Item 1.01. Entry into a Material Definitive Agreement.
On January 25, 2023, in connection with the delivery of certain of the
Transaction Documents (as defined below), Express, Inc. (the "Company") entered
into the Consent and Fourth Amendment to Second Amended and Restated Asset-Based
Loan Credit Agreement and Amendment to Certain Ancillary Loan Documents, by and
among the Company, Express Topco LLC ("Express Topco"), Express Holding, LLC
("Express Holding"), Express, LLC, Express Fashion Investments, LLC and the
other loan parties signatory thereto, Wells Fargo Bank, National Association
("Wells Fargo"), as administrative agent and collateral agent, and the other
lenders named therein (the "Amended Revolving Credit Facility"), among other
loan documents described therein.
Pursuant to the Amended Revolving Credit Facility, the Required Lenders (as
defined therein) consented to certain transactions contemplated by the
Transaction Documents, and certain conforming changes were made to the Amended
Revolving Credit Facility, as well as to certain ancillary related documents.
The foregoing description of the Amended Revolving Credit Facility does not
purport to be complete and is qualified in its entirety by reference to the
Amended Revolving Credit Facility, a copy of which is filed herewith as Exhibit
10.1 and is incorporated herein by reference.
In connection with the transactions contemplated by the Transaction Documents,
the Company has also paid in full the outstanding Obligations (as defined in the
FILO Term Loan) due under the Asset-Based Term Loan Agreement (the "FILO Term
Loan") dated as of January 13, 2021, by and among the Company, Express Topco,
Express Holding, Express, LLC and the other loan parties named therein (such
payment, the "FILO Term Loan Payoff"). Pursuant to the FILO Term Loan Payoff,
the Company has no further obligations under the FILO Term Loan except for
certain indemnity obligations and other obligations that expressly survive
receipt of the FILO Term Loan Payoff or termination of the FILO Term Loan
pursuant to its terms, and no further payment is due under the FILO Term Loan.
Item 2.01. Completion of Acquisition or Disposition of Assets.
On January 25, 2023, the Company completed the previously announced transactions
contemplated by (i) the Investment Agreement, by and between the Company and WH
Borrower, LLC, a Delaware limited liability company ("WHP"), dated as of
December 8, 2022 (the "Investment Agreement") and (ii) the Membership Interest
Purchase Agreement, by and among the Company, WHP and Express, LLC, a Delaware
limited liability company and wholly owned subsidiary of the Company, dated as
of December 8, 2022 (the "Membership Interest Purchase Agreement"). In
connection with the closing of the Investment Agreement, the Company entered
into a Registration Rights Agreement, dated January 25, 2023, with WHP (the
"Registration Rights Agreement"). In connection with the closing of the
Membership Interest Purchase Agreement, the following agreements were entered
into: (i) the amended and restated limited liability company agreement of EXP
Topco, LLC, a Delaware limited liability company (the "Joint Venture"), by and
among Express, LLC, Express Fashion Investments, LLC, a Delaware limited
liability company and wholly owned subsidiary of Express, LLC ("Contribution
Co"), and an affiliate of WHP, dated as of January 25, 2023 (the "Operating
Agreement"), (ii) the Intellectual Property License Agreement by and between the
Company and the Joint Venture, dated as of January 25, 2023 (the "Intellectual
Property License Agreement") and (iii) a contribution agreement (the
"Contribution Agreement," and together with the Investment Agreement, Membership
Interest Purchase Agreement, Registration Rights Agreement, Operating Agreement
and Intellectual Property License Agreement, the "Transaction Documents"), by
and among Express, LLC, Contribution Co and the Joint Venture, pursuant to which
Express, LLC contributed certain of its intellectual property assets to the
Joint Venture in exchange for 100% of the limited liability company interests of
the Joint Venture, after which Express, LLC assigned a 1% limited liability
company interest to Contribution Co.
The material terms of the Transaction Documents were previously disclosed in
Item 1.01 of the Company's Current Report on Form 8-K filed on December 8, 2022
(as amended on December 9, 2022, the "Announcement Form 8-K"), which is
incorporated herein by reference.
The descriptions of the Investment Agreement and Membership Interest Purchase
Agreement do not purport to be complete and are qualified in their entirety by
reference to the Investment Agreement and Membership Interest Purchase Agreement
filed as Exhibits 10.1 and 10.2, respectively, to the Announcement Form 8-K,
which
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are incorporated herein by reference. The descriptions of the Operating
Agreement, Intellectual Property License Agreement and Registration Rights
Agreement do not purport to be complete and are qualified in their entirety by
reference to the Operating Agreement, Intellectual Property License Agreement
and Registration Rights Agreement filed as Exhibits 10.2, 10.3 and 4.1,
respectively, to this Current Report on Form 8-K.
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, to the extent applicable, is
incorporated by reference into this Item 2.03.
Item 3.02. Unregistered Sales of Equity Securities.
The information contained in Item 1.01 of the Announcement Form 8-K, to the
extent applicable, is incorporated herein by reference into this Item 3.02.
