December 15, 2021 Summer Infant, Inc.
Exhibit 10.7
December 15, 2021
0000 Xxxx Xxxx Xxxxx
Xxxxxxxxxx, XX 00000
Attn:Xxxxx Xxxxx
Chief Financial Officer
Re: | Third Amended and Restated Loan and Security Agreement |
Dear Xx. Xxxxx:
Reference is hereby made to the Third Amended and Restated Loan and Security Agreement dated as of October 15, 2020 (as amended, restated, supplemented or otherwise modified from time to time, the “Loan Agreement”), by and among Summer Infant, Inc. and Summer Infant (USA), Inc., as “Borrowers” (the “Borrowers”), the guarantors from time to time party thereto (the “Guarantors”, and together with the Borrowers, the “Obligors”), Bank of America, N.A., as the sole lender (the “Lender”), and Bank of America in its capacity as “Agent” for the Lenders from time to time party to Loan Agreement (in such capacity, the “Agent”). Capitalized terms used herein without definition that are defined in the Loan Agreement shall have the meanings ascribed to such terms in the Loan Agreement.
Reference is also made to (i) that certain letter agreement dated August 27, 2021 among the Agent, the Lender and the Obligors pursuant to which the Agent and the Lender agreed to temporarily increase the maximum percentage of Accounts owing from the Amazon Companies that may be included as Eligible Accounts in the Borrowing Base from 45% to 55% through December 31, 2021 (the “Amazon Account Concentration Temporary Increase”), and (ii) that certain letter agreement dated September 22, 2021 among the Agent, the Lender and the Obligors pursuant to which the Agent and the Lender agreed to temporarily increase the maximum portion of the Borrowing Base that is attributable to Eligible In-Transit Inventory from $7,000,000 to $11,000,000 through December 31, 2021 (the “Eligible In-Transit Inventory Cap Temporary Increase”).
The Borrowers have requested, and the Agent and the Lender hereby agree, that the Amazon Account Concentration Temporary Increase and the Eligible In-Transit Inventory Cap Temporary Increase be extended through April 2, 2022. Accordingly, the Agent, the Lender and the Obligors hereby agree as follows:
During the period from the date of this letter agreement through April 2, 2022:
(a)the maximum percentage of Accounts owing from the Amazon Companies that may be included as “Eligible Accounts” under the Loan Agreement shall not exceed 55%; provided that on April 3, 2022, the maximum percentage of Accounts owing from the Amazon Companies that may be included as “Eligible Accounts” under the Loan Agreement shall automatically be reduced back to 45%; and
December 15, 2021
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(b)the maximum portion of the Revolver Borrowing Base that is attributable to Eligible In-Transit Inventory (after giving effect to the Inventory Formula Amount) shall not exceed $11,000,000; provided that on April 3, 2022, the maximum portion of the Revolver Borrowing Base that is attributable to Eligible In-Transit Inventory (after giving effect to the Inventory Formula Amount) shall automatically be reduced back to $7,000,000. For the avoidance of doubt, the maximum portion of the FILO Borrowing Base that is attributable to Eligible In-Transit Inventory (after giving effect to the Applicable FILO Inventory Advance Percentage) shall remain at $1,000,000.
By their acknowledgment below, the Obligors (a) hereby represent, warrant and confirm that (i) all representations and warranties of the 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), and (ii) no Default or Event of Default has occurred and is continuing, and (b) 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 remain in full force and effect.
In consideration of the accommodations reflected in this letter agreement, Borrowers shall pay to Agent, for the benefit of itself and the Lender, a one-time fee in an amount equal to $5,000 (the “December 2021 Letter Agreement Fee”). Borrowers agree that the December 2021 Letter Agreement Fee shall be fully earned by the Agent and the Lender on the date hereof and shall be payable by Borrowers to the Agent and the Lender on the date hereof. The December 2021 Letter Agreement Fee is in addition to any other fee set forth in the Loan Documents and shall not be refundable for any reason whatsoever.
Please confirm your agreement to the foregoing matters by counter-signing a copy of this letter agreement in the space provided therefor below and thereafter returning a fully executed copy hereof to the undersigned at your earliest opportunity.
| Yours etc., | ||
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| BANK OF AMERICA, N.A., | ||
| as Agent and Lender | ||
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| By | /s/ Xxxxxxx X. Xxxxxxxx | |
| | Name: | Xxxxxxx X. Xxxxxxxx |
| | Title: | Senior Vice President |
December 15, 2021
Page 3
ACKNOWLEDGED AND AGREED | |||
AS OF DECEMBER 15, 2021 | |||
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BORROWERS: | |||
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By: | /s/ Xxxxx Xxxxx | | |
| Name: | Xxxxx Xxxxx | |
| Title: | Interim Chief Financial Officer | |
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SUMMER INFANT (USA), INC. | |||
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By: | /s/ Xxxxx Xxxxx | | |
| Name: | Xxxxx Xxxxx | |
| Title: | Chief Financial Officer | |
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GUARANTORS: | |||
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SUMMER INFANT CANADA, LIMITED | |||
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By: | /s/ Xxxxx Xxxxx | | |
| Name: | Xxxxx Xxxxx | |
| Title: | Chief Financial Officer | |
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SUMMER INFANT EUROPE LIMITED | |||
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By: | /s/ Xxxxx Xxxxx | | |
| Name: | Xxxxx Xxxxx | |
| Title: | Chief Financial Officer | |
