WeightWatchers 2012 Annual Report Download - page 99

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WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
from time to time in effect. At December 29, 2012, the Term A-1 Loan bore interest at a rate equal to LIBO Rate
(Reserve Adjusted) plus 1.25% per annum; the Term B Loan bore interest at a rate equal to LIBO Rate (Reserve
Adjusted) plus 1.50% per annum; the Term C Loan bore interest at a rate equal to LIBO Rate (Reserve Adjusted)
plus 2.25% per annum; the Term D Loan bore interest at a rate equal to LIBO Rate (Reserve Adjusted) plus
2.25% per annum; the Term E Loan bore interest at a rate equal to LIBO Rate (Reserve Adjusted) plus 2.25% per
annum; the Term F Loan bore interest at a rate equal to LIBO Rate (Reserve Adjusted) plus 3.00% per annum;
the Revolver A-1 bore interest at a rate equal to LIBO Rate (Reserve Adjusted) plus 2.50% per annum; and the
Revolver A-2 bore interest at a rate equal to LIBO Rate (Reserve Adjusted) plus 2.25% per annum. For purposes
of calculating the interest rate on the Term F Loan, the LIBO Rate (Reserve Adjusted) will always be at least
1.00% per annum. In addition to paying interest on outstanding principal under the WWI Credit Facility, the
Company is required to pay an undrawn commitment fee to the lenders under each of the Revolver A-1 and the
Revolver A-2 with respect to the unused commitments under each such facility at a rate that is dependent on the
Company’s Net Debt to EBITDA Ratio from time to time in effect. As of December 29, 2012, the applicable
commitment fee rate for the Revolver A-1 was 0.50% per annum and for the Revolver A-2 was 0.40% per
annum.
The WWI Credit Facility contains customary covenants including covenants that, in certain circumstances,
restrict the Company’s ability to incur additional indebtedness, pay dividends on and redeem capital stock, make
other payments, including investments, sell its assets and enter into consolidations, mergers and transfers of all or
substantially all of its assets. The WWI Credit Facility also requires the Company to maintain specified financial
ratios and satisfy certain financial condition tests. At December 29, 2012, the Company was in compliance with
all of the required financial ratios and also met all of the financial condition tests, and expects to continue to do
so for the foreseeable future. The WWI Credit Facility contains customary events of default. Upon the
occurrence of an event of default under the WWI Credit Facility, the lenders thereunder may cease making loans
and declare amounts outstanding to be immediately due and payable. The WWI Credit Facility is guaranteed by
certain of the Company’s existing and future subsidiaries. Substantially all of the Company’s assets secure the
WWI Credit Facility.
The WWI Credit Facility allows the Company to make loan modification offers to all lenders of any tranche
of term loans or revolving commitments to extend the maturity date of such loans and/or commitments and/or
reduce or eliminate the scheduled amortization. Any such loan modifications would be effective only with
respect to such tranche of term loans or revolving commitments and only with respect to those lenders that accept
the Company’s offer. Loan modification offers may be accompanied by increased pricing and/or fees payable to
accepting lenders. The WWI Credit Facility also allows for up to an additional $400,000 of incremental financing
through the creation of either new tranches of term loans or through an increase in commitments under the
Revolver A-2, in each case to be provided to the Company under the WWI Credit Facility. The incremental
capacity is uncommitted and the Company must find lenders to provide any such financing prior to incurrence. In
addition, the Company may incur up to an additional $200,000 of incremental term loans through the creation of
a new tranche of term loans, provided that the aggregate principal amount of such new term loans cannot exceed
the amount then outstanding under its existing revolving credit facilities and the proceeds from such new tranche
of term loans must be used solely to repay certain outstanding revolving loans and permanently reduce the
commitments of certain revolving lenders.
F-17