Exhibit 10.1
 
GENERAL ELECTRIC CAPITAL CORPORATION
201 Merritt 7
Norwalk, CT  06856

CONFIDENTIAL

June 15, 2009

Spectrum Brands, Inc.
Six Concourse Parkway
Suite 3300
Atlanta, GA 30328
Attention: Chief Financial Officer

                                               Re:           Commitment Letter

Ladies and Gentlemen:

You have advised General Electric Capital Corporation (“GE Capital”, “Agent”,
“we” or “us”) that Spectrum Brands, Inc. (the “Company” or “you”), together with
certain of its subsidiaries (the “Subsidiary Loan Parties”, and together with
the Company, collectively the “Loan Parties”), as the reorganized debtors under
a plan of reorganization (the “Plan of Reorganization”) to be confirmed in Case
No. 09-50455 (the “Bankruptcy Case”) commenced under Chapter 11 of the
Bankruptcy Code in the United State Bankruptcy Court for the Western District of
Texas, San Antonio Division (the “Bankruptcy Court”), are seeking up to $242
million of financing (the “Financing”) in connection with the consummation of
the Plan of Reorganization (the transactions under the Plan of Reorganization
and the Financing are collectively referred to herein as the
“Transaction”).  Capitalized terms used herein without definition have the
meanings assigned to such terms in the Term Sheet attached hereto as Exhibit A
(the “Term Sheet”, and together with this letter, this “Commitment Letter”).
 
We anticipate that the Loan Parties are domestic operating companies that
directly own substantially all of the assets used in their respective
businesses.  We further anticipate that, upon consummation of the Plan of
Reorganization, the Loan Parties will not have any material indebtedness other
than (i) the Term Credit Facility (as defined in the Term Sheet) in a principal
amount of up to approximately $1.4 billion and, (ii) senior subordinated notes
in an aggregate principal amount of $218,076,045 (‘the “Senior Notes”) and (iii)
the Financing.

You have asked that the Financing be provided under senior secured asset-based
revolving credit facilities consisting of (i) $197 million of revolving loans,
including a $60 million sub-facility available for the issuance of commercial or
stand-by letters of credit, and with up to $30 million of such revolving loans
available as swing line loans, (ii) a “first-in, last-out” supplemental loan, in
respect of which GE Capital will act as fronting lender, in the amount of up to
$45 million, and (iii) up to $103 million of additional revolving loan
facilities as may be made available subject to the terms and conditions set out
in the Term Sheet.

Based on our understanding of the Transaction as described above and the
information which you have provided to us to date, GE Capital is pleased to
advise you of its commitment (a) to act as a Supplemental
 
 

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Loan Lender and (b) to provide (i) $197 million of revolving loans under the
Senior Revolving Credit Facility and (ii) up to $15 million of additional
revolving loans under one or more Incremental Facilities, in each case upon the
terms and subject to the conditions set out in this Commitment Letter and the
fee letter dated as of the date hereof between the Company and GE Capital (the
“Fee Letter”).  GE Capital’s affiliate, GE Capital Markets, Inc. (“GECM”), shall
act as the sole lead arranger and sole bookrunner with respect to the Financing.

GE Capital reserves the right, in consultation with you, prior to and after the
execution of the closing of the Financing, to syndicate all or a portion of its
commitments under this Commitment Letter or its loans and commitments under the
Financing documentation, as the case may be, to one or more banks, financial
institutions or other institutional lenders reasonably acceptable to you
pursuant to a syndication to be managed by GECM (such syndication in an
aggregate amount of up to $100 million, the “Primary Syndication”); provided,
however, that GE Capital’s commitment herein is not subject to the successful
completion of the Primary Syndication.  GE Capital agrees that it may not assign
all or any portion of its commitments hereunder prior to the date of the initial
funding under the Financing without the prior consent of the Company (such
consent not to be unreasonably withheld or delayed), except to any of its
affiliates; provided that any such assignment will not relieve GE Capital from
any of its obligations hereunder unless and until such assignee shall have
funded the portion of the commitment so assigned.  Any assignments of GE
Capital’s loans and commitments under the Financing documentation entered into
to complete the Primary Syndication shall not be subject to the consent, minimum
amounts and fee provisions set forth in the assignment provisions of the
Financing documentation.  GECM may commence the Primary Syndication promptly
after your acceptance of this Commitment Letter and the Fee Letter.

The Company agrees that, except as expressly provided for in this Commitment
Letter or the Fee Letter, without the prior written consent of GE Capital (i) no
additional agents, co-agents, co-arrangers or co-bookrunners shall be appointed,
or other titles conferred to any person or entity, in respect of the Financing,
and (ii) no other lender under the Financing shall receive any compensation of
any kind for its participation in the Financing.

If requested by GECM, the Company agrees to use commercially reasonable efforts
to assist and cooperate with (and cause its affiliates and advisors to assist
and cooperate with) GE Capital and GECM in effecting and completing a
syndication of the Financing, reasonably satisfactory to GE Capital and to you,
including, participating in bank and other relevant meetings, preparing and
providing to GECM all information relating to the Financing, using commercially
reasonable efforts to ensure that GECM’s syndication efforts benefit from your
existing banking relationships, and assisting GECM in the preparation of a
confidential information memorandum, presentations and other Evaluation Material
(as defined below) to be used in connection with the Primary Syndication and
confirming the completeness and accuracy of such materials. The Evaluation
Material shall include a version of the confidential information memorandum,
presentation and other information materials consisting exclusively of
information that is either publicly available with respect to the Company or its
affiliates, or that is not material with respect to the Company or its
affiliates and their respective securities for purposes of U.S. federal and
state securities laws.  You also hereby agree that you will (a) identify in
writing (and cause your affiliates to identify in writing) and (b) clearly and
conspicuously mark such Evaluation Material that does not contain any such
material non-public information referred to in the prior sentence as “PUBLIC”.
You hereby agree that by identifying such Evaluation Material pursuant to clause
(a) of the preceding sentence and marking Evaluation Material as “PUBLIC”
pursuant to clause (b) of the preceding sentence and/or publicly filing any
Evaluation Material with the Securities and Exchange Commission, then any
prospective Lenders or other persons who receive such material shall be entitled
to treat such Evaluation Material as not containing any material non-public
information with respect to the Company
 
