1
---------------------------------------------------------------
CREDIT AGREEMENT
by and among
WINDMERE CORPORATION
as Borrower,
NATIONSBANK, NATIONAL ASSOCIATION (SOUTH)
as Agent and as Lender,
NATIONAL BANK OF CANADA,
as Lender
and
THE OTHER LENDERS PARTY HERETO FROM TIME TO TIME
October 11, 1996
---------------------------------------------------------------
2
TABLE OF CONTENTS
Page
ARTICLE I Definitions and Terms.................................................. 2
1.1. Definitions............................................................................... 2
1.2. Rules of Interpretation...................................................................17
ARTICLE II The Revolving Credit Facility.........................................19
2.1. Revolving Loans...........................................................................19
2.2. Payment of Interest.......................................................................21
2.3. Payment of Principal......................................................................21
2.4. Manner of Payment.........................................................................22
2.5. Notes.....................................................................................22
2.6. Pro Rata Payments.........................................................................22
2.7. Reductions................................................................................23
2.8. Conversions and Elections of Subsequent Interest Periods..................................23
2.9. Increase and Decrease in Amounts..........................................................24
2.10. Unused Fee................................................................................24
2.11. Deficiency Advances.......................................................................24
2.12. Use of Proceeds...........................................................................24
2.13. Extension of Stated Termination Date......................................................24
ARTICLE III Letters of Credit....................................................26
3.1. Letters of Credit.........................................................................26
3.2. Reimbursement.............................................................................26
3.3. Letter of Credit Facility Fees............................................................29
3.4. Administrative Fees.......................................................................29
ARTICLE IV Security..............................................................31
4.1. Security..................................................................................31
4.2. Further Assurances........................................................................31
4.3. Information Regarding Collateral..........................................................31
ARTICLE V Yield Protection and Illegality........................................32
5.1. Additional Costs..........................................................................32
5.2. Suspension of Loans.......................................................................33
5.3. Illegality................................................................................34
5.4. Compensation..............................................................................34
5.5. Alternate Loan and Lender.................................................................35
5.6. Taxes.....................................................................................35
ARTICLE VI Conditions to Making Loans and Issuing Letters of Credit..............37
6.1. Conditions of Initial Advance.............................................................37
6.2. Conditions of Loans and Letter of Credit..................................................39
3
ARTICLE VII Representations and Warranties.......................................41
7.1. Organization and Authority................................................................41
7.2. Loan Documents............................................................................41
7.3. Solvency..................................................................................42
7.4. Subsidiaries and Stockholders.............................................................42
7.5. Ownership Interests.......................................................................42
7.6. Financial Condition.......................................................................42
7.7. Title to Properties.......................................................................43
7.8. Taxes.....................................................................................43
7.9. Other Agreements..........................................................................43
7.10. Litigation................................................................................44
7.11. Margin Stock..............................................................................44
7.12. Investment Company........................................................................44
7.13. Patents, Etc..............................................................................44
7.14. No Untrue Statement.......................................................................44
7.15. No Consents, Etc..........................................................................45
7.16. Employee Benefit Plans....................................................................45
7.17. No Default................................................................................46
7.18. Hazardous Materials.......................................................................46
7.19. Employment Matters........................................................................47
7.20. RICO......................................................................................47
ARTICLE VIII Affirmative Covenants...............................................48
8.1. Financial Reports, Etc....................................................................48
8.2. Maintain Properties.......................................................................49
8.3. Existence, Qualification, Etc.............................................................49
8.4. Regulations and Taxes.....................................................................49
8.5. Insurance.................................................................................49
8.6. True Books................................................................................49
8.7. Right of Inspection.......................................................................50
8.8. Observe all Laws..........................................................................50
8.9. Covenants Extending to Other Persons......................................................50
8.10. Officer's Knowledge of Default............................................................50
8.11. New Subsidiaries..........................................................................50
8.12. Financial Covenants.......................................................................51
ARTICLE IX Negative Covenants....................................................52
9.1. Negative Covenants........................................................................52
ARTICLE X Events of Default and Acceleration.....................................54
10.1. Events of Default.........................................................................54
10.2. Agent to Act..............................................................................57
10.3. Cumulative Rights.........................................................................57
10.4. No Waiver.................................................................................57
10.5. Allocation of Proceeds....................................................................57
4
ARTICLE XI The Agent.............................................................59
11.1. Appointment...............................................................................59
11.2. Attorneys-in-fact.........................................................................59
11.3. Limitation on Liability...................................................................59
11.4. Reliance..................................................................................59
11.5. Notice of Default.........................................................................60
11.6. No Representations........................................................................60
11.7. Indemnification...........................................................................61
11.8. Lender....................................................................................61
11.9. Resignation...............................................................................61
11.10. Sharing of Payments, etc..................................................................62
ARTICLE XII Miscellaneous........................................................63
12.1. Assignments and Participations............................................................63
12.2. Notices...................................................................................64
12.3. Setoff....................................................................................66
12.4. Survival..................................................................................66
12.5. Expenses..................................................................................67
12.6. Amendments................................................................................67
12.7. Counterparts..............................................................................68
12.8. Termination...............................................................................68
12.9. Indemnification; Limitation of Liability..................................................68
12.10. Severability..............................................................................69
12.11. Entire Agreement..........................................................................69
12.12. Agreement Controls........................................................................69
12.13. Usury Savings Clause......................................................................70
12.14. Governing Law; Waiver of Jury Trial.......................................................70
EXHIBIT A Applicable Commitment Percentages........................................................A-1
EXHIBIT B Form of Assignment and Acceptance........................................................B-1
EXHIBIT C Notice of Appointment (or Revocation) of Authorized
Representative...........................................................................C-1
EXHIBIT D Form of Borrowing Notice.................................................................D-1
EXHIBIT E Form of Interest Rate Selection Notice...................................................E-1
EXHIBIT F Form of Note.............................................................................F-1
EXHIBIT G Form of Opinion of Borrower's Counsel....................................................G-1
EXHIBIT H Compliance Certificate...................................................................H-1
EXHIBIT I Form of Borrowing Base Certificate.......................................................I-1
EXHIBIT J Guaranty and Suretyship Agreement........................................................J-1
EXHIBIT K Surety Agreement - Accounts and Inventory................................................K-1
Schedule 4.3 Information Regarding Collateral.........................................................S-1
Schedule 7.4 Subsidiaries and Investments in Other Persons............................................S-2
Schedule 7.6 Indebtedness.............................................................................S-3
Schedule 7.7 Liens....................................................................................S-4
Schedule 7.8 Tax Matters..............................................................................S-5
Schedule 7.10 Litigation...............................................................................S-6
5
CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of October 11, 1996 (the "Agreement"), is
made by and among WINDMERE CORPORATION, a Florida corporation having its
principal place of business in Miami Lakes, Florida (the "Borrower"),
NATIONSBANK, NATIONAL ASSOCIATION (SOUTH), a national banking association
organized and existing under the laws of the United States, in its capacity as
a Lender ("NationsBank"), National Bank of Canada and each other financial
institution executing and delivering a signature page hereto and each other
financial institution which may hereafter execute and deliver an instrument of
assignment with respect to this Agreement pursuant to Section 12.1 (hereinafter
such financial institutions may be referred to individually as a "Lender" or
collectively as the "Lenders"), and NATIONSBANK, NATIONAL ASSOCIATION (SOUTH),
a national banking association organized and existing under the laws of the
United States, in its capacity as agent for the Lenders (in such capacity, and
together with any successor agent appointed in accordance with the terms of
Section 11.9, the "Agent");
W I T N E S S E T H:
WHEREAS, the Borrower has requested that the Lenders make available to the
Borrower a revolving credit facility of up to $30,000,000, the proceeds of
which are to be used for general corporate purposes, including capital
expenditures and the funding of Borrower's 50% or more owned joint ventures,
and which shall include a letter of credit facility of up to $15,000,000 for
the issuance of standby and documentary letters of credit; and
WHEREAS, the Lenders are willing to make such revolving credit and letter
of credit facilities available to the Borrower upon the terms and conditions
set forth herein;
NOW, THEREFORE, the Borrower, the Lenders and the Agent hereby agree as
follows:
6
ARTICLE I
Definitions and Terms
I.1. Definitions. For the purposes of this Agreement, in addition to the
definitions set forth above, the following terms shall have the respective
meanings set forth below:
"Acquisition" means the acquisition of (i) a controlling equity
interest in another Person (including the purchase of an option, warrant
or convertible or similar type security to acquire such a controlling
interest at the time it becomes exercisable by the holder thereof),
whether by purchase of such equity interest or upon exercise of an option
or warrant for, or conversion of securities into, such equity interest,
or (ii) assets of another Person which constitute any material part of
the assets of such Person or of a line or lines of business conducted by
such Person.
"Advance" means a borrowing under the Revolving Credit Facility
consisting of a Base Rate Loan or a Eurodollar Rate Loan.
"Applicable Commitment Percentage" means, with respect to each
Lender at any time, that percentage of the Total Revolving Credit
Commitment set forth opposite the name of such Lender in Exhibit A;
provided, however, that the Applicable Commitment Percentage of each
Lender shall be increased or decreased to reflect any assignments to or
by such Lender effected in accordance with Section 12.1.
"Applicable Margin" means 1.50%.
"Applicable Unused Fee" means 37.50 basis points.
"Applications and Agreements for Letters of Credit" means,
collectively, the Applications and Agreements for Letters of Credit, or
similar documentation, executed by the Borrower from time to time and
delivered to the Issuing Bank to support the issuance of Letters of
Credit.
"Assignment and Acceptance" shall mean an Assignment and Acceptance
in the form of Exhibit B (with blanks appropriately filled in) delivered
to the Agent in connection with an assignment of a Lender's interest
under this Agreement pursuant to Section 12.1.
"Authorized Representative" means any of the President or any Vice
President of the Borrower or, with respect to financial matters, the
chief financial officer of the Borrower, or any other Person expressly
designated by the Board of Directors of the Borrower (or the appropriate
committee thereof) as an Authorized Representative of the Borrower, as
set forth from time to time in a certificate in the form of Exhibit C.
