Exhibit 10.9

 

Execution Copy

 

AMENDMENT NO. 2 TO
TERM LOAN AGREEMENT

 

This AMENDMENT NO. 2 TO TERM LOAN AGREEMENT (this “Amendment”) is dated as of
December 31, 2014 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 previously amended (as the
same may be amended, restated, supplemented or otherwise modified from time to
time, the “Loan Agreement”); and

 

WHEREAS, pursuant to clause (g) of Section 6.02 of the Loan Agreement, Loan
Parties are required to furnish to Agent and Lenders, not later than 30 days
prior to the end of each Fiscal Year, projections of Borrowers’ consolidated
balance sheets, results of operations and cash flow for the next Fiscal Year,
month by month; and

 

WHEREAS, the Loan Parties have advised Agent that the Loan Parties require
additional time to deliver the projections of Borrowers’ consolidated balance
sheets, results of operations and cash flow for Fiscal Year 2015 (the “2015
Projections”); and

 

WHEREAS, pursuant to Section 7.14 of the Loan Agreement, the Loan Parties are
not permitted to change their Fiscal Year or make a material change in
accounting treatment or reporting practices; and

 

WHEREAS, the Loan Parties have advised Agent that the Loan Parties desire (i) to
adopt a 4-4-5 week fiscal calendar and (ii) to modify  their Fiscal Year so that
it generally ends on the Saturday that falls on or closest to December 31 of
each year (collectively,  the “Fiscal Calendar Modifications”); and

 

WHEREAS, (a) the Loan Parties have requested that Agent and Lenders (i) waive
the requirement under clause (g) of Section 6.02 of the Loan Agreement that the
Loan Parties deliver the 2015 Projections no later than 30 days prior to the end
of Fiscal Year 2014, (ii) extend the date for delivery by the Loan Parties of
the 2015 Projections to January 31, 2015, (iii) amend clause (g) of Section6.02
of the Loan Agreement to extend the date for delivery of projections of
Borrowers’ consolidated balance sheets, results of operations and cash flow for
each Fiscal Year hereafter until January 31st of each such Fiscal Year,
(iv) waive Section 7.14 of the Loan Agreement to permit the Loan Parties to make
the Fiscal Calendar Modifications, and (v) amend certain provisions of the Loan
Agreement to effectuate the Fiscal Calendar Modifications, and (b) Agent and
Lenders have agreed to do so subject  to the terms and conditions set forth
herein;

 

NOW, THEREFORE, in consideration of the foregoing and the agreements contained
herein, each party hereto hereby agrees 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.

 

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2.                                      Waiver and Extension of Delivery Date
for 2015 Projections.  In reliance upon the representations, warranties and
covenants of the Loan Parties set forth herein, Agent and Lenders hereby
(a) waive the requirement under clause (g) of Section 6.02 of the Loan Agreement
that the Loan Parties deliver the 2015 Projections no later than 30 days prior
to the end of Fiscal Year 2014, and (b) agree that the date for delivery by the
Loan Parties of the 2015 Projections shall be extended to January 31, 2015.  The
Loan Parties hereby covenant and agree to furnish to Agent and Lenders the 2015
Projections no later than January 31, 2015.  The Loan Parties hereby further
acknowledge and agree that (x) the foregoing waiver is limited solely to the
Loan Parties’ requirement under clause (g) of Section 6.02 of the Loan Agreement
to deliver the 2015 Projections no later than 30 days prior to the end of Fiscal
Year 2014, and (y) nothing herein shall be construed as a waiver of any other
provision of the Loan Agreement.

 

3.                                      Waiver to Permit Fiscal Calendar
Modifications.  In reliance upon the representations, warranties and covenants
of the Loan Parties set forth herein, Agent and Lenders hereby waive
Section 7.14 of the Loan Agreement to permit the Loan Parties (a) to adopt a
4-4-5 week fiscal calendar and (b) to modify their Fiscal Year so that it
generally ends on the Saturday that falls on or closest to December 31 of each
year.  The Loan Parties hereby acknowledge and agree that (x) the foregoing
waiver of Section 7.14 is limited solely to the fiscal calendar and Fiscal Year
changes described in the preceding sentence, and (y) nothing herein shall be
construed as a waiver of any other provision of the Loan Agreement.

 

4.                                      Amendments to Section 1.01 of the Loan
Agreement.  In reliance upon the representations, warranties and covenants of
the Loan Parties set forth herein, Agent and Lenders hereby agree with the Loan
Parties that Section 1.01 of the Loan Agreement shall be amended by deleting the
existing definitions of “Fiscal Month,” “Fiscal Quarter” and “Fiscal Year” and
replacing them with the following new definitions:

 

“Fiscal Month” means any fiscal month of any Fiscal Year, which fiscal month
shall consist of either four or five weeks and generally end on the Saturday
closest to the last day of each calendar month in accordance with the fiscal
accounting calendar of the Parent and its Subsidiaries.

