Exhibit 10.2

EXECUTION

 

AMENDMENT TO FORBEARANCE PERIOD

This AMENDMENT TO FORBEARANCE PERIOD, dated as of April 10, 2020 (this
“Amendment”), is entered into by and among Apex Global Brands Inc. (formerly
known as Cherokee Inc.), a Delaware corporation (the “Parent” and the “U.S.
Borrower”), Irene Acquisition Company B.V., a private company with limited
liability incorporated under the laws of the Netherlands, having its statutory
seat (statutaire zetel) in Amsterdam, the Netherlands and registered with the
Dutch trade register under number 67160921 (the “Dutch Borrower” and, together
with the U.S. Borrower, each a “Borrower” and collectively, the “Borrowers”),
each Guarantor party hereto, the Lenders party hereto which constitute all of
the Lenders party to the Financing Agreement as of the date hereof, Gordon
Brothers Finance Company, a Delaware corporation (“GBFC”), as collateral agent
for the Lenders (in such capacity, together with its successors and assigns in
such capacity, the “Collateral Agent”), and GBFC, as administrative agent for
the Lenders (in such capacity, together with its successors and assigns in such
capacity, the “Administrative Agent” and together with the Collateral Agent,
each an “Agent” and collectively, the “Agents”).

W I T N E S S E T H:

WHEREAS, the Parent, the Borrowers, the Guarantors, the lenders from time to
time party thereto (collectively, the “Lenders” and each individually, a
“Lender”) and the Agents are parties to that certain Financing Agreement, dated
as of August 3, 2018 (as amended by that certain First Amendment to Financing
Agreement, dated as of December 28, 2018, as further amended by that certain
Second Amendment to Financing Agreement, dated as of January 29, 2019, as
further amended by that certain Third Amendment to Financing Agreement and
Forbearance Agreement, dated as of December 20, 2019 (the “Forbearance
Agreement”), and as further amended, modified or otherwise supplemented from
time to time prior to the date hereof, the “Financing Agreement”);

WHEREAS, Events of Default have occurred and are continuing under the Financing
Agreement pursuant to Section 9.01(c) as a result of the Borrowers breach of
Section 7.03(b) for the periods ended October 31, 2019 and January 31, 2020 (the
“Existing Events of Default”).  The Borrowers requested the Agents and Lenders
forbear from exercising the Agents rights and remedies granted pursuant to the
Financing Agreement and other Loan Documents in order to provide the Borrowers
an opportunity to consider various business alternatives.  The Agents and
Lenders agreed to forbear from exercising their rights and remedies solely in
accordance with the terms and conditions of the Forbearance Agreement; and

WHEREAS, the Borrowers have requested that the Agents and the Lenders extend the
forbearance period under the Forbearance Agreement, and the Agents and the
Lenders are willing, as applicable, to extend such forbearance period on the
terms and conditions hereinafter set forth.

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
herein contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, it is hereby agreed by and between
the Agents, the Lenders, the Borrowers and the Guarantors, as follows:

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1.Defined Terms.  Except as otherwise defined in this Amendment, capitalized
terms used herein that are not otherwise defined shall have the meanings given
to those terms in the Financing Agreement.

2.Effect on Loan Documents; Ratification and Reaffirmation.  The Financing
Agreement and the other Loan Documents, after giving effect to this Amendment,
shall be and remain in full force and effect in accordance with their terms and
hereby are ratified and confirmed in all respects.  Except as expressly set for
the herein, the execution, delivery, and performance of this Amendment shall not
operate as a waiver of any right, power, or remedy of the Agents or any other
Secured Party under the Financing Agreement or any other Loan Document.  Each
Loan Party party hereto hereby ratifies and confirms in all respects all of its
obligations under the Loan Documents to which it is a party and each Loan Party
party hereto hereby ratifies and confirms in all respects any prior grant of a
security interest under the Loan Documents to which it is party and acknowledges
that all of such security interests, and all collateral heretofore pledged as
security for such indebtedness, continues to be and remains collateral for such
indebtedness from and after the date hereof.  Each Loan Party further
acknowledges and agrees that none of the Loan Parties have any defense (whether
legal or equitable), set-off or counterclaim to the payment or performance of
the Obligations in accordance with the terms of the Loan Documents.