2
7
"Base Rate" means the per annum rate of interest equal to the
greater of (i) the Prime Rate or (ii) the Federal Funds Effective Rate
plus one-half of one percent (.50%). Any change in the Base Rate
resulting from a change in the Prime Rate or the Federal Funds Effective
Rate shall become effective as of 12:01 A.M. of the Business Day on which
each such change occurs. The Base Rate is a reference rate used by Agent
in determining interest rates on certain loans and is not intended to be
the lowest rate of interest charged on any extension of credit to any
debtor.
"Base Rate Loan" means a Loan for which the rate of interest is
determined by reference to the Base Rate.
"Base Rate Refunding Loan" means a Base Rate Loan made to satisfy
Reimbursement Obligations arising from a drawing under a Letter of
Credit.
"Board" means the Board of Governors of the Federal Reserve System
(or any successor body).
"Borrower's Account" means a demand deposit account with the Agent,
which may be maintained at one or more offices of the Agent or an agent
of the Agent.
"Borrowing Notice" means the notice delivered by an Authorized
Representative in connection with an Advance under the Revolving Credit
Facility, in the form of Exhibit D.
"Borrowing Base" means, as of the date of determination thereof, (i)
Eligible Receivables multiplied by 80% plus (ii) Eligible Inventory
multiplied by 40% (the "Eligible Inventory Amount") provided that the
Eligible Inventory Amount shall not exceed $10,000,000.
"Borrowing Base Certificate" means a certificate of an Authorized
Representative in the form attached hereto as Exhibit I.
"Business Day" means, (i) with respect to any Base Rate Loan, any
day which is not a Saturday, Sunday or a day on which banks in the States
of New York and North Carolina are authorized or obligated by law,
executive order or governmental decree to be closed and, (ii) with
respect to any Eurodollar Rate Loan, any day which is a Business Day, as
described above, and on which the relevant international financial
markets are open for the transaction of business contemplated by this
Agreement in London, England, New York, New York and Charlotte, North
Carolina.
"Capital Leases" means all leases which have been or should be
capitalized in accordance with GAAP as in effect from time to time
including Statement No. 13 of the Financial Accounting Standards Board
and any successor thereof.
3
8
"Closing Date" means the date as of which this Agreement is executed
by the Borrower, the Lenders and the Agent and on which the conditions
set forth in Section 6.1 have been satisfied.
"Code" means the Internal Revenue Code of 1986, as amended, and any
regulations promulgated thereunder.
"Collateral" as defined under any Security Instrument.
"Consistent Basis" in reference to the application of GAAP means the
accounting principles observed in the period referred to are comparable
in all material respects to those applied in the preparation of the
audited financial statements of the Borrower referred to in Section
7.6(a).
"Consolidated Interest Coverage Ratio" means, with respect to the
Parent and its Subsidiaries, for the period of four consecutive fiscal
quarters ending as of the date of determination, the ratio of (i)
Consolidated Net Income plus Consolidated Interest Expense and income
taxes to (ii) Consolidated Interest Expense.
"Consolidated Interest Expense" means, with respect to any period of
computation thereof, the gross interest expense of the Parent and its
Subsidiaries, including without limitation (i) the amortization of debt
discounts, (ii) the amortization of all fees payable in connection with
the incurrence of Indebtedness to the extent included in interest
expense, and (iii) the portion of any liabilities incurred in connection
with Capital Leases allocable to interest expense, all determined on a
consolidated basis in accordance with GAAP applied on a Consistent Basis.
"Consolidated Net Income" means the gross revenues of the Parent and
its Subsidiaries less all operating and non-operating expenses of the
Parent and its Subsidiaries including taxes on income, all determined on
a consolidated basis in accordance with GAAP applied on a Consistent
Basis; but excluding (i) gains and losses on the sale, conversion or
other disposition of capital assets, (ii) gains and losses on the
acquisition, retirement, sale or other disposition of capital stock and
other securities of the Parent or its Subsidiaries, (iii) gains and
losses on the collection of proceeds of life insurance policies, (iv) any
write-up of any asset, and (v) any other gain or credit or loss of an
extraordinary nature as determined in accordance with GAAP applied on a
Consistent Basis.
"Consolidated Tangible Net Worth" means the total of Parent's and
its Subsidiaries' shareholder equity as determined in accordance with
GAAP, minus the sum of the following, (i) the book value of all assets as
would be treated as intangible assets under GAAP and (ii) any prepaid
advertising credits.
"Consolidated Total Assets" means, as of any date on which the
amount thereof
4
9
is to be determined, the net book value of all assets of the Parent and
its Subsidiaries as determined on a consolidated basis in accordance with
GAAP applied on a Consistent Basis.
"Contingent Obligation" of any Person means all contingent
liabilities required (or which, upon the creation or incurring thereof,
would be required) to be included in the financial statements (including
footnotes) of such Person in accordance with GAAP applied on a Consistent
Basis, including Statement No. 5 of the Financial Accounting Standards
Board, and any obligation of such Person guaranteeing or in effect
guaranteeing any Indebtedness, dividend or other obligation of any other
Person (the "primary obligor") in any manner, whether directly or
indirectly, including obligations of such Person however incurred:
(1) to purchase such Indebtedness or other obligation or any
property or assets constituting security therefor;
(2) to advance or supply funds in any manner (i) for the
purchase or payment of such Indebtedness or other obligation, or
(ii) to maintain a minimum working capital, net worth or other
balance sheet condition or any income statement condition of the
primary obligor;
(3) to grant or convey any lien, security interest, pledge,
charge or other encumbrance on any property or assets of such
Person to secure payment of such Indebtedness or other obligation;
(4) to lease property or to purchase securities or other
property or services primarily for the purpose of assuring the
owner or holder of such Indebtedness or obligation of the ability
of the primary obligor to make payment of such Indebtedness or
other obligation; or
(5) otherwise to assure the owner of the Indebtedness or such
obligation of the primary obligor against loss in respect thereof.
Contingent Obligations shall be computed at the amount which, in
light of all the facts and circumstances existing at the time, represent
the amount which can reasonably be expected to become an actual or
matured liability of such Person.
"Credit Party" means, collectively, the Borrower, each Guarantor and
each other Person providing Collateral pursuant to any Security
Instrument.
"Default" means any event or condition which, with the giving or
receipt of notice or lapse of time or both, would constitute an Event of
Default hereunder.
"Default Rate" means (i) with respect to each Eurodollar Rate Loan,
until the
5
10
end of the Interest Period applicable thereto, a rate of two percent (2%)
above the Eurodollar Rate applicable to such Loan, and thereafter at a
rate of interest per annum which shall be two percent (2%) above the Base
Rate, (ii) with respect to Base Rate Loans, at a rate of interest per
annum which shall be two percent (2%) above the Base Rate and (iii) in
any case, the maximum rate permitted by applicable law, if lower.
"Dollars" and the symbol "$" means dollars constituting legal tender
for the payment of public and private debts in the United States of
America.
"Domestic Subsidiary" means any Subsidiary which is incorporated
under the laws of any state of the United States of America.
"Eligible Inventory" means that domestic inventory of the Borrower
and its Domestic Subsidiaries which is determined by the Agent in the
reasonable exercise of its discretion to be Eligible Inventory; provided,
however, that any of the following shall not be Eligible Inventory:
(i) inventory that is kept in any location other than the (a)
warehouses owned by the Borrower and located in Miami, Florida, (b)
public warehouse located in Memphis, Tennessee and (c) public
warehouse located in ▇▇▇▇▇▇▇, Nevada; and
(ii) inventory that is unfinished.
"Eligible Receivables" means those trade accounts receivable of the
Borrower, the Parent and their Domestic Subsidiaries which are determined
by the Agent in the reasonable exercise of its discretion to be an
Eligible Receivable; provided, however, that any of the following shall
not be Eligible Receivables:
(i) intercompany receivables;
(ii) receivables owed by the United States government or any
of its states, departments, agencies or instrumentalities of any
thereof;
(iii) receivables owed by any person not a United States
citizen or corporation, partnership or other entity organized under
the laws of the United States whose principal office is not located
within the United States;
(iv) receivables of any customer more than 50% of which
receivables due Borrower, the Parent or any of their Domestic
Subsidiaries are more than 90 days past due;
(v) receivables that are due or unpaid for more than ninety
(90) days from the original due date thereof; and
6
11
(vi) any receivable which is subject to any offset, deduction,
defense, dispute or counterclaim.
"Employee Benefit Plan" means any employee benefit plan within the
meaning of Section 3(3) of ERISA which (i) is maintained for employees of
the Borrower, the Parent or any of their ERISA Affiliates or is assumed
by the Borrower, the Parent or any of their ERISA Affiliates or (ii) has
at any time been maintained for the employees of the Borrower, the Parent
or any current or former ERISA Affiliate.
"Environmental Laws" means, collectively, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as
amended, the Superfund Amendments and Reauthorization Act of 1986, the
Resource Conservation and Recovery Act, the Toxic Substances Control Act,
as amended, the Clean Air Act, as amended, the Clean Water Act, as
amended, any other "Superfund" or "Superlien" law or any other federal,
or applicable state or local statute, law, ordinance, code, rule,
regulation, order or decree regulating, relating to, or imposing
liability or standards of conduct concerning, any pollutant, contaminant,
or hazardous, toxic or dangerous waste, substance or material.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time, and any successor statute and all rules and
regulations promulgated thereunder.
"ERISA Affiliate", as applied to the Borrower or the Parent, means any
Person or trade or business which is a member of a group which is under
common control with the Borrower or the Parent, who together with the
Borrower, is treated as a single employer within the meaning of Section
414(b) and (c) of the Code.
"Eurodollar Rate Loan" means a Loan for which the rate of interest
is determined by reference to the Eurodollar Rate.
"Eurodollar Rate" means the interest rate per annum calculated
according to the following formula:
Eurodollar = Interbank Offered Rate + Applicable
Rate -------------------------------- Margin
1- Eurodollar Reserve Percentage
"Eurodollar Reserve Percentage" means, for any day, that percentage
(expressed as a decimal) which is in effect from time to time under
Regulation D or any successor regulation, as the maximum reserve
requirement (including any basic, supplemental, emergency, special, or
marginal reserves) applicable with respect to Eurocurrency liabilities as
that term is defined in Regulation D (or against any other category of
liabilities that includes deposits by reference to which the interest
rate of Eurodollar
7
12
Rate Loans is determined), whether or not the Agent or any Lender has any
Eurocurrency liabilities subject to such requirements, without benefits
of credits or proration, exceptions or offsets that may be available from
time to time to the Agent or any Lender. The Eurodollar Rate shall be
adjusted automatically on and as of the effective date of any change in
the Eurodollar Reserve Percentage.