 
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and its affiliates for purposes of U.S. federal and state securities laws.  You
further acknowledge and agree that the following documents and materials shall
be deemed to be PUBLIC, whether or not so marked, and do not contain any
material non-public information: term sheets with respect to the Financing and
the Transaction, and administrative materials of a customary nature prepared by
GE Capital or GECM for prospective lenders, such as a lender meeting invitation,
bank allocation, if any, and funding and closing memorandum.  Before
distribution of any Evaluation Material, you agree (or agree to cause your
affiliates) to execute and deliver to us a letter in which you authorize
distribution of the Evaluation Material to prospective lenders and their
employees willing to receive material non-Public information, and a separate
letter in which you authorize distribution of Evaluation Material that does not
contain material non-public information and represent that no material
non-public information is contained therein.

Until the earlier of (a) the completion of the Primary Syndication and (b) three
months from the Closing Date, you shall not (and shall cause your affiliates not
to), without the prior written consent of GECM, offer, issue, place, syndicate
or arrange any debt or preferred equity securities or debt facilities (including
any renewals, restatements, restructuring or refinancings of any existing debt
or preferred equity securities or debt facilities), attempt or agree to do any
of the foregoing, announce or authorize the announcement of any of the
foregoing, or engage in discussion concerning any of the foregoing, other than,
in each case, the Senior Notes.

You hereby represent and covenant (and it is a condition to GE Capital’s
commitment hereunder) that (a) all information, taken as a whole, other than the
financial information and projections (including financial estimates, forecasts
and other forward-looking information, the “Projections”) and other than general
economic or specific industry information (the “Information”), that has been or
will be made available to us, GECM and/or the lenders by you or any of your
affiliates or representatives was or will be, when furnished, complete and
correct in all material respects and did not or will not, when furnished,
contain any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements contained therein not materially
misleading in light of the circumstances under which such statements were or are
made and (b) the Projections that have been or will be made available to us by
you or any of your affiliates or representatives have been or will be prepared
in good faith based upon reasonable assumptions (it being understood and agreed
that financial projections are not a guarantee of financial performance and
actual results may differ from financial projections and such differences may be
material).  You agree that if at any time prior to the closing of the Financing
any of the representations in the preceding sentence would be incorrect if the
Information were being furnished, and such representations were being made, at
such time, then you will promptly supplement the Information so that such
representations will be correct under those circumstances (it being understood
that any Projections, including any updates or supplements thereto, prepared by
the Company after the date hereof shall be promptly furnished to GE Capital and
GECM).  You understand that in arranging and syndicating the Financing GECM may
use and rely on the Information and Projections without independent verification
thereof.

You hereby authorize and agree, on behalf of yourself and your affiliates, that
the Information, the Projections and all other information provided by or on
behalf of you and your affiliates to GE Capital and GECM regarding you, your
affiliates, the Transaction and the other transactions contemplated hereby in
connection with the Financing (collectively, “Evaluation Material”) may be
disseminated by or on behalf of GE Capital or GECM, and made available, to
prospective lenders and other persons, who have agreed to be bound by customary
confidentiality undertakings (including, “click-through” agreements), all in
accordance with GECM’s standard loan syndication practices (whether transmitted
electronically by means of a website, e-mail or otherwise, or made available
orally or in writing, including at prospective lender or other meetings).  You
hereby further authorize GECM to download copies of your logos from
 
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your websites and post copies thereof on an Intralinks® or similar workspace and
use such logos on any confidential information memoranda, presentations and
other marketing and materials prepared in connection with the Primary
Syndication in a manner consistent with industry practice.

The Company hereby acknowledges and agrees that GECM may provide to industry
trade organizations information with respect to the Financing that is necessary
and customary for inclusion in league table measurements.

GE Capital’s commitment hereunder is subject only to the following: (i) the
execution and delivery of final legal documentation customary for financings of
this type incorporating the terms set forth in this Commitment Letter and
otherwise reasonably acceptable to GE Capital and the Company, (ii) the absence,
during the period from the date hereof to the closing and initial funding of the
Financing, of any material disruption of, or material adverse change in, loan
syndication or capital markets conditions, (iii) GECM having been afforded a
period of at least 35 consecutive days following the date hereof (it being
understood that, upon the Company’s request, GECM shall be afforded fewer than
35 consecutive days if all other conditions to the closing of the Financing have
been met) and (iv) the other conditions set forth in the Term Sheet and your
compliance in all material respects with the terms and provisions of this
Commitment Letter and the Fee Letter.

By signing this Commitment Letter, each party acknowledges that this Commitment
Letter supersedes any and all discussions and understandings, written or oral,
between or among GE Capital and any other person as to the subject matter
hereof.  No amendments, waivers or modifications of this Commitment Letter or
any of its contents shall be effective unless expressly set forth in writing and
executed by the parties hereto.

This Commitment Letter is being provided to you on the condition that, except as
required by law (including, without limitation, in connection with any filing
with the Bankruptcy Court in the Bankruptcy Case and to the United States
Trustee), or as otherwise consented to by GE Capital, neither it, the Fee
Letter, nor their contents will be disclosed publicly or privately except to the
Supplemental Loan Participants, the Administrative Agent for the Senior Secured
Lenders, the Official Committee of Equity Security Holders and their respective
advisors, and to those individuals who are your officers, employees or advisors
who have a need to know of them as a result of their being specifically involved
in the Transaction under consideration and then only on the condition that such
matters may not, except as required by law, be further disclosed.  No person,
other than the parties signatory hereto, is entitled to rely upon this
Commitment Letter or any of its contents.  No person shall, except as required
by law, use the name of, or refer to, GE Capital, or any of its affiliates, in
any press release, advertisement or public disclosure made in connection with
the Transaction without the prior written consent of GE Capital.

