UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM 8-K
CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 2, 2020

RTW RETAILWINDS, INC.
(Exact name of registrant as specified in its charter)

330 West 34^th Street
9^th Floor
New York, New York 10001
(Address of principal executive offices, including  Zip Code)

(212) 884-2000
(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ¨ 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨ 

Item 1.01 Entry into a Material Definitive Agreement.

On July 2, 2020, RTW Retailwinds, Inc. and its wholly-owned direct and indirect subsidiaries, including Lerner New York, Inc., Lernco, Inc., Lerner New York Outlet, LLC, Lerner New York FTF, LLC, Lerner New York Holding, Inc., New York & Company Stores, Inc., Lerner New York GC, LLC and FTF GC, LLC entered into Amendment No. 3 (“Amendment No. 3”) to Fourth Amended and Restated Loan and Security Agreement and Joinder with Wells Fargo Bank, National Association, as administrative agent and lender (as amended by Amendment No.3, the “Loan Agreement”). The obligations under the Loan Agreement are guaranteed by RTW Retailwinds, Inc. (the “Company”) and certain of its subsidiaries. All capitalized terms used herein without definition have the meanings ascribed to such terms in the Loan Agreement.

The provisions of the Loan Agreement amended by Amendment No. 3 include, among other things: (i) full repayment of amounts outstanding under the Loan Agreement by August 31, 2020; (ii) repayment of $2.7 million of amounts outstanding under the Loan Agreement on or before July 3, 2020; and (iii) forbearance until July 15, 2020 of Existing Defaults.

The foregoing summary of the amendments to the Loan Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of Amendment No. 3, which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of a Registrant.

The information contained in Item 1.01 Entry into a Material Definitive Agreement is incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits.

(d)  Exhibit

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Exhibit 10.1

Execution

AMENDMENT NO. 3 TO FOURTH AMENDED
AND RESTATED LOAN AND SECURITY AGREEMENT

AMENDMENT NO. 3 TO FOURTH AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT, dated as of July 2, 2020 (this “Amendment No. 3”), is entered into by and among Lerner New York, Inc., a Delaware corporation (“Lerner”), Lernco, Inc., a Delaware corporation (“Lernco”), Lerner New York Outlet, LLC, a Massachusetts limited liability company (“Lerner Outlet”), Lerner New York FTF, LLC, a Delaware limited liability company (“Lerner FTF”, and together with Lerner, Lernco and Lerner Outlet, collectively, “Borrowers” and individually each a “Borrower”), RTW Retailwinds, Inc., a Delaware corporation (“RTW”), Lerner New York Holding, Inc., a Delaware corporation (“Parent”), New York & Company Stores, Inc., a New York corporation (“NY & Co Stores”), Lerner New York GC, LLC, an Ohio limited liability company (“Lerner GC”), and FTF GC, LLC, an Ohio limited liability company (“FTF”, and together with RTW, Parent, NY & Co Stores and Lerner GC, collectively, “Guarantors” and each a “Guarantor”), Wells Fargo Bank, National Association, in its capacity as administrative and collateral agent (in such capacity, “Agent”) pursuant to the Loan Agreement (as hereinafter defined) acting for and on behalf of the financial institutions which are parties to the Loan Agreement as lenders (individually, each a “Lender” and collectively, “Lenders”).

W I T N E S S E T H:

WHEREAS, Agent, Lenders, Borrowers and Guarantors are parties to financing arrangements pursuant to which Lenders (or Agent on behalf of Lenders) have made and may make loans and advances and provide other financial accommodations to Borrowers as set forth in the Fourth Amended and Restated Loan and Security Agreement, dated October 24, 2014, as amended (as the same now exists and is amended and supplemented pursuant hereto and may hereafter be further amended, modified, supplemented, extended, renewed, restated or replaced, the “Loan Agreement”) and together with all agreements, documents and instruments at any time executed and/or delivered in connection therewith or related thereto (as may from time to time be amended, modified, supplemented, extended, renewed, restated, or replaced, collectively, the “Financing Agreements”);

WHEREAS, Agent, Lenders, Borrowers and Guarantors are parties to that certain Amendment No. 2 to the Loan Agreement dated June 3, 2020 (“Amendment No. 2”) whereby, among other things, Agent and the Lenders agreed to forbear temporarily from exercising their rights and remedies against the Borrowers based upon the Existing Defaults (as defined in the Amendment No. 2);

