Exhibit 10.2

 

EXECUTION VERSION

 

AMENDMENT NO. 1 AND WAIVER TO CREDIT AGREEMENT

 

This AMENDMENT NO. 1 AND WAIVER TO CREDIT AGREEMENT, dated as of April 17, 2019
(this “Amendment”), is entered into by and among, inter alia, CENTRIC BRANDS
INC. (f/k/a DIFFERENTIAL BRANDS GROUP INC.), a Delaware corporation
(“Borrower”), the Lenders signatory hereto, U.S. BANK NATIONAL ASSOCIATION, as
the administrative agent (the “Administrative Agent”) and as the collateral
agent (the “Collateral Agent” together with the Administrative Agent, the
“Agents”; the Agents together with the Lenders, the “Lender Parties”). All
capitalized terms used but not otherwise defined herein shall have the meanings
ascribed to them in the Credit Agreement (as defined below).

 

WITNESSETH

 

WHEREAS, the Borrower and the Lender Parties are party to that certain Second
Lien Credit Agreement, dated as of October 29, 2018 (as amended, restated,
supplemented or otherwise modified from time to time, the “Credit Agreement”);

 

WHEREAS, the Borrower has requested that the Lender Parties agree to amend the
Credit Agreement to, among other things, increase the Indebtedness in respect of
the Revolving Credit Facility (as defined in the First Lien Credit Agreement by
$50,000,000);

 

WHEREAS, an Event of Default has occurred pursuant to Section 7.01(e) of the
Credit Agreement as a result of the Borrower’s failure to comply with Section
5.04(c) of the Credit Agreement with respect to the delivery of the financial
statements for the fiscal month ending January 31, 2019 (the “Existing Event of
Default”); and

 

WHEREAS, the Lender Parties signatory hereto, which represents Required Lenders,
are willing to amend certain provisions of the Credit Agreement and waive the
Existing Event of Default, in each case, subject to the terms and conditions set
forth herein.

 

NOW THEREFORE, in consideration of the foregoing recitals, mutual agreements
contained herein and for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

 

Section 1.           Amendment to Credit Agreement. Subject to the satisfaction
of the conditions precedent set forth in Section 4 hereof, Section 6.01(j) of
the Credit Agreement is hereby amended and restated in its entirety as follows:

 

Indebtedness in respect of the First Lien Credit Agreement and any Permitted
Refinancing Indebtedness with respect thereto, in an aggregate principal amount
at any one time outstanding not to exceed (i) $200,000,000 of Revolving Facility
Aggregate Commitments (as defined in the First Lien Credit Agreement) and (ii)
$645,000,000 of Term Loans (as defined in the First Lien Credit Agreement);
provided that such Indebtedness is secured only by the Liens permitted under
Section 6.02 and shall be subject to the First-Second Intercreditor Agreement;

 

Section 2.           Waiver.

 

(a)                Subject to the satisfaction of the conditions precedent in
Section 4 hereof, the Administrative Agent and the Required Lenders hereby
permanently waive the Existing Event of Default.

 

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(b)                The parties hereto agree that the waiver set forth in Section
2(a) is a limited waiver and shall not be relied upon and used for any purpose
other than the waiver of the Existing Event of Default and shall not constitute
nor be deemed to constitute a custom or course of dealing among the parties
hereto. Except as expressly set forth in this Section 2 and as further set forth
in Section 6, the waiver set forth in Section 2(a) shall not be deemed to be a
consent to any amendment, waiver or modification of any other term or condition
of the Credit Agreement or any other Loan Document or a waiver of any Default or
Event of Default other than the Existing Event of Default.

