Exhibit 10.2

 

AMENDMENT NO. 1 TO

TERM LOAN AGREEMENT

 

This AMENDMENT NO. 1 TO TERM LOAN AGREEMENT (this “Amendment”) is dated as of
November 8, 2013 by and among SUMMER INFANT, INC. and SUMMER INFANT (USA), INC.,
as “Borrowers” under the Loan Agreement referenced below (“Borrowers”), SUMMER
INFANT CANADA, LIMITED and SUMMER INFANT EUROPE LIMITED, as “Guarantors” under
the Loan Agreement referenced below (“Guarantors”), the “Lenders” part to the
Loan Agreement referenced below (“Lenders”), and SALUS CAPITAL PARTNERS, LLC, in
its capacity as “Agent” for the Lenders under the Loan Agreement referenced
below (“Agent”).

 

WHEREAS, Borrowers, Guarantors, Lenders and Agent are parties to that certain
Term Loan Agreement dated as of February 28, 2013 (as the same may be amended,
restated, supplemented or otherwise modified from time to time, the “Loan
Agreement”); and

 

WHEREAS, Borrowers, Guarantors, Lenders and Agent desire to amend certain
provisions of the Loan Agreement, all as more fully described herein.

 

NOW, THEREFORE, in consideration of the foregoing and the agreements contained
herein, the parties agree that the Loan Agreement is hereby amended as follows:

 

1.                                      Capitalized Terms.  Capitalized terms
used herein which are defined in the Loan Agreement have the same meanings
herein as therein, except to the extent such terms are amended hereby.

 

2.                                      Amendment to Section 1.01 of the Loan
Agreement.  Section 1.01 of the Loan Agreement is hereby amended by adding the
defined terms “Fixed Charge Coverage Ratio” and “Fixed Charges” in the
appropriate alphabetical order, as follows:

 

“Fixed Charge Coverage Ratio” means the ratio, determined on a consolidated
basis for Parent and its Subsidiaries for the most recent period of twelve
consecutive months, of (a) EBITDA minus Capital Expenditures (except those
financed with (i) Borrowed Money other than Revolver Loans (as defined in the
ABL Agreement) or (ii) proceeds of casualty events or the issuance of Equity
Interests to the extent such Capital Expenditures are made substantially
contemporaneously with the receipt of such proceeds) and cash taxes paid for
such period, to (b) Fixed Charges paid in cash during such period.

 

“Fixed Charges” means the sum of interest expense (other than payment-in-kind),
principal payments made on Borrowed Money, and Distributions made.

 

3.                                      Amendment to Section 7.23 of the Loan
Agreement.  Section 7.23  of the Loan Agreement is hereby amended by deleting
Section 7.23  in its entirety and replacing it with the following new
Section 7.23:

 

“7.23                  Financial Covenants.

 

(a)  Minimum EBITDA. Permit the Consolidated EBITDA, calculated as of the last
day of each month for each of the consecutive month periods set forth below, to
be less than the amounts set forth below for such periods:

 

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Period of Consecutive Months Beginning 
March 1, 2013 and Ending

 

Minimum Consolidated
EBITDA

 

 

 

March 31, 2013

 

$

750,000

April 30, 2013

 

$

1,500,000

May 31, 2013

 

$

2,500,000

June 30, 2013

 

$

3,500,000

July 31, 2013

 

$

4,500,000

August 31, 2013

 

$

6,000,000

September 30, 2013

 

$

7,000,000

 

Notwithstanding anything to the contrary set forth in the Loan Agreement, the
Loan Parties shall not be required to comply with this Section 7.23(a) for any
period ending after September 30, 2013.

 

(b)  Fixed Charge Coverage Ratio.  Commencing on September 30, 2013, permit the
Fixed Charge Coverage Ratio, for each period of twelve consecutive months most
recently ended, to be less than 1.0 to 1.0.”

 

4.                                      Amendment to Section 7.24 of the Loan
Agreement.  Section 7.24 of the Loan Agreement is hereby amended by deleting
Section 7.24 in its entirety and replacing it with the following new
Section 7.24:

 

“7.24                  Maximum Senior Leverage Ratio.  Commencing February 28,
2014, permit the Senior Leverage Ratio, as of the last day of any month to be
greater than the corresponding amount set forth below:

 

Last Day of the Month Set 
Forth Below

 

Maximum Senior Leverage
Ratio

February 2014

 

6.00

March 2014

 

6.00

April 2014

 

6.00

May 2014

 

6.00

June 2014

 

6.00

July 2014

 

5.50

August 2014

 

5.50

September 2014

 

5.50

October 2014

 

5.00

November 2014

 

5.00

December 2014

 

5.00

 

provided, that the maximum Senior Leverage Ratio shall be established by the
Agent for the period commencing on January 31, 2015 and thereafter, based upon
the Business Plan.

 

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5.                                      No Default; Representations and
Warranties, Etc.  The Loan Parties hereby represent, warrant and confirm that:
(a) all representations and warranties of the Loan Parties in the Loan Agreement
and the other Loan Documents are true and correct in all material respects on
and as of the date hereof as if made on such date (except to the extent that
such representations and warranties expressly relate to or are stated to have
been made as of an earlier date, in which case, such representations and
warranties shall be true and correct in all material respects as of such earlier
date; (b) after giving effect to this Amendment, no Default or Event of Default
has occurred and is continuing; and (c) the execution, delivery and performance
by the Loan Parties of this Amendment and all other documents, instruments and
agreements executed and delivered in connection herewith or therewith (i) have
been duly authorized by all necessary action on the part of the Loan Parties
(including any necessary shareholder consents or approvals), (ii) do not
violate, conflict with or result in a default under and will not violate or
conflict with or result in a default under any applicable law or regulation, any
term or provision of the organizational documents of any Loan Party or any term
or provision of any material indenture, agreement or other instrument binding on
any Loan Party or any of its assets, and (iii) do not require the consent of any
Person which has not been obtained.