"Event of Default" means any of the occurrences set forth as such in
Section 10.1.
"Existing Letters of Credit" means LC Nos. L914790 and L916720, in
the amount of, respectively, $3,000,000 and $2,250,000.
"Facility Guaranty" means each Guaranty and Suretyship Agreement
between one or more Guarantors and the Agent for the benefit of the
Lenders, delivered as of the Closing Date and otherwise pursuant to
Section 8.11, as the same may be amended, modified or supplemented.
"Federal Funds Effective Rate" means, for any day, the rate per
annum (rounded upward to the nearest 1/100th of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members
of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business
Day next succeeding such day, provided that (a) if such day is not a
Business Day, the Federal Funds Effective Rate for such day shall be such
rate on such transactions on the next preceding Business Day, and (b) if
no such rate is so published on such next succeeding Business Day, the
Federal Funds Effective Rate for such day shall be the average rate
quoted to the Agent on such day on such transaction as determined by the
Agent.
"Foreign Benefit Law" means any applicable statute, law, ordinance,
code, rule, regulation, order or decree of any foreign nation or any
province, state, territory, protectorate or other political subdivision
thereof regulating, relating to, or imposing liability or standards of
conduct concerning, any Employee Benefit Plan.
"GAAP" or "Generally Accepted Accounting Principles" means generally
accepted accounting principles, being those principles of accounting set
forth in pronouncements of the Financial Accounting Standards Board, the
American Institute of Certified Public Accountants or which have other
substantial authoritative support and are applicable in the circumstances
as of the date of a report.
"Governmental Authority" shall mean any Federal, state, municipal,
national or other governmental department, commission, board, bureau,
court, agency or instrumentality or political subdivision thereof or any
entity or officer exercising executive, legislative, judicial, regulatory
or administrative functions of or pertaining to any government or any
court, in each case whether associated with a state of the United
8
13
States, the United States, or a foreign entity or government.
"Guarantors" means the Parent and the Domestic Subsidiaries of the
Borrower and the Parent.
"Hazardous Material" means and includes any pollutant, contaminant,
hazardous, toxic or dangerous waste, substance or material (including
petroleum products, asbestos-containing materials and lead), the
management, generation, handling, storage, transportation, disposal,
treatment, release, discharge or emission of which is subject to any
Environmental Law.
"Indebtedness" means with respect to any Person, without
duplication, all Indebtedness for Money Borrowed, all indebtedness of
such Person for the acquisition of property other than purchases of
property, product, merchandise and services in the ordinary course of
business (so long as such amounts are payable in less than twelve (12)
months), all indebtedness secured by any Lien on the property of such
Person whether or not such indebtedness is assumed (except unperfected
Liens incurred in the ordinary course of business and not in connection
with the borrowing of money), all liability of such Person by way of
endorsements (other than for collection or deposit in the ordinary course
of business), all Contingent Obligations; provided that in no event shall
the term Indebtedness include capital stock surplus and retained
earnings, minority interests in the common stock of Subsidiaries, lease
obligations (other than pursuant to Capital Leases), reserves for
deferred income taxes and investment credits, other deferred credits or
reserves, FASB 106 charges and deferred compensation obligations.
"Indebtedness for Money Borrowed" means with respect to any Person,
without duplication, all indebtedness in respect of money borrowed,
including without limitation all Capital Leases and the deferred purchase
price of any property or asset, evidenced by a promissory note, bond,
debenture or similar written obligation for the payment of money
(including conditional sales or similar title retention agreements),
other than trade payables incurred in the ordinary course of business.
"Interbank Offered Rate" means, for any Loan bearing interest at the
Eurodollar Rate for any Interest Period therefor, the rate per annum
(rounded upwards, if necessary, to the nearest 1/100th of 1%) appearing
on Telerate Page 3750 (or any successor page) as the London interbank
offered rate for deposits in Dollars at approximately 11:00 a.m. (London
time) two Business Days prior to the first day of such Interest Period
for a term comparable to such Interest Period. If for any reason such
rate is not available, the term "Interbank Offered Rate" shall mean, for
any Loan bearing interest at the Eurodollar Rate for any Interest Period
therefor, the rate per annum (rounded upwards, if necessary, to the
nearest 1/100th of 1%) appearing on Reuters Screen LIBO Page as the
London interbank offered rate for deposits in Dollars at approximately
11:00 a.m. (London Time) two Business Days prior to the first day of such
Interest Period for a term comparable to such Interest Period; provided,
however,
9
14
if more than one rate is specified on Reuters Screen LIBO Page, the
applicable rate shall be the arithmetic mean of all such rates.
"Interest Period" means, for each Eurodollar Rate Loan, a period
commencing on the date such Eurodollar Rate Loan is made or converted and
ending, at the Borrower's option, on the date one, two, three or six
months thereafter as notified to the Agent by the Authorized
Representative three (3) Business Days prior to the beginning of such
Interest Period; provided, that,
(i) if the Authorized Representative fails to notify the Agent
of the length of an Interest Period three (3) Business Days prior
to the first day of such Interest Period, the Loan for which such
Interest Period was to be determined shall be deemed to be a Base
Rate Loan as of the first day thereof;
(ii) if an Interest Period for a Eurodollar Rate Loan would
end on a day which is not a Business Day, such Interest Period
shall be extended to the next Business Day (unless such extension
would cause the applicable Interest Period to end in the succeeding
calendar month, in which case such Interest Period shall end on the
next preceding Business Day);
(iii) any Interest Period which begins on the last Business
Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of
such Interest Period) shall end on the last Business Day of a
calendar month;
(iv) no Interest Period shall extend past the Stated
Termination Date; and
(v) there shall not be more than ten (10) Interest Periods in
effect on any day.
"Interest Rate Selection Notice" means the written notice delivered
by an Authorized Representative in connection with the election of a
subsequent Interest Period for any Eurodollar Rate Loan or the conversion
of any Eurodollar Rate Loan into a Base Rate Loan or the conversion of
any Base Rate Loan into a Eurodollar Rate Loan in the form of Exhibit E.
"Issuing Bank" means initially NationsBank and thereafter any Lender
which is successor to NationsBank as issuer of Letters of Credit under
Article III.
"LC Account Agreement" means the LC Account Agreement dated as of
the date hereof between the Borrower and the Agent, as amended, modified
or supplemented from time to time.
10
15
"Lending Office" means, as to each Lender, the Lending Office of
such Lender designated on the signature pages hereof or in an Assignment
and Acceptance or such other office of such Lender (or of an affiliate of
such Lender) as such Lender may from time to time specify to the
Authorized Representative and the Agent as the office by which its Loans
are to be made and maintained.
"Letter of Credit" means (i) a standby or documentary letter of
credit issued by the Issuing Bank for the account of the Borrower in
favor of a Person advancing credit or securing an obligation on behalf of
the Borrower and (ii) the Existing Letters of Credit.
"Letter of Credit Commitment" means, with respect to each Lender,
the obligation of such Lender to acquire Participations in respect of
Letters of Credit and Reimbursement Obligations up to an aggregate amount
at any one time outstanding equal to such Lender's Applicable Commitment
Percentage of the Total Letter of Credit Commitment as the same may be
increased or decreased from time to time pursuant to this Agreement.
"Letter of Credit Facility" means the facility described in Article
III providing for the issuance by the Issuing Bank for the account of the
Borrower of Letters of Credit in an aggregate stated amount at any time
outstanding not exceeding the Total Letter of Credit Commitment.
"Letter of Credit Outstandings" means, as of any date of
determination, the aggregate amount remaining undrawn under all Letters
of Credit plus the principal amount of all Reimbursement Obligations then
outstanding.
"Lien" means any interest in property securing any obligation owed
to, or a claim by, a Person other than the owner of the property, whether
such interest is based on the common law, statute or contract, and
including but not limited to the lien or security interest arising from a
mortgage, encumbrance, pledge, security agreement, conditional sale or
trust receipt or a lease, consignment or bailment for security purposes.
For the purposes of this Agreement, the Borrower and any Subsidiary shall
be deemed to be the owner of any property which it has acquired or holds
subject to a conditional sale agreement, financing lease, or other
arrangement pursuant to which title to the property has been retained by
or vested in some other Person for security purposes.
"Loan" or "Loans" means any borrowing pursuant to an Advance under
the Revolving Credit Facility.
"Loan Documents" means this Agreement, the Notes, the Security
Instruments, the Facility Guaranties, the LC Account Agreement, the
Applications and Agreements for Letter of Credit, and all other
instruments and documents heretofore or hereafter
11
16
executed or delivered to or in favor of any Lender, the Issuing Bank or
the Agent in connection with the Loans made and transactions contemplated
under this Agreement, as the same may be amended, supplemented or
replaced from the time to time.
"Material Adverse Effect" means a material adverse effect on (i) the
business, properties, operations or condition, financial or otherwise, of
the Borrower or any of its Subsidiaries or any other Credit Party, (ii)
the ability of any Credit Party to pay or perform its respective
obligations, liabilities and indebtedness under the Loan Documents as
such payment or performance becomes due in accordance with the terms
thereof, or (iii) the rights, powers and remedies of the Agent or any
Lender under any Loan Document or the validity, legality or
enforceability thereof (including for purposes of clauses (ii) and (iii)
the imposition of burdensome conditions thereon).
"Multiemployer Plan" means a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA to which the Borrower or any ERISA Affiliate
is making, or is accruing an obligation to make, contributions or has
made, or been obligated to make, contributions within the preceding six
(6) fiscal years.
"Notes" means, collectively, the promissory notes of the Borrower
evidencing Loans executed and delivered to the Lenders substantially in
the form of Exhibit F.