WHEREAS, Borrowers and Guarantors have acknowledged that the Existing Defaults exist and are continuing as of the date hereof;

WHEREAS, on or after the expiration of the Forbearance Period, as a result of the Existing Defaults, and in accordance with the terms of the Loan Agreement and applicable law, the Agent and the Lenders may, among other things, (i) declare all or any portion of the unpaid principal amount of the loans, and all other amounts owing or payable thereunder or under any other Financing Agreement, to be immediately due and payable, (ii) continue to charge the Default Rate, (iii) terminate any then outstanding commitments to lend to the Borrowers, without presentment, demand, protest or other notice of any kind, and (iv) exercise on behalf of itself and the Lenders all rights and remedies available to it and the Lenders thereunder or under any other Financing Agreement, at law or equity;

WHEREAS, as a result of the upcoming expiration of the Forbearance Period, the Borrowers have requested that the Agent and the Lenders agree to extend the Forbearance Period and forbear temporarily from exercising their rights and remedies against the Borrowers arising solely as a result of the Existing Defaults, and the Agent and the Lenders are willing to do so, but only to the extent, and on the terms and conditions, expressly set forth herein;

WHEREAS, Borrowers and Guarantors have also requested that Agent and Lenders agree to amend certain terms and conditions of the Loan Agreement as set forth in this Amendment No. 3;

NOW THEREFORE, in consideration of the foregoing and the mutual agreements and covenants contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1.                  Definitions. For purposes of this Amendment No. 3, unless otherwise defined herein, all capitalized terms used herein which are defined in the Loan Agreement shall have the meanings given to such terms in the Loan Agreement.

2.                  Amendments to Loan Agreement. As of the Amendment No. 3 Effective Date, the Loan Agreement is amended as follows:

(a)               Section 1.1. Section 1.1 of the Loan Agreement is amended by the addition, in alphabetical order, or the amendment and restatement, as applicable, of the following definitions to read in their entirety as follows:

“Amendment No. 3” means Amendment No. 3 to Fourth Amended and Restated Loan and Security Agreement, dated as of July 2, 2020, among Agent, Lenders, Borrowers and Guarantors, as may be amended, modified, supplemented, extended, renewed, restated or replaced.

“Amendment No. 3 Effective Date” means the date on which all of the conditions precedent to the effectiveness of Amendment No. 3 shall have been satisfied or shall have been waived by Agent in writing.

(b)               Section 6.4(e). Section 6.4(e) of the Loan Agreement is hereby amended and restated in its entirety as follows:

[reserved]

(c)               Section 6.4(f). Section 6.4(f) of the Loan Agreement is hereby amended and restated in its entirety as follows:

(f)        Borrowers shall cause the outstanding principal balance of the Revolving Loans to be reduced to $0 on or before August 31, 2020.

(d)               Forbearance. Section 5 of Amendment No. 2 is hereby amended and restated as follows:

“5. Agent’s and Lenders’ Agreement to Forbear from Enforcement Action.

(e)               Budget. Exhibit B to Amendment No. 2 is amended and replaced in all respects and for all purposes by the amended Budget attached hereto as Exhibit A.

3.                  References. Each reference in the Loan Agreement to “this Agreement,” “hereunder,” “hereof,” “herein” or words of similar import, and each reference in the other Financing Agreements to the “Loan Agreement” (including, without limitation, by means of words such as “thereunder” or “thereof” and words of similar import), shall mean and be a reference to the Loan Agreement, as amended by this Amendment No. 3. Agent, each of the Lenders signatory hereto, each Borrower and each Guarantor consent to the amendment of the Loan Agreement pursuant to this Amendment No. 3.

4.                  Acknowledgment of Existing Defaults. Each Borrower acknowledges and agrees that each of the Existing Defaults has occurred and continues to exist as of the date of this Amendment No. 3.

5.                  Additional Event of Default. Each Borrower and Guarantor acknowledges and agrees that the failure to comply with the terms of this Amendment No. 3 shall constitute an immediate Event of Default under the Loan Agreement.