 

Section 3.           Representations and Warranties of Borrower. In order to
induce the Lender Parties signatory hereto to enter into this Amendment, the
Borrower hereby represents and warrants that:

 

(a)                Organization; Power; Qualification. The Borrower and each of
the Subsidiaries (a) is a limited liability company, unlimited liability
company, corporation or partnership duly organized, validly existing and in good
standing (or, if applicable in a foreign jurisdiction, enjoys the equivalent
status under the laws of any jurisdiction of organization outside the United
States) under the laws of the jurisdiction of its organization, (b) has all
requisite corporate or other organizational power and authority to own its
property and assets and to carry on its business as now conducted, except where
the failure to do so would not reasonably be expected to have a Material Adverse
Effect (c) is qualified to do business in each jurisdiction and licensed and, as
applicable, in good standing under the laws of each jurisdiction where such
qualification or license or, if applicable, good standing is required, except
where the failure so to qualify would not reasonably be expected to have a
Material Adverse Effect, (d) has the corporate or other organizational power and
authority to execute, deliver and perform its obligations under this Amendment,
each of the Loan Documents and each other agreement or instrument contemplated
thereby to which it is or will be a party and, in the case of the Borrower, to
borrow and otherwise obtain credit under the Credit Agreement and (e) has all
requisite governmental licenses, authorizations, consents and approvals to own
its property and assets and to carry on its business as now conducted, except
where the failure to do so would not reasonably be expected to have a Material
Adverse Effect.

 

(b)                Authorization; Enforceability. The Borrower has the power and
has taken all necessary action, corporate or otherwise, to authorize it to
execute, deliver, and perform its obligations under this Amendment and to
consummate the transactions contemplated hereby. This Amendment has been duly
executed and delivered by the Borrower, and this Amendment (and the Credit
Agreement as modified hereby) is the legal, valid and binding obligation of the
Borrower, enforceable in accordance with its terms, subject to (i) the effects
of bankruptcy, insolvency, moratorium, reorganization, fraudulent conveyance or
other similar laws affecting creditors’ rights generally, (ii) general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law) and (iii) implied covenants of good faith and
fair dealing.

 

(c)                No Conflicts, Etc. The execution, delivery, and performance
of this Amendment in accordance with its terms and the consummation of the
transactions contemplated hereby do not and will not (i) violate (A) any
provision of law, statute, rule or regulation, (B) the certificate or articles
of incorporation or other constitutive documents (including any limited
liability company or operating agreements) or by-laws of the Borrower or any
other Loan Parties, (C) any applicable order of any court or any rule,
regulation or order of any Governmental Authority or (D) any provision of any
indenture, certificate of designation for preferred stock, agreement or other
instrument to which the Borrower or any other Loan Party is a party or by which
any of them or any of their property is or may be bound, or (ii) result in or
require the creation or imposition of any Lien upon or with any assets or
property of Borrower or any Loan Party.

 

(d)                   Solvency. Immediately after giving effect to this
Amendment (i) the sum of the debt (including contingent liabilities) of the
Borrower and its Subsidiaries, taken as a whole, does not exceed the fair value
of the present assets of the Borrower and its Subsidiaries, taken as a whole;
(ii) the fair saleable value of the assets of the Borrower and its Subsidiaries,
taken as a whole, is not less than the amount that will be required to pay the
probable liabilities (including contingent liabilities) of the Borrower and its
Subsidiaries, taken as a whole, on their debts as they become absolute and
matured; (iii) the capital of the Borrower and its Subsidiaries, taken as a
whole, is not unreasonably small in relation to the business of the Borrower or
its Subsidiaries, taken as a whole, contemplated as of the First Amendment
Effective Date; and (iv) the Borrower and its Subsidiaries, taken as a whole, do
not intend to incur, or believe that they will incur, debts (including current
obligations and contingent liabilities) beyond their ability to pay such debts
as they mature in the ordinary course of business. For the purposes of this
Section 3(d), the amount of any contingent liability at any time shall be
computed as the amount that, in light of all of the facts and circumstances
existing at such time, represents the amount that can reasonably be expected to
become an actual or matured liability.

 

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(e)                   Accuracy of Representations; No Event of Default. After
giving effect to this Amendment, (a) the representations and warranties of the
Borrower set forth herein and the Loan Documents that are qualified by
materiality are true and correct, and the representations and warranties that
are not so qualified shall be true and correct in all material respects, in each
case on and as of the date hereof and after giving effect to this Amendment, as
applicable, with the same effect as though made on and as of the date hereof,
except to the extent such representations and warranties expressly relate to an
earlier date (in which case such representations and warranties that are
qualified by materiality shall be true and correct, and the representations and
warranties that are not so qualified shall be true and correct in all material
respects, as of such earlier date) and (b) as of the date hereof, no Default or
Event of Default exists.

