AMENDMENT NO. 1 and WAIVER
LOAN AND SECURITY AGREEMENT
THIS AMENDMENT NO. 1 AND WAIVER TO LOAN AND SECURITY AGREEMENT (this “Amendment”) is entered into as of August 12, 2021, by and among XCEL BRANDS, INC., a Delaware corporation (“Borrower”), each other signatory hereto that is a Credit Party under the Loan Agreement (as hereinafter defined), the financial institutions from time to time party to the Loan Agreement (collectively, “Lenders” and individually, each a “Lender”), BANK HAPOALIM B.M., (“BHI”) as administrative agent and collateral agent for Lenders (BHI in such capacity together with its successors and assigns in such capacity, “Administrative Agent”) and FEAC Agent, LLC (“FEAC”), as co-collateral agent (FEAC in such capacity together with its successors and assigns in such capacity, “Co-Collateral Agent”).
Borrower, IM Brands, LLC (“IM Brands”), JR Licensing, LLC, H Licensing, LLC, C Wonder Licensing, LLC, Xcel Design Group, LLC, Judith Ripka Fine Jewelry, LLC, H Heritage Licensing, LLC, Xcel-CT MFG, LLC and Gold Licensing, LLC (other than Borrower, collectively, “Guarantors”), Lenders and Agents are parties to a Loan and Security Agreement dated as of April 12, 2021 (as amended, restated, supplemented or otherwise modified from time to time, the “Loan Agreement”) pursuant to which Lenders made term loans to Borrower secured by a Lien on substantially all of the assets of Borrower. Guarantors have guaranteed the payment and performance of Borrower’s obligations to Lenders and Agents under the Loan Agreement which guarantee obligations are secured by a Lien on substantially all of the assets of Guarantors.
Borrower has requested that Lenders waive compliance with certain financial covenants, and make certain amendments to the Loan Agreement. Lenders and Agents have agreed to provide such waiver and amend the Loan Agreement on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the financial accommodations provided to Borrower by Lenders, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:
1.Definitions. All capitalized terms not otherwise defined herein shall have the meanings given to them in the Loan Agreement.
2.Waiver. Subject to the satisfaction of the conditions precedent set forth in Section 4 below, Lenders hereby waive the Event of Default arising from the failure of Borrower and the Included Subsidiaries on a consolidated basis to achieve EBITDA of at least $1,750,000 for the three month period ending June 30, 2021.
3.Amendment to Loan Agreement. Subject to the satisfaction of the conditions set forth in Section 4 below, the Loan Agreement is hereby amended as follows:
(a)The defined term “Maximum Revolving Loan Amount” in Section 1.1 amended to provide as follows: