Section 1.01 Entering into a Material Definitive Agreement
company (“WOJT”) and wholly owned subsidiary of
company (the “Company”), as borrower, has entered into a credit agreement and a revolving credit note (the “Note” and collectively the “Credit Agreement”) with
General Terms The Credit Agreement provides for a senior secured revolving credit facility (“Revolving Facility”) of up to
Payment and full performance of WOJT’s obligations under the credit agreement are guaranteed by the Company under a continuing guarantee granted by the Company in favor of the Bank and concluded on
(warranty”). Payment and performance of the Company’s obligations under the Guarantee are secured by a lien and pledge on all WOJT equity interests held by the Company.
As of the closing date, WOJT had no borrowings outstanding under the credit agreement and the only use of the sub-limit letters of credit under the credit agreement was a
Interest Rates and Fees Borrowings under the Revolving Facility bear interest at an annual rate equal to the SOFR simple daily rate plus 0.75%. Amounts that may be drawn under outstanding letters of credit generate fees of an amount equal to 1.00% per year. The unused portion of the renewable commitment is not subject to a commitment fee.
Under the Credit Agreement, WOJT and the Company are subject to a variety of affirmative and negative covenants of the types customary in a cash flow based loan facility, including financial covenants that require the maintenance (1 ) a ratio of the fund’s total debt to earnings before interest, taxes, depreciation, amortization and annual rent expense of not more than 4.00 to 1.00 and (2) a fixed charge coverage ratio of at least 1.25 for 1.00 (the calculation of which takes into account dividends, distributions, redemptions and redemptions of the interests of the Company only if the cash in hand of the Company, net of any amount unpaid under the Contract of credit, is less than
Events of Default Events of default under the Credit Agreement include, but are not limited to, failure to pay principal, interest, fees or other amounts; lack of commitment; material inaccuracy of representations and warranties; bankruptcy events involving WOJT or the Company; the actual or claimed invalidity of any of the loan documents; or a change in control of WOJT or the Company.
Additional agreements As part of the conclusion of the Credit Agreement, the
The foregoing descriptions of the Credit Agreement, Note, Guarantee Agreement, Guarantee and Collateral Agreement do not purport to be complete and are subject to and qualified in their entirety by reference to the Agreement. Agreement, Guarantee Agreement, Guarantee and Collateral Agreement, respectively, copies of which are filed herewith as Exhibits 10.1, 10.2, 10.3, 10.4 and 10.5, respectively, and incorporated herein by reference.
Section 1.02 Termination of a Material Definitive Agreement
The information included in Section 1.01 of this Current Report on Form 8-K regarding termination of Prior Credit Agreement, Prior Guarantee and Prior Guarantee Agreement is incorporated by reference in this Section 1.02.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
The information included in Section 1.01 of this Current Report on Form 8-K is incorporated by reference into this Section 2.03.
Item 9.01 Financial statements and supporting documents
The following parts are provided herewith.
(d) Exhibits. Exhibit No. Exhibit Title or Description 10.1 Credit Agreement, dated January 20, 2022, by and among World of Jeans & Tops and
Wells Fargo Bank, National Association . 10.2 Revolving Line of Credit Note, dated January 20, 2022, of Tilly's , Inc. 10.3 Guaranty, dated January 20, 2022, of Tilly's, Inc. 10.4 Security Agreement: Business Assets, dated January 20, 2022 of World of Jeans & Tops. 10.5 Third Party Pledge Agreement, dated January 20, 2022 of Tilly's, Inc. 104 Cover Page Interactive Data File (embedded within the Inline XBRL document).
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