SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 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):
February
9, 2009 (February 5, 2009)
SPECTRUM
BRANDS, INC.
(Exact
name of registrant as specified in its charter)
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Wisconsin
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001-13615
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22-2423556
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(State
or Other Jurisdiction of Incorporation)
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(Commission
File Number)
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(IRS
Employer Identification Number)
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Six
Concourse Parkway, Suite 3300
Atlanta,
Georgia
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30328
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(Address
of Principal Executive Offices)
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(Zip
Code)
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(770)
829-6200
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(Registrant’s
telephone number, including area code)
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N/A
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(Former
name or former address, if changed since last
report)
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Check
the appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Item
2.03. Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
On February 3, 2009, Spectrum Brands,
Inc. (the "Company") announced that it and its United States subsidiaries
(together with the Company, collectively, the "Debtors") filed voluntary
petitions in the United States Bankruptcy Court for the Western District of
Texas (the "Bankruptcy Court") seeking reorganization relief under the
provisions of Chapter 11 of Title 11 of the United States Code (the "Bankruptcy
Code").
On February 5, 2009, the Company
received interim approval from the Bankruptcy Court (the "Interim Financing
Order") to access new financing pursuant to a $235 million senior secured
debtor-in-possession revolving credit facility (the "DIP
Facility"). The DIP Facility is being provided pursuant to a
Ratification and Amendment Agreement with Wachovia Bank, National Association,
as administrative and collateral agent (the "Agent"), and certain of the
existing lenders under the Company's senior secured asset-based revolving loan
facility (the "ABL Facility"), with a participating interest from certain
holders of the Company's senior subordinated notes, representing, in the
aggregate, approximately 70% of the face value of the Company's outstanding
notes (the "Significant Noteholders"). The Ratification and Amendment
Agreement amends the Company's existing credit agreement and the guarantee and
collateral agreement governing the ABL Facility (such credit agreement as so
amended, the "DIP Credit Agreement"). The DIP 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 DIP Facility. The proceeds of
borrowings under the DIP Facility are to be used for costs, expenses and fees in
connection with the DIP Facility, for working capital of the Company and its
subsidiaries' restructuring costs and other general corporate purposes, in each
case consistent with a budget. Proceeds from the Supplemental Loan
shall be used by the Company consistent with the budget, including, without
limitation, to repay a portion of the revolving loans outstanding as of the
filing of the Bankruptcy Cases.
The DIP Facility carries an interest
rate, at the Company’s option, of either (a) the base rate plus 3.50% per annum
or (b) the reserve-adjusted LIBOR rate (the "Eurodollar Rate") plus 4.50% per
annum, except that the Supplemental Loan carries an interest rate, payable in
cash, equal to the Eurodollar Rate plus 14.50% per annum. No
amortization will be required with respect to the DIP Facility. For
purposes of the Revolving Loans, the Eurodollar Rate shall at no time be less
than 3.50%. For purposes of the Supplemental Loans, the Eurodollar
Rate shall at no time be less than 3.00%.
The DIP Facility will mature on the
earliest of (a) February 5, 2010, (b) 45 days after the entry of the Interim
Financing Order if the final financing order has not been
entered
prior to the expiration of such 45 day period, (c) the substantial consummation
(as defined in Section 1101 of the Bankruptcy Code and which shall be no later
than the "effective
date") of a plan of reorganization filed in the Chapter 11 cases that is
confirmed pursuant to an order entered by the Bankruptcy Court or (d) the
termination of the commitment with respect to the DIP
Facility.
The Supplemental Loan will mature on
the earliest of (a) February 5, 2010, (b) 45 days after the entry of the Interim
Financing Order if the final financing order, in form and substance satisfactory
to the Supplemental Loan participants, has not been entered prior to the
expiration of such 45-day period, (c) the substantial consummation (as defined
in Section 1101 of the Bankruptcy Code and which shall be no later than the
"effective date") of a plan of reorganization filed in the Chapter 11 cases that
is confirmed pursuant to an order entered by the Bankruptcy Court, such plan and
order on terms and conditions satisfactory to the Supplemental Loan participants
or (d) the termination of the commitment with respect to the DIP Facility;
provided that if certain exit conditions are satisfied prior to the maturity of
the Supplemental Loan pursuant to clauses (a) through (d) above, the maturity of
the Supplemental Loan shall be automatically extended to March 31,
2012.