6.                  Representations and Warranties. Each Borrower and each Guarantor, jointly and severally, represents and warrants with and to Agent, the other members of the Lender Group and Bank Product Providers as follows:

(a)               No Default or Event of Default exists or has occurred and is continuing as of the date hereof other than the Existing Defaults;

(b)               The execution, delivery and performance of this Amendment No. 3 and any other agreements, documents and instruments executed or delivered by any Borrower or Guarantor in connection herewith (together with Amendment No. 2 and this Amendment No. 3, the “Amendment Documents”) and the consummation of the transactions contemplated hereby or thereby, and compliance with the provisions hereof or thereof by each Borrower and Guarantor (i) are all within such Borrower’s or Guarantor’s corporate or limited liability company powers, (ii) have been duly authorized, (iii) are not in contravention of law or the terms of such Borrower’s or Guarantor’s certificate of incorporation, certificate of formation, bylaws, operating agreement or other organizational documentation, or any indenture, agreement or undertaking to which such Borrower or Guarantor is a party or by which such Borrower or Guarantor or its property are bound, except for those lease agreements of Lerner for which Lerner did not obtain consents from the parties thereto with respect to this Amendment No. 3, and (iv) will not result in the creation or imposition of, or require or give rise to any obligation to grant, any lien, security interest, charge or other encumbrance upon any property of such Borrower or Guarantor other than liens in favor of Agent or any Lender as contemplated by the Financing Agreements;

(c)               Each of the Amendment Documents to which each Borrower and Guarantor is a party constitute legal, valid and binding obligations of such Borrower or Guarantor enforceable in accordance with their respective terms;

(d)               All of the representations and warranties set forth in the Loan Agreement, and the other Financing Agreements, are true and correct in all material respects after giving effect to the provisions of this Amendment No. 3, except to the extent any such representations and warranties expressly relate solely to an earlier date (in which case such representations and warranties shall have been true and accurate in all material respects on and as of such earlier date); and

(e)               No action of, or filing with, or consent of any Governmental Authority, and no approval or consent of any other party, is required to authorize, or is otherwise required in connection with, the execution, delivery and performance of any of the Amendment Documents by any Borrower or Guarantor, except for any actions or filings already made or taken and approvals or consents previously obtained.

7.                  Forbearance and Restructuring Support Fee. In addition to all other fees and charges payable by Borrowers under the Loan Agreement or any of the other Financing Agreements, the Borrowers hereby agree to pay as part of the consideration for Agent’s and Lenders’ agreement to (a) forbear from exercising their respective rights and remedies under the Loan Agreement and other Financing Agreements to the extent set forth in the Amendment Documents; (b) consent to Borrowers’ store closings outside of the ordinary course of business, (c) negotiate additional financial accommodations extended to Borrowers outside of the ordinary course of business, and (d) continue administration of the Borrowers’ cash management system and Collateral monitoring, a forbearance and restructuring support fee in the amount of $75,000, which fee is fully earned on the date hereof and nonrefundable (the “Forbearance and Restructuring Support Fee”).

8.                  Security Deposit. The Borrowers hereby agree to deposit an amount of not less than $8,000,000 on or before July 7, 2020, into a controlled account maintained at Wells Fargo Bank, National Association (the “Security Deposit”). Borrowers hereby acknowledge, confirm and agree that upon the occurrence of an Event of Default, other than the Existing Defaults, Agent may in its sole discretion apply the Security Deposit to the Obligations without further notice, demand, or any other action whatsoever

9.                  LC Cash Collateral. The Borrowers hereby agree that the Agent is authorized to transfer cash collateral in an amount equal to one hundred five percent (105%) of all Letter of Credit Exposure, plus the amount of any fees and expenses payable in connection therewith (the “LC Cash Collateral”), from the Debtors’ accounts maintained at Wells Fargo Bank, National Association into a separate account, which funds or any portion thereof, may be immediately applied to the Obligations upon any draw on any Letter of Credit.

10.              Budget Payment. The Borrowers hereby agree to make the payment in an amount of not less than $2,700,000 on or before July 3, 2020, in accordance with the Budget.

11.              Deposit Account Control Agreements. The Borrowers hereby agree to deliver to Agent duly authorized and executed Deposit Account Control Agreements with respect to those certain deposit accounts of the Borrowers with account numbers 4094197167 and 4849633243 on or before July 7, 2020.

