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| CWTR > SEC Filings for CWTR > Form 8-K/A on 13-Jul-2012 | All Recent SEC Filings |
13-Jul-2012
Entry into a Material Definitive Agreement, Creation of a Direct Financial
Amended and Restated Credit Agreement
On July 9, 2012, Coldwater Creek Inc. (the "Company"), through its wholly-owned subsidiaries Coldwater Creek U.S. Inc., Coldwater Creek The Spa, Inc. and Coldwater Creek Merchandising & Logistics Inc. (the "Borrowers"), the Company and certain other subsidiaries of the Company, as guarantors (the "Guarantors"), entered into a Limited Waiver and First Amendment to Amended and Restated Credit Agreement (the "ABL Amendment") with Wells Fargo Bank, National Association ("Wells Fargo Bank") and Wells Fargo Credit, Inc. (the "Term Loan Agent") to, amend that certain Amended and Restated Credit Agreement, dated as of May 16, 2011, by and among the Borrowers, the Guarantors, Wells Fargo Bank and the Term Loan Agent (the "ABL Agreement"), to among other things, provide for the repayment in full of the Borrowers' $15.0 million term loan provided under the ABL Agreement from the proceeds of the Term Loan Agreement (as defined herein). The ABL Amendment also amended certain covenants and representations and warranties in the ABL Agreement to make them consistent with the Term Loan Agreement.
The foregoing description of the ABL Amendment is qualified in its entirety by reference to the ABL Amendment, which is attached hereto as Exhibit 10.1 and incorporated by reference herein.
Term Loan Agreement
On July 9, 2012, the Borrowers received a $65.0 million term loan (the "Term Loan") pursuant to a Term Loan Agreement with affiliates of Golden Gate Private Equity, Inc. ("GGC") (the "Term Loan Agreement"). The loan under the Term Loan Agreement was advanced to the Borrowers on July 9, 2012.
The Term Loan bears interest initially at an interest rate equal to 5.5% per annum in cash, due and payable quarterly in arrears, and 7.5% per annum, due and payable in kind ("PIK") quarterly in arrears, with adjustments to the cash and PIK portions of the interest rate in accordance with the Term Loan Agreement, following principal repayments. The Term Loan is scheduled to mature upon the earlier of July 9, 2017 or the date that the obligations under the ABL Agreement (or an agreement refinancing such indebtedness) mature or are accelerated. The obligations under the ABL Agreement are currently scheduled to mature on May 16, 2016.
The Term Loan Agreement is guaranteed by the Company and each of the Company's domestic subsidiaries that are not Borrowers and will be guaranteed by any future domestic subsidiaries of the Company. The Term Loan Agreement is secured by a first priority security interest in all assets of the Company and its subsidiaries, except that such lien will be second priority in the case of inventory, receivables and related assets that are subject to a first priority security interest under the ABL Agreement.
The Term Loan Agreement also contains certain financial, business and operational covenants, including a $15.0 million minimum liquidity covenant, as well as financial covenants related to capital expenditures, minimum inventory book value and maximum usage of the revolving credit facility under the ABL Agreement as a percentage of the borrowing base value under the ABL Agreement. The Term Loan Agreement also contains various restrictive covenants relating to customary matters, such as indebtedness, liens, investments, acquisitions, mergers, dispositions and dividends. Any prepayment of the Term Loan prior to the maturity date, including any mandatory prepayments in connection with an asset disposition or change of control, will require a premium and/or make-whole payment
Upon the occurrence of an event of default under the Term Loan Agreement, the lenders may declare the unpaid principal, interest amount and any applicable premiums and/or make whole amounts, of all outstanding loans to be immediately due and payable. The Term Loan Agreement specifies a number of events of default (some of which are subject to applicable grace or cure periods), including, among other things, the failure to make timely principal and interest payments or to satisfy the covenants contained therein.
The proceeds of the Term Loan Agreement will be used for debt repayment, to finance the acquisition of working capital assets, and for other general corporate purposes. On July 9, 2012, the Company used $14.8 million of the proceeds to repay its term loan with Wells Fargo Bank.
The foregoing description of the Term Loan Agreement is qualified in its . . .
The information about the Term Loan Agreement set forth in Item 1.01 under the heading "Term Loan Agreement" is incorporated by reference into this Item 2.03.
The information about the Series A Preferred set forth in Item 1.01 under the
heading "Stock Purchase and Investor Rights Agreement" is incorporated by
reference into this Item 3.02. The issuance and sale of the Series A Preferred
were conducted in reliance on the exemption from registration provided by
Section 4(2) of the Securities Act of 1933, as amended (the "Securities Act").
Neither the Series A Preferred nor the underlying Common Stock of the Company
issuable upon conversion of the Series A Preferred has been registered under the
Securities Act and neither may be offered or sold in the United States absent
registration or an applicable exemption from registration requirements.
The Company's Board of Directors approved the appointment of Neale Attenborough to the Board, effective July 9, 2012. Mr. Attenborough was designated as a Class I director of the Board and was appointed by the Series A Holder pursuant to the terms of the Stock Purchase Agreement and the Certificate of Designation. Mr. Attenborough is an Operating Partner of GGC.
On July 9, 2012, the Company filed the Certificate of Designation of Preferences of Convertible Series A Preferred Stock of the Company (the "Certificate of Designation") establishing the rights, preferences and privileges of the Series A Preferred. Shares of Series A Preferred are convertible at any time on or prior to July 9, 2022 into Common Stock of the Company at an initial conversion rate of 24,351.504 shares of common stock for each share of Series A Preferred. The Common Stock underlying the Series A Preferred represents 19.99% of the Company's outstanding Common Stock as of July 9, 2012, and 16.67% on a fully-diluted basis. The Series A Preferred is convertible into shares of the Common Stock at an initial exercise price of $0.85 per share of underlying Common Stock (subject to adjustment for certain dilutive issuances). In the event of a change of control transaction, the Series A Preferred will automatically convert into Common Stock on a net-exercise basis.
The Series A Preferred is mandatorily redeemable by the Company on July 9, 2022 for a cash amount equal to the net exercise value of the Series A Preferred. The Series A Preferred is not otherwise redeemable at the Company's option.
The description of the right of the Series A Holder to elect members to the Board of Directors as described in Item 1.01 is incorporated by reference herein. The Series A Preferred will vote on an as-converted basis with the Common Stock on all other matters, including with respect to the election of the other directors.
(d) Exhibits
3.1 Certificate of Designation of Preferences of Convertible Series A
Preferred Stock of the Company.
10.1 Limited Waiver and First Amendment to Amended and Restated Credit
Agreement dated as of July 9, 2012 among the Borrowers and Guarantors
thereto, the lenders party thereto, Wells Fargo Bank, National
Association (as successor by merger to Wells Fargo Retail Finance,
LLC), as Administrative Agent, Collateral Agent and Swing Line Lender,
and Wells Fargo Credit, Inc.
10.2 Term Loan Agreement dated as of July 9, 2012 among the Borrowers and
Guarantors thereto, the Lenders party thereto and CC Holdings Agency
Corp.
10.3 Stock Purchase and Investor Rights Agreement, dated as of July 9, 2012,
between the Company and CC Holdings of Delaware, LLC - Series A.
10.4 Registration Rights Agreement, dated as of July 9, 2011, between the
Company and CC Holdings of Delaware, LLC - Series A.
99.1 Press Release, dated July 9, 2012, issued by the Company.
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