Item 1.01.
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Entry into a Material Definitive Agreement.
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On March 10, 2020, Summer Infant, Inc. (the “Company”)
and Summer Infant (USA), Inc., as borrowers entered into (i) Amendment No. 4 to Second Amended and Restated Loan and Security Agreement
among the Company and Summer Infant (USA) Inc., as borrowers, the guarantors from time to time party thereto, the financial institutions
from time to time party thereto as lenders, and Bank of America, N.A., as agent for the lenders (the “BofA Amendment”),
and (ii) Amendment No. 4 to Term Loan and Security Agreement among the Company and Summer Infant (USA) Inc., as borrowers, the
guarantors from time to time party thereto, the financial institutions from time to time party thereto as lenders, and Pathlight
Capital LLC, as agent for the lenders (the “Term Loan Amendment”).
BofA
Amendment. The BofA Amendment amended the terms of the Second Amended and Restated Loan and Security Agreement to,
among other things: (a) amend the definition of EBITDA to exclude fees and expenses paid to Winter Harbor and any investment
bank retained by the Company; (b) modify the definition of Financial Covenant Trigger Amount so that the amount is (i) $3
million through May 31, 2020, (ii) $3.5 million from June 1 through June 30, 2020, (iii) $3.75 million from July 1 through
August 31, 2020, (iv) $4.0 million from September 1 through September 30, 2020, (v) $4.25 million from October 1 through
October 31, 2020, (vi) $4.5 million from November 1 through November 30, 2020, and (vii) $5.0 million at any time from and
after December 1, 2020; (c) reduce the lenders’ aggregate revolver commitments to $48.0 million; (d) require that the
Company meet certain minimum net sales amounts for each period of three consecutive fiscal months, through the three-month period ending December 31, 2020; (e) require that the Company meet a certain
minimum EBITDA as of the end of each fiscal month, calculated on a trailing 12-month period; (f) increase the applicable
margin and applicable unused line fee rate; and (g) modify certain reporting requirements.
Term Loan Amendment.
The Term Loan Amendment amended the terms of the Term Loan and Security Agreement to, among other things: (a) amend the definition
of Term Loan Borrowing Base to deduct a specified equipment reserve amount from the calculation of the borrowing base; (b) amend
the definitions of EBITDA and Financial Covenant Trigger Amount consistent with the BofA Amendment; (c) modify the definition of
IP Advance Rate to be 55%, provided that such rate shall be reduced by 1.0% per month on and after the earlier of (i) the due date
of the Company’s borrowing base certificate for September 2020 and (ii) the date such borrowing base certificate is delivered;
(d) suspend principal payments on the term loan for 2020, such payments to resume in March 2021; (e) require that the Company meet
certain financial covenants, consistent with the BofA Amendment; and (f) modify certain reporting requirements, consistent with
the BofA Amendment.
In addition, pursuant to Term Loan Amendment, beginning on March
10, 2020, the term loan will begin to bear additional interest, to be paid in kind (“PIK interest”) at annual rate
of 4.0%, such PIK interest to be payable upon the earliest to occur of (i) the sale or merger of the Company, (ii) the repayment
in full of the term loan and termination of commitments, (iii) the occurrence of a default or event of default under the Term Loan
and Security Agreement, and (iv) the Company achieving adjusted EBITDA of $12.0 million (calculated on a trailing 12-month basis).
If PIK interest becomes due and payable as a result of the Company achieving the adjusted EBITDA event described in clause (iv),
then the Company shall pay all outstanding PIK interest accrued as of such date, and PIK interest shall continue to accrue thereafter
and be paid on each subsequent anniversary of such event.
The foregoing summary of the BofA Amendment and the Term Loan
Amendment does not purport to be complete and is qualified in its entirety by reference to the full text of such amendments, copies
of which are filed herewith as Exhibit 10.1 and Exhibit 10.2, respectively, and incorporated herein by reference.