On January 25, 2023, the transactions governed by the Transaction Documents
closed. Based in part upon the representations in the Investment Agreement, the
offer and sale of the Purchased Shares was made in reliance on the exemption
afforded by Section 4(a)(2) of the Securities Act of 1933, as amended (the
"Securities Act") and/or Rule 506 of Regulation D under the Securities Act and
corresponding provisions of state securities or "blue sky" laws. The Purchased
Shares (as defined in the Announcement Form 8-K) have not been registered under
the Securities Act or any state securities laws and may not be offered or sold
in the United States absent registration with the Securities and Exchange
Commission (the "SEC") or an applicable exemption from the registration
requirements. The sale of the Purchased Shares did not involve a public offering
and was made without general solicitation or general advertising. WHP
represented that it is an accredited investor, as such term is defined in Rule
501(a) of Regulation D under the Securities Act, and that it is acquiring the
securities solely for investment purposes and not with a view to the
distribution of the Purchased Shares.
Neither this Current Report on Form 8-K nor any exhibit attached hereto is an
offer to sell or the solicitation of an offer to buy shares of common stock or
other securities of the Company.
Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
On January 25, 2023, Mr. Yehuda Shmidman, Chairman and Chief Executive Officer
of WHP Global, was appointed to the Company's Board of Directors (the "Board")
as a Class II director in connection with the Closing. In connection with this
appointment, the Board increased its size from ten to eleven directors.
Mr. Shmidman will be entitled to the Company's standard non-employee director
compensation arrangements including an annual cash retainer equal to $80,000 and
a grant of restricted stock units having a value of $130,000 on the date of
grant that will vest on June 15, 2023, each prorated based on the number of days
that remain in the 12-month period beginning on the date of the Company's most
recent Annual Meeting of Stockholders and ending on the first anniversary
thereof. In addition, Mr. Shmidman has entered into the Company's standard
indemnification agreement for directors, the form of which was filed as an
exhibit to the Current Report on Form 8-K filed by the Company on August 3,
2016. Except as described in the Investment Agreement, there are no arrangements
or understandings between Mr. Shmidman and any other person pursuant to which he
was selected to serve on the Board, and there are no relationships between
Mr. Shmidman and the Company that would require disclosure under Item 404(a) of
Regulation S-K.
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Item 7.01. Regulation FD Disclosure.
On January 25, 2023, the Company issued the press release furnished hereto as
Exhibit 99.1 which is incorporated by reference into this Item 7.01, announcing
the closing of the transactions governed by the Transaction Documents.
The information included in this Item 7.01 and Exhibit 99.1 shall not be deemed
"filed" for purposes of Section 18 of the Exchange Act of 1934, as amended (the
"Exchange Act"), or otherwise be subject to the liabilities of Section 18 of the
Exchange Act. The information in this Item 7.01 shall not be incorporated by
reference into any filing or other document filed by the Company with the SEC
pursuant to the Securities Act, the rules and regulations of the SEC thereunder,
the Exchange Act, or the rules and regulations of the SEC thereunder, except as
shall be expressly set forth by specific reference in such filing or document.
Item 8.01. Other Events.
As previously disclosed in the Announcement Form 8-K, (i) on December 8, 2022,
the Company entered into the Investment Agreement and (ii) the closing of the
Stock Purchase was subject to the satisfaction or waiver of customary closing
conditions, including the expiration or termination of the waiting period under
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act"). The waiting period with respect to the transaction under the HSR Act
expired at 11:59 p.m. Eastern Time on January 20, 2023.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit
No. Description of Exhibit
4.1*+ Registration Rights Agreement, by and between the Company and WHP
Borrower, LLC, dated January 25, 2023.
10.1*+ Amended Revolving Credit Facility, by and among the Company, Express
Topco LLC, Express Holding, LLC, Express, LLC, Express Fashion
Investments, LLC and the other loan parties signatory thereto, Wells
Fargo Bank, National Association, as administrative agent and
collateral agent, and the other lenders named therein, dated
January 25, 2023.
10.2* Operating Agreement, by and among Express, LLC, Contribution Co and
an affiliate of WHP, dated January 25, 2023.
10.3*+ Intellectual Property License Agreement, by and between the Company
and the Joint Venture, dated January 25, 2023.
10.4*+ Investment Agreement, by and between the Company and WH Borrower,
LLC, dated December 8, 2022 (incorporated by reference from Exhibit
10.1 to the Company's Current Report on Form 8-K/A filed with the
Securities and Exchange Commission on December 9, 2022) .
10.5*+ Membership Interest Purchase Agreement, by and among the Company, WH
Borrower, LLC and Express, LLC, dated December 8, 2022 (incorporated
by reference from Exhibit 10.2 to the Company's Current Report on Form
8-K/A filed with the Securities and Exchange Commission on December 9,
2022) .
10.6 Form of Indemnification Agreement (incorporated by reference from
Exhibit 10.1 to the Company's Current Report on Form 8-K filed with
the Securities and Exchange Commission on August 3, 2016).
99.1 Press Release of the Company, dated January 25, 2023.
104 The cover page from this Current Report on Form 8-K formatted in
Inline XBRL.
* Exhibits and schedules have been omitted pursuant to Item 601(a) of
Regulation S-K and will be provided on a supplemental basis to the Securities
and Exchange Commission upon request.
+ Certain portions of the exhibit have been redacted pursuant to Item 601(a) of
Regulation S-K. The Company hereby undertakes to furnish supplementally an
unredacted copy of the exhibit upon request by the Securities and Exchange
Commission.
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