations, warranties,
affirmative and negative covenants in favor of the holders of the Notes.
The NPA contains two financial maintenance covenants:
a minimum liquidity covenant of (x) for any date ending prior on or prior to June 30, 2022, $15.0 million and (y) for any date thereafter,
$15.0 million if the Company’s Asset Valuation (as defined in the NPA) is greater than $25.0 million, $20.0 million if the Company’s
Asset Valuation is greater than $20.0 million but less than $25.0 million and $25.0 million if the Company’s Asset Valuation is
less than or equal to $20.0 million, and a covenant requiring the Issuer to maintain a minimum Asset Coverage Ratio (as defined in the
NPA) of at least 1.25 to 1.00. The Issuer has also agreed to use commercially reasonable efforts to cause 90% of the packaging for the
Company’s meal kit boxes to recyclable, reusable or compostable (the “ESG KPI Goal”); the failure to achieve the ESG
KPI Goal prior to the date on which the Notes are repaid will require the Issuer to pay holders a fee equal to 1% of the principal amount
of the Notes.
The negative covenants include restrictions on
the ability to, among other things, incur liens and indebtedness, sell assets, make dividends or other distributions, enter into transactions
with affiliates, or make loans or investments, in each case, subject to certain exceptions. The NPA also includes certain customary events
of default (subject in certain cases to cure periods and thresholds), including, without limitation, payment defaults, representation
or warranty inaccuracies in any material respect, covenant violations, cross-defaults to other agreements evidencing indebtedness for
borrowed money, invalidity of certain loan documents relating to the NPA, certain judgments, bankruptcy and insolvency events.
If the Issuer experiences a “change in control”
event specified in the NPA, the Issuer must offer to purchase all of the Notes at a price equal to 101% of the principal amount of the
Notes, together with unpaid interest accrued thereon, if any, to but not including the repurchase date. In addition, if the Issuer engages
in certain asset dispositions, the Issuer will be required to use the proceeds of such asset sales to make an offer to purchase a principal
amount of the Notes equal to the net cash proceeds from such asset sale at a price of 100% of the principal amount of the Notes, together
with unpaid interest accrued thereon, if any, to but not including the repurchase date.
The Issuer will have the option to make voluntary
prepayments under the NPA beginning 18 months after the issuance date, subject to certain prepayment premiums. The holders of the Notes
are entitled to accelerate repayment of all or any portion of the Notes then outstanding upon the occurrence, and in certain instances
the continuance, of any events of default under the NPA.
In connection with the execution of the NPA, the
Issuer paid customary fees and expenses to the Agent and the holders of the Notes.
The foregoing description of the NPA does not
purport to be complete and is qualified in its entirety by reference to the full text of the NPA, which is filed as Exhibit 10.5 to this
Current Report on Form 8-K and incorporated herein by reference.