Attached files
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| EX-10.1 - WEST MARINE INC | v195428_ex10-1.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 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): August 23, 2010
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West Marine, Inc.
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(Exact
name of registrant as specified in its
charter)
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Delaware
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0-22512
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77-0355502
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(State
or other
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(Commission
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(I.R.S.
Employer
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jurisdiction
of
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File
Number)
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Identification
No.)
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incorporation)
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500
Westridge Drive
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Watsonville,
California 95076
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(Address
of Principal Executive Offices, Including Zip
Code)
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(831) 728-2700
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(Registrant’s
Telephone Number, Including Area
Code)
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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:
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¨
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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¨
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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¨
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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¨
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Item
1.01.
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Entry
Into a Material Definitive
Agreement.
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As
previously disclosed, we have been in discussions with Wells Fargo Bank,
National Association, to amend and restate our existing credit
facility. On August 23, 2010, West Marine, Inc. and certain of its
subsidiaries, as borrowers and guarantors, and certain lenders entered into an
amended and restated loan and security agreement pursuant to which we will have
$140.0 million in borrowing capacity and, at our option (and subject to certain
conditions precedent set forth in the loan agreement), we may increase our
borrowing capacity up to an additional $25.0 million. Borrowing
availability is based on a percentage of our inventory (excluding capitalized
indirect costs) and certain accounts receivable. This loan agreement
amends and supersedes our previous loan and security agreement dated as of
December 29, 2005.
Borrowings
under the loan agreement are guaranteed by West Marine, Inc. and West Marine
Canada Corp. (an indirect subsidiary of West Marine, Inc.) and secured by a
security interest in all of our accounts receivable and inventory, certain other
related assets, and all proceeds thereof. The amended and restated loan
agreement scheduled to terminate on August 23, 2014, at which time
we must repay all outstanding loans under the agreement.
The new
credit facility is available for general working capital and general corporate
purposes. On August 23, 2010, we had no outstanding amounts under the new loan
agreement other than approximately $4.8 million in aggregate of undrawn letters
of credit that were previously outstanding under our prior credit
facility.
At our
election, borrowings under the credit facility will bear interest at one of the
following options: (1) the prime rate, highest of (a) the federal funds rate, as
in effect from time to time, plus one-half of one percent, (b) the LIBOR rate
for a one-month interest period plus one percent, or (c) the rate of interest in
effect for such day as publicly announced from time to time by Wells Fargo as
its “prime rate”; or (2) the LIBOR rate quoted by the British Bankers
Association for the applicable interest period. In each case, the
applicable interest rate is increased by a margin imposed by the loan
agreement. The applicable margin for any date will depend upon the amount
of available credit under the revolving credit facility, and the margin range is
between 1.50% and 2.00% for option (1) and between 2.50% and 3.00% for option
(2). The loan agreement also imposes a commitment fee on the unused
portion of the revolving credit facility available.
The loan
agreement contains customary covenants including, but not limited to,
restrictions on the ability of West Marine, Inc. and its subsidiaries to incur
liens, make acquisitions and investments, pay dividends and sell or transfer
assets. Additionally, we must maintain a minimum revolving credit
availability equal to the greater of $7 million or 10% of the borrowing
base.
If certain
events of default occur, our obligations under the credit facility may be
accelerated and the lending commitments under the credit facility
terminated. These events of default include, after the expiration of
any applicable grace periods, payment defaults to the lenders, material
inaccuracies of representations and warranties, covenant defaults, material
payment defaults (other than under the credit facility), voluntary and
involuntary bankruptcy proceedings, material money judgments, material ERISA
events, change of control and other customary defaults.
The
description set forth in this Item 1.01 is qualified in its entirety by
reference to the full text of the amended and restated loan and security
agreement filed with this report as Exhibit 10.1.
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Item
9.01.
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Financial
Statements and Exhibits.
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(a) Not
Applicable.
(b) Not
Applicable.
(c) Not
Applicable.
(d) Exhibit:
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10.1
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Amended
and Restated Loan and Security Agreement, dated as of August 23, 2010, by
and among West Marine Products, Inc., West Marine Puerto Rico, Inc. and W
Marine Management Company, Inc., as borrowers, West Marine, Inc. and West
Marine Canada Corp., as guarantors, Wells Fargo Retail Finance, LLC, as
arranger and administrative agent, Wells Fargo Bank, National Association,
as issuing lender, and Bank of America, N.A. and Union Bank, N.A., as the
other lenders.
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SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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WEST
MARINE, INC.
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Date: August
27, 2010
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By:
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/s/ Thomas R. Moran
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Thomas
R. Moran
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Senior
Vice President and
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Chief
Financial Officer
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