Document:

Exhibit 10.1

 

Execution

 

SECOND AMENDMENT TO
 AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

 

This SECOND AMENDMENT TO AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (this “Amendment”) is dated as of May 24, 2016 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” party to the Loan Agreement referenced below (“Lenders”), and BANK OF AMERICA, N.A., 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 Amended and Restated Loan and Security Agreement dated as of April 21, 2015, as amended by that certain Amendment to Amended and Restated Loan and Security Agreement dated as of December 10, 2015 (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.                                      Amendments to Section 1.1 of the Loan Agreement.  Section 1.1 of the Loan Agreement is hereby amended as follows:

 

(a)                                 The definition of “EBTTDA” set forth in Section 1.1 of the Loan Agreement is hereby amended by deleting clause (b)(xii) of such definition in its entirety and replacing such clause with the following:

 

“(xii) (1) solely with respect to the calculation of the Fixed Charge Coverage Ratio and the Leverage Ratio pursuant to Section 10.3.l and 10.3.2, respectively, hereof, fees and expenses of advisors and independent consultants retained by Obligors in connection with the Former Management Litigation; provided, that the aggregate amount of such fees and expenses added back to EBITDA pursuant to this clause (b)(xii) shall not exceed (A) $3,500,000 in the aggregate for the period of four consecutive Fiscal Quarters ending October 1, 2016, (B) $2,500,000 in the aggregate for the period of four consecutive Fiscal Quarters ending December 31, 2016, (C) $1,250,000 in the aggregate for the period of four consecutive Fiscal Quarters ending April 1, 2017, (D) $1,125,000 in the aggregate for the period of four consecutive Fiscal Quarters ending July 1, 2017, (E) $250,000  for any Fiscal Quarter ending on or after September 30, 2017, and (F) $1,000,000 in the aggregate for any period of four consecutive Fiscal Quarters ending on or aft.er September 30, 2017; and (2) without duplication to the foregoing clause (1), fees and expenses of advisors and independent consultants retained by Obligors and approved by Agent in its Permitted Discretion, provided, that the aggregate amount of such fees and expenses added back to EBITDA pursuant to this clause (2) shall not exceed $250,000 during any Fiscal Quarter;”

 

 

(b)                                 The following new defined term is hereby inserted in the appropriate alphabetical order:

 

“Former Management Litigation: the litigation and related proceedings between the Borrowers and certain former members of management of the Borrowers.”

 

3.                                       Amendments to Section 10.1.2 of the Loan Agreement.  Section 10.1.2 of the Loan Agreement is hereby amended by deleting the word “and” following the end of clause (i), relabeling clause “(j)” as clause “(k)”, and inserting a new clause (j) as follows:

 

“(j) as soon as available, and in any event within 15 days after the end of each month, a cash flow forecast for Obligors and Subsidiaries, in form reasonably satisfactory to the Agent, outlining the projected cash receipts and cash disbursements of Obligors and Subsidiaries on a weekly basis for each of the next thirteen weeks (each, a “13-Week Cash Flow Forecast”), together with a comparison of the actual cash receipts and cash disbursements for the preceding four-week period to the forecasts for such period set forth in the 13-Week Cash Flow Forecast delivered in the previous month, along with an explanation of any material variances (it being understood that the first 13-Week Cash Flow Forecast will not include such comparison), which 13-Week Cash Flow Forecast shall be prepared based upon ·good faith estimates and assumptions that the Obligors and Subsidiaries believed were reasonable at the time made (it being understood and agreed that such 13-Week Cash Flow Forecast is not to be viewed as a statement of fact, is subject to the uncertainties and approximations inherent in any projections, and that actual results may differ from such projected results), provided, that, if the aggregate amount of fees and expenses added back to EBITDA pursuant to clause (b)(xii) of the definition of “EBITDA” is equal to zero, upon a determination by the Agent in its Permitted Discretion that that delivery of such 13-Week Cash Flow Forecast is no longer required, the Borrower shall not be required to deliver any further 13-Week Cash Flow Forecasts upon receipt by the Borrower of written notice from the Agent of such a determination ; and”

 

4.                                      No Default; Representations and Warranties, Etc. Obligors hereby represent, warrant and confirm that: (a) all representations and warranties of Obligors in the Loan Agreement and the other Loan Documents are true and correct in all material respects (without duplication of any materiality qualifier contained therein) 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 (without duplication of any materiality qualifier contained therein) 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 Obligors 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 Obligors (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 Obligor or any term or provision of any material indenture, agreement or other instrument binding on any Obligor or any of its assets, and (iii) do not require the consent of any Person which has not been obtained.

 

5.                                      Ratification and Confirmation. Obligors 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, Obligors 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

 

2

 

Agreement and the other Loan Documents, and Obligors 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.

 

6.                                                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:

 

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

 

(b)                                  Borrowers shall have paid to Agent, for the account of each Lender (including Bank of America, N.A., in its capacity as a Lender) that executes and delivers to Agent by 3:00 p.m. New York City time on May    , 2016 a counterpart to this Amendment (each such Lender, an “Approving Lender”), an amendment fee in an amount equal to 12.5 basis points multiplied by such Approving Lender’s Commitment.