"Obligations" means the obligations, liabilities and Indebtedness of
the Borrower with respect to (i) the principal and interest on the Loans
as evidenced by the Notes, (ii) the Reimbursement Obligations and
otherwise in respect of the Letters of Credit, and (iii) the payment and
performance of all other obligations, liabilities and Indebtedness of the
Borrower to the Lenders, the Issuing Bank or the Agent hereunder, under
any one or more of the other Loan Documents or with respect to the Loans.
"Parent" means Windmere-Durable Holdings, Inc., a Florida
corporation.
"Participation" means, with respect to any Lender (other than the
Issuing Bank) and a Letter of Credit, the extension of credit represented
by the participation of such Lender hereunder in the liability of the
Issuing Bank in respect of a Letter of Credit issued by the Issuing Bank
in accordance with the terms hereof.
"PBGC" means the Pension Benefit Guaranty Corporation and any
successor thereto.
"Pension Plan" means any employee pension benefit plan within the
meaning of Section 3(2) of ERISA, other than a Multiemployer Plan, which
is subject to the provisions of Title IV of ERISA or Section 412 of the
Code and which (i) is maintained for employees of the Borrower or any of
its ERISA Affiliates or is assumed by the Borrower or any of its ERISA
Affiliates or (ii) has at any time been maintained for the employees of
the Borrower or any current or former ERISA Affiliate.
12
17
"Person" means an individual, partnership, corporation, trust,
unincorporated organization, association, joint venture or a government
or agency or political subdivision thereof.
"Prime Rate" means the rate of interest per annum announced publicly
by the Agent as its prime rate from time to time. The Prime Rate is not
necessarily the best or the lowest rate of interest offered by the Agent.
"Principal Office" means the office of the Agent at NationsBank,
National Association, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇-▇▇-▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Agency Services, or such
other office and address as the Agent may from time to time designate.
"Regulation D" means Regulation D of the Board as the same may be
amended or supplemented from time to time.
"Regulatory Change" means any change effective after the Closing
Date in United States federal or state laws or regulations (including
Regulation D and capital adequacy regulations) or foreign laws or
regulations or the adoption or making after such date of any
interpretations, directives or requests applying to a class of banks,
which includes any of the Lenders, under any United States federal or
state or foreign laws or regulations (whether or not having the force of
law) by any court or governmental or monetary authority charged with the
interpretation or administration thereof or compliance by any Lender with
any request or directive regarding capital adequacy, including those
relating to "highly leveraged transactions," whether or not having the
force of law, and whether or not failure to comply therewith would be
unlawful and whether or not published or proposed prior to the date
hereof.
"Reimbursement Obligation" shall mean at any time, the obligation of
the Borrower with respect to any Letter of Credit to reimburse the
Issuing Bank and the Lenders to the extent of their respective
Participations (including by the receipt by the Issuing Bank of proceeds
of Loans pursuant to Section 3.2) for amounts theretofore paid by the
Issuing Bank pursuant to a drawing under such Letter of Credit.
"Required Lenders" means, as of any date, Lenders on such date
having Credit Exposures (as defined below) aggregating at least 66-2/3%
of the aggregate Credit Exposures of all the Lenders on such date. For
purposes of the preceding sentence, the amount of the "Credit Exposure"
of each Lender shall be equal to the aggregate principal amount of the
Loans owing to such Lender plus the aggregate unutilized amounts of such
Lender's Revolving Credit Commitment plus the amount of such Lender's
Applicable Commitment Percentage of Letter of Credit Outstandings;
provided that, if any Lender shall have failed to pay to the Issuing Bank
its Applicable Commitment Percentage of any drawing under any Letter of
Credit resulting in an outstanding Reimbursement Obligation, such
Lender's Credit Exposure attributable to Letters of Credit and
Reimbursement Obligations shall be deemed to be held by the
13
18
Issuing Bank for purposes of this definition.
"Revolving Credit Commitment" means, with respect to each Lender,
the obligation of such Lender to make Loans to the Borrower up to an
aggregate principal amount at any one time outstanding equal to such
Lender's Applicable Commitment Percentage of the Total Revolving Credit
Commitment.
"Revolving Credit Facility" means the facility described in Article
II hereof providing for Loans to the Borrower by the Lenders in the
aggregate principal amount of the Total Revolving Credit Commitment.
"Revolving Credit Outstandings" means, as of any date of
determination, the aggregate principal amount of all Loans then
outstanding.
"Revolving Credit Termination Date" means (i) the Stated Termination
Date or (ii) such earlier date of termination of Lenders' obligations
pursuant to Section 10.1 upon the occurrence of an Event of Default, or
(iii) such date as the Borrower may voluntarily and permanently terminate
the Revolving Credit Facility by payment in full of all Revolving Credit
Outstandings and Letter of Credit Outstandings, together with all accrued
and unpaid interest thereon and other Obligations incurred in connection
therewith, and cancellation of all Letters of Credit.
"Revolving Loan" means any borrowing pursuant to an Advance under
the Revolving Credit Facility in accordance with Article II.
"Security Agreements" means, collectively (or individually as the
context may indicate), (i) the Security Agreement dated as of the date
hereof by the Borrower to the Agent, and (ii) the Security Agreement
dated as of the date hereof by the Parent and its Domestic Subsidiaries
to the Agent, and (iii) any additional Security Agreement delivered to
the Agent pursuant to Section 8.11, as hereafter modified, amended or
supplemented from time to time.
"Security Instruments" means, collectively, the Security Agreements,
and all other agreements, instruments and other documents, whether now
existing or hereafter in effect, pursuant to which the Borrower, the
Parent or any Domestic Subsidiary of the Borrower or the Parent shall
grant or convey to the Agent or the Lenders a Lien in property as
security for all or any portion of the Obligations, as any of them may be
amended, modified or supplemented from time to time.
"Single Employer Plan" means any employee pension benefit plan
covered by Title IV of ERISA in respect of which the Borrower or any
Subsidiary is an "employer" as described in Section 4001(b) of ERISA and
which is not a Multiemployer Plan.
"Solvent" means, when used with respect to any Person, that at the
time of
14
19
determination:
(i) the fair value of its assets (both at fair valuation and
at present fair saleable value on an orderly basis) is in excess of
the total amount of its liabilities, including Contingent
Obligations; and
(ii) it is then able and expects to be able to pay its debts
as they mature; and
(iii) it has capital sufficient to carry on its business as
conducted and as proposed to be conducted.
"Special Purpose Subsidiary" means a wholly-owned Subsidiary of the
Borrower organized for the sole purpose of accomplishing a Year End
Domestic Receivables Transaction and which engages in no other business,
the proper name of which shall be furnished to the Agent promptly
following its organization.
"Stated Termination Date" means July 27, 1997 or such later date as
the parties may agree pursuant to Section 2.13.
"Subsidiary" means, except for Borrower's joint venture in Paragon
Industries, any corporation in which more than 50% of its outstanding
voting stock is owned directly or indirectly by the Parent or the
Borrower and/or by one or more of the Borrower's or Parent's Subsidiaries
or, in the case of a Person other than a corporation, the Borrower or the
Parent, as the case may be, directly or indirectly, is entitled to more
than 50% of the profits of such Person.
"Termination Event" means: (i) a "Reportable Event" described in
Section 4043 of ERISA and the regulations issued thereunder (unless the
notice requirement has been waived by applicable regulation); or (ii) the
withdrawal of the Borrower or any ERISA Affiliate from a Pension Plan
during a plan year in which it was a "substantial employer" as defined in
Section 4001(a)(2) of ERISA or was deemed such under Section 4068(f) of
ERISA; or (iii) the termination of a Pension Plan, the filing of a notice
of intent to terminate a Pension Plan or the treatment of a Pension Plan
amendment as a termination under Section 4041 of ERISA; or (iv) the
institution of proceedings to terminate a Pension Plan by the PBGC; or
(v) any other event or condition which would constitute grounds under
Section 4042(a) of ERISA for the termination of, or the appointment of a
trustee to administer, any Pension Plan; or (vi) the partial or complete
withdrawal of the Borrower or any ERISA Affiliate from a Multiemployer
Plan; or (vii) the imposition of a Lien pursuant to Section 412 of the
Code or Section 302 of ERISA; or (viii) any event or condition which
results in the reorganization or insolvency of a Multiemployer Plan under
Section 4241 or Section 4245 of ERISA, respectively; or (ix) any event or
condition which results in the termination of a Multiemployer Plan under
Section 4041A of ERISA or the institution
15
20
by the PBGC of proceedings to terminate a Multiemployer Plan under
Section 4042 of ERISA.
"Total Letter of Credit Commitment" means an amount not to exceed
$15,000,000.
"Total Revolving Credit Commitment" means a principal amount equal
to $30,000,000 up to and including January 31, 1997 and thereafter, a
principal amount equal to $20,000,000, each such amount as reduced from
time to time in accordance with Section 2.7.
"Year End Domestic Receivables Transaction" means the transfer by
the Borrower and/or its Domestic Subsidiaries to Windmere Holdings
Corporation, a Guarantor, ("Holdings") or a Special Purpose Subsidiary on
or about December 31 of any year of Domestic Receivables (as defined in
the Security Agreement entered into by the Borrower or such Domestic
Subsidiary), subject at all times to the existing and continuing Lien on
such property in favor of the Agent for the benefit of the Lenders;
provided that all of the following conditions are satisfied:
(i) all Domestic Receivables transferred to Holdings or the
Special Purpose Subsidiary on or about any December 31 and
retransferred to the appropriate transferor not later than the
fifth Business Day following January 1;
(ii) immediately prior to giving effect to any such transfer,
no Default or Event of Default shall have occurred and be
continuing;
(iii) Holdings and the Special Purpose Subsidiary shall incur
no Indebtedness or other liabilities for the payment of money,
other than those in favor of the Agent and the Lenders, corporate
franchise taxes and similar unsecured obligations necessarily
incurred to maintain its existence, and the obligation to
retransfer Domestic Receivables as of the fifth Business Day
following each January 1 to the appropriate transferor;
(iv) immediately before giving effect to any such transfer on
or about any December 31, Holdings and the Special Purpose
Subsidiary shall not have become liable to any Person, and no
Person shall have asserted any claim against Holdings or the
Special Purpose Subsidiary (including without limitation the
submission of any invoice) for the payment of any amount or the
delivery of any property or interest therein other than routine
invoices for the payment of operating costs in connection with
liabilities expressly permitted under the immediately preceding
clause (iii);
(v) the Agent for the benefit of the Lenders shall have a duly
perfected first priority security interest in the Domestic
Receivables in which
16
21
Holdings or the Special Purpose Subsidiary may acquire any interest
at any time, subject to no adverse claims of creditors of, or
purchasers for value from, Holdings or the Special Purpose
Subsidiary;
(vi) the Special Purpose Subsidiary shall have been created in
full compliance with the provisions of 8.11 hereof and there shall
be then in effect an appropriate guaranty and an appropriate
security agreement executed and delivered by and effective against
the Special Purpose Subsidiary as contemplated in such Section; and
(vii) the purpose of the Special Purpose Subsidiary shall be
strictly limited, by charter or in such other manner as shall be
acceptable to the Agent, to (A) the acquisition and retransfer or
Domestic Receivables as contemplated in the preceding clauses of
this definition and (B) the incurring of obligations and the grant
of a Lien to the Agent and the Lenders as required by Section 8.11
hereof, and the operations and activities of the Special Purpose
Subsidiary shall at all times be strictly limited to those actions
necessary to accomplish such purposes.
