Movado Group 8-K 2009
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) July 17, 2009
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 (see General Instruction A.2. below):
On July 17, 2009, Movado Group, Inc. (the “Company”), together with Movado Group Delaware Holdings Corporation, Movado Retail Group, Inc. and Movado LLC (together with the Company, the “Borrowers”), each a wholly-owned domestic subsidiary of the Company, entered into an Amended and Restated Loan and Security Agreement (the “Amended Loan Agreement”) with Bank of America, N.A. and Bank Leumi USA, as lenders, and Bank of America, N.A., as agent (in such capacity, the “Agent”), which amended and restated the Loan and Security Agreement dated as of June 5, 2009 among the Borrowers and Bank of America, N.A., as lender and agent (the “Existing Loan Agreement”).
The Amended Loan Agreement adds Leumi as a lender thereunder and, to accommodate Leumi holding up to $15.0 million of the Borrowers’ obligations thereunder, increases the size of the Borrowers’ asset based senior secured revolving credit facility (the “Facility”) from $50.0 million to $55.0 million, including a $15.0 million letter of credit subfacility. The maturity date of the Facility remains June 5, 2012. The collateral securing the Facility also remains unchanged.
Modifications to the Facility implemented under the Amended Loan Agreement include the following:
$10.0 million (increased from $7.5 million in the Existing Loan Agreement, but under the Amended Loan Agreement such threshold may be reduced to the extent the borrowing base exceeds $55.0 million, up to a maximum $5.0 million reduction), Borrowers will be subject to a minimum EBITDA covenant. Unlike under the Existing Loan Agreement, however, Borrowers will be subject to a minimum EBITDA covenant after the Block Release Date, as well, if borrowing availability is less than $15.0 million.
The guarantees and collateral securing the Facility remain unchanged. The representations and warranties and events of default remain unchanged as well and, except as described above, the covenants remain unchanged.
As of July 17, 2009, $40.0 million aggregate principal amount of loans and $1.5 million in letters of credit were outstanding under the Facility. As of July 17, 2009, total availability under the Facility, after giving effect to the availability block, the $40.0 million in outstanding loans and $1.5 million in outstanding letters of credit, was $8.5 million.
See the discussion under Item 1.01 above, which discussion is incorporated by reference herein.
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report on Form 8-K to be signed on its behalf by the undersigned, hereunto duly authorized.
Dated: July 23, 2009