Regardless of whether the commitment herein is terminated or the Transaction or
the Financing closes, the Company agrees to pay upon demand to GE Capital all
reasonable and documented out-of-pocket expenses (“Transaction Expenses”) which
may be incurred by GE Capital or GECM in connection with the Financing or the
Transaction (including all reasonable out-of-pocket legal, environmental, and
other consultant costs and fees incurred in the preparation of this Commitment
Letter, the Fee Letter, and evaluation of and documenting of the Financing and
the Transaction). The Company’s reimbursement obligation hereunder shall apply
whether or not the Financing closes, and GE Capital’s right to receive
reimbursement of all costs and expenses incurred in connection with the
Financing shall be entitled to priority as an administrative claim under Section
503(b)(1) of the Bankruptcy Code, and shall be payable upon demand by GE Capital
without any further order of the Bankruptcy Court, whether or not the Financing
closes.  Regardless of whether the commitment herein is terminated or the
Transaction or the Financing closes, the Company shall indemnify and hold
harmless each of GE Capital, GECM, the
 
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Lenders, their respective affiliates, and the directors, officers, employees,
agents, attorneys and representatives of any of them (each, an “Indemnified
Person”), from and against all suits, actions, proceedings, claims, damages,
losses (other than lost profits), liabilities and expenses (including, but not
limited to, reasonable out-of-pocket attorneys’ fees and disbursements and other
costs of investigation or defense, including those incurred upon any appeal),
which may be instituted or asserted against or incurred by any such Indemnified
Person in connection with, or arising out of, this Commitment Letter, the Fee
Letter, the Financing or the Transaction under consideration, the documentation
related thereto, any other financing related thereto, any actions or failures to
act in connection therewith, and any and all environmental liabilities and legal
costs and expenses arising out of or incurred in connection with any disputes
between or among any parties to any of the foregoing, and any investigation,
litigation, or proceeding related to any such matters.  Notwithstanding the
preceding sentence, indemnitors shall not be liable for any indemnification to
an Indemnified Person to the extent that any such suit, action, proceeding,
claim, damage, loss, liability or expense results from that Indemnified Person’s
gross negligence or willful misconduct, as finally determined by a court of
competent jurisdiction.  Under no circumstances shall GE Capital, GECM, the
Company or any of their respective affiliates be liable to each other or any
other person for any punitive, exemplary, consequential or indirect damages
which may be alleged in connection with this Commitment Letter, the Fee Letter,
the Transaction, the Financing, the documentation related thereto or any other
financing, regardless of whether the commitment herein is terminated or the
Transaction or the Financing closes.

EACH PARTY HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM,
DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER THIS COMMITMENT LETTER, THE FEE
LETTER, ANY TRANSACTION RELATING HERETO OR THERETO, OR ANY OTHER INSTRUMENT,
DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR THEREWITH,
WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE.  Each party hereto consents and
agrees that the state or federal courts located in New York County, City of New
York, New York, shall have exclusive jurisdiction to hear and determine any
claims or disputes between or among any of the parties hereto pertaining to this
Commitment Letter, the Fee Letter, the Financing or the Transaction under
consideration, any other financing related thereto, and any investigation,
litigation, or proceeding related to or arising out of any such matters;
provided, that the parties hereto acknowledge that any appeals from those courts
may have to be heard by a court (including an appellate court) located outside
of such jurisdiction; provided; further, prior to the effective date of the Plan
of Reorganization, the parties hereto agree that the Bankruptcy Court presiding
over the Bankruptcy Case shall have exclusive jurisdiction or, if that court
does not have subject matter jurisdiction, then the U.S. District Court for the
Southern District of New York or, if that court does not have subject matter
jurisdiction, then any state court located in New York City.  Each party hereto
expressly submits and consents in advance to such jurisdiction in any action or
suit commenced in any such court, and hereby waives any objection which such
party may have based upon lack of personal jurisdiction, improper venue or
inconvenient forum.

This Commitment Letter is governed by and shall be construed in accordance with
the laws of the State of New York applicable to contracts made and performed in
that state.

GE Capital and GECM shall have access to all relevant facilities, personnel and
accountants, and copies of all documents which GE Capital may reasonably
request, including business plans, financial statements (actual and pro forma),
books, records, and other documents of each Loan Party.

This Commitment Letter may be executed in counterparts, each of which shall be
deemed an original and all of which counterparts shall constitute one and the
same document.  Delivery of an executed signature
 
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page of this Commitment Letter by facsimile or electronic (including “PDF”)
transmission shall be effective as delivery of a manually executed counterpart
hereof.

This Commitment Letter shall be of no force and effect unless and until (a) this
Commitment Letter and the Fee Letter are each executed and delivered to the
undersigned on or before 5:00 p.m. New York time on June 15, 2009 at 201
Merritt, 7, Norwalk, Connecticut, 06851 and (b) an Approval Order (as defined
below) has been signed and entered by the Bankruptcy Court in the Bankruptcy
Case.  You hereby agree that you shall file on the date hereof a motion in the
Bankruptcy Case for an order (“Approval Order”), in form and substance
reasonably satisfactory to GE Capital, authorizing the Company’s acceptance of,
and performance under, this Commitment Letter and the Fee Letter, which order
shall specifically provide that the Company is authorized to pay to GE Capital
the fees referenced in the Fee Letter and to reimburse all reasonable
out-of-pocket costs and expenses incurred in connection with the Financing as
administrative expense claims under Section 503(b)(1) of the Bankruptcy Code,
immediately upon demand by GE Capital without any further order of the
Bankruptcy Court, whether or not the Financing closes.  You agree that you shall
use your reasonable best efforts to obtain the entry of such Approval Order on
the date hereof and you agree that you shall deliver to GE Capital all documents
filed on behalf of you or any of your subsidiaries with the Bankruptcy Court in
connection with the Approval Order.  You hereby agree that any copy of the Fee
Letter filed with the Bankruptcy Court in connection with the Approval Order,
the Confirmation Order or otherwise shall be filed under seal to the maximum
extent permitted by the Bankruptcy Court; provided, however, if such filing
under seal is not permitted by the Bankruptcy Court, any such filing of the Fee
Letter will be redacted to the maximum extent permitted by the Bankruptcy
Court.  Once effective, GE Capital’s commitment to provide financing in
accordance with the terms of this Commitment Letter shall cease if the
Transaction does not close, or the Financing is not funded for any reason, on or
before September 30, 2009, and, notwithstanding any further discussions,
negotiations or other actions taken after such date, neither GE Capital nor any
of its affiliates shall have any liability to any person in connection with its
refusal to fund the Financing or any portion thereof after such date.