 

Section 4.           Conditions Precedent to Effectiveness. This Amendment shall
be effective upon the date (such date, the “First Amendment Effective Date”)
that each of the following conditions is satisfied:

 

(a)                The Administrative Agent shall have received a counterpart
signature page of this Amendment duly executed by (i) each Agent, (ii) the
Borrower and (iii) the Required Lenders;

 

(b)                The Required Lenders shall have received a copy of a duly
executed amendment to the First Lien Credit Agreement, which shall be in form
and substance satisfactory to the Required Lenders;

 

(c)                The Required Lenders shall have received a customary legal
opinion of Dechert LLP, special counsel to the Borrower and the other Loan
Parties, in connection with this Amendment, which shall be in form and substance
satisfactory to the Required Lenders;

 

(d)                The Required Lenders shall have received a certificate from
the secretary of each Loan Party (i) certifying to and attaching resolutions
authorizing the transactions contemplated by the Amendment, which shall be in
form and substance satisfactory to the Required Lenders, (ii) certifying that
the Organizational Documents of such Loan Party have not been amended, amended
and restated or otherwise modified since the Closing Date (or attaching such
amendments or other modifications), and (iii) attaching a certificate of good
standing (to the extent such concept or a similar concept exists under the laws
of such Loan Party’s jurisdiction of organization) of such Loan Party (other
than DBG Holdings Subsidiary Inc. (“DBG Holdings”) and Hudson Clothing, LLC
(“Hudson Clothing”)) as of a recent date from the Secretary of State (or other
similar official) of the jurisdiction or organization of such Loan Party; and

 

(e)                The Required Lenders shall have received a certificate from
the Chief Financial Officer of the Borrower certifying to the matters set forth
in Section 3(d) hereof.

 

Section 5.           Post Closing Covenant. No later than April 23, 2019 (or
such later date as the Administrative Agent may agree in its reasonable
discretion), the Borrower shall deliver a certificate of good standing of each
of DBG Holdings and Hudson Clothing as of a recent date from the Secretary of
State of the State of California.

 

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Section 6.           Reference to and Effect Upon the Loan Documents.

 

(a)                Except as expressly modified hereby, all terms, conditions,
covenants, representations and warranties contained in the Credit Agreement and
the other Loan Documents, and all rights of the Lender Parties and all of the
Obligations, shall remain in full force and effect. The Borrower and each other
Loan Party signatory hereto hereby confirms that no Loan Party has any right of
setoff, recoupment or other offset or any defense, claim or counterclaim with
respect to any of the Obligations, the Credit Agreement or any other Loan
Document.

 

(b)                From and after the First Amendment Effective Date, (i) the
term “Agreement” in the Credit Agreement, and all references to the Credit
Agreement in any Loan Document, shall mean the Credit Agreement as amended
hereby and (ii) the term “Loan Documents” in the Credit Agreement and the other
Loan Documents shall include, without limitation, this Amendment and any
agreements, instruments and other documents executed and/or delivered in
connection herewith.

 

(c)                This Amendment shall not be deemed or construed to be a
satisfaction, reinstatement, novation or release of the Credit Agreement or any
other Loan Document.

 

Section 7.           Reaffirmation and Confirmation. Each of the Loan Parties as
debtor, grantor, pledgor, guarantor, assignor, or in other any other similar
capacity in which such Loan Party grants liens or security interests in its
property or otherwise acts as accommodation party or guarantor, as the case may
be, hereby (i) ratifies and reaffirms all of its payment and performance
obligations, contingent or otherwise, under each of the Loan Documents to which
it is a party (after giving effect hereto) and (ii) to the extent such Loan
Party granted liens on or security interests in any of its property pursuant to
any such Loan Document as security for or otherwise guaranteed the Borrower’s
Obligations under or with respect to the Loan Documents, ratifies and reaffirms
such guarantee and grant of security interests and liens and confirms and agrees
that such security interests and liens hereafter secure all of the Obligations
as amended hereby.  Each of the Loan Parties hereby consents to this Amendment
and acknowledges that each of the Loan Documents remains in full force and
effect as amended hereby and is hereby ratified and reaffirmed.  Except as
expressly set forth herein, the execution of this Amendment shall not operate as
a waiver of any right, power or remedy of the Administrative Agent or Lenders or
serve to effect a novation of the Obligations.