 

(c)                                   Borrowers shall have paid all other fees and amounts due and payable to Agent and its legal counsel in connection with the Loan Agreement, this Amendment and the other Loan Documents, including, (i) the fees payable pursuant to that certain Amendment Fee Letter dated as of the date hereof between Borrowers and Agent, and (ii) to the extent invoiced, all out-of-pocket expenses required to be reimbursed or paid by Borrowers under the Loan Agreement.

 

7.                                      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)                                      Th.is 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]

 

3

 

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/ William Mote
    
	
 
    	
Name:
    	
William   Mote
    
	
 
    	
Title:
    	
CFO
    
	
 
    	
 
    
	
 
    	
SUMMER INFANT   (USA), INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By: 
    	
/s/ William Mote
    
	
 
    	
Name:
    	
William   Mote
    
	
 
    	
Title:
    	
CFO
    
	
 
    	
 
    
	
 
    	
GUARANTORS
    
	
 
    	
 
    
	
 
    	
SUMMER INFANT CANADA,   LIMITED
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By: 
    	
/s/ William Mote
    
	
 
    	
Name:
    	
William   Mote
    
	
 
    	
Title:
    	
CFO
    
	
 
    	
 
    
	
 
    	
SUMMER INFANT EUROPE   LIMITED
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ William Mote
    
	
 
    	
Name:
    	
William   Mote
    
	
 
    	
Title:
    	
CFO
    
				

 

[Signature Page to Second Amendment to Amended and Restated Loan and Security Agreement]

 

 

	
 
    	
LENDER
    
	
 
    	
 
    
	
 
    	
BANK OF AMERICA, N.A.,   as Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Cynthia G. Stannard
    
	
 
    	
Name:
    	
Cynthia G. Stannard
    
	
 
    	
Title: 
    	
Senior Vice President
    
				

 

[Signature Page to Second Amendment to Amended and Restated Loan and Security Agreement]

 

 

	
 
    	
LENDER
    
	
 
    	
 
    
	
 
    	
CITIZENS BUSINESS   CAPITAL,
    
	
 
    	
A DIVISION OF CITIZENS   ASSET FINANCE, INC.,
    
	
 
    	
as Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By: 
    	
/s/ Alex D’Alessandro
    
	
 
    	
Name: 
    	
Alex D’Alessandro
    
	
 
    	
Title:
    	
SVP
    
				

 

[Signature Page to Second Amendment to Amended and Restated Loan and Security Agreement]

 

 

	
 
    	
LENDER
    
	
 
    	
 
    
	
 
    	
FIRST NIAGARA   COMMERCIAL FINANCE, INC.,
    
	
 
    	
A WHOLLY-OWNED   SUBSIDIARY OF
    
	
 
    	
FIRST NIAGARA BANK,   N.A., as Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By: 
    	
/s/ Danielle Prentis
    
	
 
    	
Name: 
    	
Danielle Prentis
    
	
 
    	
Title: 
    	
FVP – Sr. Relationship   Manager
    
				

 

[Signature Page to Second Amendment to Amended and Restated Loan and Security Agreement]Exhibit

Exhibit 10.2

SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT OF THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY SUBMITTED TO THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH THREE ASTERISKS (***).

May 13, 2016
Via Overnight Delivery and Email
Weatherford Artificial Lift Systems, Inc.
2000 St. James Place
Houston, Texas 77056
Attention: Legal Contracts

Ladies and Gentlemen:
Reference is hereby made to that certain Supply Agreement dated as of January 11, 2010, as amended by that certain First Amendment to Supply Agreement, dated as of March 5, 2014, as amended by that certain Amended and Restated First Amendment to Supply Agreement, dated as of March 5, 2014, as amended by that certain Second Amendment to Supply Agreement, dated as of August 8, 2014 (as amended, the “Supply Agreement”), by and between Weatherford U.S., L.P., on behalf of itself and its affiliates including Weatherford Artificial Lift Systems, L.L.C. (f/k/a Weatherford Artificial Lift Systems, Inc.) (collectively with its affiliates, “Weatherford”), and Hi-Crush Operating LLC, on behalf of itself and its affiliates (collectively with its affiliates, “Supplier” and, together with Weatherford, the “Parties”).  All capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Supply Agreement.

The Parties hereby agree that, during the period commencing on *** (the “Interim Term Effective Date”) and ending *** (such ***-month period, the “Interim Term”), the following terms and conditions shall apply:

		
	a)
	During the Interim Term, pricing for all Product purchased by Weatherford under the Supply Agreement shall be as set forth on Exhibit A attached hereto.  The Parties acknowledge and agree that, to the extent applicable and except as reflected on Exhibit A, the pricing set forth on Exhibit A includes rail freight from mine to the respective destination and fuel surcharges, and that such freight charges and fuel surcharges are outside of Supplier’s control.  Increases in rail freight and/or fuel surcharges after the Interim Term Effective Date will be passed through to Weatherford at ***% of the increase.

		
	b)
	On ***, Weatherford shall pay Supplier the sum of $***, and on each of ***, ***, ***, and ***, Weatherford shall pay Supplier the sum of $*** (each such payment, a “Prepayment”).  Each Prepayment shall be used as a $*** per ton credit against the prices set forth on Exhibit A for Product purchased by Weatherford (even if such Product is purchased from locations besides those listed in Exhibit A) under the Supply Agreement during any calendar quarter of the Interim Term, until Weatherford has purchased *** tons of Product for such calendar quarter.  For the avoidance of doubt, after Weatherford has purchased *** tons of Product during a calendar quarter of the Interim Term, Weatherford shall pay the full prices set forth on Exhibit A for any additional volumes purchased during that quarter.  

		
	c)
	Subject to Supplier’s issuance of an invoice to Weatherford at least ten calendar days prior to the Prepayment due dates listed in (b) above (other than with respect to the Prepayment due ***), if Weatherford fails to make any Prepayment in full on any applicable payment date, this letter agreement shall automatically terminate, and any Makewhole Payment liability accrued as of such date, including Makewhole Payment liability that accrued prior to the Interim Term Effective Date which the Parties agree is $***, shall become automatically due and payable.

Exhibit 10.2

SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT OF THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY SUBMITTED TO THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH THREE ASTERISKS (***).

The Parties hereby further agree that, at the end of the Interim Term, provided that Weatherford has fully complied with its obligations set forth in this letter agreement:

		
	a)
	the Fifth Term and all other references to *** in the Supply Agreement shall be extended by the number of months equal to (i) the total Purchase Shortfall existing as of ***, including the Purchase Shortfalls accumulated prior to the Interim Term Effective Date which the Parties agree is *** tons, divided by (ii) ***, rounded up to the nearest whole number; 

		
	b)
	after calculation of the term extension in subsection (x) of this letter agreement, any Supply Shortfall or Purchase Shortfall (or monetary obligation with respect thereto, including Makewhole Payment liability) existing as of *** shall be fully and forever waived by both Parties; and

		
	c)
	any unused Prepayments remaining at the end of the Interim Term, not to exceed $*** in the aggregate, shall be used as a $*** per ton credit against the Supply Agreement prices for Product purchased by Weatherford under the Supply Agreement during any calendar quarter of the Fifth Term, until Weatherford has purchased *** tons of Product for such calendar quarter.  For the avoidance of doubt, any unused Prepayments remaining at the end of the Interim Term in excess of $*** in the aggregate shall be retained by Supplier.

Except as expressly set forth herein, the Supply Agreement is and will remain unmodified and in full force and effect, including without limitation with respect to the volume requirements contained in the Supply Agreement in effect as of the date hereof.  Each future reference to the Supply Agreement will refer to the Supply Agreement as modified by this letter agreement.

All information contained in this letter agreement, including the existence of such letter agreement, is deemed confidential and shall not be disclosed to any third party; provided that the provisions set forth in Article 5 of the Supply Agreement shall apply to the information contained herein as if such information was Confidential Information.  This letter agreement may be executed in any number of counterparts, each of which shall be deemed to be an original instrument, but all of which taken together shall constitute one instrument.  A signature page to this letter agreement that contains a copy of a party’s signature and that is sent by such party or its agent with the apparent intention (as reasonably evidenced by the actions of such party or its agent) that it constitute such party’s execution and delivery of this letter agreement, including a document sent by facsimile transmission or by email in portable document format (pdf), shall have the same effect as if such party had executed and delivered an original of this letter agreement.  This letter agreement shall be governed by and construed in accordance with the internal laws of the State of Texas without regard to conflict of law principles and shall be binding on the parties hereto and their successors and assigns.

[Signature Page Follows.]

Exhibit 10.2

SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT OF THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY SUBMITTED TO THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH THREE ASTERISKS (***).

In Witness Whereof, this letter agreement is executed by the parties hereto as of the date first set forth above.
Best regards,
	
	
	Hi-Crush Operating LLC, on behalf of itself and its affiliates

	Signature: /s/ Robert E. Rasmus

	Printed Name: Robert E. Rasmus

	Title: Chief Executive Officer

AGREED TO AND ACKNOWLEDGED:
	
	
	Weatherford U.S., L.P. on behalf of itself and its affiliates

	Signature: /s/ Authorized Person

	Printed Name: Authorized Person

	Title: Authorized Officer

Hi-Crush Operating LLC
8850 State Hwy 173
Tomah, WI  54660
P: 608-372-4705
F: 608-372-4699

Exhibit 10.2

SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT OF THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY SUBMITTED TO THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH THREE ASTERISKS (***).

EXHIBIT A

	
					
	WFT
	20/40
	30/50
	40/70
	100 M

	Big Springs
	$***
	$***
	$***
	$***

	Odessa, TX
	$***
	$***
	$***
	$***

	Pecos
	$***
	$***
	$***
	$***

	Jal
	$***
	$***
	$***
	$***

	Smithfield
	 
	 
	$***
	$***

	Mingo Junction
	 
	 
	$***
	$***

	FOB Mine1
	$***
	$***
	$***
	$***

1 Price excludes rail freight

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