UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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 9, 2003
PARTY CITY CORPORATION
(Exact name of registrant as specified in its chapter)
DELAWARE 0-27826 22-3033692
(State or other jurisdiction (Commission File (IRS Employer Identification
of incorporation) Number) No.)
400 COMMONS WAY, ROCKAWAY, NJ 07866
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (973) 983-0888
3
ITEM 5. OTHER EVENTS.
On January 10, 2003, Party City Corporation ("Party City" or the "Company")
announced that it had replaced its existing revolving credit facility with a new
revolving credit facility with Wells Fargo Retail Finance, LLC ("WFRF"), as the
arranger, collateral agent and administrative agent, and Fleet Retail Finance,
Inc. ("Fleet"), as the documentation agent.
Under the terms of the Loan and Security Agreement (the "Loan Agreement")
which the Company entered into with WFRF and Fleet, the Company may from time to
time borrow amounts based on a percentage of its eligible inventory and credit
card receivables, up to a maximum of $65 million at any time outstanding
(subject to certain borrowing conditions and customary sublimits, reserves and
other limitations). Advances will bear interest, at the Company's option, (i) at
the adjusted Eurodollar rate plus the applicable margin, which will initially be
1.50% per annum (subject, from and after March 29, 2003, to possible reduction
to 1.25% per annum or increase to 1.75% per annum based on the Company's excess
availability) or (ii) at the rate of 0.25% per annum below the prime rate. The
term of the Loan Agreement is three years, and the credit facility is secured by
a lien on substantially all of the Company's assets. The foregoing description
is qualified in its entirety by reference to the Loan and Security Agreement,
which is attached hereto as Exhibit 10.1 and is incorporated herein by
reference.
The Company will use initial amounts borrowed under the Loan Agreement (i)
to pay off all amounts owing under the current credit facility, (ii) to pay fees
and expenses in connection with entering into the Loan Agreement and (iii) for
working capital purposes.
A copy of the press release announcing the foregoing is attached hereto as
Exhibit 99.1 and is incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial statements of businesses acquired: None
(b) Pro forma financial information: None
(c) Exhibits:
10.1 Loan and Security Agreement, dated as of January 9, 2003, by and
among Party City Corporation, as Borrower, the Lenders that are
signatories thereto, as the Lenders, Wells Fargo Retail Finance,
LLC, as the Arranger, Collateral Agent and Administrative Agent,
and Fleet Retail Finance, Inc., as the Documentation Agent.
99.1 Press Release issued by Party City Corporation on January 10,
2003.
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.
PARTY CITY CORPORATION
By: /s/ Linda M. Siluk
-----------------------
Name: Linda M. Siluk
Title: Chief Financial Officer
Date: January 10, 2003
EXHIBIT INDEX
Exhibit
Number Description
------- -----------
10.1 Loan and Security Agreement, dated as of January 9, 2003, by and among
Party City Corporation, as Borrower, the Lenders that are signatories
thereto, as the Lenders, Wells Fargo Retail Finance, LLC, as the
Arranger, Collateral Agent and Administrative Agent, and Fleet Retail
Finance, Inc., as the Documentation Agent
99.1 Press Release issued by Party City Corporation on January 10, 2003