Forbearance Agreement among Lulus Fashion Lounge, LLC, Lulus Fashion Lounge Parent, LLC, Bank of America, N.A., and Lenders (June 23, 2025)
This agreement is between Lulus Fashion Lounge, LLC, its parent company, other guarantors, Bank of America, N.A., and certain lenders. It addresses defaults under a prior credit agreement. The lenders agree not to exercise their rights or remedies for these specific defaults until August 15, 2025, provided certain conditions are met. The agreement sets new financial requirements, reporting obligations, and prepayment terms for the borrower during this period. If the borrower fails to meet these terms or other defaults occur, the lenders may take action immediately.
EXHIBIT 10.1
FORBEARANCE AGREEMENT
THIS FORBEARANCE AGREEMENT (this “Agreement”), dated as of June 23, 2025, entered into among LULU’S FASHION LOUNGE, LLC, a Delaware limited liability company (the “Borrower”), Lulu’s Fashion Lounge Parent, LLC, a Delaware limited liability company (“Holdings”), the other Guarantors party hereto, the Lenders party hereto, and Bank of America, N.A., as Administrative Agent (in such capacity, the “Administrative Agent”), Swing Line Lender and an L/C Issuer.
RECITALS
WHEREAS, the Borrower, Holdings, the other Guarantors from time to time party thereto, the Lenders from time to time party thereto, and Bank of America, N.A., as Administrative Agent, Swing Line Lender and an L/C Issuer, are parties that that certain Credit Agreement dated as of November 15, 2021 (as amended, modified, supplemented, increased, extended, restated, renewed, refinanced and replaced from time to time, the “Credit Agreement”);
WHEREAS, certain Defaults have occurred pursuant to Section 8.01(d) of the Credit Agreement as a result of the Credit Parties’ failure to comply with the requirements of Sections 6.19(a), (c), and (d) of the Credit Agreement (collectively, the “Acknowledged Defaults”);
WHEREAS, the Credit Parties have requested that the Administrative Agent and the Lenders agree to forbear from exercising their rights and remedies arising under the Loan Documents and applicable Laws as a result of the Acknowledged Defaults during the Forbearance Period; and
WHEREAS, the Administrative Agent and the Lenders have agreed to do so, but only pursuant to the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
AGREEMENT
1.Definitions. Capitalized terms used herein but not otherwise defined herein shall have the meanings given to such terms in the Credit Agreement. As used in this Agreement, the following terms shall have the meanings set forth below:
“Acknowledged Defaults” has the meaning set forth in the Recitals.
“Agreement” has the meaning set forth in the preamble to this Agreement.
“Effective Date” has the meaning set forth in Section 12 hereof.
“Forbearance Fee” has the meaning set forth in Section 10 hereof.
“Forbearance Period” means the period from the Effective Date to (but excluding) the earliest date that a Forbearance Termination Event occurs.
“Forbearance Termination Event” means the earliest of the following to occur: (a) any Event of Default other than an Event of Default constituting Acknowledged Defaults; (b) the breach
by the Borrower of any covenant or provision of this Agreement; (c) 11:59 p.m. (Eastern time) on August 15, 2025.
“Released Party” has the meaning set forth in Section 13.
2.Estoppel. Each Credit Party hereby acknowledges and agrees that, as of June 18, 2025: (a) the Outstanding Amount of the Revolving Loans was not less than $5,750,000; (b) the Outstanding Amount of all Swing Line Loans was not less than $0.00; and (c) the Outstanding Amount of all L/C Obligations was not less than $250,000.00, each of which constitutes a valid and subsisting obligation of the Credit Parties owed to the Lenders that is not subject to any credits, offsets, defenses, claims, counterclaims or adjustments of any kind.
