Item 1.01 Entry into a Material Definitive Agreement
On
General Terms
The Credit Agreement provides for an asset-based, senior secured revolving
credit facility ("Revolving Facility") of up to
The maximum borrowings permitted under the Revolving Facility is equal to the
lesser of (x) the Revolving Commitment and (y) the Borrowing Base. The Borrowing
Base is equal to (a) 90% of the Borrowers' eligible credit card receivables,
plus (b) 90% of the Cost of the Borrowers' eligible inventory, less inventory
reserves established by the Agent, and adjusted by the appraised value of such
eligible inventory, plus (c) 90% of the Cost of the Borrowers' eligible
in-transit inventory, less inventory reserves established by the Agent, and
adjusted by the appraised value of such eligible in-transit inventory (not to
exceed 10% of the total amount of all Eligible Inventory included in the
Borrowing Base) less (d) reserves established by the Agent. As of the Closing
Date, WOJT was eligible to borrow up to a total of
Interest Rates and Fees
The unused portion of the Revolving Commitment accrues a commitment fee, which ranges from 0.375% to 0.50% per annum, based on the average daily borrowing capacity under the Revolving Facility over the applicable fiscal quarter. Borrowings under the Revolving Facility bear interest at a rate per annum that ranges from the LIBOR Rate plus 2.0% to the LIBOR Rate plus 2.25%, or the Base Rate plus 1.0% to the Base Rate plus 1.25%, based on the average daily borrowing capacity under the Revolving Facility over the applicable fiscal quarter. WOJT may elect to apply either the LIBOR Rate or Base Rate interest to borrowings at its discretion, other than in the case of swing line loans, to which the Base Rate shall apply.
Covenants
Under the Credit Agreement, WOJT and the Company are subject to a variety of affirmative and negative covenants of types customary in an asset-based lending facility, including a financial covenant relating to availability, and provides for customary events of default. Prior to the first anniversary of the Closing Date, WOJT and the Company are prohibited from declaring or paying any cash dividends to their respective stockholders or repurchasing
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their own common stock. After the first anniversary of the Closing Date, WOJT and the Company are allowed to declare and pay cash dividends to their respective stockholders and repurchase their own common stock, provided, among other things, no default or event of default exists as of the date of any such payment and after giving effect thereto and certain minimum availability and minimum projected availability tests are satisfied.
Events of Default
Events of default under the Credit Agreement include, among other things, failure to pay principal, interest, fees or other amounts; covenant defaults; material inaccuracy of representations and warranties; bankruptcy events with respect to WOJT or the Company; actual or asserted invalidity of any of the Loan Documents; or a change of control of WOJT or the Company.
Ancillary Agreements
In connection with the entry into the Credit Agreement, on
Item 1.02 Termination of a Material Definitive Agreement
The information included in 1.01 of this Current Report on Form 8-K regarding the termination of the Prior Credit Agreement, the Prior Pledge Agreement, the Prior Guaranty and the Prior Security Agreements is incorporated by reference into this Item 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 Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 2.03.
Item 7.01 Results of Operations and Financial Condition
On
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Item 9.01 Financial Statements and Exhibits
(d) Exhibits. 10.1 Credit Agreement, datedNovember 9, 2020 , by and amongWorld of Jeans & Tops ,Tilly's, Inc. andWells Fargo Bank, National Association . 10.2 Security Agreement, datedNovember 9, 2020 , by and amongWorld of Jeans & Tops ,Tilly's, Inc. andWells Fargo Bank, National Association . 10.3 Guaranty, datedNovember 9, 2020 , ofTilly's, Inc. 99.1 Press Release ofTilly's, Inc. , datedNovember 9, 2020 . 104 Cover Page Interactive Data File (embedded within the Inline XBRL document).
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