Form 8-K RADIOSHACK CORP For: Jan 30
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
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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 27, 2015
RADIOSHACK CORPORATION
(Exact name of registrant as specified in its charter)
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Delaware
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1-5571
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75-1047710
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(State or other jurisdiction
of incorporation)
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(Commission File Number)
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(I.R.S. Employer
Identification No.)
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300 RadioShack Circle, Mail Stop CF3-203, Fort Worth, Texas 76102
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(Address of principal executive offices)
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������������(Zip Code)
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Registrants telephone number, including area code: (817) 415-3011
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:
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Written communications pursuant to Rule 425 under the Securities Act
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act
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Item 2.04. Triggering Events That Accelerate or Increase a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement.
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As previously disclosed on Form 8-K filed on December 2, 2014, on December�1, 2014, RadioShack Corporation (the Company ) received a notice of default and acceleration (the First Notice of Default ) from the SCP Agent (defined below) asserting that certain events of default had occurred and were continuing under the Credit Agreement, dated as of December�10, 2013 (the SCP Credit Agreement ), among the Company, certain subsidiaries of the Company that are designated as credit parties, the lenders party thereto (the SCP Lenders ) and Salus Capital Partners, LLC, as agent for the SCP Lenders (in such capacity, the SCP Agent ). In addition to asserting events of default, the First Notice of Default also included a demand by the SCP Agent for the immediate payment in full by the Company of the $250 million term loan outstanding under the SCP Credit Agreement, together with all accrued and unpaid interest thereon (all of which interest that was due on December�1, 2014 having been paid in full on that date) and any other amounts owing to the SCP Lenders thereunder.
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As noted in the First Notice of Default, on December 1, 2014, the SCP Agent sent a notice to the depositary bank at which the Company maintains a deposit account into which proceeds of certain residual accounts are to be deposited (the Residual Account Deposit Account ), instructing the depositary bank to prevent the Company from withdrawing funds on deposit in the Residual Account Deposit Account and directing the depositary bank to transfer all funds at any time on deposit in the Residual Account Deposit Account to the SCP Agent.
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On January 27, 2015, the Company received a notice of default (the Second Notice of Default ) from the SCP Agent asserting that an event of default has occurred and is continuing under the SCP Credit Agreement because the Company has not deposited all proceeds that it has received from the applicable residual accounts into the Residual Account Deposit Account.
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The SCP Agent alleges in the Second Notice of Default that the foregoing matters constitute continuing events of default under the SCP Credit Agreement.
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If it is determined that an event of default has occurred and is continuing under the SCP Credit Agreement, such event of default would also constitute an event of default under the Credit Agreement dated as of December 10, 2013, as amended by the First Amendment dated as of October 3, 2014 (the ABL Credit Agreement ), with the lenders party thereto and Cantor Fitzgerald Securities as administrative agent. If the maturity of the obligations outstanding under the SCP Credit Agreement is validly accelerated, then an event of default would occur under the Indenture, dated as of May�3, 2011, by and among the Company, the Guarantors named therein, and Wells Fargo Bank, National Association, as Trustee, which governs our $325 million of 6.75% Senior Notes. The occurrence of any such events of default under these other debt arrangements would permit the lenders thereunder (or the agent or trustee acting on their behalf) to declare all amounts outstanding thereunder to become immediately due and payable and to exercise other remedies set forth in the applicable debt documents.
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The foregoing description of the Second Notice of Default is not complete and is qualified in its entirety by reference to the full text of the Second Notice of Default, a copy of which is filed as Exhibit 99.1 hereto and incorporated herein by this reference.
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Item 9.01. Financial Statements and Exhibits.
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(d)�����������Exhibits.
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Exhibit
Number
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Description
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99.1
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Notice of Breach and Demand Letter, dated January 27, 2015
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Forward Looking Statements.
This report (including the documents furnished as Exhibits to this report) contains forward-looking statements, as referenced in the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect managements current views. These statements can be identified by the fact that they include words like our position, believe, estimate, expect, intend, project, guidance, plan, outlook and other words with similar meaning. These statements involve a number of risks and uncertainties that could cause actual results or circumstances to differ materially from those expressed or implied in our forward-looking statements, including the possibility that the Company may be unable to dispute the allegations of defaults under the term loan credit facility, the potential consequences of those allegations, including potential adverse effects on relationships between the Company and its business partners, other creditors (including in relation to cross-default provisions in our other credit agreement or debt indenture) and third parties, including suppliers and customers, and the continued availability of working capital financing. Any or all of these matters would have a material adverse effect on RadioShacks liquidity and financial viability. Additional information regarding these and other factors is included in RadioShacks filings with the SEC, including its most recent Annual Report on Form 10-K for the year ended Dec. 31, 2013 and Quarterly Reports on Form 10-Q. We specifically disclaim any duty to update any of the information set forth in this report, including any forward-looking statements.
