Rayovac 2009 Annual Report Download - page 75

Table of Contents
Index to Financial Statements
administrative and co−collateral agent (the “Agent”) with a participating interest from each of Harbinger Capital Partners Master Fund I, Ltd. and Harbinger
Capital Partners Special Situations Fund, L.P., D. E. Shaw Laminar Portfolios, L.L.C. and Avenue International Master, L.P., Avenue Investments, L.P.,
Avenue Special Situations Fund V, L.P., Avenue Special Situations Fund IV, L.P. and Avenue−CDP Global Opportunities Fund, L.P. The ABL Revolving
Credit Facility replaced our debtor−in−possession credit facility, which was simultaneously prepaid using cash on hand generated from our operations and
available cash from prior borrowings under the ABL Revolving Credit Facility. The ABL Revolving Credit Facility consists of (a) revolving loans (the
“Revolving Loans”), with a portion available for letters of credit and a portion available as swing line loans, in each case subject to the terms and limits
described therein, and (b) a supplemental loan (the “Supplemental Loan”), in the form of an asset based revolving loan, in an amount up to $45 million.
The Revolving Loans may be drawn, repaid and reborrowed without premium or penalty. The Supplemental Loan shall be repaid after payment in full
of the Revolving Loans and all other obligations due and payable under the ABL Revolving Credit Facility. The proceeds of borrowings under the ABL
Revolving Credit Facility and Supplemental Loan are to be used for costs, expenses and fees in connection with the ABL Revolving Credit Facility, for our
working capital requirements, restructuring costs and other general corporate purposes.
The ABL Revolving Credit Facility carries an interest rate, at our option, of either (a) the base rate plus 3.0% per annum or (b) the reserve−adjusted
LIBOR rate (the “Eurodollar Rate”) plus 4.0% per annum, except that the Supplemental Loan carries an interest rate, equal to the Eurodollar Rate plus
14.5% per annum. No amortization will be required with respect to the ABL Revolving Credit Facility. For purposes of the Revolving Loans, the Eurodollar
Rate shall at no time be less than 2.5%. For purposes of the Supplemental Loans, the Eurodollar Rate shall at no time be less than 3.00%. The ABL
Revolving Credit Facility will mature on March 31, 2012.
As a result of borrowings and payments under the ABL Revolving Credit Facility during the one month period ended September 30, 2009, we had
aggregate borrowing availability of approximately $129 million, net of lender reserves of $20 million and outstanding letters of credit of $6 million under
the ABL Revolving Credit Facility.
The ABL Credit Agreement contains various representations and warranties and covenants, including, without limitation, enhanced collateral
reporting and a maximum fixed charge coverage ratio. The ABL Credit Agreement also provides for customary events of default, including payment
defaults and cross−defaults on other material indebtedness.
At September 30, 2009, the aggregate amount outstanding under the ABL Revolving Credit Facility totaled $84 million under the Revolving ABL
Credit Facility, which includes the Supplemental Loan of $45 million and $6 million in outstanding letters of credit.
As of September 30, 2009, we were in compliance with all covenants under the ABL Credit Agreement.
12% Notes
On August 28, 2009, in connection with our emergence from voluntary reorganization under Chapter 11 of the Bankruptcy Code and pursuant to the
Plan, we issued $218 million in aggregate principal amount of 12% Notes maturing August 28, 2019. Semiannually, at our option, we may elect to pay
interest on the 12% Notes in cash or as payment in kind, or “PIK”. PIK interest would be added to principal upon the relevant semi−annual interest payment
date. Under the Term Credit Amendments, we agreed to make interest payments on the 12% Notes through PIK for the first three semi−annual interest
payment periods.
We may redeem all or a part of the 12% Notes, upon not less than 30 or more than 60 days notice, beginning August 28, 2012 at specified redemption
prices. Further, the indenture governing the 12% Notes require we make an offer, in cash, to repurchase all or a portion of the applicable outstanding notes
for a specified redemption price, including a redemption premium, upon the occurrence of a change of control, as defined in such indenture.
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