 

Section 8.           Fees and Expenses. The Borrower shall have paid all
reasonable and documented out-of-pocket fees and expenses of the Agents and the
Required Lenders no later than seven (7) Business Days after the First Amendment
Effective Date to the extent (i) invoiced at least two (2) Business Days after
the date hereof and (ii) required to be paid pursuant to Section 9.05(a) of the
Credit Agreement.

 

Section 9.           Governing Law; Miscellaneous.

 

(a)                Governing Law. THIS AMENDMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.

 

(b)                Jurisdiction; Service of Process; Consent to Venue; Waiver of
Jury Trial. The provisions of Sections 9.13 and 9.17 of the Credit Agreement are
hereby incorporated as if set forth herein, mutatis mutandis.

 

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Section 10.       Headings. Section headings used herein are for convenience of
reference only, are not part of this Amendment and are not to affect the
construction of, or to be taken into consideration in interpreting, this
Amendment.

 

Section 11.       Severability. The illegality or unenforceability of any
provision of this Amendment or any instrument or agreement required hereunder
shall not in any way affect or impair the legality or enforceability of the
remaining provisions of this Amendment or any instrument or agreement required
hereunder.

 

Section 12.       Notices. All notices, requests, and demands to or upon the
respective parties hereto shall be given in accordance with Section 9.01 of the
Credit Agreement.

 

Section 13.       Counterparts. This Amendment may be executed in two or more
counterparts, each of which shall be deemed to be an original but all of which,
when taken together, shall constitute but one contract, and shall become
effective as provided in Section 4 of this Amendment. Delivery of an executed
counterpart to this Amendment by facsimile (or other electronic) transmission
pursuant to procedures approved by the Administrative Agent shall be as
effective as delivery of a manually signed original.

 

Section 14.       Agent. In executing this Amendment, the Agents shall be
entitled to the rights, benefits, protections, indemnities and immunities
afforded to them under the Credit Agreement. By its signature hereto, the GSO
Representative (x) confirms that it has received each of the documents required
to the conditions to the effectiveness of this Amendment, and (y) hereby directs
the Administrative Agent to execute and deliver this Amendment.

 

(signature pages follow)

 

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed and delivered by their duly authorized officers as of the day and year
first above written.

 

  BORROWER:         CENTRIC BRANDS INC.         By: /s/ Lori Nembirkow     Name:
Lori Nembirkow     Title: Secretary

 

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Acknowledged and Agreed:

 

  SUBSIDIARY LOAN PARTIES:         DBG HOLDINGS SUBSIDIARY INC.              
By: /s/ Lori Nembirkow   Name: Lori Nembirkow   Title: Secretary         DBG
SUBSIDIARY INC.               By: /s/ Lori Nembirkow   Name: Lori Nembirkow  
Title: Secretary         HUDSON CLOTHING HOLDINGS, INC.               By: /s/
Lori Nembirkow   Name: Lori Nembirkow   Title: Secretary         HUDSON
CLOTHING, LLC               By: /s/ Lori Nembirkow   Name: Lori Nembirkow  
Title: Secretary         DFBG SWIMS, LLC               By: /s/ Lori Nembirkow  
Name: Lori Nembirkow   Title: Secretary               HC ACQUISITION HOLDINGS,
INC.               By: /s/ Lori Nembirkow   Name: Lori Nembirkow   Title:
Secretary      

 