3.Consent, Acknowledgement and Reaffirmation. Each Credit Party hereby: (a) acknowledges that (i) the Acknowledged Defaults have occurred and have not been waived or cured, and (ii) no Default or Event of Default is being waived pursuant to this Agreement; (b) ratifies and reaffirms all of its payment and performance obligations, contingent or otherwise, under each Loan Document to which it is a party; and (c) to the extent such Person granted Liens on any of its property pursuant to any such Loan Document as security for or otherwise guaranteed the Obligations under or with respect to the Loan Documents, ratifies and reaffirms such guarantee and grant of Liens and confirms and agrees that such Liens hereafter secure all of the Obligations as amended hereby. Each Credit Party consents to this Agreement and acknowledges that each and every Loan Document to which it is party remains in full force and effect and is hereby ratified and reaffirmed. Except as expressly provided herein, the execution of this Agreement shall not operate as a waiver of any right, power or remedy of the Administrative Agent or the Lenders, constitute a waiver of any provision of any Loan Document or serve to effect a novation of any of the Obligations.
4.Forbearance.
(a)Forbearance. Subject to the terms and conditions set forth herein, the Administrative Agent, the L/C Issuer, and the Lenders shall, during the Forbearance Period, forbear from exercising any and all of the rights and remedies available to them under the Loan Documents and applicable Laws (including, implementing the Default Rate), but only to the extent that such rights and remedies arise exclusively as a result of the existence of the Acknowledged Defaults; provided, however, that (i) the Administrative Agent, the L/C Issuer, and the Lenders shall be free to exercise any or all of their rights and remedies arising on account of the Acknowledged Defaults at any time upon or after the occurrence of a Forbearance Termination Event and (ii) the Acknowledged Defaults shall continue to exist and apply for all other purposes and provisions under the Loan Documents, including those provisions, conditions, requirements, rights, and obligations that are dependent upon the absence of any Default or Event of Default.
(b)Forbearance Period. Nothing set forth herein or contemplated hereby is intended to constitute an agreement by the Administrative Agent, the L/C Issuer, or any Lender to forbear from exercising any of the rights or remedies available to the Administrative Agent, the L/C Issuer, and the Lenders under the Loan Documents or applicable Laws (all of which rights and remedies are hereby expressly reserved by the Administrative Agent, the L/C Issuer, and the Lenders) upon or after the occurrence of a Forbearance Termination Event.
5.Refinancing Transaction Milestones. Notwithstanding anything to the contrary in the Credit Agreement, each of the Refinancing Transaction Milestones in Sections 6.19(a), (c), and (d) of the Credit Agreement shall be due on the Maturity Date.
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6.Liquidity. Notwithstanding anything to the contrary in the Credit Agreement, during the Forbearance Period, the minimum Liquidity otherwise required to be maintained pursuant to Section 7.16(c) of the Credit Agreement shall be $1,000,000, and to the extent the minimum Liquidity prior to the Effective Date was below the required threshold, any resulting Default or Event of Default is waived.
7.Mandatory Prepayment. During the Forbearance Period, and measured based on and payable at the time the monthly financial statements are to be delivered pursuant to Section 8(a) hereof for each fiscal month, a prepayment shall be required under Section 2.05(b) of the Credit Agreement if, as of the last day of such fiscal month, the Total Revolving Outstandings exceed the difference of (a) 55% of the net book value in accordance with GAAP of inventory of Holdings and its Subsidiaries minus (b) 50% of the store value credit liability.
8.Additional Reporting. In addition to all existing reporting requirements under the Credit Agreement and the other Loan Documents, the Borrower shall deliver to the Administrative Agent (which shall make the same available to the Lender), in each case in form and detail reasonably satisfactory to the Administrative Agent:
(a)not later than 30 days after the last day of each fiscal month, a copy of the internally prepared unaudited consolidated balance sheet of Holdings and its Subsidiaries and the related consolidated statements of income and cash flows as of the end of such fiscal month, all certified on behalf of Holdings and its Subsidiaries by a Responsible Officer of Holdings as fairly presenting, in all material respects, in accordance with GAAP, the financing condition and results of operation of Holdings and its Subsidiaries.