3.Representations and Warranties.  Each Loan Party hereby represents and
warrants to the Agents and the Lenders as follows:

a.other than the Existing Events of Default, no Default or Event of Default has
occurred and is continuing on the date hereof.

b.the execution, delivery and performance by each Loan Party of this Amendment
(i) have been duly authorized by all necessary action, (ii) do not and will not
contravene (A) any of its Governing Documents, (B) any applicable material
Requirement of Law or (C) any material Contractual Obligation binding on or
otherwise affecting it or any of its properties, and (iii) do not and will not
result in any default, noncompliance, suspension, revocation, impairment,
forfeiture or nonrenewal of any permit, license, authorization or approval
applicable to its operations or any of its properties, except (solely for the
purposes of subclause (iii)), to the extent where such contravention, default,
noncompliance, suspension, revocation, impairment, forfeiture or nonrenewal
could not reasonably be expected to have a Material Adverse Effect;

c.no authorization or approval or other action by, and no notice to or filing
with, any Governmental Authority is required in connection with the due
execution, delivery and performance by any Loan Party of this Amendment;

d.this Amendment has been duly executed and delivered by each Loan Party and
this Amendment constitutes a legal, valid and binding obligation of each such
Loan Party, enforceable against each such Loan Party in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the
enforcement of creditors’ rights generally and by general principles of equity;
and

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e.all representations and warranties contained in the Financing Agreement and
each other Loan Document are true and correct in all material respects (except
for those representations and warranties that (i) are conditioned by
materiality, which shall be true and correct in all respects and (ii) expressly
relate to an earlier date or to the Existing Events of Default) on and as of the
date hereof.

4.Acknowledgment of Indebtedness.  Each Loan Party acknowledges and agrees that,
as of April 10, 2020, the Loan Parties are indebted, jointly and severally,
(a) to the Tranche A Term Loan Lenders for the Tranche A Term Loans in an
aggregate outstanding principal amount equal to $4,812,500.00 plus accrued and
unpaid interest thereon, as provided in the Financing Agreement and the other
Loan Documents, (b) the Tranche B Term Loan Lenders for the Tranche B Term Loans
in an aggregate outstanding principal amount equal to $33,687,500.00 plus
accrued and unpaid interest thereon, as provided in the Financing Agreement and
the other Loan Documents; (c) the Tranche C Term Loan Lenders for the Tranche C
Term Loans in an aggregate outstanding principal amount equal to $777,132.91
plus accrued and unpaid interest thereon, as provided in the Financing Agreement
and the other Loan Documents; (d) the Tranche D Term Loan Lenders for the
Tranche D Term Loans in an aggregate outstanding principal amount equal to
$4,662,797.38 plus accrued and unpaid interest thereon, as provided in the
Financing Agreement and the other Loan Documents and (e) for accrued and unpaid
fees and expenses of Agents and Lenders (and any other amounts due under the
Financing Agreement and the other Loan Documents, including but not limited to
reasonable fees and disbursements of counsel).

5.Acknowledgment of Existence of Event of Default.  Each Loan Party acknowledges
and agrees that the Existing Events of Default have occurred and are
continuing.  Each Loan Party acknowledges and agrees that the Agents and the
Lenders have not waived the Existing Events of Default or any other Event of
Default existing on the date hereof.  Each Loan Party further acknowledges and
agrees that, as a result of the occurrence of the Existing Events of Default:
(a) all of such Loan Party’s obligations, liabilities and indebtedness to the
Agents and the Lenders under the Financing Agreement and the other Loan
Documents may at any time, subject to the terms of the Forbearance Agreement, as
amended by this Amendment, the Financing Agreement and the other Loan Documents,
be declared due and payable in full, (b) the Agents and the Lenders have no
further commitment to extend credit to the Borrowers and (c) the Agents and the
Lenders, subject to the terms of the Forbearance Agreement, as amended by this
Amendment, are entitled to proceed to enforce any and all of their rights and
remedies under the terms of the Financing Agreement and the other Loan
Documents.