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  RG PARENT LLC               By: /s/ Lori Nembirkow   Name: Lori Nembirkow  
Title: Secretary         ROBERT GRAHAM HOLDINGS, LLC               By: /s/ Lori
Nembirkow   Name: Lori Nembirkow   Title: Secretary         ROBERT GRAHAM
DESIGNS, LLC               By: /s/ Lori Nembirkow   Name: Lori Nembirkow  
Title: Secretary         ROBERT GRAHAM RETAIL LLC         By: /s/ Lori Nembirkow
  Name: Lori Nembirkow   Title: Secretary         RGH GROUP LLC              
By: /s/ Lori Nembirkow   Name: Lori Nembirkow   Title: Secretary         MARCO
BRUNELLI IP, LLC               By: /s/ Lori Nembirkow   Name: Lori Nembirkow  
Title: Secretary               CENTRIC BRANDS HOLDING LLC         By: /s/ Lori
Nembirkow   Name: Lori Nembirkow   Title: Secretary

 

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  AMERICAN MARKETING ENTERPRISES INC.               By: /s/ Lori Nembirkow  
Name: Lori Nembirkow   Title: Secretary               BRIEFLY STATED HOLDINGS
INC.               By: /s/ Lori Nembirkow   Name: Lori Nembirkow   Title:
Secretary               BRIEFLY STATED INC.               By: /s/ Lori Nembirkow
  Name: Lori Nembirkow   Title: Secretary               CENTRIC JEWELRY INC.    
          By: /s/ Lori Nembirkow   Name: Lori Nembirkow   Title: Secretary      
        KHQ INVESTMENT LLC               By: /s/ Lori Nembirkow   Name: Lori
Nembirkow   Title: Secretary               KHQ ATHLETICS LLC         By: /s/
Lori Nembirkow   Name: Lori Nembirkow   Title: Secretary               ROSETTI
HANDBAGS AND ACCESSORIES, LTD               By: /s/ Lori Nembirkow   Name: Lori
Nembirkow   Title: Secretary

 

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  CENTRIC ACCESSORIES GROUP LLC               By: /s/ Lori Nembirkow   Name:
Lori Nembirkow   Title: Secretary               CENTRIC SOCKS LLC              
By: /s/ Lori Nembirkow   Name: Lori Nembirkow   Title: Secretary              
VZI INVESTMENT CORP.               By: /s/ Lori Nembirkow   Name: Lori Nembirkow
  Title: Secretary               CENTRIC-BCBG LLC               By: /s/ Lori
Nembirkow   Name: Lori Nembirkow   Title: Secretary               CENTRIC-BCBG
RETAIL LLC               By: /s/ Lori Nembirkow   Name: Lori Nembirkow   Title:
Secretary               CENTRIC DENIM USA, LLC               By: /s/ Lori
Nembirkow   Name: Lori Nembirkow   Title: Secretary

 

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  CENTRIC BEAUTY LLC               By: /s/ Lori Nembirkow   Name: Lori Nembirkow
  Title: Secretary               ADDED EXTRAS LLC               By: /s/ Lori
Nembirkow   Name: Lori Nembirkow   Title: Secretary               LOTTA LUV
BEAUTY LLC               By: /s/ Lori Nembirkow   Name: Lori Nembirkow   Title:
Secretary         CENTRIC WEST LLC               By: /s/ Lori Nembirkow   Name:
Lori Nembirkow   Title: Secretary               F&T APPAREL LLC         By: /s/
Lori Nembirkow   Name: Lori Nembirkow   Title: Secretary         CENTRIC DENIM
RETAIL LLC         By: /s/ Lori Nembirkow   Name: Lori Nembirkow   Title:
Secretary               INNOVO WEST SALES, INC.         By: /s/ Lori Nembirkow  
Name: Lori Nembirkow   Title: Secretary         CENTRIC BEBE LLC         By: /s/
Lori Nembirkow   Name: Lori Nembirkow   Title: Secretary

 

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  AGENT:         U.S. BANK NATIONAL ASSOCIATION, as Administrative Agent and
Collateral Agent         By: /s/ Crystal Crudup-Burt     Name: Crystal
Crudup-Burt     Title: Vice President

 

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  GSO CAPITAL PARTNERS LP, as GSO Representative         By: /s/ Marisa J.
Beeney     Name: Marisa J. Beeney     Title: Authorized Signatory

 

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