(b)not later than 30 days after the last day of each fiscal month, true and complete copies of all accounts receivable, accounts payable and aging inventory.
9.Lender Updates. The Borrower shall make certain representatives of the Borrower available and shall use commercially reasonable efforts to make certain of its advisors available, in each case as reasonably requested by the Administrative Agent, available to the Administrative Agent and the Lenders for periodic conference calls to be held once every week, commencing on the first week following the Effective Date and continuing every week thereafter at other times and dates as mutually agreed to among the parties, to provide updates regarding the Refinancing Transaction.
10.Forbearance Fee. In consideration of the agreements set forth herein, the Loan Parties shall pay a one-time fee in the amount of $100,000.00 (the “Forbearance Fee”). The Forbearance Fee shall be fully earned and non-refundable as of the Effective Date and payable in immediately available funds upon the earlier of (a) the Maturity Date, and (b) the occurrence of a Forbearance Termination Event; provided, that, if all Obligations (other than the Forbearance Fee) have been paid in full on or prior to the Maturity Date, the Forbearance Fee shall be cancelled and waived.
11.Fees and Expenses. Without in any way limiting the obligations of the Credit Parties under the Loan Documents, the Credit Parties shall on the Effective Date, and thereafter promptly, and in any event within five (5) Business Days of demand therefor, reimburse the Administrative Agent for all of its reasonable and documented out-of-pocket fees, costs and expenses (including, without limitation, the reasonable and documented fees and out-of-pocket expenses of the Administrative Agent’s counsel, Moore & Van Allen PLLC (“MVA”), and the Administrative Agent’s financial advisor, Gulf Atlantic Capital Corporation (“GACC”)).
12.Conditions Precedent. This Agreement shall be effective on the date first written above (the “Effective Date”), subject to:
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(a)receipt by the Administrative Agent of counterparts of this Agreement duly executed by the Loan Parties, the Administrative Agent and each Lender; and
(b)receipt by the Administrative Agent of reimbursement for all reasonable and documented fees and expenses of the Administrative Agent incurred in connection with this Agreement and the other Loan Documents through the Effective Date, including, without limitation, the reasonable and documented fees, costs and expenses of the Administrative Agent’s counsel, MVA, and financial advisor, GACC, in each case to the extent invoiced on or prior to the Effective Date.
13.Release of Claims. In consideration of the Administrative Agent’s and the Lenders’ willingness to enter into this Agreement, each Credit Party hereby releases and forever discharges the Administrative Agent, the Swing Line Lender, the L/C Issuer, each Lender, and each of their respective predecessors, successors, assigns, and Related Parties (each and every of the foregoing, a “Released Party”) from any and all claims, counterclaims, demands, damages, debts, suits, liabilities, actions, and causes of action of any nature whatsoever, in each case through the date hereof, whether arising at law or in equity, whether known or unknown, whether liability be direct or indirect, whether liquidated or unliquidated, whether absolute or contingent, whether foreseen or unforeseen, and whether or not heretofore asserted, which any Credit Party may have or claim to have against any Released Party.
As to each and every claim released hereunder, each Credit Party hereby represents that it has received the advice of legal counsel with regard to the releases contained herein, and having been so advised, specifically waives the benefit of the provisions of Section 1542 of the Civil Code of California, which provides as follows:
“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE AND THAT, IF KNOWN BY HIM OR HER, WOULD HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY.”
By executing this Agreement, each Credit Party intends to: (a) waive and relinquish any and all rights and benefits which they may have under Section 1542 of the Civil Code or California; and (b) assume the risk of releasing any existing, but as of yet unknown, claims.
14.No Action, Claims. Each Credit Party represents, warrants, acknowledges and confirms that, as of the Effective Date, it has no knowledge of any action, cause of action, claim, demand, damage or liability of whatever kind or nature, in law or in equity, against any Released Party arising from any action by such Persons, or failure of such Persons to act, under or in connection with any of the Loan Documents.