12.              Conditions Precedent. The effectiveness of this Amendment No. 3 shall be subject to the satisfaction of each of the following conditions precedent in a manner satisfactory to Agent:

(a)               On or prior to the Amendment No. 3 Effective Date, Agent shall have received payment of the Forbearance and Restructuring Support Fee;

(b)               No Default or Event of Default shall exist or have occurred and be continuing other than the Existing Defaults;

(c)               Agent shall have received counterparts of this Amendment No. 3, duly authorized, executed and delivered by Borrowers, Guarantors, and the Lenders;

(d)               Agent shall have received, in form and substance satisfactory to Agent, an officer’s certificate or secretary’s certificate from each Borrower and Guarantor, duly authorized, executed and delivered by an appropriate officer of such Borrower or Guarantor, in form and substance reasonably satisfactory to Agent, setting forth the incumbency and specified signatures of each applicable officer and approving the transactions contemplated by this Amendment No. 3, together with organizational documents and records of all requisite corporate or limited liability company action and proceedings in connection with this Amendment No. 3.

13.              Release and Covenant Not to Sue.

(a)               Release.

(i)                 In consideration of the agreements of Agent and Lenders contained herein and the making of Loans and providing of Letters of Credit by or on behalf of Agent and Lenders to Borrowers pursuant to the Loan Agreement, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, each Borrower and Guarantor on behalf of itself and its successors, assigns, and other legal representatives, hereby, jointly and severally, absolutely, unconditionally and irrevocably releases, remises and forever discharges Agent and each Lender and their present and former shareholders, affiliates, subsidiaries, divisions, predecessors, directors, officers, attorneys, employees, agents and other representatives (Agent, each Lender and all such other parties being hereinafter referred to collectively as the “Releasees” and individually as a “Releasee”), of and from all demands, actions, causes of action, suits, covenants, contracts, controversies, agreements, promises, sums of money, accounts, bills, reckonings, damages and any and all other claims, counterclaims, defenses, rights of set-off, demands and liabilities whatsoever (individually, a “Claim” and collectively, “Claims”) of every name and nature, known or unknown, suspected or unsuspected, matured or contingent both at law and in equity, which any Borrower or Guarantor, or any of its successors, assigns, or other legal representatives may now own, hold, have or claim to have against the Releasees or any of them for, upon, or by reason of any nature, cause or thing whatsoever which arises at any time on or prior to the date of this Amendment No. 3, including, without limitation, for or on account of, or in relation to, or in any way in connection with the Loan Agreement, as amended and supplemented through the date hereof and the other Financing Agreements.

(ii)              Each Borrower and Guarantor understands, acknowledges and agrees that the release set forth above may be pleaded as a full and complete defense and may be used as a basis for an injunction against any action, suit or other proceeding which may be instituted, prosecuted or attempted in breach of the provisions of such release.

(iii)            Each Borrower and Guarantor agrees that no fact, event, circumstance, evidence or transaction which could now be asserted shall affect in any manner the final and unconditional nature of the release set forth above.

(iv)             Each Borrower and Guarantor represents and warrants that each such Person is the sole and lawful owner of all right, title and interest in and to all of the claims released hereby and each such Person has not heretofore voluntarily, by operation of law or otherwise, assigned or transferred or purported to assign or transfer to any person any such claim or any portion thereof.

(v)              Nothing contained herein shall constitute an admission of liability with respect to any Claim on the part of any Releasee.

(b)               Covenant Not to Sue. Each Borrower and Guarantor, on behalf of itself and its successors, assigns, and other legal representatives, hereby absolutely, unconditionally and irrevocably, jointly and severally, covenants and agrees with each Releasee that it will not sue (at law, in equity, in any regulatory proceeding or otherwise) any Releasee on the basis of any Claim released, remised and discharged by such Borrower or Guarantor under Section 13(a) hereof. If any Borrower or Guarantor violates the foregoing covenant, each Borrower and Guarantor agrees to pay, in addition to such other damages as any Releasee may sustain as a result of such violation, all attorneys’ fees and costs incurred by any Releasee as a result of such violation.

(c)               Waiver of Statutory Provisions. EACH BORROWER AND GUARANTOR HEREBY EXPLICITLY WAIVES ALL RIGHTS UNDER AND ANY BENEFITS OF ANY COMMON LAW OR STATUTORY RULE OR PRINCIPLE WITH RESPECT TO THE RELEASE OF SUCH CLAIMS, AND EACH BORROWER AND GUARANTOR AGREES THAT NO SUCH COMMON LAW OR STATUTORY RULE OR PRINCIPLE SHALL AFFECT THE VALIDITY OR SCOPE OR ANY OTHER ASPECT OF THIS RELEASE.

