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): July 24, 2017

 

 

SPORTSMAN’S WAREHOUSE HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

 

 

Registrant’s telephone number, including area code (801) 566-6681

 

 

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):

 

 

 

 

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company  ☒

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act: ☒

 

 

 

Item 1.01Entry into a Material Definitive Agreement.

On July 24, 2017, Sportsman’s Warehouse, Inc. (“SWI”), a wholly owned subsidiary of Sportsman’s Warehouse Holdings, Inc. (the “Company”), as borrower, and Wells Fargo Bank, National Association (“Wells Fargo”), as administrative agent, collateral agent, and swing line lender, entered into the eighth amendment (the “Eighth Amendment”) to the Credit Agreement, dated May 28, 2010, by and among SWI, the Company, Wells Fargo and the other lenders party thereto (as amended, restated, supplemented or otherwise modified, the “Credit Agreement”).

The Eighth Amendment increases the amount available to borrow under the Company’s senior secured revolving credit facility by $15.0 million to $150.0 million, subject to a borrowing base calculation, and lowers the interest rate paid on borrowings under the revolving credit facility by 25 basis points.  The applicable margin for loans under the revolving credit facility, which varies based on the average daily availability, now ranges from 0.25% to 0.75% per year for base rate loans and from 1.25% to 1.75% per year for LIBOR loans.  The Eighth Amendment, among other items, also extends the maturity date of the revolving credit facility from December 3, 2019 to the earlier to occur of (x) the date that is 90 days prior to the maturity date of our senior secured term loan, which maturity date is currently December 3, 2020, unless the term loan has been repaid to the extent permitted under the Credit Agreement or the term loan maturity has been extended to October 23, 2022 or later and (y) July 24, 2022. The Company did not make any borrowings under the revolving credit facility in connection with the Eighth Amendment.

Except as otherwise specifically amended by the Eighth Amendment, all of the terms of the Credit Agreement remain the same.

The foregoing description of the Eighth Amendment does not purport to be complete and is qualified in its entirety by reference to the full text of the Eighth Amendment, which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.

The following exhibit is being filed as part of this report:

 

SIGNATURES

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.

 

 

Date: July 24, 2017

EIGHTH AMENDMENT TO CREDIT AGREEMENT

This Eighth Amendment to Credit Agreement (this “Amendment”) is made as of July 24, 2017,  by and among:

SPORTSMAN’S WAREHOUSE, INC., a Utah corporation (the “Lead Borrower”);

the Persons named on Schedule I hereto (together with the Lead Borrower, individually, a  “Borrower”, and collectively, the “Borrowers”);

the Persons named on Schedule II hereto (individually, a “Guarantor”, and collectively, the “Guarantors”, and together with the Borrowers, individually, a  “Loan Party”, and collectively the “Loan Parties”);

the LENDERS party hereto; and

WELLS FARGO BANK, NATIONAL ASSOCIATION (as successor by merger to Wells Fargo Retail Finance, LLC), as Administrative Agent, Collateral Agent, and Swing Line Lender;

in consideration of the mutual covenants herein contained and benefits to be derived herefrom.

W I T N E S S E T H:

WHEREAS, reference is made to that certain Credit Agreement, dated as of May 28, 2010 (as amended, restated, supplemented or otherwise modified and in effect from time to time, the “Credit Agreement”), by and among the Loan Parties, the Lenders party thereto from time to time, and Wells Fargo Bank, National Association (as successor by merger to Wells Fargo Retail Finance, LLC), as Administrative Agent, Collateral Agent and Swing Line Lender;

WHEREAS, the parties hereto have agreed to amend certain provisions of the Credit Agreement as set forth herein.

NOW, THEREFORE, in consideration of the premises contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

(i)        By deleting the definition of “Accelerated Borrowing Base Delivery Event” in its entirety therefrom and substituting in its stead the following new definition:

“Accelerated Borrowing Base Delivery Event” means either (i) the occurrence and continuance of any Event of Default, or (ii) the failure of the Borrowers to maintain Availability at least equal to twenty percent (20%) of the Loan Cap at any time.  For purposes of this Agreement, the occurrence of an Accelerated Borrowing Base Delivery Event shall be deemed continuing at the Administrative Agent’s option (i) so long as such Event of Default has not been waived, and/or (ii) if the Accelerated Borrowing Base Delivery Event arises as a result of the Borrowers’ failure to achieve Availability as required hereunder, until Availability has exceeded twenty percent (20%) of the Loan Cap for forty-two (42) consecutive calendar days, in which case an Accelerated Borrowing Base Delivery Event shall no longer be deemed to be continuing for purposes of this Agreement.  The termination of an Accelerated Borrowing Base Delivery Event as provided herein shall in no way limit, waive or delay the occurrence of a subsequent Accelerated Borrowing Base Delivery Event in the event that the conditions set forth in this definition again arise.

(ii)       By deleting the definition of “Aggregate Commitments” in its entirety therefrom and substituting in its stead the following new definition:

“Aggregate Commitments” means the Commitments of all the Lenders.  As of the Eighth Amendment Effective Date, the Aggregate Commitments are $150,000,000.