15.Representations and Warranties of the Credit Parties. Each Credit Party hereby represents and warrants to the Administrative Agent, the L/C Issuer and Lenders that:
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16.No Third Party Beneficiaries. This Agreement and the rights and benefits hereof shall inure to the benefit of each of the parties hereto and their respective successors and assigns, and the obligations hereof shall be binding upon each Credit Party. No other Person shall have or be entitled to assert rights or benefits under this Agreement, other than non-party Persons that are Released Parties with respect to Section 13 and Section 14 hereof.
17.Incorporation of Agreement. Except as specifically modified herein, the terms of the Loan Documents shall remain in full force and effect. The execution, delivery and effectiveness of this Agreement shall not operate as a waiver of any right, power or remedy of the Administrative Agent, L/C Issuer or any Lender under the Loan Documents, or constitute a waiver or amendment of any provision of the Loan Documents, except as expressly set forth herein. The breach of any provision or representation under this Agreement shall constitute an immediate Event of Default, and this Agreement shall constitute a Loan Document. Except as otherwise provided in this Agreement, if any provision contained in this Agreement is in conflict with, or inconsistent with, any provision in any Loan Document, the provision contained in this Agreement shall govern and control.
18.Entirety. This Agreement, the Credit Agreement and the other Loan Documents embody the entire agreement among the parties hereto and supersede all prior agreements and understandings, oral or written, if any, relating to the subject matter hereof. This Agreement, the Credit Agreement and the other Loan Documents represent the final agreement between the parties and may not be contradicted by evidence of prior, contemporaneous or subsequent oral agreements of the parties.
19.Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be an original, but all of which shall constitute one and the same instrument. Delivery of executed counterparts of this Agreement by facsimile or other secure electronic format (.pdf) shall be effective as an original.
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20.Governing Law; Submission to Jurisdiction; Waiver of Venue; Service of Process; Waiver of Jury Trial. The GOVERNING LAW, SUBMISSION TO JURISDICTION, WAIVER OF VENUE, SERVICE OF PROCESS and Waiver of Jury Trial provisions set forth in Sections 11.14 and 11.15 of the Credit Agreement are hereby incorporated herein, mutatis mutandis.
21.Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.
22.Headings. The headings of the sections hereof are provided for convenience only and shall not in any way affect the meaning or construction of any provision of this Agreement.
23.Severability. If any provision of this Agreement is held to be illegal, invalid or unenforceable, (a) the legality, validity and enforceability of the remaining provisions of this Agreement shall not be affected or impaired thereby and (b) the parties shall endeavor in good faith negotiations to replace the illegal, invalid or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the illegal, invalid or unenforceable provisions. The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
24.Further Assurances. Each of the parties hereto agrees to execute and deliver, or to cause to be executed and delivered, all such instruments as may reasonably be requested to effectuate the intent and purposes, and to carry out the terms, of this Agreement.
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Each of the parties hereto has caused a counterpart of this Agreement to be duly executed and delivered as of the date first above written.
BORROWER:LULU’S FASHION LOUNGE, LLC,
a Delaware limited liability company
By: /s/ Crystal Landsem
Name: Crystal Landsem
Title: CEO
HOLDINGS:LULU’S FASHION LOUNGE PARENT, LLC,
a Delaware limited liability company
By: /s/ Crystal Landsem
Name: Crystal Landsem
Title: CEO
[Signature pages continue.]
LuLu’s Fashion Lounge, LLC
Forbearance Agreement
ADMINISTRATIVE AGENT:BANK OF AMERICA, N.A., as Administrative Agent
By: /s/ Susanne M. Perkins
Name: Susanne M. Perkins
Title:Senior Vice President
LENDERS:BANK OF AMERICA, N.A.,
as a Lender, L/C Issuer and Swing Line Lender
By: /s/ Susanne M. Perkins
Name: Susanne M. Perkins
Title:Senior Vice President
[Signature pages end.]
LuLu’s Fashion Lounge, LLC
Forbearance Agreement