I.2. Rules of Interpretation.
(a) All accounting terms not specifically defined herein shall have
the meanings assigned to such terms and shall be interpreted in
accordance with GAAP applied on a Consistent Basis.
(b) Each term defined in Article 1 or 9 of the Florida Uniform
Commercial Code shall have the meaning given therein unless otherwise
defined herein, except to the extent that the Uniform Commercial Code of
another jurisdiction is controlling, in which case such terms shall have
the meaning given in the Uniform Commercial Code of the applicable
jurisdiction.
(c) The headings, subheadings and table of contents used herein or
in any other Loan Document are solely for convenience of reference and
shall not constitute a part of any such document or affect the meaning,
construction or effect of any provision thereof.
(d) Except as otherwise expressly provided, references herein to
articles, sections, paragraphs, clauses, annexes, appendices, exhibits
and schedules are references to articles, sections, paragraphs, clauses,
annexes, appendices, exhibits and schedules in or to this Agreement.
(e) All definitions set forth herein or in any other Loan Document
shall apply to the singular as well as the plural form of such defined
term, and all references to the masculine gender shall include reference
to the feminine or neuter gender, and vice
17
22
versa, as the context may require.
(f) When used herein or in any other Loan Document, words such as
"hereunder", "hereto", "hereof" and "herein" and other words of like
import shall, unless the context clearly indicates to the contrary, refer
to the whole of the applicable document and not to any particular
article, section, subsection, paragraph or clause thereof.
(g) References to "including" means including without limiting the
generality of any description preceding such term, and for purposes
hereof the rule of ejusdem generis shall not be applicable to limit a
general statement, followed by or referable to an enumeration of specific
matters, to matters similar to those specifically mentioned.
(h) All dates and times of day specified herein shall refer to such
dates and times at Charlotte, North Carolina.
(i) Each of the parties to the Loan Documents and their counsel have
reviewed and revised, or requested (or had the opportunity to request)
revisions to, the Loan Documents, and any rule of construction that
ambiguities are to be resolved against the drafting party shall be
inapplicable in the construing and interpretation of the Loan Documents
and all exhibits, schedules and appendices thereto.
(j) Any reference to an officer of the Borrower or any other Person
by reference to the title of such officer shall be deemed to refer to
each other officer of such Person, however titled, exercising the same or
substantially similar functions.
(k) All references to any agreement or document as amended, modified
or supplemented, or words of similar effect, shall mean such document or
agreement, as the case may be, as amended, modified or supplemented from
time to time only as and to the extent permitted therein and in the Loan
Documents.
18
23
ARTICLE II
The Revolving Credit Facility
II.1. Revolving Loans.
(a) Commitment. Subject to the terms and conditions of this
Agreement, each Lender severally agrees to make Advances to the Borrower under
the Revolving Credit Facility from time to time from the Closing Date until the
Revolving Credit Termination Date on a pro rata basis as to the total borrowing
requested by the Borrower on any day determined by such Lender's Applicable
Commitment Percentage up to but not exceeding the Revolving Credit Commitment
of such Lender, provided, however, that the Lenders will not be required and
shall have no obligation to make any such Advance (i) so long as a Default or
an Event of Default has occurred and is continuing or (ii) if the Agent has
accelerated the maturity of any of the Notes as a result of an Event of
Default; provided further, however, that immediately after giving effect to
each such Advance, the principal amount of Revolving Credit Outstandings plus
Letter of Credit Outstandings shall not exceed the Total Revolving Credit
Commitment or the Borrowing Base. Within such limits, the Borrower may borrow,
repay and reborrow under the Revolving Credit Facility on a Business Day from
the Closing Date until, but (as to borrowings and reborrowings) not including,
the Revolving Credit Termination Date; provided, however, that (y) no Revolving
Loan that is a Eurodollar Rate Loan shall be made which has an Interest Period
that extends beyond the Stated Termination Date and (z) each Revolving Loan
that is a Eurodollar Rate Loan may, subject to the provisions of Section 2.7,
be repaid only on the last day of the Interest Period with respect thereto
unless such payment is accompanied by the additional payment, if any, required
by Section 5.4.
(b) Amounts. Except as otherwise permitted by the Lenders from time
to time, the aggregate unpaid principal amount of the Revolving Credit
Outstandings plus Letter of Credit Outstandings shall not exceed at any time
the Total Revolving Credit Commitment or the Borrowing Base, and, in the event
there shall be outstanding any such excess, the Borrower shall immediately make
such payments and prepayments as shall be necessary to comply with this
restriction. Each Loan hereunder, other than Base Rate Refunding Loans, and
each conversion under Section 2.8, shall be in an amount of at least $500,000,
and, if greater than $500,000, an integral multiple of $100,000.
(c) Advances. (i) An Authorized Representative shall give the Agent
(1) at least three (3) Business Days' irrevocable written notice by
telefacsimile transmission of a Borrowing Notice or Interest Rate Selection
Notice (as applicable) with appropriate insertions, effective upon receipt, of
each Loan that is a Eurodollar Rate Loan (whether representing an additional
borrowing hereunder or the conversion of a borrowing hereunder from Base Rate
Loans to Eurodollar Rate Loans) prior to 10:30 A.M. and (2) irrevocable written
notice by telefacsimile transmission of a Borrowing Notice or Interest Rate
Selection Notice (as applicable) with appropriate insertions, effective upon
receipt, of each Revolving Loan (other
19
24
than Base Rate Refunding Loans to the extent the same are effected without
notice pursuant to Section 2.1(c)(iv)) that is a Base Rate Loan (whether
representing an additional borrowing hereunder or the conversion of borrowing
hereunder from Eurodollar Rate Loans to Base Rate Loans) prior to 10:30 A.M. on
the day of such proposed Loan. Each such notice shall specify the amount of the
borrowing, the type of Loan (Base Rate or Eurodollar Rate), the date of
borrowing and, if a Eurodollar Rate Loan, the Interest Period to be used in the
computation of interest. Notice of receipt of such Borrowing Notice or Interest
Rate Selection Notice, as the case may be, together with the amount of each
Lender's portion of an Advance requested thereunder, shall be provided by the
Agent to each Lender by telefacsimile transmission with reasonable promptness,
but (provided the Agent shall have received such notice by 10:30 A.M.) not
later than 1:00 P.M. on the same day as the Agent's receipt of such notice.
(ii) Not later than 2:00 P.M. on the date specified for each borrowing
under this Section 2.1, each Lender shall, pursuant to the terms and subject to
the conditions of this Agreement, make the amount of the Advance or Advances to
be made by it on such day available by wire transfer to the Agent in the amount
of its pro rata share, determined according to such Lender's Applicable
Commitment Percentage of the Loan or Loans to be made on such day. Such wire
transfer shall be directed to the Agent at the Principal Office and shall be in
the form of Dollars constituting immediately available funds. The amount so
received by the Agent shall, subject to the terms and conditions of this
Agreement, be made available to the Borrower by delivery of the proceeds
thereof to the Borrower's Account or otherwise as shall be directed in the
applicable Borrowing Notice by the Authorized Representative and reasonably
acceptable to the Agent.
(iii) The Borrower shall have the option to elect the duration of the
initial and any subsequent Interest Periods and to convert the Loans in
accordance with Section 2.8. Eurodollar Rate Loans and Base Rate Loans may be
outstanding at the same time, provided, however, there shall not be outstanding
at any one time Eurodollar Rate Loans having more than ten (10) different
Interest Periods. If the Agent does not receive a Borrowing Notice or an
Interest Rate Selection Notice giving notice of election of the duration of an
Interest Period or of conversion of any Loan to or continuation of a Loan as a
Eurodollar Rate Loan by the time prescribed by Section 2.1(c) or 2.8, the
Borrower shall be deemed to have elected to convert such Loan to (or continue
such Loan as) a Base Rate Loan until the Borrower notifies the Agent in
accordance with Section 2.8.