6.Conditions to Effectiveness.  This Amendment shall not be effective until each
of the following conditions precedent have been satisfied:

a.The Agents shall have received this Amendment, duly executed by each of the
parties hereto.

b.Each of the representations and warranties set forth in Section 3 hereof shall
be true and correct on and as of the date hereof.

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c.All action on the part of the Loan Parties necessary for the valid execution,
delivery and performance by the Loan Parties of this Amendment shall have been
duly and effectively taken.

7.Amendments to Forbearance Agreement.  Subject to the satisfaction of the
conditions precedent specified in Section 6 above, the Forbearance Agreement is
hereby amended by:

a.deleting “April 10, 2020” from Section 7(c) and inserting “April 17, 2020” in
lieu thereof;

b.adding the following clause (d) to Section 7 of the Forbearance Agreement:

“d.Qualified Cash.  Commencing as of April 10, 2020 and until the earlier to
occur of (i) the Termination Date or (ii) a Termination Event, Section 7.03(c)
of the Financing Agreement shall be amended by deleting “$700,000” and inserting
“$500,000” in lieu thereof.”; and

c.deleting “April 10, 2020” from Section 8 and inserting “April 24, 2020” in
lieu thereof.

8.Release.  Each Loan Party hereby releases and forever discharges the Agents,
the Lenders and each of their parents, subsidiaries and affiliates, past or
present, and each of them, as well as each of Agents’ and Lenders’ directors,
officers, agents, servants, employees, shareholders, representatives, attorneys,
administrators, executors, heirs, assigns, predecessors and successors in
interest, and all other persons, firms or corporations with whom any of the
former have been, are now, or may hereafter be affiliated, and each of them
(collectively, the “Releasees”), from and against any and all claims, demands,
liens, agreements, contracts, covenants, actions, suits, causes of action in law
or equity, obligations, controversies, debts, costs, expenses, damages,
judgments, orders and liabilities of whatever kind or nature in law, equity or
otherwise, whether known or unknown, fixed or contingent, suspected or
unsuspected by any Loan Party, and whether concealed or hidden (collectively,
“Claims”), which any Loan Party now owns or holds or has at any time heretofore
owned or held, which are based upon or arise out of or in connection with any
matter, cause or thing existing at any time prior to the date hereof or anything
done, omitted or suffered to be done or omitted at any time prior to the date
hereof in connection with the Financing Agreement, the other Loan Documents or
this Amendment (collectively the “Released Matters”).  Each Loan Party
represents, warrants and agrees that in executing and entering into this
release, they are not relying and have not relied upon any representation,
promise or statement made by anyone which is not recited, contained or embodied
in this Amendment or the Loan Documents.  Each Loan Party has reviewed this
release with the Loan Parties’ legal counsel, and understands and acknowledges
the significance and consequence of this release and of the specific waiver
thereof contained herein.  Each Loan Party understands and expressly assumes the
risk that any fact not recited, contained or embodied therein may turn out
hereafter to be other than, different from, or contrary to the facts now known
to any Loan Party or believed by any Loan Party to be true.  Nevertheless, each
Loan Party intends by this release to release fully, finally and forever all
Released Matters and agrees that this release shall be effective in all respects
notwithstanding any such difference in facts, and shall not be subject to
termination, modification or rescission by reason of any such difference in
facts.

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9.No Novation; Entire Agreement.  This Amendment evidences solely the specified
terms and obligations of the Loan Parties under the Financing Agreement and is
not a novation or discharge of any of the other obligations of the Loan Parties
under the Financing Agreement.  There are no other understandings, express or
implied, among the Loan Parties, the Agents and the Lenders regarding the
subject matter hereof or thereof.