As collateral security for the
performance, observance and payment in full of all of the obligations (including
pre-petition obligations and the post-petition obligations), Agent has valid,
enforceable and perfected first priority and senior security interests in and
liens upon all pre-petition collateral granted under the Company's guarantee and
collateral agreement with respect to the ABL Facility, as well as valid and
enforceable first priority and senior security interests in and liens upon all
post-petition collateral granted to Agent, for the benefit of itself and the
other secured parties, under the Interim Financing Order, subject only to liens
or encumbrances that were expressly permitted under the ABL Facility and any
other liens or encumbrances expressly permitted by any financing order that may
have priority over the liens in favor of Agent and the secured
parties.
The DIP Credit Agreement contains
various representations and warranties and covenants, including, without
limitation, enhanced collateral reporting, a maximum variance to budget covenant
and other provisions directly relating to the Bankruptcy Cases. The
DIP Credit Agreement also provides for customary events of default, including
payment defaults and cross-defaults on other material
indebtedness. If an event of default occurs and is continuing,
amounts outstanding due under the DIP Facility may be accelerated and the rights
and remedies of the lenders under the DIP Facility available under the
applicable loan documents may be exercised, including rights with respect to the
collateral securing obligations under the DIP Facility.
The Significant Noteholders are also
party to that certain restructuring support agreement entered into with the
Company on February 3, 2009 in connection with the Chapter 11
cases.
Item
8.01. Other Events.
On February 6, 2009, the Bankruptcy
Court entered an order on an interim basis (the "Interim Trading Order")
granting the Debtors' motion to require beneficial owners of substantial amounts
of the Company's common stock to provide notice of their holdings and restrict,
in specified circumstances and subject to specified terms and conditions,
acquisitions or dispositions of the Company's common stock by a Substantial
Shareholder (as defined below) (the "Common Stock Notice and Transfer
Requirements"). The objection deadline to the Interim Trading Order
is February 27, 2009. The Bankruptcy Court also scheduled a hearing
to consider approval of the final order to be held on March 4,
2009.
Under the Common Stock Notice and
Transfer Requirements, each "Substantial Shareholder" must provide the Debtors,
the Debtors' counsel and the Bankruptcy Court advance notice (a "Transfer
Notice") of its intent to buy or sell common stock (including options to acquire
the Company's common stock, as further specified in the Interim Trading Order)
prior to effectuating any such purchase or sale. A "Substantial
Shareholder" under the Interim Trading Order is a person or entity that
beneficially owns or, as a result of a purchase or sale transaction, would
beneficially own, at least 2,509,000 shares (including options to acquire
shares, as further specified in the Interim Trading Order) of the Company's
common stock, representing approximately 4.75% of all issued and outstanding
shares of the Company's common stock as of February 5, 2009. A person
or entity that is or becomes a Substantial Shareholder must file with the
Bankruptcy Court, and provide the Debtors and their counsel with, notification
of such status on or before the later of (a) 25 days after the date of entry of
the Interim Trading Order, or March 3, 2009, or (b) 10 days after becoming a
Substantial Shareholder.
The Debtors requested the Common Stock
Notice and Transfer Requirements to help identify and, where necessary, restrict
potential trades of the Company's common stock that could negatively impact the
Debtors' ability to preserve maximum availability of their net operating losses
under Section 382 of the Internal Revenue Code of 1986, as
amended. Pursuant to the Interim Trading Order, the Debtors have 20
calendar days after receipt of a Transfer Notice to file any objections to the
transfer with the Bankruptcy Court and serve notice on the Substantial
Shareholder providing the notice. If the Debtors file any such
objections, the transfer would not become effective unless approved by a final
and non-appealable order of the Bankruptcy Court.
The foregoing description of the
Interim Trading Order does not purport to be complete and is qualified in its
entirety by reference to the Interim Trading Order, a copy of which is attached
as Exhibit 99.1 to this report and incorporated herein by
reference.
Item
9.01 Financial Statements
and Exhibits.
(d) Exhibits
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Exhibit
No.
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Description
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99.1
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Interim
Trading Order of the Bankruptcy Court, entered on February 6,
2009
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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.
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Date:
February 9, 2009
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SPECTRUM
BRANDS, INC.
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By:
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/s/ Anthony
L. Genito |
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Name:
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Anthony
L. Genito
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Title:
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Executive
Vice President,
Chief
Financial Officer and
Chief
Accounting Officer
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EXHIBIT
INDEX
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Exhibit
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Description
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99.1
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Interim
Trading Order of the Bankruptcy Court, entered on February 6,
2009
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