14.              Effect of this Amendment. Except as expressly set forth herein, no other amendments, changes or modifications to the Financing Agreements are intended or implied, and in all other respects the Financing Agreements are hereby specifically ratified, restated and confirmed by all parties hereto as of the Amendment No. 3 Effective Date and Borrowers and Guarantors shall not be entitled to any other or further amendment by virtue of the provisions of this Amendment No. 3 or with respect to the subject matter of this Amendment No. 3. To the extent of conflict between the terms of this Amendment No. 3 and the other Financing Agreements, the terms of this Amendment No. 3 shall control. The Loan Agreement, Amendment No. 2 and this Amendment No. 3 shall be read and construed as one agreement.

15.              No Novation. The amendment of the Loan Agreement pursuant to this Amendment No. 3 shall not, in any manner, be construed to constitute payment of, or impair, limit, cancel or extinguish, or constitute a novation in respect of, the Obligations and other obligations and liabilities of Borrowers and Guarantors evidenced by or arising under the Loan Agreement as amended by this Amendment No. 3 or any of the other Financing Agreements. Each Borrower and each Guarantor confirms and agrees that it continues to remain liable for all such Obligations and other obligations and liabilities, and the liens and security interests in the Collateral of Agent securing such Obligations and other obligations and liabilities shall not in any manner be impaired, limited, terminated, waived or released, but shall continue in full force and effect in favor of Agent for the benefit of the Secured Parties.

(a)        No Waiver; Reservation of Rights. Agent and Lenders have not waived, are not by this Amendment No. 3 waiving and has no intention of waiving the Existing Defaults or any other Event of Default that has occurred as of the date hereof, that may be continuing as of the date hereof or that may occur after the date hereof, whether any such Events of Default are the same or similar to the Existing Defaults. Except with respect to the Existing Defaults, in each case, as and to the extent expressly set forth in Section 5 of Amendment No. 2, Agent and Lenders have not agreed to forbear from exercising any of their respective rights or remedies concerning any Event of Default that may have occurred as of the date hereof, that may be continuing as of the date hereof or that may occur after the date hereof. Subject to Section 5 of Amendment No. 2, Agent and Lenders reserve the right to exercise any or all of their respective rights and remedies under the Financing Agreements or otherwise as a result of any Event of Default that may be continuing on the date hereof or that may occur after the date hereof. Agent and Lenders have not waived any of their respective rights or remedies and nothing in this Amendment No. 3, or any delay on their part in exercising any such rights or remedies, should be construed as a waiver of any such rights or remedies.

16.              Governing Law. The validity, interpretation and enforcement of this Amendment No. 3 and any dispute arising out of the relationship between the parties hereto, whether in contract, tort, equity or otherwise, shall be governed by the internal laws of the State of New York but excluding any principles of conflicts of law or other rule of law that would cause the application of the law of any jurisdiction other than the laws of the State of New York.

17.              Binding Effect. This Amendment No. 3 shall be binding upon and inure to the benefit of each of the parties hereto and their respective successors and assigns.

18.              Headings. The headings listed herein are for convenience only and do not constitute matters to be construed in interpreting this Amendment No. 3.

19.              Counterparts. This Amendment No. 3 and any notices delivered under this Amendment No. 3, may be executed by means of (a) an electronic signature that complies with the federal Electronic Signatures in Global and National Commerce Act, state enactments of the Uniform Electronic Transactions Act, or any other relevant and applicable electronic signatures law; (b) an original manual signature; or (c) a faxed, scanned, or photocopied manual signature. Each electronic signature or faxed, scanned, or photocopied manual signature shall for all purposes have the same validity, legal effect, and admissibility in evidence as an original manual signature. Agent reserves the right, in its sole discretion, to accept, deny, or condition acceptance of any electronic signature on this Amendment No. 3 or on any notice delivered to Agent under this Amendment No. 3. This Amendment No. 3 and any notices delivered under this Amendment No. 3 may be executed in any number of counterparts, each of which shall be deemed to be an original, but such counterparts shall, together, constitute only one instrument. Delivery of an executed counterpart of a signature page of this Amendment No. 3 and any notices as set forth herein will be as effective as delivery of a manually executed counterpart of the Amendment No. 3 or notice.

20.              Further Assurances. Borrowers and Guarantors shall execute and deliver such additional documents and take such additional action as may be reasonably requested by the Agent to effectuate the provisions and purposes of this Amendment No. 3.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

       IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 3 to be duly executed and delivered by their authorized officers as of the day and year first above written.