10.Severability.  Any provision of this Amendment which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining portions hereof or affecting the validity or enforceability of such
provision in any other jurisdiction.

11.Headings.  Headings and captions used in this Amendment are included for
convenience of reference only and shall not be given any substantive effect.

12.Counterparts.  This Amendment may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which shall be
deemed to be an original, but all of which taken together shall constitute one
and the same agreement.  Delivery of an executed counterpart of this Amendment
by telecopier or electronic mail shall be equally as effective as delivery of an
original executed counterpart of this Amendment.  Any party delivering an
executed counterpart of this Amendment by telecopier or electronic mail also
shall deliver an original executed counterpart of this Amendment but the failure
to deliver an original executed counterpart shall not affect the validity,
enforceability, and binding effect of this Amendment.

13.Miscellaneous.  The terms and provisions hereof shall be binding upon and
inure to the benefit of the parties hereto and their permitted successors and
assigns.

14.Governing Law.  THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE
AND TO BE PERFORMED IN THE STATE OF NEW YORK.

15.WAIVER OF JURY TRIAL, ETC.  EACH LOAN PARTY, EACH AGENT AND EACH LENDER
HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM CONCERNING ANY RIGHTS UNDER THIS AMENDMENT OR THE OTHER LOAN
DOCUMENTS, OR UNDER ANY AMENDMENT, WAIVER, CONSENT, INSTRUMENT, DOCUMENT OR
OTHER AGREEMENT DELIVERED OR WHICH IN THE FUTURE MAY BE DELIVERED IN CONNECTION
THEREWITH, OR ARISING FROM ANY FINANCING RELATIONSHIP EXISTING IN CONNECTION
WITH THIS AMENDMENT, AND AGREES THAT ANY SUCH ACTION, PROCEEDINGS OR
COUNTERCLAIM SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.  EACH LOAN
PARTY CERTIFIES THAT NO OFFICER, REPRESENTATIVE, AGENT OR ATTORNEY OF ANY AGENT
OR ANY LENDER HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT ANY AGENT OR ANY
LENDER WOULD NOT, IN THE EVENT OF ANY ACTION, PROCEEDING OR COUNTERCLAIM, SEEK
TO ENFORCE THE FOREGOING WAIVERS.  EACH LOAN PARTY HEREBY ACKNOWLEDGES THAT THIS
PROVISION IS A MATERIAL INDUCEMENT FOR THE AGENTS AND THE LENDERS ENTERING INTO
THIS AMENDMENT.

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16.Informed Execution.  Each of the Loan Parties represents and warrants to the
Agents and Lenders that:

a.Each Loan Party has read and understands all of the terms and conditions of
this Amendment;

b.The Loan Parties intend to be bound by the terms and conditions of this
Amendment; and

c.The Loan Parties are executing this Amendment freely and voluntarily, without
duress, after consultation with independent counsel of the Loan Parties own
selection.

[Remainder of Page Intentionally Left Blank; Signature Pages Follow]

 

 

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IN WITNESS WHEREOF, this Amendment has been executed as of the date first
written above.

 

 

BORROWERS:

 

 

 

 

 

APEX GLOBAL BRANDS, INC. (f/k/a Cherokee Inc.), as U.S. Borrower

 

 

 

 

 

By:

 

/s/ Henry Stupp

 

Name:

 

Henry Stupp

 

Title:

 

Chief Executive Officer

 

 

 

 

 

 

IRENE ACQUISITION COMPANY B.V., as Dutch Borrower

 

 

 

 

 

By:

 

/s/ Henry Stupp

 

Name:

 

Henry Stupp

 

Title:

 

Director A

 

 

 

 

 

By:

 

/s/ Kimberly Doyle

 

Name:

 

Kimberly Doyle

 

Title:

 

Director B

 

 

GUARANTORS:

 

 

 

 

 

CHEROKEE INC.