(iv) Notwithstanding the foregoing, if a drawing is made under any Letter
of Credit, such drawing is honored by the Issuing Bank prior to the Stated
Termination Date, and the Borrower shall not immediately fully reimburse the
Issuing Bank in respect of such drawing, (A) provided that the conditions to
making a Loan as herein provided shall then be satisfied, the Reimbursement
Obligation arising from such drawing shall be paid to the Issuing Bank by the
Agent without the requirement of notice to or from the Borrower from
immediately available funds which shall be advanced as a Base Rate Refunding
Loan by each Lender under the Revolving Credit Facility in an amount equal to
such Lender's Applicable Commitment Percentage of such Reimbursement
Obligation, and (B) if the conditions to making a Loan as
20
25
herein provided shall not then be satisfied, each of the Lenders shall fund by
payment to the Agent (for the benefit of the Issuing Bank) in immediately
available funds the purchase from the Issuing Bank of their respective
Participations in the related Reimbursement Obligation based on their
respective Applicable Commitment Percentages of the Total Letter of Credit
Commitment. If a drawing is presented under any Letter of Credit in accordance
with the terms thereof and the Borrower shall not immediately reimburse the
Issuing Bank in respect thereof, then notice of such drawing or payment shall
be provided promptly by the Issuing Bank to the Agent and the Agent shall
provide notice to each Lender by telephone or telefacsimile transmission. If
notice to the Lenders of a drawing under any Letter of Credit is given by the
Agent at or before 12:00 noon on any Business Day, each Lender shall, pursuant
to the conditions specified in this Section 2.1(c)(iv), either make a Base Rate
Refunding Loan or fund the purchase of its Participation in the amount of such
Lender's Applicable Commitment Percentage of such drawing or payment and shall
pay such amount to the Agent for the account of the Issuing Bank at the
Principal Office in Dollars and in immediately available funds before 2:30 P.M.
on the same Business Day. If notice to the Lenders of a drawing under a Letter
of Credit is given by the Agent after 12:00 noon on any Business Day, each
Lender shall, pursuant to the conditions specified in this Section 2.1(c)(iv),
either make a Base Rate Refunding Loan or fund the purchase of its
Participation in the amount of such Lender's Applicable Commitment Percentage
of such drawing or payment and shall pay such amount to the Agent for the
account of the Issuing Bank at the Principal Office in Dollars and in
immediately available funds before 12:00 noon on the next following Business
Day. Any such Base Rate Refunding Loan shall be advanced as, and shall continue
as, a Base Rate Loan unless and until the Borrower converts such Base Rate Loan
in accordance with the terms of Section 2.8.
II.2. Payment of Interest. (a) The Borrower shall pay interest to the
Agent for the account of each Lender on the outstanding and unpaid principal
amount of each Loan made by such Lender for the period commencing on the date
of such Loan until such Loan shall be paid, continued or converted, as the case
may be, at the then applicable Base Rate for Base Rate Loans or applicable
Eurodollar Rate for Eurodollar Rate Loans, as designated by the Authorized
Representative pursuant to Section 2.1; provided, however, that if any amount
shall not be paid when due (at maturity, by acceleration or otherwise), all
amounts outstanding hereunder shall bear interest thereafter at the Default
Rate.
(b) Interest on each Loan shall be computed on the basis of a year
of 360 days and calculated in each case for the actual number of days elapsed.
Interest on each Revolving Loan shall be paid (i) quarterly in arrears on the
last Business Day of each September, December, March and June, commencing
December 31, 1996 for each Base Rate Loan, (ii) on the last day of the
applicable Interest Period for each Eurodollar Rate Loan and, if such Interest
Period extends for more than three (3) months, at intervals of three (3) months
after the first day of such Interest Period, and (iii) upon payment in full of
the principal amount of such Loan.
II.3. Payment of Principal. The principal amount of each Loan shall be
due and
21
26
payable to the Agent for the benefit of each Lender in full on the Revolving
Credit Termination Date, or earlier as specifically provided herein. The
principal amount of any Base Rate Loan may be prepaid in whole or in part at
any time. The principal amount of any Eurodollar Rate Loan may be prepaid only
at the end of the applicable Interest Period unless the Borrower shall pay to
the Agent for the account of the Lenders the additional amount, if any,
required under Section 5.4. All prepayments of Loans made by the Borrower shall
be in the amount of $500,000 or such greater amount which is an integral
multiple of $100,000, or the amount equal to all Revolving Credit Outstandings,
or such other amount as necessary to comply with Section 2.1(b) or Section 2.7.
II.4. Manner of Payment. (a) Each payment of principal (including any
prepayment) and payment of interest and fees, and any other amount required to
be paid to the Lenders with respect to the Loans, shall be made to the Agent at
the Principal Office, for the account of each Lender, in Dollars and in
immediately available funds before 12:30 P.M. on the date such payment is due.
The Agent may, but shall not be obligated to, debit the amount of any such
payment which is not made by such time to any ordinary deposit account, if any,
of the Borrower with the Agent.
(b) The Agent shall deem any payment made by or on behalf of the
Borrower hereunder that is not made both in Dollars and in immediately
available funds and prior to 12:30 P.M. to be a non-conforming payment. Any
such payment shall not be deemed to be received by the Agent until the later
of (i) the time such funds become available funds and (ii) the next Business
Day. Any non-conforming payment may constitute or become a Default or Event of
Default. Interest shall continue to accrue on any principal as to which a
non-conforming payment is made until the later of (x) the date such funds
become available funds or (y) the next Business Day at the Default Rate from
the date such amount was due and payable.
(c) In the event that any payment hereunder or under the Notes
becomes due and payable on a day other than a Business Day, then such due date
shall be extended to the next succeeding Business Day unless provided otherwise
under clause (ii) of the definition of "Interest Period"; provided that interest
shall continue to accrue during the period of any such extension and provided
further, that in no event shall any such due date be extended beyond the
Revolving Credit Termination Date.
II.5. Notes. Loans made by each Lender shall be evidenced by the Note
payable to the order of such Lender in the respective amount of its Applicable
Commitment Percentage of the Revolving Credit Commitment, which Note shall be
dated the Closing Date or a later date pursuant to an Assignment and Acceptance
and shall be duly completed, executed and delivered by the Borrower.
II.6. Pro Rata Payments. Except as otherwise provided herein, (a) each
payment on account of the principal of and interest on the Loans and the fees
described in Section 2.10 shall be made to the Agent for the account of the
Lenders pro rata based on their Applicable
22
27
Commitment Percentages, (b) all payments to be made by the Borrower for the
account of each of the Lenders on account of principal, interest and fees,
shall be made without diminution, setoff, recoupment or counterclaim, and (c)
the Agent will promptly distribute to the Lenders in immediately available
funds payments received in fully collected, immediately available funds from
the Borrower.
II.7. Reductions. The Borrower shall, by notice from an Authorized
Representative, have the right from time to time but not more frequently than
once each calendar month, upon not less than three (3) Business Days' written
notice to the Agent, effective upon receipt, to reduce the Total Revolving
Credit Commitment. The Agent shall give each Lender, within one (1) Business
Day of receipt of such notice, telefacsimile notice, or telephonic notice
(confirmed in writing), of such reduction. Each such reduction shall be in the
aggregate amount of $5,000,000 or such greater amount which is in an integral
multiple of $1,000,000, or the entire remaining Total Revolving Credit
Commitment, and shall permanently reduce the Total Revolving Credit Commitment.
Each reduction of the Total Revolving Credit Commitment shall be accompanied by
payment of the Loans to the extent that the principal amount of Revolving
Credit Outstandings plus Letter of Credit Outstandings exceeds the Total
Revolving Credit Commitment or the Borrowing Base after giving effect to such
reduction, together with accrued and unpaid interest on the amounts prepaid. No
such reduction shall result in the payment of any Eurodollar Rate Loan other
than on the last day of the Interest Period of such Eurodollar Rate Loan unless
such prepayment is accompanied by amounts due, if any, under Section 5.4.
II.8. Conversions and Elections of Subsequent Interest Periods. Provided
that no Default or Event of Default shall have occurred and be continuing and
subject to the limitations set forth below and in Article V, the Borrower may:
(a) upon delivery, effective upon receipt, of a properly completed
Interest Rate Selection Notice to the Agent on or before 10:30 A.M. on any
Business Day, convert all or a part of Eurodollar Rate Loans to Base Rate Loans
on the last day of the Interest Period for such Eurodollar Rate Loans; and
(b) upon delivery, effective upon receipt, of a properly completed
Interest Rate Selection Notice to the Agent on or before 10:30 A.M. three (3)
Business Days' prior to the date of such election or conversion:
(i) elect a subsequent Interest Period for all or a portion of
Eurodollar Rate Loans to begin on the last day of the then current
Interest Period for such Eurodollar Rate Loans; and
(ii) convert Base Rate Loans to Eurodollar Rate Loans on any
Business Day.
Each election and conversion pursuant to this Section 2.8 shall be subject
to the limitations on Eurodollar Rate Loans set forth in the definition of
"Interest Period" herein and
23
28
in Sections 2.1, 2.3 and Article V. Notice of receipt of each such notice of
election or conversion shall be provided by the Agent to each Lender by
telefacsimile transmission with reasonable promptness, but (provided the Agent
shall have received such notice by 10:30 A.M.) not later than 1:00 P.M. on the
same Business Day as the Agent's receipt of such notice. All such continuations
or conversions of Loans shall be effected pro rata based on the Applicable
Commitment Percentages of the Lenders.
II.9. Increase and Decrease in Amounts. The amount of the Total Revolving
Credit Commitment which shall be available to the Borrower as Advances shall be
reduced by the aggregate amount of Outstanding Letters of Credit.
II.10. Unused Fee. For the period beginning on the Closing Date and ending
on the Revolving Credit Termination Date, the Borrower agrees to pay to the
Agent, for the pro rata benefit of the Lenders based on their Applicable
Commitment Percentages, an unused fee equal to the Applicable Unused Fee
multiplied by the average daily amount by which the Total Revolving Credit
Commitment exceeds the sum of (i) Revolving Credit Outstandings plus (ii)
Letter of Credit Outstandings. Such fees shall be due in arrears on the last
Business Day of each September, December, March and June commencing December
31, 1996 to and on the Revolving Credit Termination Date. Notwithstanding the
foregoing, so long as any Lender fails to make available any portion of its
Revolving Credit Commitment when requested, such Lender shall not be entitled
to receive payment of its pro rata share of such fee until such Lender shall
make available such portion. Such fee shall be calculated on the basis of a
year of 360 days for the actual number of days elapsed.
