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):
January 24, 1995 (November 17, 1994)
INTERCO INCORPORATED
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(Exact name of Registrant as specified in charter)
Delaware I-91 43-0337683
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(State of (Commission (IRS Employer
Incorporation) File Number) Identification Number)
101 South Hanley Road, St. Louis, Missouri 63105
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(Address of principal executive offices)
(314) 863-1100
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(Registrant's telephone number)
Item 5. Other Events
On November 17, 1994, INTERCO INCORPORATED (the "Company"),
Broyhill Industries, Inc. ("Broyhill") and The Lane Company,
Incorporated, ("Lane") (collectively, the "Borrowers") entered
into a $285 million term loan agreement and a $75 million
revolving credit facility with Bankers Trust Company, as agent,
and other institutional lenders (collectively, the "Lenders")
(the "Secured Credit Agreement"). On the same date, Interco
Receivables Corp. ("IRC"), an indirect wholly-owned subsidiary,
entered into a $150 million receivables securitization facility
with an affiliate of Credit Lyonnais New York Branch ("Credit
Lyonnais") (the "Receivables Facility"). Proceeds from the $285
million term loan as well as the proceeds from the Receivables
Facility were used to repay certain outstanding indebtedness
issued in 1992 in connection with the reorganization of the
Company (the "Refinancing Transaction"). The $75 million
revolving credit facility will be used to fund the Company's
working capital needs.
The following is a summary description of these agreements,
which are filed hereto as exhibits, and such summary description
is qualified in its entirety by reference to such exhibits.
The Secured Credit Agreement, which will expire on November
17, 2001, provides for (i) an aggregate revolving loan commitment
of up to $75 million, which may be used for the issuance of
standby and trade letters of credit and for revolving loans, and
(ii) a term loan facility of $285 million, which term loan was
extended to finance the Refinancing Transaction and to pay fees
and expenses in connection with the consummation of the
Refinancing Transaction. The term loan is subject to scheduled
semiannual amortizations and other mandatory repayments as set
forth in the Secured Credit Agreement.
Borrowings under the Secured Credit Agreement bear interest
either at the Base Rate (as defined in the Secured Credit
Agreement) plus the Applicable Margin or at the Eurodollar Rate
(as defined in the Secured Credit Agreement) plus the Applicable
Margin. The Applicable Margin, in the case of Base Rate loans,
equals .75%, and in the case of Eurodollar Rate loans, equals
1.75%, in each case subject to reduction based upon certain
financial performance criteria.
Obligations outstanding under the Secured Credit Agreement
are secured by a guaranty executed by Broyhill Transport, Inc.,
Lane Advertising, Inc., Action Industries, Inc. and Action
Transport, Inc. (the "Subsidiary Guarantors"). Obligations
outstanding under the Secured Credit Agreement are further
secured by a first priority lien on substantially all of the
assets owned by the Borrowers and the Subsidiary Guarantors,
including accounts receivable (excluding trade receivables sold
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pursuant to the Receivables Facility), inventory, fixed assets,
general intangibles (including trademarks) and all proceeds
thereof, subject to certain exceptions. The Lenders are also
entitled to offset amounts outstanding under the Secured Credit
Agreement against certain deposit accounts of the Borrowers upon
the occurrence of an event of default under the Secured Credit
Agreement.
The Secured Credit Agreement contains covenants and
provisions that restrict, among other things, the Borrowers'
ability to: (i) incur additional indebtedness; (ii) incur liens
on their property; (iii) make investments and advances; (iv)
enter into guarantees and other contingent obligations; (v) merge
or consolidate with or acquire another person or engage in other
fundamental changes; (vi) engage in certain sales of assets;
(vii) make capital expenditures; (viii) engage in certain
transactions with affiliates; (ix) make restricted junior
payments; (x) pay dividends or acquire their capital stock; and
(xi) issue certain preferred and common stock. The Secured
Credit Agreement also requires the satisfaction of certain
financial performance criteria (including consolidated net
interest coverage ratio and maximum leverage ratio) and the
repayment of loans under the Secured Credit Agreement with
proceeds of certain sales of assets.