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We look forward to continuing to work with you toward completing this
transaction.

Our business is helping yours.

 
Sincerely,
         
GENERAL ELECTRIC CAPITAL
 
CORPORATION
             
By:
/s/ Robert E. Kelly   
Its:
Duly Authorized Signatory

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AGREED AND ACCEPTED THIS
15th DAY OF JUNE, 2009

SPECTRUM BRANDS, INC.,
a Wisconsin corporation, on behalf of
itself and the other Loan Parties
 
 
By:
/s/ Anthony L. Genito 
 
Name:
Anthony Genito 
 
Title:
EVP/CFO 
 

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Exhibit A

Term Sheet

See attached.
 
 
 
 
 

 
 

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Exhibit A to Commitment Letter
$242,000,000 Senior Secured Plan-of-Reorganization Revolving Credit Facilities

Summary of Terms
June 15, 2009

This is the Term Sheet described as Exhibit A in that certain letter dated June
15, 2009, of which this Exhibit A is a part.  Capitalized terms used herein
without definition shall have the meanings assigned to such terms in the letter
referenced above or in the Existing Credit Agreement (as defined below).
 

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Borrower:
Spectrum Brands, Inc. (the “Company”).
   
Guarantors:
 
Senior Credit Facilities (defined below) shall be guaranteed by all existing and
future domestic direct and indirect subsidiaries of the Company (the
“Guarantors”, and with the Company, each a “Loan Party”).
   
Sole Administrative
 
Agent:
General Electric Capital Corporation (“GE Capital” or in its capacity as
administrative agent, the “Administrative Agent”).
   
Sole Lead Arranger &
 
Sole Book Manager:
GE Capital Markets, Inc. (“GECM” or in its capacity as arranger, the
“Arranger”).
   
Lenders:
 
A syndicate of banks, financial institutions and/or institutional lenders
(including GE Capital), to be arranged by GECM after consultation with the
Company (collectively, the “Lenders”).
   
Senior Credit Facilities:
 
Up to $242 million pursuant to senior secured plan-of-reorganization revolving
credit facilities (the “Senior Credit Facilities”) consisting of (a) revolving
loans (“Revolving Loans”) of up to $197 million, subject to availability,
including a $60 million sub-facility available for commercial or stand-by
letters of credit (“Letters of Credit”), and up to $30 million of the Revolving
Loans available as swing line loans (“Swingline Loans”) (as such amount(s) may
be increased by any Incremental Facility provided to the Company, the “Senior
Revolving Credit Facility”) and (b) a “first-in, last-out” supplemental loan
(the “Supplemental Loan”) in respect of which GE Capital will act as fronting
lender, in the amount of up to $45 million.
     
The term “Revolving Loans” as used herein (i) includes Swingline Loans, except
as otherwise provided, and (ii) excludes the Supplemental Loan; provided,
however, that for the avoidance of doubt, the Supplemental Loan will be part of
the Senior Credit Facilities and will be an Obligation thereunder, and as such,
will benefit from certain of the provisions thereof, including the security
interests granted thereunder.

 

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Supplemental Loan:
The Supplemental Loan shall be fronted by GE Capital (in such capacity,
“Supplemental Loan Lender”), and shall be repaid (as set forth herein) after
payment in full of the Revolving Loans and all other Obligations due and payable
under the Senior Revolving Credit Facility; provided, that GE Capital’s
obligation to fund the Supplemental Loan is conditioned upon its receipt of
funds equal to a 100% participation in the Supplemental Loan pursuant to one or
more Supplemental Loan Participation Agreements (as defined below) in form and
substance reasonably acceptable to the Supplemental Loan Lender and the
Supplemental Loan Participant.
   
Incremental Facilities:
 
The Company may request one or more increases in the amount of the Senior
Revolving Credit Facility by an aggregate amount of up to $103 million (any such
increase, an “Incremental Facility”); provided, that certain customary
conditions are satisfied, including the following:
     
(a) on a pro forma basis for the initial borrowing under any such Incremental
Facility and the application of the proceeds therefrom, (i) no default or event
of default has occurred and is continuing (including compliance with all
financial covenants) and (ii) the Company’s Excess Availability (to be defined
as domestic, unrestricted cash plus excess availability plus suppressed
availability (parameters of which are to be defined in the definitive
documentation)) exceeds the Excess Availability Threshold (defined below);
     
(b) the Company will first seek commitments for any such Incremental Facility
from existing Lenders and, if additional commitments are needed, from new
Lenders mutually acceptable to the Company and Administrative Agent, provided,
that no commitment of any existing Lender may be increased without the consent
of such Lender;
     
(c) any such Incremental Facility will be on the same terms and pursuant to the
same documentation as the Senior Revolving Credit Facility and availability
thereunder will be subject to the restrictions described below; and
     
(d) proceeds of any Incremental Facility shall be applied first, to prepay any
amounts outstanding under the Supplemental Loan and second, in accordance with
the section entitled “Use of Proceeds” below.
   