II.11. Deficiency Advances. No Lender shall be responsible for any default
of any other Lender in respect to such other Lender's obligation to make any
Loan or fund its purchase of any Participation hereunder nor shall the
Revolving Credit Commitment of any Lender hereunder be increased as a result of
such default of any other Lender. Without limiting the generality of the
foregoing, in the event any Lender shall fail to advance funds to the Borrower
as herein provided, the Agent may in its discretion, but shall not be obligated
to, advance under the Note in its favor as a Lender all or any portion of such
amount or amounts (each, a "deficiency advance") and shall thereafter be
entitled to payments of principal of and interest on such deficiency advance in
the same manner and at the same interest rate or rates to which such other
Lender would have been entitled had it made such advance under its Note;
provided that, upon payment to the Agent from such other Lender of the entire
outstanding amount of each such deficiency advance, together with accrued and
unpaid interest thereon, from the most recent date or dates interest was paid
to the Agent by the Borrower on each Loan comprising the deficiency advance at
the interest rate per annum for overnight borrowing by the Agent from the
Federal Reserve Bank, then such payment shall be credited against the
applicable Note of the Agent in full payment of such deficiency advance and the
Borrower shall be deemed to have borrowed the amount of such deficiency advance
from such other Lender as of the most recent date or dates, as the case may be,
upon which any payments of interest were made by the Borrower thereon.
II.12. Use of Proceeds. The proceeds of the Loans made pursuant to the
Revolving
24
29
Credit Facility hereunder shall be used by the Borrower for general working
capital needs and other corporate purposes, including capital expenditures and
the funding at Borrower's 50% or more owned joint ventures.
II.13. Extension of Stated Termination Date. At the request of the
Borrower the Lenders may, in their sole discretion, elect to extend the Stated
Termination Date then in effect for additional periods of one year each. The
Borrower shall notify the Lenders of its request for such an extension by
delivering to the Agent and the Lenders notice of such request signed by an
Authorized Representative not more than ninety (90) days nor less than sixty
(60) days prior to the Stated Termination Date then in effect. If the Lenders
shall elect to so extend, the Agent shall notify the Borrower in writing within
sixty (60) days of its receipt of such request for extension of the decision of
the Lenders as to whether to extend the Stated Termination Date. Failure by any
Lender to respond to a request for an extension shall constitute a refusal of
such Lender to give its consent to such extension. Failure by the Agent to give
such notice shall constitute refusal by the Lenders to extend the Stated
Termination Date.
25
30
ARTICLE III
Letters of Credit
III.1. Letters of Credit. The Issuing Bank agrees, subject to the terms
and conditions of this Agreement, upon request of the Borrower to issue from
time to time for the account of the Borrower Letters of Credit upon delivery to
the Issuing Bank of an Application and Agreement for Letter of Credit relating
thereto in form and content acceptable to the Issuing Bank; provided, that (i)
the Letter of Credit Outstandings shall not exceed the Total Letter of Credit
Commitment and (ii) no Letter of Credit shall be issued if, after giving effect
thereto, Letter of Credit Outstandings plus Revolving Credit Outstandings shall
exceed the Total Revolving Credit Commitment or the Borrowing Base. No Letter
of Credit shall have an expiry date (including all rights of the Borrower or
any beneficiary named in such Letter of Credit to require renewal) or payment
date occurring later than the earlier to occur of (x) (i) in the case of
standby Letters of Credit, one year after the date of its issuance and (ii) in
the case of documentary Letters of Credit, 120 days or (y) the Stated
Termination Date.
III.2. Reimbursement.
(a) The Borrower hereby unconditionally agrees to pay to the
Issuing Bank immediately on demand at the Principal Office all amounts required
to pay all drafts drawn or purporting to be drawn under the Letters of Credit
and all reasonable expenses incurred by the Issuing Bank in connection with the
Letters of Credit, and in any event and without demand to place in possession
of the Issuing Bank (which shall include Advances under the Revolving Credit
Facility if permitted by Section 2.1) sufficient funds to pay all debts and
liabilities arising under any Letter of Credit. The Issuing Bank agrees to give
the Borrower prompt notice of any request for a draw under a Letter of Credit.
The Issuing Bank may charge any account the Borrower may have with it for any
and all amounts the Issuing Bank pays under a Letter of Credit, plus charges and
reasonable expenses as from time to time agreed to by the Issuing Bank and the
Borrower; provided that to the extent permitted by Section 2.1(c)(iv), amounts
shall be paid pursuant to Advances under the Revolving Credit Facility. The
Borrower agrees to pay the Issuing Bank interest on any Reimbursement
Obligations not paid when due hereunder at the Base Rate plus two percent
(2.0%), or the maximum rate permitted by applicable law, if lower, such rate to
be calculated on the basis of a year of 360 days for actual days elapsed.
(b) In accordance with the provisions of Section 2.1(c), the
Issuing Bank shall notify the Agent of any drawing under any Letter of Credit
promptly following the receipt by the Issuing Bank of such drawing.
(c) Each Lender (other than the Issuing Bank) shall automatically
acquire on the date of issuance thereof, a Participation in the liability of the
Issuing Bank in respect of each Letter of Credit in an amount equal to such
Lender's Applicable Commitment Percentage of such liability, and to the extent
that the Borrower is obligated to pay the Issuing Bank under
26
31
Section 3.2(a), each Lender (other than the Issuing Bank) thereby shall
absolutely, unconditionally and irrevocably assume, and shall be
unconditionally obligated to pay to the Issuing Bank as hereinafter described,
its Applicable Commitment Percentage of the liability of the Issuing Bank under
such Letter of Credit.
(i) Each Lender (including the Issuing Bank in its capacity as a
Lender) shall, subject to the terms and conditions of Article II, pay to
the Agent for the account of the Issuing Bank at the Principal Office in
Dollars and in immediately available funds, an amount equal to its
Applicable Commitment Percentage of any drawing under a Letter of Credit,
such funds to be provided in the manner described in Section 2.1(c)(iv).
(ii) Simultaneously with the making of each payment by a Lender to
the Issuing Bank pursuant to Section 2.1(c)(iv)(B), such Lender shall,
automatically and without any further action on the part of the Issuing
Bank or such Lender, acquire a Participation in an amount equal to such
payment (excluding the portion thereof constituting interest accrued
prior to the date the Lender made its payment) in the related
Reimbursement Obligation of the Borrower. The Reimbursement Obligations
of the Borrower shall be immediately due and payable whether by Advances
made in accordance with Section 2.1(c)(iv) or otherwise.
(iii) Each Lender's obligation to make payment to the Agent for the
account of the Issuing Bank pursuant to Section 2.1(c)(iv) and this
Section 3.2(c), and the right of the Issuing Bank to receive the same,
shall be absolute and unconditional, shall not be affected by any
circumstance whatsoever and shall be made without any offset, abatement,
withholding or reduction whatsoever. If any Lender is obligated to pay
but does not pay amounts to the Agent for the account of the Issuing Bank
in full upon such request as required by Section 2.1(c)(iv) or this
Section 3.2(c), such Lender shall, on demand, pay to the Agent for the
account of the Issuing Bank interest on the unpaid amount for each day
during the period commencing on the date of notice given to such Lender
pursuant to Section 2.1(c) until such Lender pays such amount to the
Agent for the account of the Issuing Bank in full at the interest rate
per annum for overnight borrowing by the Agent from the Federal Reserve
Bank.
(iv) In the event the Lenders have purchased Participations in any
Reimbursement Obligation as set forth in clause (ii) above, then at any
time payment (in fully collected, immediately available funds) of such
Reimbursement Obligation, in whole or in part, is received by Issuing
Bank from the Borrower, Issuing Bank shall promptly pay to each Lender an
amount equal to its Applicable Commitment Percentage of such payment from
the Borrower.
(d) Promptly following the end of each calendar quarter, the Issuing Bank
shall deliver to the Agent a notice describing the aggregate undrawn amount of
all Letters of Credit at the end of such quarter. Upon the request of any
Lender from time to time, the
27
32
Issuing Bank shall deliver to the Agent, and the Agent shall deliver to such
Lender, any other information reasonably requested by such Lender with respect
to each Letter of Credit outstanding.
(e) The issuance by the Issuing Bank of each Letter of Credit shall, in
addition to the conditions precedent set forth in Article VI, be subject to the
conditions that such Letter of Credit be in such form and contain such terms as
shall be reasonably satisfactory to the Issuing Bank consistent with the then
current practices and procedures of the Issuing Bank with respect to similar
letters of credit, and the Borrower shall have executed and delivered such
other instruments and agreements relating to such Letters of Credit as the
Issuing Bank shall have reasonably requested consistent with such practices and
procedures. All Letters of Credit shall be issued pursuant to and subject to
the Uniform Customs and Practice for Documentary Credits, 1993 revision,
International Chamber of Commerce Publication No. 500 and all subsequent
amendments and revisions thereto.
(f) The Borrower agrees that Issuing Bank may, in its sole discretion,
accept or pay, as complying with the terms of any Letter of Credit, any drafts
or other documents otherwise in order which may be signed or issued by an
administrator, executor, trustee in bankruptcy, debtor in possession, assignee
for the benefit of creditors, liquidator, receiver, attorney in fact or other
legal representative of a party who is authorized under such Letter of Credit
to draw or issue any drafts or other documents.
(g) Without limiting the generality of the provisions of Section 12.9, the
Borrower hereby agrees to indemnify and hold harmless the Issuing Bank, each
other Lender and the Agent from and against any and all claims and damages,
losses, liabilities, reasonable costs and expenses which the Issuing Bank, such
other Lender or the Agent may incur (or which may be claimed against the
Issuing Bank, such other Lender or the Agent) by any Person by reason of or in
connection with the issuance or transfer of or payment or failure to pay under
any Letter of Credit; provided that the Borrower shall not be required to
indemnify the Issuing Bank, any other Lender or the Agent for any claims,
damages, losses, liabilities, costs or expenses to the extent, but only to the
extent, (i) caused by the willful misconduct or gross negligence of the party
to be indemnified or (ii) caused by the failure of the Issuing Bank to pay
under any Letter of Credit after the presentation to it of a request for
payment strictly complying with the terms and conditions of such Letter of
Credit, unless such payment is prohibited by any law, regulation, court order
or decree. The indemnification and hold harmless provisions of this Section
3.2(g) shall survive repayment of the Obligations, occurrence of the Revolving
Credit Termination Date and expiration or termination of this Agreement.