Events of default under the Secured Credit Agreement
include, among other things: (i) any failure of the Borrowers to
pay principal and interest thereunder when due; (ii) default
under indebtedness involving an aggregate outstanding principal
amount in excess of $5 million; (iii) noncompliance with or
breach of certain covenants contained in the Secured Credit
Agreement and certain related documents; (iv) material inaccuracy
of any representation or warranty made by the Borrowers in the
Secured Credit Agreement and certain related documents; (v)
certain events of bankruptcy or insolvency; (vi) impairment of
collateral; (vii) invalidity of obligations created by the
Secured Credit Agreement and related documents; (viii) a Change
of Control (as defined in the Secured Credit Agreement); and (ix)
the repurchase by the Borrowers of accounts receivable from the
receivables subsidiary in excess of $15 million in any fiscal
year.
The Receivables Facility provides up to $150 million in
financing secured by the trade receivables portfolio of the
Company's subsidiaries, Broyhill and Lane, and of Lane's
subsidiary, Action Industries, Inc. ("Action") (collectively, the
"Furniture Companies"). On November 17, 1994, the Effective Date
of the Agreement, $130 million was drawn against the Receivables
Facility.
Under the terms of the Receivables Facility, the Furniture
Companies have entered into a Purchase and Contribution Agreement
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with IRC, a bankruptcy-remote special purpose subsidiary of the
Furniture Companies, whereby the Furniture Companies have sold
all of their trade accounts receivable to IRC. At the same time,
IRC has entered into a Receivables Purchase Agreement with
Atlantic Asset Securitization Corp. ("Atlantic"), an affiliate of
Credit Lyonnais, by which IRC has sold undivided interests in
those receivables to Atlantic. The Furniture Companies have also
entered into a Servicer Agreement with IRC, whereby they have
agreed to handle the servicing and collection of the trade
receivables sold to IRC.
The Receivables Facility has a term of five years. The
monthly interest expense payable by IRC to Atlantic under the
Receivables Purchase Agreement is calculated at the one-month
commercial paper rate for AA-rated firms for all amounts drawn
plus 0.65% per annum on the entire $150 million facility.
The Receivables Facility contains covenants and provisions
that obligate or restrict the Furniture Companies or IRC, in
certain respects, including: (i) the delivery of certain
financial reports, (ii) providing access to books and records
with respect to the receivables portfolio, (iii) an agreement not
to sell, assign or pledge any receivable otherwise sold to IRC,
(iv) to maintain the corporate separateness of IRC, (v)
maintenance of certain financial ratios, generally at a rate
somewhat stricter than those covenants included in the Secured
Credit Agreement.
Events of default under the Receivables Facility will
include, among other things: (i) any failure to pay fees
thereunder when due; (ii) default under indebtedness involving an
aggregate outstanding principal amount in excess of specified
levels, if the effect of the default is to permit acceleration of
such indebtedness; (iii) noncompliance with or breach of certain
covenants contained in the Receivables Facility and certain
related documents; (iv) material inaccuracy of any representation
or warranty made by the Furniture Companies or IRC in the
Receivables Facility and certain related documents; (v) certain
events of bankruptcy or insolvency; (vi) impairment of
collateral; and (vii) invalidity of obligations created by the
Receivables Facility and related documents.
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Item 7. Exhibits
10(a). Credit Agreement, dated as of November 17, 1994,
among the Company, Broyhill Furniture Industries,
Inc., The Lane Company, Incorporated, Various
Banks, and Bankers Trust Company, as Agent.
10(b). Purchase and Contribution Agreement, dated as of
November 15, 1994 among The Lane Company,
Incorporated, Action Industries, Inc. and Broyhill
Furniture Industries, Inc. as Sellers and Interco
Receivables Corp. as Purchaser.
10(c). Receivables Purchase Agreement, dated as of
November 15, 1994 among Interco Receivables Corp.
as the Seller and Atlantic Asset Securitization
Corp. as an Investor and Credit Lyonnais New York
Branch as the Agent.
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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 thereunto duly authorized.
INTERCO INCORPORATED
BY: Steven W. Alstadt
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Steven W. Alstadt
Controller and Chief
Accounting Officer
January 24, 1995
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