Supplemental Loan
 
Participants and
 
Supplemental Loan
 
Participation
 
Agreement:
“Supplemental Loan Participant” means D. E. Shaw Laminar Portfolios, L.L.C. and
its affiliates (“DE Shaw”), Avenue Capital and its affiliates (“Avenue”) and
Harbinger Capital Partners and its affiliates (“Harbinger”).

 
Exhibit A-2

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The Supplemental Loan Participation Agreement shall contain terms and provisions
that, inter alia, will have the effect of giving the Supplemental Loan
Participant (a) voting rights equivalent to those set forth in the Ratification
and Amendment Agreement, dated as of February 5, 2009, by and among the Company,
certain subsidiaries of the Company and other parties party thereto (the
“Ratification Agreement”) and (b) the right to receive information provided to
each Lender under the Senior Revolving Credit Facility (subject to certain
limitations to be agreed upon).  In addition, the Supplemental Loan Lender will
grant the Supplemental Loan Participant a buy-out right consistent with the
corresponding provisions set forth in the Ratification Agreement and subject to
the payment of any premium set forth in the “Voluntary Prepayments” section
below.
   
Letters of Credit:
 
Letters of Credit will be issued by one or more financial institutions that
shall have agreed to do so upon request of the Company and shall have been
approved by the Administrative Agent (such approval not to be unreasonably
withheld or delayed) (the “Issuing Banks”), and will expire not later than the
earlier of (a) 12 months after the date of issuance and (b) the fifth business
day prior to the final maturity of the Senior Credit Facilities; provided that
any Letter of Credit may provide (under customary “evergreen” provisions) for
renewal thereof for additional periods of 12 months (but not beyond the date
referred to in clause (b) above).
     
Drawings under any Letter of Credit prior to 1 p.m. EST on any business day
shall be reimbursed by the Company on the same business day.  To the extent the
Company does not reimburse any Issuing Bank on the same business day, the
Lenders will be irrevocably obligated to reimburse such Issuing Bank pro rata
based upon their commitments under the Senior Revolving Credit Facility.
     
The issuance of all Letters of Credit will be subject to the customary
procedures of the applicable Issuing Bank.
   
Use of Proceeds:
 
Proceeds from the Senior Credit Facilities may be used (a) to cash collateralize
outstanding letters of credit; (b) to pay for goods and services in the ordinary
course of business; (c) to pay allowed administrative expenses and allowed
claims in accordance with the plan of reorganization of the Company and the
Guarantors (the “Plan of Reorganization”); (d) to pay costs, expenses and fees
in connection with the Senior Credit Facilities and (e) for working capital and
general corporate purposes, including to payoff the existing Debtor in
Possession revolving credit facility (the “ABL DIP Facility”) and, at the option
of the Supplemental Loan Lender and upon terms and conditions set forth herein,
the Supplemental Loan.  Letters of Credit will be used to support the Company’s
and its Guarantors’ payment obligations incurred consistent with past practices.

 
Exhibit A-3

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Commitment Fee:
Set forth in the Fee Letter.
   
Underwriting /
 
Closing Fee:
Set forth in the Fee Letter.
   
Letter of Credit Fees:
 
A fee equal to an annual rate of 4.0% times the average daily maximum aggregate
amount available to be drawn under all Letters of Credit will be payable
quarterly in arrears to the Lenders.  In addition, a fronting fee, to be agreed
upon between an Issuing Bank and the Company, will be payable to such Issuing
Bank with respect to Letters of Credit issued by it, as well as certain
customary fees assessed thereby.
   
Interest Rates:
 
(a) with respect to the Senior Revolving Credit Facility, at the Company’s
option, (i) LIBOR + 4.00% with a LIBOR floor of 2.5% and (ii) the Base Rate plus
3.00% with a Base Rate floor of 3.5% and (b) with respect to the Supplemental
Loan, LIBOR + 14.50% with a LIBOR floor of 3.0%.
     
“Base Rate” means a floating rate of interest per annum equal to the highest of
the rate last quoted by The Wall Street Journal (or another national publication
selected by the Administrative Agent) as the U.S. “Prime Rate,” (b) the federal
funds rate plus 50 basis points, and (c) the sum of the three-month LIBOR plus
100 basis points.
   
Interest Payments:
 
On the last day of selected interest periods (which shall be one, two, three or
six months and, if agreed by all Lenders, nine or twelve months, provided that
the interest rate for one and two month periods shall not be less than the three
month rate) and upon prepayment (in each case payable in arrears and computed on
the basis of a 360-day year).
   
Funding Protection:
 
Customary for transactions of this type, including breakage costs (but excluding
lost profits), gross-up for withholding, compensation for increased costs and
compliance with capital adequacy and other regulatory restrictions.
   
Unused Line Fee:
0.75% to 1.00%, based on a usage grid.
   
Administrative Agent
 
Fee:
Set forth in the Fee Letter.
   
Maturity:
36 months.

 
Exhibit A-4

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Borrowing Base:
Extensions of credit under the Senior Revolving Credit Facility shall be subject
to a borrowing base (the “Borrowing Base”) calculated as the sum of the
following (a) 85% of Eligible Accounts of the Loan Parties, and (b) the lesser
of (i) 85% of the net orderly liquidation value (“NOLV”) of Eligible Inventory
and (ii) 65% of the value of Eligible Inventory minus reserves (applied in a
manner consistent with the Existing Credit Agreement) including, without
limitation, (A) an availability block of $15,000,000 at all times (B) a reserve
against any cash management or hedging exposures of any Lender that are secured
by the Collateral, (C) a reserve to be imposed as a result of the Company’s
failure to obtain landlord consents and bailee waivers reasonably requested by
the Administrative Agent and (D) such other reserves as may be imposed by the
Administrative Agent in its reasonable credit discretion and should the
Administrative Agent not have access to the results of a recent field exam or
current inventory appraisal.
     