(iii)      By deleting the pricing grid set forth in the definition of “Applicable Margin” in its entirety therefrom and substituting in its stead the following pricing grid:

 

(iv)      By deleting clause (b) of the definition of “Borrowing Base” in its entirety therefrom and substituting in its stead the following:

“(b)the Cost of Eligible Inventory, net of Inventory Reserves, multiplied by the product of (A) Appraisal Percentage multiplied by (B) the Appraised Value of Eligible Inventory;”

(v)       By deleting the definition of “Cash Dominion Event” in its entirety therefrom and substituting in its stead the following new definition:

“Cash Dominion Event” means either (i) the occurrence and continuance of any Event of Default, or (ii) the failure of the Borrowers to maintain Availability at least equal to twenty percent (20%) of the Loan Cap at any time.  For purposes of this Agreement, the occurrence of a Cash Dominion Event shall be deemed continuing at the Agent’s option (i) so long as such Event of Default has not been waived, and/or (ii) if the Cash Dominion Event arises as a result of the Borrowers’ failure to achieve Availability as required hereunder, until Availability has exceeded 20% of the Loan Cap for ninety (90) consecutive Business Days, in which case a Cash Dominion Event shall no longer be deemed to be continuing for purposes of this Agreement; provided that a Cash Dominion Event shall be deemed continuing (even if an Event of Default is no longer continuing and/or Availability exceeds the required amount for ninety (90) consecutive Business Days) at all times after a Cash Dominion Event has occurred and been discontinued on two (2) occasions after the Eighth Amendment Effective Date. The termination of a Cash Dominion Event as provided herein shall in no way limit, waive or delay the occurrence of a subsequent Cash Dominion Event in the event that the conditions set forth in this definition again arise.

(vi)      By deleting “other than the Sponsor” in the third line of the definition of “Change of Control”.

(vii)     By deleting the definition of “Fee Letter” in its entirety therefrom and substituting in its stead the following new definition:

“Fee Letter” means, collectively, (i) the letter agreement, dated May 28, 2010, among the Lead Borrower and the Administrative Agent, (ii) the letter agreement, dated October 27, 2011, by and among the Borrowers and the Administrative Agent, (iii) the Third Amendment Fee Letter, (iv) the Fifth Amendment Fee Letter, (v) the Sixth Amendment Fee Letter, and (v) the Eighth Amendment Fee Letter.

(viii)    By deleting the definition of “Maturity Date” in its entirety therefrom and substituting in its stead the following new definition:

“Maturity Date” means the earlier to occur of (x) July 24, 2022 and (y) the date that is ninety (90) days prior to the maturity date of the Term Credit Agreement unless the Indebtedness thereunder has been repaid (including as a result of Permitted Refinancing Indebtedness) to the extent permitted hereunder or such maturity date has been extended to a date which is at least ninety-one (91) days after the Maturity Date set forth in clause (x) above.

(ix)      By deleting the definitions of “Additional Commitment Lender”, “Increase Effective Date”, “Inventory Advance Rate” and “Sponsor” in their entirety therefrom.

(x)       By adding the following new definitions thereto in appropriate alphabetical order:

“Eighth Amendment Fee Letter” means the letter agreement, dated as of the Eighth Amendment Effective Date, by and among the Borrowers and the Administrative Agent.

“Eighth Amendment Effective Date” means July 24, 2017.

(i)        By deleting “0.375%” where it appears in Section 2.09(a) thereof, and by substituting “0.25%” in its stead.

(ii)       By deleting Section 2.15 thereof in its entirety and by substituting the following in its stead:

“2.15Reserved.”

“(b)  Upon the request of the Administrative Agent after reasonable prior notice, permit the Administrative Agent or professionals (including investment bankers, consultants, accountants, lawyers and appraisers) retained by the Administrative Agent to conduct appraisals, commercial finance examinations and other evaluations, including, without limitation, of (i) the Lead Borrower’s practices in the computation of the Borrowing Base and (ii) the assets included in the Borrowing Base and related financial information such as, but not limited to, sales, gross margins, payables, accruals and reserves.  The Loan Parties shall pay the fees and expenses of the Administrative Agent and such professionals with respect to such evaluations and appraisals.  Without limiting the foregoing, the Loan Parties acknowledge that the

Administrative Agent may, in its discretion, undertake, at the Loan Parties’ expense, up to (X) one (1) inventory appraisal and one (1) commercial finance examination in any Fiscal Year when Availability is at all times during such Fiscal Year greater than 35% of the Loan Cap, (Y) up to two (2) inventory appraisals and two (2) commercial finance examinations in any Fiscal Year when Availability is at any time during such Fiscal Year is less than or equal to 35% of the Loan Cap but greater than 20% of the Loan Cap, and (Z) up to three (3) inventory appraisals in any Fiscal Year when Availability is at any time during such Fiscal Year less than or equal to 20% of the Loan Cap.  Notwithstanding anything to the contrary contained herein, the Administrative Agent may cause additional inventory appraisals and commercial finance examinations to be undertaken (x) as it in its discretion deems necessary or appropriate, at its own expense, or (y) at the expense of the Loan Parties, at any time required by applicable Law or if a Default shall have occurred and be continuing.”

[SIGNATURE PAGES FOLLOW]

 

 

IN WITNESS WHEREOF, the parties have hereunto caused this Amendment to be executed and their seals to be hereto affixed as of the date first above written.

 

 

 

 

 

Schedule I

 

Borrowers other than the Lead Borrower

 

 

Sportsman’s Warehouse Southwest, Inc.

Minnesota Merchandising Corp.

Pacific Flyway Wholesale, LLC

Sportsman’s Warehouse Development I, LLC

Sportsman’s Warehouse Development II, LLC

 

 

Schedule II

 

Guarantors

 

Sportsman’s Warehouse Holdings, Inc., a Delaware corporation