 

 

 

 

 

By:

 

/s/ Henry Stupp

 

Name:

 

Henry Stupp

 

Title:

 

CEO

 

 

 

 

 

 

SPELL C. LLC

 

 

 

 

 

By: CHEROKEE INC., its sole member

 

 

 

 

 

By:

 

/s/ Henry Stupp

 

Name:

 

Henry Stupp

 

Title:

 

CEO

 

 

 

 

 

[Signature Page to Amendment to Forbearance Period]

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CHEROKEE BRANDS LLC

 

 

 

 

 

By: CHEROKEE INC., its sole member

 

 

 

 

 

By:

 

/s/ Henry Stupp

 

Name:

 

Henry Stupp

 

Title:

 

CEO

 

 

 

 

 

 

HAWK 900 BRANDS LLC

 

 

 

 

 

By: CHEROKEE INC., its sole member

 

 

 

 

 

By:

 

/s/ Henry Stupp

 

Name:

 

Henry Stupp

 

Title:

 

CEO

 

 

 

 

 

 

EDCA LLC

 

 

 

 

 

By: CHEROKEE INC., its sole member

 

 

 

 

 

By:

 

/s/ Henry Stupp

 

Name:

 

Henry Stupp

 

Title:

 

CEO

 

 

 

 

 

 

FFS HOLDINGS, LLC

 

 

 

 

 

By: CHEROKEE INC., its sole member

 

 

 

 

 

By:

 

/s/ Henry Stupp

 

Name:

 

Henry Stupp

 

Title:

 

CEO

 

 

 

 

 

 

FLIP FLOP SHOES FRANCHISE COMPANY, LLC

 

 

 

 

 

By: FFS HOLDINGS, LLC, its sole member

 

 

 

By: CHEROKEE INC., its sole member

 

 

 

 

 

By:

 

/s/ Henry Stupp

 

Name:

 

Henry Stupp

 

Title:

 

CEO

 

 

 

 

 

[Signature Page to Amendment to Forbearance Period]

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HI-TEC SPORTS INTERNATIONAL HOLDINGS B.V.

 

 

 

 

 

By:

 

/s/ Henry Stupp

 

Name:

 

Henry Stupp

 

Title:

 

CEO

 

 

 

 

 

 

HI-TEC SPORTS PLC

 

 

 

 

 

By:

 

/s/ Henry Stupp

 

Name:

 

Henry Stupp

 

Title:

 

CEO

 

 

 

 

 

 

HI-TEC INTERNATIONAL HOLDINGS B.V.

 

 

 

 

 

By:

 

/s/ Henry Stupp

 

Name:

 

Henry Stupp

 

Title:

 

CEO

 

 

 

 

 

 

HI-TEC SPORTS UK LIMITED

 

 

 

 

 

By:

 

/s/ Henry Stupp

 

Name:

 

Henry Stupp

 

Title:

 

CEO

 

 

 

 

 

 

HI-TEC NEDERLAND B.V.

 

 

 

 

 

By:

 

/s/ Henry Stupp

 

Name:

 

Henry Stupp

 

Title:

 

CEO

 

 

 

 

 

[Signature Page to Amendment to Forbearance Period]

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COLLATERAL AGENT AND

 

ADMINISTRATIVE AGENT:

 

 

 

GORDON BROTHERS FINANCE COMPANY

 

 

 

 

 

By:

 

/s/ Felicia Galeota

 

Name:

 

Felicia Galeota

 

Title:

 

Vice President

 

 

 

 

 

 

LENDERS:

 

 

 

GORDON BROTHERS FINANCE COMPANY, LLC

 

 

 

 

 

By:

 

/s/ Felicia Galeota

 

Name:

 

Felicia Galeota

 

Title:

 

Vice President

 

 

 

 

 

 

GORDON BROTHERS BRANDS, LLC

 

 

 

 

 

By:

 

/s/ Patricia E. Parent

 

Name:

 

Patricia E. Parent

 

Title:

 

VP, Asst. Secretary

 

 

 

 

 

[Signature Page to Amendment to Forbearance Period]