The definitions of “Eligible Accounts,” “Eligible Inventory,” and “Eligible
In-Transit Inventory” shall be consistent with the definitions of such terms as
set forth in the credit agreement, entered into as of September 28, 2007, among
the Company, Wachovia Bank, National Association (“Wachovia”), as the agent and
the other agents and lenders party thereto (the “Existing Credit Agreement”).
     
The Supplemental Loan Borrowing Base shall be determined in a manner consistent
with the provisions set forth in the Ratification Agreement.
   
Voluntary
 
Prepayments:
The Senior Revolving Credit Facility may be prepaid in whole or in part, and
commitments may be permanently reduced, at any time by the Company; provided
that Revolving Loans may be repaid only on the last day of the related interest
period unless the Company pays any applicable breakage costs; provided, further,
that upon any commitment reduction or cancellation (or any prepayment of the
outstanding amount of the Senior Revolving Credit Facility with the proceeds of
a new credit facility whether or not commitments are cancelled), the Company
shall pay a premium equal to (i) 2.0% of the amount prepaid/cancelled if such
prepayment/cancellation occurs on or prior to the first anniversary of the
Closing Date and (ii) 1.0% of the amount prepaid/cancelled if such
prepayment/cancellation occurs after the first anniversary of the Closing Date
but on or prior to the second anniversary of the Closing Date.
   
Mandatory
 
Prepayments:
 
The Senior Revolving Credit Facility must be prepaid at any time when the
aggregate amount of loans and the face amount of all Letters of Credit exceeds
the Borrowing Base availability, such prepayment to be in an amount equal to the
amount of such excess.

 
Exhibit A-5

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All mandatory prepayments will be made without penalty or premium (except for
breakage costs, if any), and will be applied (without any reduction of
commitments under the Senior Revolving Credit Facility) first to prepayment of
loans under the Senior Revolving Credit Facility and, thereafter, to cash
collateralization of Letters of Credit.
   
Collateral:
The Senior Credit Facilities, each Guarantee and any cash management and/or
hedging obligations of the Company owed to a Lender or the Supplemental Loan
Lender or any affiliates is secured by first priority, perfected security
interests in and liens upon the ABL Collateral (as defined in the Existing
Credit Agreement) only and not on the Non-ABL Collateral (as defined in the
Existing Credit Agreement).
     
The ABL Collateral and the Non-ABL Collateral secure the obligations (the “Term
Credit Facility”) under the Credit Agreement, dated as of March 30, 2007, among
the Company, Goldman Sachs Credit Partners L.P. (“GSCP”), as the administrative
agent, collateral agent and syndication agent, Wachovia, as the deposit agent,
Bank of America, N.A., as an LC issuer, and the lenders party thereto (the “Term
Credit Agreement”).  The priority of liens under the Senior Credit Facilities
and under the Term Credit Facility shall continue to be subject to the terms of
the Intercreditor Agreement, dated as of September 28, 2007, among Wachovia (or
its successor), as the administrative agent under the Existing Credit Agreement,
GSCP (or its successor), as the administrative agent under the Term Credit
Agreement and the Company (the “Existing Intercreditor Agreement”).
   
Representations and
 
Warranties:
 
The Senior Credit Facilities will contain the following representations and
warranties by the Company consistent with the representations and warranties in
the Existing Credit Agreement:  existence, qualification and power; compliance
with laws; authorization; no contravention; governmental authorizations and
other consents; binding effect; financial statements; no material adverse
effect; litigation; no default; ownership of property; environmental compliance;
insurance; taxes; ERISA compliance; subsidiaries; equity interests; loan
parties; margin regulations; Investment Company Act; disclosure; intellectual
property and licenses; solvency; certain accounts; status of the Senior Credit
Facilities as “Senior Debt” and “Designated Senior Debt”.
Reporting
 
Requirements:
 
Usual and customary for transactions of this type and for a borrower of the
Company’s size and credit quality including, but not limited to: Monthly
Borrowing Base Certificates (including a calculation of Excess Availability (to
be defined as domestic, unrestricted cash plus excess availability plus
suppressed availability (parameters of which are to be defined in the definitive
documentation)) and Quarterly and Annual Financial Statements in accordance with
GAAP.  In addition, at GE Capital’s discretion twice annual field examinations
and an annual inventory appraisal update.  Furthermore, an inventory appraisal
and field examination will be conducted prior to closing for purposes of
evaluating the borrowing base calculations.  However, in the event that the
administrative agent (Wachovia) for the existing Debtor-in-Possession credit
facility releases the most recent field examination conducted in April 2009 such
field examination requirement prior to closing will be waived.

 
Exhibit A-6

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Covenants:
 
The Senior Credit Facilities will contain the following affirmative and negative
covenants consistent with such affirmative and negative covenants in the
Existing Credit Agreement:
     
(a)  affirmative covenants: covenants with respect to: delivery of financial
statements and certificates; notices; non-public information; payment of
obligations; preservation of existence; maintenance of properties; maintenance
of insurance; compliance with laws; books and records; inspections; periodic
field examinations, collateral appraisals and verification of accounts; use of
proceeds; information, guarantee of obligations and provision of security with
respect to ABL Collateral and additional subsidiaries; compliance with
environmental laws; further assurances; and collateral reporting;
     
(b)  negative covenants: covenants with respect to: liens; indebtedness;
investments; fundamental changes; dispositions (including sales and leasebacks);
restricted payments; change in nature of business; transactions with affiliates;
burdensome agreements; use of proceeds; amendments of organizational documents;
accounting changes; prepayments of indebtedness; amendment of certain documents
and agreements; speculative transactions; designation of other indebtedness as
“Senior Debt” or “Designated Senior Debt”; and changes in fiscal year; and
     
(c) financial covenants: (i) maximum capital expenditures of $40 million per
annum (tested annually) and (ii) a springing fixed charge covenant to be
determined (tested if Excess Availability (to be defined as domestic,
unrestricted cash plus excess availability plus suppressed availability
(parameters of which are to be defined in the definitive documentation)) falls
below a certain threshold to be agreed upon (such threshold, the “Excess
Availability Threshold”)).
   