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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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RadioShack Corporation
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(Registrant)
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Date: February 2, 2015
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/s/ Carlin Adrianopoli
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Carlin Adrianopoli
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Interim Chief Financial Officer
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(principal financial officer)
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INDEX TO EXHIBITS
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Exhibit
Number
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Description
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99.1
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Notice of Breach and Demand Letter, dated January 27, 2015
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Exhibit 99.1
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January 27, 2015
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VIA OVERNIGHT MAIL, FACSIMILE AND EMAIL
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| � RadioShack Corporation | � |
| � 300 RadioShack Circle | � |
| � Fort Worth, TX 76102-1964 | � |
| � Attn:�������Carlin Adrianopoli, Interim CPO | � |
| � cc:�����������Mr. Joseph C. Magnacca, CEO | � |
| ����������������� Robert Donohoo, General Counsel | � |
| � Facsimile: 817-415-3703 | � |
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Re:
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Notice of Breach and Demand Letter Regarding Residual Account Deposit Account
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Gentlemen:
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Reference is made to (i)��the Credit Agreement dated as of December 10, 2013 (as amended, restated, modified or supplemented from time to time, the "Credit Agreement"), by and among RadioShack Corporation and the other Persons party thereto that are designated as a "Credit Party" (collectively, the "Borrower"), Salus Capital Partners, LLC, as Agent (in such capacity, the "Agent'') for the several financial institutions from time to time party thereto . (collectively, the "Lenders" and each individually, a "Lender") and for itself as a Lender, and such Lenders and (ii) that certain Notice of Default and Acceleration and Reservation of Rights, dated as of December 1, 2014, from the Agent to the Borrower (the "Notice of Default"). Capitalized��terms used but not defined herein shall have the respective��meanings assigned thereto in the Credit Agreement and the Notice of Default, as applicable.
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Please take NOTICE that, in addition to the continuing Existing Events of Default, which are described in the Notice of Default, an additional Event of Default under the Credit Agreement has occurred and is continuing (such additional Event of Default referred to collectively herein with the Existing Events of Default as the Existing Events of Default"). Specifically, the Borrower has failed to deposit all proceeds that it has received from the Residual Accounts into the Residual Account Deposit Account, as required by Section 4.11 (i) of the Credit Agreement.
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In light of the foregoing, the Agent hereby DEMANDS that the Borrower immediately (i) provide a written accounting of all proceeds it has received with respect to the Residual Accounts from December 1, 2014 to the present; and (ii) deposit all proceeds that it has received from the Residual Accounts into the Residual Account Deposit Account.
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The Agent and the Lenders have certain rights and remedies with respect to the Existing Events of Default under the terms of the Credit Agreement and the other Loan Documents as well as applicable law, including, without limitation, the right to exercise any other remedies available under the Credit Agreement (including, without limitation, under Section 7.2 thereof) and the other Loan Documents, at law or in equity.��The Agent and the Lenders are presently evaluating all available courses of action that may be available under the Credit Agreement, the other Loan Documents, at law. or in equity. Accordingly, without waiving the Existing Events of Default, the Agent and the Lenders reserve all of their rights and remedies under the Credit
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Agreement, the Intercreditor Agreement, the other Loan Documents and applicable law.
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The Agent's and the Lenders' voluntary forbearance, if any, from exercising any of their rights, remedies, claims or causes of action is not intended (and should not be construed) as a waiver of the Existing Events of Default or of the Agent's and the Lenders' rights and remedies with respect thereto, all of which are hereby reserved and preserved in their entirety.
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This letter is not intended to establish a custom or course of dealing (including as a result of providing any notice to the Credit Parties hereunder that is not otherwise required notice under the Loan Documents) and does not waive, limit or postpone any of the liabilities or obligations of the Borrower or the other Credit Parties��under the Credit Agreement or any other Loan Documents or otherwise. and any discussion that has occurred or that may hereafter occur shall not be deemed to be a waiver, limitation or postponement of any of the Agent's or Lenders' rights and remedies under the Credit Agreement and the other Loan Documents, under applicable law or at equity, all of which rights and remedies are expressly reserved to the fullest extent by such parties.
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Nothing contained in, or omitted from, this letter shall constitute an amendment or waiver by the Agent or any Lender of any provision of the Credit Agreement or any other Loan Documents, and all provisions of the Credit Agreement and the other Loan Documents shall remain in full force and effect.��The Agent's and Lenders' failure to exercise, or delay in exercising, any right, remedy, power or privilege under the Credit Agreement and the other Loan Documents shall not operate as a waiver or amendment thereof or waive, affect or diminish any right of the Agent and the Lenders��thereafter to demand strict compliance and performance therewith. The delivery by the Agent of this letter shall not constitute or create a right to notice or demand on any future occasion.
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Very truly yours,
SALUS CAPITAL PARTNERS, LLC,
As Agent
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| � By:� | ���/s/ Kyle C. Shonak������������������������������������������� |
| � Name: | � Kyle C. Shonak |
| ��Title: | � Executive Vice President |
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| � cc:� | � Mr. Kevin P. Genda (via email and overnight mail) |
| � | � 875 Third Avenue |
| � | � New York, New York 10022� |
| � | � [email protected] |
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| � | � Frederic L. Ragucci (via email and overnight mail) |
| � | � Schulte Roth & Zabel LLP |
| � | � 919 Third Avenve New York, NY 10022 [email protected] |
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| � | � John E. Mazey, Esq. (via email and overnight mail) |
| � | � Jones Day LLP |
| � | � 2727 North Harwood Street Dallas, Texas 75201 1515 [email protected] |
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| � | � Choate, Hall & Stewart LLP (via email only) |
| � | � Attention: John F. Ventola |
| � | ��Email: [email protected] |
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| � | � Cantor Fitzgerald Securities (via email and overnight mail) |
| � | � 110 East 59t11 Street |
| � | � New York, New York 10022 |
| � | � Attention: Nils Homing |
| � | � Facsimile: (646) 219-1188 |
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| � | � Cantor Fitzgerald Securities (via email and overnight mail) |
| � | � 900 West Trade Street, Suite 725 |
| � | � Charlotte, North Carolina 28202 |
| � | � Attention: Bobbie Young |
| � | � Facsimile: (646) 390-1764 |
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| � | � Kaye Scholer LLP (via email and overnight mail) |
| � | � 250 West 55th Street |
| � | � New York, NY 10019-9710 |
| � | � Attention: H. Stephen Castro |
| � | � Facsimile: (212) 836-6360 |
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