Sunbeam 2005 Annual Report Download - page 60

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Jarden Corporation
Notes to Consolidated Financial Statements (cont’d)
December 31, 2005
Dividend Restrictions
The Senior Credit Facility and the Foreign Senior Debt contain a covenant which restricts the
Company and its subsidiaries from making certain “restricted payments” (any dividend or other
distribution, whether in cash, securities or other property, with respect to any stock or stock equivalents of
the Company or any subsidiary), except that:
‰the Company may declare and make dividend payments or other distributions payable in common
stock;
‰the Company may repurchase shares of its own stock (provided certain financial and other
conditions are met); and
‰the Company may make restricted payments during any fiscal year not otherwise permitted,
provided that certain applicable thresholds are met.
The indenture related to the Company’s 9
3
⁄
4
% Senior Subordinated Notes (the “Indenture”) contains
a covenant which restricts the Company from declaring or paying any dividends, or making any other
payment or distribution of the Company’s equity interests or to the holders of the Company’s equity
interests in their capacity as such (other than distributions payable in equity interests of the Company or to
the Company or a restricted subsidiary of the Company), unless specified thresholds are met.
Debt Covenant Compliance
The Company is in compliance as of December 31, 2005 with all covenants contained in its Senior
Credit Facility, the Foreign Senior Debt and the Indenture.
Each of the Senior Credit Facility, the Foreign Senior Debt and the Indenture contain cross-default
provisions pursuant to which a default in respect to certain of the Company’s other indebtedness could
trigger a default by the Company under the Senior Credit Facility, the Foreign Senior Debt and the Indenture.
If the Company defaults under the covenants (including the cross- default provisions) the Company’s
lenders could foreclose on their security interest in the Company’s assets, which may have a material
adverse effect on the Company’s consolidated results of operations, financial condition or cash flows.
The Company’s obligations under the Senior Credit Facility and the Indenture are guaranteed, on a
joint and several basis, by certain of its subsidiaries, which are primarily domestic subsidiaries and all of
which are directly or indirectly 100% owned by the Company (See Note 14). The obligations under the
Foreign Senior Debt are guaranteed by the Company and certain of its foreign subsidiaries which are
directly or indirectly 100% owned by the Company.
2004 Activity
On June 28, 2004, in connection with its USPC Acquisition, the Company completed a $116 million
add-on to its Term B loan facility (“Term B Add-on”) under its Second Amended Credit Agreement. The
proceeds from the Term B Add-on offering were used to partially fund the USPC Acquisition. The spread
on the Term B Add-on is 2.25% over London Interbank Offered Rate (“LIBOR”). Additionally, under this
Second Amended Credit Agreement, the spread on the Company’s existing Term B loan facility was
reduced from 2.75% over LIBOR to 2.25% over LIBOR.
58