Events of Default:
The Senior Credit Facilities will include the following events of default
consistent with the events of default in the Existing Credit Agreement: failure
to make payments when due; noncompliance with covenants; breaches of
representations and warranties; certain payment defaults and events permitting
acceleration of other indebtedness (giving effect to applicable grace periods);
insolvency and bankruptcy proceedings; judgments; ERISA; invalidity of loan
documents; impairment of security interests in the ABL Collateral; loss of
status of the Senior Credit Facilities as “Senior Debt” or “Designated Senior
Debt”; and change of control.
   

 
Exhibit A-7

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Conditions Precedent
 
To Initial Borrowing:
 
The several obligations of the Lenders to make, or cause one of their respective
affiliates to make, loans under the Senior Revolving Credit Facility will be
subject to the conditions precedent set forth below and those listed on Annex A
attached hereto (which may be waived in the sole discretion of the
Administrative Agent (and not without the approval of the Administrative
Agent)).
Conditions to All
 
Borrowings:
 
The conditions to all borrowings will include (a) prior telephonic notice of
borrowing confirmed in writing, (b) the accuracy of representations and
warranties (in the case of any borrowing other than the initial borrowing, in
all material respects), (c) the absence of any default or event of default, and
(d) compliance with the Borrowing Base.
   
Waivers:
 
To include, but not be limited to, a waiver by Administrative Agent, Lenders,
Supplemental Loan Participants, the Company and each Guarantor of its rights to
jury trial; waiver by Administrative Agent, Lenders, Supplemental Loan
Participants, the Company and each Guarantor of claims for special, indirect or
consequential damages in respect of any breach or alleged breach by any agent,
any Lender, any Supplemental Loan Participant, the Company or any Guarantor of
any of the loan documents (other than resulting from gross negligence or willful
misconduct as determined pursuant to a final, non-appealable order of a court of
competent jurisdiction).
   
Assignments:
 
Lenders will be permitted to make assignments to other financial institutions
acceptable to Administrative Agent (which acceptance shall not be unreasonably
withheld or delayed) and the Company (unless an Event of Default shall have
occurred and be continuing).  All assignments of a Lender’s interest in the
Senior Revolving Credit Facility will be made via an electronic settlement
system designated by Administrative Agent.  An assignment fee of $3,500 shall be
payable to Administrative Agent upon the effectiveness of any such assignment.
   
Expenses and Indemnity:
 
The Company will, from and after closing, and promptly following Administrative
Agent’s or Supplemental Loan Participant’s written demand, pay all costs and
expenses and customary administrative charges as provided for under the Existing
Credit Agreement.
     
The Senior Revolving Credit Facility will also include customary and appropriate
provisions relating to indemnity and related matters, in a form reasonably
satisfactory to the Administrative Agent and the Company.

 
Exhibit A-8

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Requisite Lenders:
 
“Requisite Lenders” shall mean: (i) if there is one (1) Lender, such Lender;
(ii) if there are two (2) Lenders, both Lenders (or, if one Lender is a
non-funding Lender, the other Lender shall constitute the “Requisite Lenders”);
(iii) if there are three (3) Lenders, two or more Lenders having in the
aggregate more than fifty percent (50%) of total commitments or exposure under
the Senior Revolving Credit Facility; and (iv) if there are four (4) or more
Lenders, two or more Lenders having in the aggregate more than sixty-six and two
thirds percent (66 2/3%) of total commitments or exposure under the Senior
Revolving Credit Facility (unless GE Capital and its affiliates hold in the
aggregate thirty percent (30%) or less of total commitments or exposure under
the Senior Revolving Credit Facility, in which case two or more Lenders having
in the aggregate more than fifty percent (50%) of total commitments or exposure
under the Senior Revolving Credit Facility constitute the Requisite Lenders);
provided that so long as any Lender is a non-funding Lender, the commitments or
exposure under the Senior Revolving Credit Facility of such non-funding Lender
will not be taken into account in determining the calculation of which Lenders
constitute Requisite Lenders.
     
Further, the consent of all directly affected Lenders shall be required with
respect to increases in commitments; changes in interest rates, fees and
maturity; certain guarantee and collateral issues (including the release of all
or substantially all of the ABL Collateral or Guarantors); and changes in the
percentage set forth in the definition of Requisite Lenders.  The consent of the
Administrative Agent and each Issuing Bank will be required for any amendments
affecting their respective rights or responsibilities.
     
Any increases in advance rates shall require the consent of the greater of (i)
the Requisite Lenders and (ii) sixty six and two thirds percent (66 2/3%) of the
Lenders.
     
The Supplemental Loan Lender shall vote as directed by the Supplemental Loan
Participation Agreement.
     
The Company will have the right to replace any Lender that does not consent to
any amendment or waiver requiring the consent of such Lender but approved by the
Requisite Lenders; provided that (a) all of the outstanding obligations owing to
such Lender under the Senior Revolving Credit Facility shall be satisfied and
(b) any replacement Lender is reasonably acceptable to the Administrative Agent
and each Issuing Bank to the extent that assignments to such Lender would
otherwise require consent of the Administrative Agent or the Issuing Banks under
the provisions of “Assignments” above.

 
Exhibit A-9

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Taxes:
The Senior Credit Facilities will provide that all payments are to be made free
and clear of any taxes (other than franchise taxes and taxes on overall net
income), imposts, assessments, withholdings or other deductions whatsoever, with
certain exceptions to be described in the loan documents.  Lenders shall furnish
to the Administrative Agent appropriate certificates or other evidence of
exemption from U.S. federal tax withholding to be described in the loan
documents.
   
Governing Law:
New York.