 

6.                                      Ratification and Confirmation.  The Loan
Parties hereby ratify and confirm all of the terms and provisions of the Loan
Agreement and the other Loan Documents and agree that all of such terms and
provisions, as amended hereby, remain in full force and effect.  Without
limiting the generality of the foregoing, the Loan Parties hereby acknowledge
and confirm that all of the “Obligations” under and as defined in the Loan
Agreement are valid and enforceable and are secured by and entitled to the
benefits of the Loan Agreement and the other Loan Documents, and the Loan
Parties hereby ratify and confirm the grant of the liens and security interests
in the Collateral in favor of Agent, for the benefit of itself and Lenders,
pursuant to the Loan Agreement and the other Loan Documents, as security for the
Obligations.

 

7.                                      Conditions to Effectiveness of
Amendment.  This Amendment shall become effective as of the date when, and only
when, each of the following conditions precedent shall have been satisfied or
waived in writing by Agent (the effective date of this Amendment, the “Effective
Date”):

 

(a)                                 Agent shall have received counterparts to
this Amendment, duly executed by Agent, Lenders and Loan Parties.

 

(b)                                 Agent shall have received a true and
accurate copy of an effective amendment to the ABL Agreement that (i) provides
that Obligors (as defined in the ABL Agreement) shall not be obligated to comply
with Section 10.3.1 of the ABL Agreement for any period ending after
September 30, 2013 and (ii) amends the definition of Fixed Charge Coverage Ratio
and Section 10.3.2 of the ABL Agreement to match the definition of Fixed Charge
Coverage Ratio and the Fixed Charge Coverage Ratio covenant levels set forth in
Section 1.01 and Section 7.23(b), respectively, of the Loan Agreement (as
amended by this Amendment), duly executed by all requisite parties to the ABL
Agreement and in form and substance reasonably satisfactory to Agent.

 

(c)                                  Borrowers shall have paid all fees and
amounts due and payable to Agent, its legal counsel and Lenders in connection
with the Loan Agreement, this Amendment and the other Loan Documents, including,
(i) the amendment fee payable to Agent in the amount of $45,000, and (ii) to the
extent invoiced, reimbursement or payment of all out-of-pocket expenses required
to be reimbursed or paid by Borrowers under the Loan Agreement.

 

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8.                                      Miscellaneous.

 

(a)                                 Except to the extent specifically amended
hereby, the Loan Agreement, the other Loan Documents and all related documents
shall remain in full force and effect.

 

(b)                                 This Amendment may be executed in any number
of counterparts, each of which, when executed and delivered, shall be an
original, but all counterparts shall together constitute one instrument.

 

(c)                                  Borrowers shall reimburse Agent for, or pay
directly, all reasonable out-of-pocket costs and expenses of Agent (including,
without limitation, the reasonable fees and expenses of Agent’s legal counsel)
in connection with the preparation, negotiation, execution and delivery of this
Amendment and the other Loan Documents, within 30 days of Borrowers’ receipt of
invoices (in reasonably sufficient detail) setting forth such costs and
expenses.

 

(d)                                 This Amendment shall be governed by the laws
of the State of New York and shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns.

 

[Remainder of page intentionally left blank; signatures begin on the following
page]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Amendment which shall
be deemed to be a sealed instrument as of the date first above written.

 

 

BORROWERS

 

 

 

SUMMER INFANT, INC.

 

 

 

 

 

 

 

By:

/s/ Paul Francese

 

Name:

Paul Francese

 

Title:

CFO

 

 

 

SUMMER INFANT (USA), INC.

 

 

 

 

 

By:

/s/ Paul Francese

 

Name:

Paul Francese

 

Title:

CFO

 

 

 

 

 

 

 

GUARANTORS

 

 

 

SUMMER INFANT CANADA, LIMITED

 

 

 

 

 

 

 

By:

/s/ Paul Francese

 

Name:

Paul Francese

 

Title:

CFO

 

 

 

 

SUMMER INFANT EUROPE, LIMITED

 

 

 

 

 

 

 

By:

/s/ Paul Francese

 

Name:

Paul Francese

 

Title:

CFO

 

[Signature Page to Amendment No.1 to Term Loan Agreement]

 

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AGENT

 

 

 

SALUS CAPITAL PARTNERS, LLC, as  Agent

 

 

 

 

 

 

 

By

/s/ Jonas D.L. McCray

 

Name:

Jonas D.L. McCray

 

Title:

Senior Vice President

 

[Signature Page to Amendment No.1 to Term Loan Agreement]

 

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LENDER

 

 

 

SALUS CLO 2012-1, LTD., as Lender

 

 

 

By: Salus Capital Partners, LLC

 

Its: Collateral Manager

 

 

 

 

 

 

 

By

/s/ Robert F. Kuppens

 

Name:

Robert F. Kuppens

 

Title:

Senior Vice President

 

[Signature Page to Amendment No.1 to Term Loan Agreement]

 

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