Exhibit 10.2

 

EXECUTION VERSION

 

September 11, 2015

 

Sequential Brands Group, Inc.

1065 Avenue of the Americas

Suite 1705

New York, NY 10018

Attention: Gary Klein

 

Re:Limited Consent and Waiver

 

Ladies and Gentlemen:

 

Reference is made to that certain Second Amended and Restated First Lien Credit
Agreement, dated as of April 8, 2015, among Sequential Brands Group, Inc., as
borrower (the “Borrower”), the Guarantors party thereto, the lenders from time
to time party thereto (the “Lenders”), and Bank of America, N.A.), as
administrative agent and collateral agent (the “Agent”) (as amended, restated,
supplemented or otherwise modified from time to time, the “First Lien Credit
Agreement”). Capitalized terms used herein and not otherwise defined shall have
the meaning given to such terms in the First Lien Credit Agreement.

 

The Borrower has requested that, notwithstanding the limitations set forth in
clause (u) of the definition of “Permitted Investments” as set forth in the
First Lien Credit Agreement, the First Lien Agent and the Required Lenders (i)
consent to the temporary increase of the basket set forth in such clause (u)
from $10,000,000 to $15,000,000 from the date hereof through and until December
31, 2015 (the “Temporary Basket Increase”) and permit any Investment made in
reliance on such clause to be made in a Person that engages in lines of business
that are substantially the same lines of business as one or more of the
principal businesses of the Borrower and its Subsidiaries in the ordinary course
(the “Temporary Basket Expansion”) and (ii) waive the requirement that the Agent
obtain a Lien on and security interest in any Equity Interests obtained by the
Borrower pursuant to any Investment made in reliance on clause (u) of the
definition of “Permitted Investments”, but solely to the extent such Equity
Interests would constitute margin stock under the Second Lien Facility (within
the meaning of Regulation U of the Board of Governors of the Federal Reserve
System of the United States).

 

Upon effectiveness of this letter agreement, the Agent and the Required Lenders
hereby consent to the Temporary Basket Increase and to the Temporary Basket
Expansion and waive the requirement that the Agent obtain a Lien on and security
interest in any Equity Interests obtained by the Borrower pursuant to any
Investment made in reliance on clause (u) of the definition of “Permitted
Investments” to the extent such Equity Interests would constitute margin stock
under the Second Lien Facility (within the meaning of Regulation U of the Board
of Governors of the Federal Reserve System of the United States), provided that
the following conditions shall have been satisfied in connection with the
Temporary Basket Increase:

 

(i) With respect to any Investment made pursuant to the provisions of clause (u)
of the definition of “Permitted Investments” during the time period that the
Temporary Basket Increase is in effect, an amount of $10,000,000 constituting
proceeds of the loans under the Second Lien Credit Agreement shall be used to
pay a portion of the consideration for such Investment, and the remaining
portion of such consideration shall be paid from cash on hand of the Borrower.
For the avoidance of doubt, no proceeds of the Loans under the First Lien Credit
Agreement shall be used to pay any portion of the consideration for any
Investment made pursuant to the provisions of clause (u) of the definition of
“Permitted Investments” during the time period that the Temporary Basket
Increase is in effect.

 

 

 

  

(ii) After giving effect to any Investment made pursuant to the provisions of
clause (u) of the definition of “Permitted Investments” during the time period
that the Temporary Basket Increase is in effect, the amount available to be
invested by the Borrower pursuant to clause (u) of the definition of “Permitted
Investments” shall be decreased by the amount of such Investment until such
time, as any, as the Borrower has sold all or any portion of any such
Investment, at which time the basket set forth in clause (u) of the definition
of “Permitted Investments” shall be increased in proportion to the amount
received by the Borrower in connection with any such sale of such Investment,
but in no event shall the amount of such basket exceed $10,000,000 at any time
from and after January 1, 2016.

 

For the avoidance of doubt, any Investment made in reliance on, and compliance
of, clause (u) of the definition of “Permitted Investments” during the time
period that the Temporary Basket Increase is in effect may be maintained and
held by the Borrower and its Subsidiaries during the term of the First Lien
Credit Agreement without regard to the amount available under such clause.

 

In addition to the foregoing, notwithstanding anything to the contrary in the
First Lien Credit Agreement and the other Loan Documents, the Agent and the
Required Lenders hereby consent (1) to the incurrence of, and the increase in,
the aggregate outstanding principal amount of Indebtedness in respect of the
Second Lien Facility (including the increase of the principal amount pursuant to
the incremental provisions therein) to $220,000,000 at any time (it being
understood that the outstanding principal amount of the loans under the Second
Lien Facility will be $216,000,000 as of the date hereof after giving effect to
the funding on such date); provided that, the aggregate outstanding principal
amount of Indebtedness in respect of the Second Lien Facility shall not be
increased to an amount greater than $220,000,000 at any time without further
consent of the Required Lenders, and (2) to the incurrence of, and the increase
in, the Liens securing the Second Lien Facility to the extent the outstanding
principal amount of such Second Lien Facility does not exceed the maximum amount
permitted pursuant to clause (1) above.

 

The foregoing consent and waiver is a one-time consent and waiver and shall
apply only to the matters set forth in this letter agreement. Without limiting
the generality of the foregoing, the limited consent herein shall not apply to
any future circumstances whether or not similar to the foregoing.

