Sunbeam 2004 Annual Report Download - page 61

Jarden Corporation
Notes to Consolidated Financial Statements (cont’d)
December 31, 2004
2003 Activity
In connection with the Lehigh Acquisition (see Note 3), the Company’s Amended Credit Agreement,
amended and restated in 2003, provided for up to $280 million of senior secured loans, consisting of a $70
million revolving credit facility, a $60 million term loan facility (“Term A”) and a second term loan facility
for $150 million (“Term B”). The second term loan facility bears interest at a rate equal to (i) the
Eurodollar Rate (as determined by the Administrative Agent) pursuant to an agreed formula or (ii) a Base
Rate equal to the higher of (a) the Bank of America prime rate and (b) the federal funds rate plus 0.50%,
plus, in each case, an applicable margin of 2.75% per annum for Eurodollar loans and 1.75% per annum
for Base Rate loans. The pricing and principal of the revolving credit facility and the previously existing
term loan did not change. On September 2, 2003, the Company drew down the full amount of Term B,
which funds were used principally to pay the majority of the cash consideration for the Lehigh Acquisition.
Our Amended Credit Agreement was scheduled to mature on April 24, 2008.
The Amended Credit Agreement contained certain restrictions on the conduct of the Company’s
business, including, among other things, restrictions, generally, on: incurring debt; disposing of certain
assets; making investments; exceeding certain agreed-upon capital expenditures; creating or suffering
liens; completing certain mergers; consolidations and sales of assets and with permitted exceptions;
acquisitions; declaring dividends; redeeming or prepaying other debt; and certain transactions with
affiliates. The Amended Credit Agreement also included financial covenants that required the Company
to maintain certain leverage and fixed charge ratios and a minimum net worth.
On May 8, 2003, the Company issued an additional $30 million of Notes (bringing to a total $180
million of Notes issued and outstanding, including the 2002 issuance discussed below). The net
proceeds of the offering were used to reduce the outstanding revolver balances under the Company’s
senior credit facility. The Notes were issued at a price of 106.5% of face value and the Company received
approximately $32.0 million in gross proceeds from the issuance. As a result of an exchange offer
completed on December 2, 2003, all of the Notes are governed by an indenture, dated as of April 24,
2002, as supplemented (“April 2002 Indenture”). Significant terms of the Notes and the indenture are
discussed under “2002 Activity.”
During 2003, a seller note in the principal amount of $10 million was repaid. For accounting
purposes, the Company imputed an interest rate of 5% on the $10 million non-interest bearing note.
2002 Activity
In April 2002, in connection with the Tilia Acquisition, the Company made an offering of $150
million of Notes to qualified institutional buyers in a private placement pursuant to Rule 144A under the
Securities Act of 1933.
The Notes were issued at a discount such that the Company received approximately $147.7 million
in net proceeds. The Notes are scheduled to mature on May 1, 2012; however, on or after May 1, 2007,
the Company can redeem all or part of the Notes at any time at a redemption price ranging from 100%
to 104.875% of the principal amount, plus accrued and unpaid interest and liquidated damages, if any.
Prior to May 1, 2005, the Company can redeem up to 35% of the aggregate principal amount of the
Notes with the net cash proceeds from certain public equity offerings at a redemption price of 109.75%
of the principal amount, plus accrued and unpaid interest and liquidated damages, if any. Interest on
the Notes accrues at the rate of 9.75% per annum and is payable semi-annually in arrears on May 1 and
November 1, with the first payment occurring on November 1, 2002. The April 2002 Indenture
governing the Notes also contains certain restrictions on the conduct of the Company’s business.
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