Item
1.01 Entry into a Material Definitive Agreement.
On May 20, 2019, iFresh Inc. (the
“Company”), NYM Holding, Inc. (“NYM” or the “Borrower”), certain subsidiaries of NYM, Mr. Long
Deng and KeyBank National Association (“Keybank” or the “Lender”) entered into the first forbearance agreement
(the “First Forbearance Agreement”) with respect to that certain Credit Agreement, dated as of December 23, 2016, as
amended, pursuant to which KeyBank made available to NYM a revolving credit facility, a term loan facility, and other credit accommodations
(the “Loan Agreements”). The Lender has agreed to delay the exercise of its rights and remedies under the Loan Agreements
based on the existence of certain events of default until the earlier to occur of: (a) 5:00 p.m. Eastern Time on the 90th day
from the date of the First Forbearance Agreement (the “First Forbearance Period”); and (b) a Forbearance Event of Default.
Reference is made to the current report on Form 8-K filed with the SEC on May 21, 2019.
The Borrower did not meet its obligations under the Loan Agreements
by the end of the First Forbearance Period. On October 17, 2019 (the “Effective Date”), the Company, NYM, certain subsidiaries
of NYM, Go Fresh 365, Inc. (“Go Fresh”), Mr. Long Deng and Keybank entered into the second forbearance agreement (the
“Second Forbearance Agreement”). Pursuant to certain Guaranty Agreement dated as of December 26, 2016, as amended by
several joinder agreements and the Second Forbearance Agreement, the Company, certain subsidiaries of NYM, Go Fresh and Mr. Long
Deng (collectively, the “Guarantors”, and together with the Borrower, the “Loan Parties”) have agreed to
guarantee the payment and performance of the obligations of the Borrower under the Credit Agreement (“Obligations”).
Terms used but not otherwise defined herein have the meanings ascribed to them in the Second Forbearance Agreement. Certain material
provisions of the Second Forbearance Agreement are summarized below.
Forbearance. the
Lender has agreed to delay the exercise of its rights and remedies under the Loan Agreement based on the existence of certain
events of default (the “Specified Events of Default”) until the earlier to occur of: (a) 5:00 p.m. Eastern Time on
the November 29, 2019; and (b) a Forbearance Event of Default.
Conditional
Limited Consent to NYM Stock Sale. The Lender has agreed to provide its limited consent to (i) the Company consummating the
sale of all of the equity interests of the Borrower held by the Company to Go Fresh 365, Inc. (“Go Fresh”), a Florida
corporation, (ii) the Company receiving and retaining the proceeds of such sale free and clear of any Lien of the Lender on or
in such proceeds, and (iii) remove the Company as a party to the Guaranty and each other Loan Document to which the Company is
a party, provided that certain conditions have been satisfied prior to the consummation of such transaction.
Release. The
Loan Parties have agreed to release the Lender from any claims the Loan Parties may have against the Lender, including in relation
to the Credit Agreement or the Forbearance Agreement.
Forbearance
Covenants. The Forbearance Agreement contains customary forbearance covenants and other forbearance covenants, including
(but not limited to):
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All
payments and interest shall be paid in immediately available funds when due.
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Effective
as of the Effective Date, interest shall accrue on the Loans at the Stated Rate.
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The
Loan Parties shall continue to retain and engage a chief restructuring officer (“CRO”) acceptable to the Lender,
and permit the CRO to access books and records, inspect operations, communicate directly with Lender’s representatives,
oversee and supervise a refinance, sale, and/or capital contribution transaction(s) on such terms and conditions, and with
proceeds in sufficient amount(s), that will enable the repayment in full of the outstanding Obligations (a “Repayment
Transaction”).
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The
Loan Parties and the CRO shall provide telephonic updates to the Lender regarding status of a Repayment Transaction on a bi-weekly
basis and as otherwise reasonably requested by the Lender.
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On
or prior to November 28, 2019, an executed Preliminary Transaction Document(s) shall be delivered to the Lender.
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Provision
of other periodic reporting.
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Joinder
of Go Fresh. Effective as of the Effective Date, Go Fresh joins in, and will be deemed to be a party to, the Guaranty, the
iFresh Joinder, the Pledge Agreement, and each other Loan Documents to which iFresh is a party in the same capacity as iFresh
and hereby assumes all of the Obligations of such a party to such Loan Documents. Go Fresh joins in, and will be deemed to be
a party to, the Security Agreement as a “Grantor” and assumes all of the obligations of a “Grantor” under
the Security Agreement.
Assignment
to Go Fresh. Effective immediately after the consummation of the NYM Stock Sale, iFresh hereby irrevocably assigns and transfers
to Go Fresh all of iFresh’s right, title, and interest in and to, and commitements, duties, and obligations under, the Guaranty,
the iFresh Joinder, the Pledge Agreement, and each other Loan Document to which iFresh is a party, and Go Fresh irrevocably assumes,
receives, and accepts such assignment and tranfer and agrees to be bound by the terms and conditions of such Loan Documents as
the successor-in-interest to iFresh.
Representations
and Warranties and Conditions Precedent. The Forbearance Agreement contains customary representations and warranties
and conditions precedent, including the Loan Parties must paid, in immediately available funds, (i) a non-refundable forbearance
fee of $20,000.00 which forbearance fee shall be deemed fully earned by the Lender on the Effective Date and (ii) costs, expenses,
and attorneys’ fees of $50,000 of the Lender related to this Agreement and the other Loan Documents.
Forbearance
Events of Default. Each of the following constitutes an immediate default and event of default under the Forbearance
Agreement:
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Failure
of the Loan Parties to pay any amounts as and when due and payable under the Forbearance Agreement or any other Loan Document;
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Failure
of any Loan Party to observe any term, condition, or covenant set forth in the Forbearance Agreement or any Loan Document,
except for the Specified Events of Default;
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Any
representation or warranty made by any Loan Party is false or misleading in any respect at the time it was made.
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The
occurrence of an Event of Default (other than the Specified Events of Default) under the Credit Agreement or any other Loan
Document occur and is continuing.
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The
occurrence of an event, or the existence of a circumstance or condition that has a Material Adverse Effect.
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The
validity, binding nature of, or enforceability of the Forbearance Agreement is disputed by, on behalf of, or in the right
or name of any Loan Party or any material term or provision of the Forbearance Agreement is found or declared to be invalid,
avoidable, or unenforceable by any court of competent jurisdiction.
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Any
material term or provision of the Forbearance Agreement is found invalid, avoidable, or unenforceable by any court of competent
jurisdiction.
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The
foregoing summary of the Forbearance Agreement is subject to, and qualified in its entirety by, the terms of the Forbearance Agreement,
a copy of which is attached hereto as Exhibit 10.1.