SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C.
Form
8-K
CURRENT
REPORT PURSUANT
TO
SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
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Date
of report (Date of earliest event reported:)
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July
31, 2007
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Tandy
Leather Factory, Inc.
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(Exact
Name of Registrant as Specified in Its
Charter)
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Delaware
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(State
or Other Jurisdiction of
Incorporation
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1-12368
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75-2543540
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(Commission
File Number)
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(IRS
Employer Identification Number)
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3847
East Loop 820 South, Fort Worth, Texas
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76119
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(Address
of Principal Executive Offices)
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(Zip
Code)
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(817)
496-4414
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(Registrant’s
Telephone Number, Including Area
Code)
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(Former
Name or Former Address, if Changed Since Last
Report)
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Item
1.01.
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Entry
into a Material Definitive
Agreement
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On
July
31, 2007, Tandy Leather Factory, Inc., through its wholly-owned subsidiary,
The
Leather Factory, L.P. (the “Company”), entered into a Credit Agreement and Line
of Credit Note with JPMorgan Chase Bank, N.A. (“JPMorgan”), pursuant to which
JPMorgan agreed to provide a credit facility to the Company of up to $5,500,000
(the “Debt Facility”) to facilitate the Company’s purchase of real estate
consisting of a 195,000 square foot building situated on 30 acres of land
located at 1900 SE Loop 820 in Fort Worth, Texas (the “Property”).
Under
the
terms of the Line of Credit Note, the Company may borrow sums up to the lesser
of $5,500,000 or 90% of the cost of the Property from the period beginning
July 31, 2007 and ending April 30, 2008 (the “Draw Period”). During
the Draw Period, the Company will make interest only payments monthly, at
which
time the principal balance will be rolled into a 10-year term
note. Amounts drawn under the Credit Agreement accrue interest at a
rate of 7.10% per annum. The Credit Agreement contains a covenant by the
Company
that it will not permit its Debt Service Coverage Ratio to fall below 1.2
to 1.0
during any twelve month period. Other negative covenants by the
Company are also contained in the Credit Agreement.
The
Debt
Facility is secured by a Deed of Trust, Assignment of Leases and Rents, Security
Agreement and Financing Statement, dated July 31, 2007, by and among the
Company, Randall B. Durant, as trustee, and JP Morgan, granting JP Morgan
a
security interest in the Property.
Proceeds
from the first draw under the Debt Facility in the amount of $4,050,000 were
used to fund the purchase of the Property from Standard Motor Products, Inc.
under an Agreement of Purchase and Sale, dated June 25, 2007, which closed
on
July 31, 2007. The remaining credit line available under the Debt Facility
will
be used to remodel portions of the building. The Company expects to move
its
corporate headquarters, central warehouse and other support units into the
acquired building during the first quarter of 2008.
The
foregoing description of the Line of Credit Note, Credit Agreement, Deed of
Trust, Assignment of Leases and Rents, Security Agreement and Financing
Statement and Agreement of Purchase and Sale is not complete and
is qualified in its entirety by reference to the full text of such
agreements, which are filed as Exhibits 10.1, 10.2, 10.3 and 10.4,
respectively, to this Current Report on Form 8-K.
A
copy of
the press release announcing the transaction is furnished as Exhibit 99.1
to
this Current Report on Form 8-K.
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Item
2.01.
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Completion
of Acquisition of Assets
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The
information concerning the Agreement of Purchase and Sale set forth above
under
Item 1.01 is incorporated herein by reference.
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Item
2.03.
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Creation
of a Direct Financial Obligation or an Obligation under an Off-Balance
Sheet
Arrangement of a
Registrant
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The
information concerning the Line of Credit Note, Credit Agreement and Deed
of
Trust, Assignment of Leases and Rents, Security Agreement and Financing
Statement set forth above under Item 1.01 is incorporated herein by
reference.
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Item
9.01.
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Financial
Statements and Exhibits
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(b) Pro Forma Financial Information.
Since
it
is impracticable to provide the required financial statements for the acquired
real property described above at the time of this filing, and no financial
statements (audited or unaudited) are available at this time, the Company
hereby
confirms that the required financial statements will be filed on or before
71
days following the date of this filing, by amendment to this Form 8−K, which
date is within the period allowed to file such an amendment.
(d) Exhibits.
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Exhibit
Number
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Description
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10.1*
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Line
of Credit Note, dated July 31, 2007, by and between The Leather
Factory,
L.P. and JPMorgan Chase Bank, N.A.
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|
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10.2*
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Credit
Agreement, dated July 31, 2007, by and between The Leather Factory,
L.P.
and JPMorgan Chase Bank, N.A.
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|
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10.3*
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Deed
Of Trust, Assignment of Leases and Rents, Security Agreement and
Financing
Statement, dated as of July 31, 2007, by and among The Leather
Factory,
L.P., Randall B. Durant and JPMorgan Chase Bank, N.A.
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|
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10.4*
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Agreement
of Purchase and Sale, dated June 25, 2007, between The Leather
Factory, LP
and Standard Motor Products, Inc.
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99.1*
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Press
release, dated August 6, 2007.
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* Filed herewith.
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.
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TANDY
LEATHER FACTORY, INC.
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Date: August
6, 2007
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By: /s/
Ron Morgan
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Ron Morgan, Chief Executive Officer
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and President
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