 

The Borrower hereby represents and warrants that the execution and delivery of
this letter agreement (a) are within the power of the Borrower and (b) have been
duly authorized by all necessary action on the part of the Borrower. The
Borrower confirms that after giving effect to this letter agreement, the
representations and warranties contained in the Credit Agreement and the other
Loan Documents are true and correct on and as of the date hereof, except (i) to
the extent such representations and warranties specifically refer to an earlier
date, in which case they are true and correct as of such earlier date, (ii) in
the case of any representation and warranty that is qualified by materiality,
such representation and warranty is true and correct in all respects and (iii)
with respect to the representations and warranties contained in subsections (a)
and (b) of Section 5.05 of the Credit Agreement, such representations and
warranties shall be deemed to refer to the most recent statements furnished
pursuant to clauses (a) and (b), respectively, of Section 6.01 of the Credit
Agreement.

 

Bank of America, N.A., in its capacity as the Administrative Agent, hereby
certifies that the Lenders signatory to this letter agreement constitute the
Required Lenders under the First Lien Credit Agreement as of the date hereof.

 

The provisions of this letter agreement shall be effective on the date on which
the First Lien Administrative Agent shall have received this letter agreement,
duly executed by the First Lien Administrative Agent, the Required Lenders, the
Borrower and the other Loan Parties.

 

Except as specifically modified herein, the Credit Agreement and the other Loan
Documents shall remain in full force and effect and are hereby ratified and
confirmed by the Borrower and the other Loan Parties in all respects. This
letter agreement may be executed in any number of counterparts and any party
hereto may execute any counterpart, each of which when executed and delivered
will be deemed to be an original and all of which counterparts of this letter
agreement when taken together will be deemed to be but one and the same
instrument. Transmission by fax (or an email of a PDF or similar electronic
image file) of an executed counterpart of this letter agreement shall be deemed
to constitute due and sufficient delivery of such counterpart. This letter
agreement shall be governed by, and construed and enforced in accordance with,
the law of the State of New York.

 

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This letter agreement is a Loan Document as defined in the Credit Agreement, and
the provisions of the Credit Agreement generally applicable to Credit Documents
are applicable hereto and incorporated herein by this reference.

 

[This Space Intentionally Left Blank]

 

 

 

 

 

 

 

 

 

 

 

 

 

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  Very truly yours,         BANK OF AMERICA, N.A.         By: /s/ Andrew Cerussi
  Name: Andrew Cerussi   Title: Director

 

 

  FIFTH THIRD BANK         By: /s/ Patrick Lingrosso   Name: Patrick Lingrosso  
Title: Vice President

 

 

  ISRAEL DISCOUNT BANK OF NEW YORK         By: /s/ Michael Paul   Name: Michael
Paul   Title: Senior Vice President

 

 

  By: /s/ Li Zhou   Name: Li Zhou   Title: Vice President

 

  

  BANK HAPOALIM         By:     Name:     Title:  

 

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Acknowledged and Agreed:

 

BORROWER:

 

SEQUENTIAL BRANDS GROUP, INC.,

a Delaware corporation

 

 

By: /s/ Gary Klein

Name: Gary Klein

Title: Chief Financial Officer

 

 

GUARANTORS:

 

SEQUENTIAL LICENSING, INC.

 

By: /s/ Gary Klein
Name: Gary Klein

Title: Chief Financial Officer

 

BELLA ROSE, LLC

 

By: /s/ Gary Klein
Name: Gary Klein

Title: Chief Financial Officer

 

WILLIAM RAST SOURCING, LLC

 

By: /s/ Gary Klein
Name: Gary Klein

Title: Chief Financial Officer

 

WILLIAM RAST LICENSING, LLC

 

By: /s/ Gary Klein
Name: Gary Klein

Title: Chief Financial Officer

 

HEELYS, INC.

 

By: /s/ Gary Klein
Name: Gary Klein

Title: Chief Financial Officer

 

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HEELING MANAGEMENT CORP.

 

By: /s/ Gary Klein
Name: Gary Klein

Title: Chief Financial Officer

 

HEELING HOLDING CORPORATION

 

By: /s/ Gary Klein
Name: Gary Klein

Title: Chief Financial Officer

 

HEELING SPORTS LIMITED

 

By: /s/ Gary Klein
Name: Gary Klein

Title: Chief Financial Officer

 

B®AND MATTER, LLC

 

By: /s/ Gary Klein
Name: Gary Klein

Title: Chief Financial Officer

 

SBG REVO HOLDINGS, LLC

 

By: /s/ Gary Klein
Name: Gary Klein

Title: Chief Financial Officer

 

SBG FM, LLC

 

By: /s/ Gary Klein
Name: Gary Klein

Title: Chief Financial Officer

 

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SBG UNIVERSE BRANDS, LLC

 

By: /s/ Gary Klein
Name: Gary Klein

Title: Chief Financial Officer

 

GALAXY BRANDS LLC

 

By: /s/ Gary Klein
Name: Gary Klein

Title: Chief Financial Officer

 

THE BASKETBALL MARKETING COMPANY, INC.

 

By: /s/ Gary Klein
Name: Gary Klein

Title: Chief Financial Officer

 

AMERICAN SPORTING GOODS CORPORATION

 

By: /s/ Gary Klein
Name: Gary Klein

Title: Chief Financial Officer

 

LNT BRANDS LLC

 

By: /s/ Gary Klein
Name: Gary Klein

Title: Chief Financial Officer

 

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