 

“Fiscal Quarter” means any fiscal quarter of any Fiscal Year, which fiscal
quarter shall consist of thirteen weeks divided into three Fiscal Months of
four, four and five weeks, which fiscal quarters shall generally end on the
Saturday closest to the last day of March, June, September and December of each
Fiscal Year in accordance with the fiscal accounting calendar of the Parent and
its Subsidiaries.

 

“Fiscal Year” means the fiscal year of Parent and its Subsidiaries for
accounting and tax purposes, generally ending on the Saturday closest to the
last day of December of each year.

 

5.                                      Amendment to Section 6.02 of the Loan
Agreement.  In reliance upon the representations, warranties and covenants of
the Loan Parties set forth herein, Agent and Lenders hereby agree with the Loan
Parties that Section 6.02 of the Loan Agreement shall be amended by deleting
existing clauses (c) and (g) of Section 6.02 and replacing them with the
following new clauses (c) and (g):

 

“(c) as soon as available, and in any event within 30 days after the end of each
month, unaudited balance sheets as of the end of the most recent Fiscal Month
and the related statements of income and cash flow for such Fiscal Month and for
the portion of the

 

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Fiscal Year then elapsed, on consolidated and, to the extent applicable,
consolidating bases for the Loan Parties and Subsidiaries, setting forth in
comparative form corresponding figures for the preceding Fiscal Year and
certified  by the chief financial officer of Lead Borrower as prepared in
accordance with GAAP and fairly presenting the financial position and results of
operations for such month and period, subject to normal year-end adjustments and
the absence of footnotes;”

 

“(g)  not later than January 31st of each Fiscal Year, projections of Borrowers’
consolidated balance sheets, results of operations and cash flow for such Fiscal
Year, on a Fiscal Month by Fiscal Month basis;”

 

6.                                      Amendment to Section 7.24 of the Loan
Agreement.  In reliance upon the representations, warranties and covenants of
the Loan Parties set forth herein, Agent and Lenders hereby agree with the Loan
Parties that Section 7.24 of the Loan Agreement shall be amended by deleting the
proviso at the end thereof and replacing it with the following proviso:

 

“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; provided, further, that until the Agent has received a copy
of the Business Plan for such subsequent Fiscal Year and established the maximum
Senior Leverage Ratio based thereon, the maximum Senior Leverage Ratio shall
remain at the same level as the immediately preceding period.”

 

7.                                      No Default; Representations and
Warranties, Etc.  The Loan Parties hereby represent, warrant and confirm that:
(a) after giving effect to this Amendment 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.

 

8.                                      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.

 

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9.                                      Conditions to Effectiveness of
Amendment.  This Amendment  shall become effective as of the date when, and only
when, Agent shall have received counterparts to this Amendment, duly executed by
Agent, Lenders and the Loan Parties.

 

10.                               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/ Carol E. Bramson

 

Name:

Carol E. Bramson

 

Title:

Chief Executive Officer

 

 

 

SUMMER INFANT (USA), INC.

 

 

 

 

 

By:

/s/ Carol E. Bramson

 

Name:

Carol E. Bramson

 

Title:

Chief Executive Officer

 

 

 

 

 

GUARANTORS

 

 

 

SUMMER INFANT CANADA, LIMITED

 

 

 

 

 

By:

/s/ Carol E. Bramson

 

Name:

Carol E. Bramson

 

Title:

Chief Executive Officer

 

 

 

SUMMER INFANT EUROPE LIMITED

 

 

 

 

 

By:

/s/ Carol E. Bramson

 

Name:

Carol E. Bramson

 

Title:

Chief Executive Officer

 

[Signature  Page to Amendment  No.2 to Term Loan Agreement]

 

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AGENT

 

 

 

SALUS CAPITAL PARTNERS, LLC, as Agent

 

 

 

 

 

By:

/s/ Macy Kiley

 

Name:

Macy Kiley

 

Title:

EVP

 

 

 

By:

/s/ Kyle C. Shonak

 

Name:

Kyle C. Shonak

 

Title:

Executive Vice President

 

[Signature  Page to Amendment  No.2 to Term Loan Agreement]

 

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LENDER

 

 

 

SALUS CLO 2012-1, LTD., as Lender

 

 

 

 

 

By:

/s/ Macy Kiley

 

Name:

Macy Kiley

 

Title:

EVP

 

 

 

By:

/s/ Kyle C. Shonak

 

Name:

Kyle C. Shonak

 

Title:

Executive Vice President

 

[Signature  Page to Amendment  No.2 to Term Loan Agreement]

 

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