 

 
Exhibit A-10

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Annex A
Spectrum Brands, Inc.
Senior Secured Plan-of-Reorganization Revolving Credit Facility
Summary of Conditions Precedent
 
This Summary of Conditions Precedent outlines the conditions precedent to the
Senior Credit Facilities referred to in the Term Sheet, of which this Annex A is
a part.  Certain capitalized terms used herein are defined in the Commitment
Letter.
 
1.
Excess Availability.  The Arranger shall have received a Borrowing Base
certificate (as of a date, and in form and substance, reasonably satisfactory to
the Arranger) demonstrating on a pro forma basis that, after giving effect to
the transactions contemplated by the Commitment Letter, the Company shall have
at least $20,000,000 of opening Excess Availability under the Senior Revolving
Credit Facility.  Excess Availability shall be calculated as domestic,
unrestricted cash plus excess availability plus suppressed availability
(parameters of which are to be defined in the definitive documentation).

 
2.
Performance of Obligations.  (a) All costs, fees, expenses (including legal fees
and expenses) and other compensation contemplated by the Commitment Letter and
the Fee Letter, the Arranger, the Administrative Agent or the Lenders shall have
been paid to the extent due and invoiced in a timely manner, and (b) the Company
shall have complied in all material respects with all of its other obligations
under the Commitment Letter.

 
3.
Certain Information.  The Arranger shall have received all documentation and
other information required by bank regulatory authorities under applicable
“know-your-customer” and anti-money laundering rules and regulations, including
the Patriot Act.

 
4.
Confirmation Order.

 
 
(a)  The Arranger shall have received a certified copy of the order confirming
the Plan of Reorganization in the Chapter 11 Case (the “Confirmation Order”) as
duly entered by the Bankruptcy Court and entered on the docket of the Clerk of
the Bankruptcy Court in the Chapter 11 Case, following due notice to such
creditors and other parties-in-interest as required by the Bankruptcy
Court.  The terms and provisions of the Plan of Reorganization shall be
reasonably satisfactory to the Arranger and Lenders (it being acknowledged by
the Arranger that the terms and provisions of the Plan of Reorganization, dated
April 28, 2009 filed with the Bankruptcy Court on such date, as amended and
supplemented on June 8, 2009, are satisfactory), and the Confirmation Order
shall include such provisions with respect to the Senior Revolving Credit
Facility as are reasonably satisfactory to the Arranger and, providing, among
other things, that the Company and the Guarantors shall be authorized to (i)
enter into the loan documents, (ii) grant the liens and security interests and
incur or guaranty the Indebtedness under the loan documents, and (iii) issue,
execute and deliver all documents, agreements and instruments necessary or
appropriate to implement and effectuate all obligations under the loan documents
and to take all other actions necessary to implement and effectuate borrowings
under the loan documents.  Except as consented to by the Arranger, the
Bankruptcy Court’s retention of jurisdiction under the Confirmation Order shall
not govern the enforcement of the loan documents or any rights or remedies
related thereto.

 
 
(b)  The Arranger shall have received evidence, satisfactory to the Arranger,
that (i) the effective date under the Plan of Reorganization shall have
occurred, the Confirmation Order shall be valid, subsisting and continuing as a
Final Order and all conditions

 

 
 

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precedent to the effectiveness of the Plan of Reorganization shall have been
fulfilled, or validly waived, including, without limitation, the execution,
delivery and performance of all of the conditions thereof other than conditions
that have been validly waived (but not including conditions consisting of the
effectiveness of the loan documents), and (ii) no motion, action or proceeding
by any creditor or other party-in-interest to the Chapter 11 Case which could
adversely affect the Plan of Reorganization, the consummation of the Plan of
Reorganization, the business or operations of the Company or the Guarantors or
the transactions contemplated by the loan documents, as determined by the
Arranger in good faith, shall be pending.

 
 
(c)  “Final Order” means an order or judgment of a court of competent
jurisdiction that has been entered on the docket maintained by the clerk of such
court and has not been reversed, vacated or stayed and as to which (a) the time
to appeal, petition for certiorari or move for a stay, new trial, reargument or
rehearing has expired and as to which no appeal, petition for certiorari or
other proceedings for a stay, new trial, reargument or rehearing shall then be
pending or (b) if an appeal, writ of certiorari, stay, new trial, reargument or
rehearing thereof has been sought, (i) such order or judgment shall have been
affirmed by the highest court to which such order was appealed, certiorari shall
have been denied or a stay, new trial, reargument or rehearing shall have been
denied or resulted in no modification of such order and (ii) the time to take
any further appeal, petition for certiorari, or move for a stay, new trial,
reargument or rehearing shall have expired.

 
5.
Supplemental Loan Participation.  The Supplemental Loan Lender shall have
received a fully executed Supplemental Loan Participation Agreement from each of
the Supplemental Loan Participants in form and substance reasonably acceptable
to the Supplemental Loan Lender and the Supplemental Loan Participant.  The
Supplemental Loan Lender shall have received funds equal to a 100% participation
in the Supplemental Loan pursuant to the Supplemental Loan Participation
Agreement.

 
6.
Master L/C Reimbursement Agreement.  The Arranger shall have received a fully
executed master L/C reimbursement agreement in form and substance reasonably
satisfactory to the Arranger.

 
7.
Other Customary Conditions.  Other customary closing conditions, relating to
delivery of reasonably satisfactory legal opinions of counsel to the Loan
Parties, evidence of payment and discharge of existing obligations and liens in
accordance with the Plan of Reorganization, creation and perfection of liens on
the Collateral as provided for in each paragraph entitled “Collateral” above, no
conflict with applicable law or other material agreements, obtaining all
necessary governmental approval and third party consents, evidence of corporate
authority, copy of organizational documents, insurance reasonably satisfactory
to Administrative Agent, delivery of an initial borrowing base certificate and
payment of all fees and expenses then due and owing.