(h) Without limiting Borrower's rights as set forth in Section 3.2(g), the
obligation of the Borrower to immediately reimburse the Issuing Bank for
drawings made under Letters of Credit and the Issuing Bank's right to receive
such payment shall be absolute, unconditional and irrevocable, and that such
obligations of the Borrower shall be performed strictly in accordance with the
terms of this Agreement and such Letters of Credit and the related Applications
and Agreement for any Letter of Credit, under all circumstances
28
33
whatsoever, including the following circumstances:
(i) any lack of validity or enforceability of the Letter of
Credit, the obligation supported by the Letter of Credit or any other
agreement or instrument relating thereto (collectively, the "Related LC
Documents");
(i) any amendment or waiver of or any consent to or departure from
all or any of the Related LC Documents;
(i) the existence of any claim, setoff, defense (other than the
defense of payment in accordance with the terms of this Agreement) or
other rights which the Borrower may have at any time against any
beneficiary or any transferee of a Letter of Credit (or any persons or
entities for whom any such beneficiary or any such transferee may be
acting), the Agent, the Lenders or any other Person, whether in
connection with the Loan Documents, the Related LC Documents or any
unrelated transaction;
(ii) any breach of contract or other dispute between the
Borrower and any beneficiary or any transferee of a Letter of Credit (or
any persons or entities for whom such beneficiary or any such transferee
may be acting), the Agent, the Lenders or any other Person;
(j) any draft, statement or any other document presented under the
Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect whatsoever;
(i) any delay, extension of time, renewal, compromise or other
indulgence or modification granted or agreed to by the Agent, with or
without notice to or approval by the Borrower in respect of any of
Borrower's Obligations under this Agreement; or
(ii) any other circumstance or happening whatsoever, whether
or not similar to any of the foregoing.
III.3. Letter of Credit Facility Fees. The Borrower shall pay to the
Agent, for the pro rata benefit of the Lenders based on their Applicable
Commitment Percentages, an issuance fee on the aggregate amount available to be
drawn on each (i) Letter of Credit which provides credit support, other than in
connection with a commercial transaction, of 1.50% per annum, and (ii) Letter
of Credit which provides credit support in a commercial transaction, of 1/4%
for each 120 day term or part thereof of such Letter of Credit. Such fees shall
be due with respect to each Letter of Credit quarterly in arrears on the last
day of each December, March, June and September, the first such payment to be
made on the first such date occurring after the date of issuance of a Letter of
Credit. The fees described in this Section 3.3 shall be calculated on the basis
of a year of 360 days for the actual number of days elapsed.
29
34
III.4. Administrative Fees. The Borrower shall pay to the Issuing Bank (i)
such administrative fee and other fees, if any, in connection with the Letters
of Credit in such amounts and at such times as the Issuing Bank and the
Borrower shall agree from time to time and (ii) a fronting fee for each Letter
of Credit equal to 1/8% on the aggregate amount available to be drawn on each
Letter of Credit.
30
35
ARTICLE IV
Security
IV.1. Security. As security for the full and timely payment and
performance of all Obligations, the Credit Parties shall on or before the
Closing Date do or cause to be done all things necessary in the opinion of the
Agent and its counsel to grant to the Agent for the benefit of the Agent and
the Lenders a duly perfected first priority security interest in all Collateral
subject to no prior Lien or other encumbrance or restriction on transfer.
IV.2. Further Assurances. At the request of the Agent, the Borrower will
or will cause the Parent or its Domestic Subsidiaries, as the case may be, to
execute, by its duly authorized officers, alone or with the Agent, any
certificate, instrument, statement or document, or to procure any such
certificate, instrument, statement or document, or to take such other action
(and pay all connected costs) which the Agent reasonably deems necessary from
time to time to create, continue or preserve the Liens and security interests
in Collateral (and the perfection and priority thereof) of the Agent
contemplated hereby and by the other Loan Documents.
IV.3. Information Regarding Collateral. The Borrower represents, warrants
and covenants that (i) the chief executive office of the Borrower and each
other Person providing Collateral pursuant to a Security Instrument (each, a
"Grantor") at the Closing Date is located at the address or addresses specified
on Schedule 4.3, and (ii) Schedule 4.3 contains a true and complete list of (a)
the name and address of each Grantor and of each other Person that has effected
any merger or consolidation with a Grantor or contributed or transferred to a
Grantor any property constituting Collateral at any time since August 1, 1991
(excluding Persons making sales in the ordinary course of their businesses to a
Grantor of property constituting inventory in the hands of such seller), (b)
each location of the chief executive office of each Grantor at any time since
August 1, 1991, (c) each location in which goods constituting Collateral are or
have been located since August 1, 1991 (together with the name of each owner of
the property located at such address if not the applicable Grantor, and a
summary description of the relationship between the applicable Grantor and such
Person), and (d) each trade style used by any Grantor since August 1, 1991 and
the purposes for which it was used. Borrower shall not change, and shall not
permit any other Grantor to change, the location of its chief executive office
or any location specified in clause (c) of the immediately preceding sentence,
or use or permit any other Grantor to use, any additional trade style, except
upon giving not less than thirty (30) days' prior written notice to the Agent
and taking or causing to be taken all such action at Borrower's or such other
Grantor's expense as may be reasonably requested by the Agent to perfect or
maintain the perfection of the Lien of the Agent for the benefit of itself and
the Lenders in Collateral.
31
36
ARTICLE V
Yield Protection and Illegality
V.1. Additional Costs. (a) The Borrower shall promptly pay to the Agent
for the account of a Lender from time to time, without duplication, such
amounts as such Lender may reasonably determine to be necessary to compensate
it for any costs incurred by such Lender which it determines are attributable
to its making or maintaining any Loan or its obligation to make any Loans, or
the issuance or maintenance by the Issuing Bank of or any other Lender's
Participation in any Letter of Credit issued hereunder, or any reduction in any
amount receivable by such Lender under this Agreement or the Notes in respect
of any of such Loans or the Letters of Credit, including reductions in the rate
of return on a Lender's capital (such increases in costs and reductions in
amounts receivable and returns being herein called "Additional Costs"),
resulting from any Regulatory Change which: (i) changes the basis of taxation
of any amounts payable to such Lender under this Agreement or the Notes in
respect of any of such Loans or the Letters of Credit (other than taxes imposed
on or measured by the income, revenues or assets); or (ii) imposes or modifies
any reserve, special deposit, or similar requirements relating to any
extensions of credit or other assets of, or any deposits with or other
liabilities of, such Lender (other than any such reserve, deposit or
requirement reflected in the Prime Rate, Federal Funds Effective Rate or the
Interbank Offered Rate, in each case computed in accordance with the respective
definitions of such terms set forth in Section 1.1); or (iii) has or would have
the effect of reducing the rate of return on capital of any such Lender to a
level below that which the Lender could have achieved but for such Regulatory
Change (taking into consideration such Lender's policies with respect to
capital adequacy); or (iv) imposes any other condition adversely affecting the
Agent or the Lenders under this Agreement, the Notes or the issuance or
maintenance of, or any Lender's Participation in, the Letters of Credit (or any
of such extensions of credit or liabilities). Each Lender will notify the
Authorized Representative and the Agent of any event occurring after the
Closing Date which would entitle it to compensation pursuant to this Section
5.1(a) as promptly as practicable after it obtains knowledge thereof and
determines to request such compensation.
(b) Without limiting the effect of the foregoing provisions of this
Section 5.1, in the event that, by reason of any Regulatory Change, any Lender
either (i) incurs Additional Costs based on or measured by the excess above a
specified level of the amount of a category of deposits or other liabilities of
the Lender which includes deposits by reference to which the interest rate on
Eurodollar Rate Loans is determined as provided in this Agreement or a category
of extensions of credit or other assets of any Lender which includes Eurodollar
Rate Loans or (ii) becomes subject to restrictions on the amount of such a
category of liabilities or assets which it may hold, then, if the Lender so
elects by notice to the other Lenders, the obligation hereunder of such Lender
to make, and to convert Base Rate Loans into, Eurodollar Rate Loans that are
the subject of such restrictions shall be suspended until the date such
Regulatory Change ceases to be in effect and the Borrower shall, on the last
day(s) of the then current Interest Period(s) for outstanding Eurodollar Rate
Loans convert such Eurodollar Rate Loans into Base Rate Loans; provided,
however, that the suspension of such obligation and the
32
37
conversion of any Eurodollar Rate Loans into Base Rate Loans shall apply only
to any Lender who is affected by such restrictions and who has provided such
notice to the other Lenders, and the obligation of the other Lenders to make,
and to convert Base Rate Loans into, Eurodollar Rate Loans shall not be
affected by such restrictions. In the event that the obligation of some, but
not all, of the Lenders to make, or to convert Base Rate Loans into, Eurodollar
Rate Loans is suspended, then any request by the Borrower during the pendency
of such suspension for a Eurodollar Rate Loan shall be deemed a request for
such Eurodollar Rate Loan from the Lender(s) not subject to such suspension and
for a Base Rate Loan from the Lender(s) who are subject to such suspension, in
each case in the respective amounts based on the Lenders' respective Applicable
Commitment Percentages.
(c) Determinations by any Lender for purposes of this Section 5.1 of
the effect of any Regulatory Change on its costs of making or maintaining, or
being committed to make Loans, or by NationsBank as issuer of any Letter of
Credit of the effect of any Regulatory Change on its costs in connection with
the issuance or maintenance of, or any other Lender's Participation in, any
Letter of Credit issued hereunder, or the effect of any Regulatory Change on
amounts receivable by any Lender in respect of Loans or Letters of Credit, and
of the additional amounts required to compensate the Lender in respect of any
Additional Costs, shall be made taking into account such Lender's policies, or
the policies of the parent corporation of such Lender, as to the allocation of
capital, costs and other items and shall be conclusive absent manifest error.
The Lender requesting such compensation shall furnish to the Authorized
Representative and the Agent within one hundred eighty (180) days of the
incurrence of any Additional Costs for which compensation is sought an
explanation of the Regulatory Change and calculations, in reasonable detail,
setting forth such Lender's determination of any such Additional Costs.
V.2. Suspension of Loans. Anything herein to the contrary notwithstanding,
if, on or prior to the determination of any interest rate for any Eurodollar
Rate Loan for any Interest Period, the Agent determines (which determination
made on a reasonable basis shall be conclusive absent manifest error) that:
(a) quotations of interest rates for the relevant deposits referred
to in the definition of "Eurodollar Rate" in Section 1.1 are not being
provided in the relevant amounts or for the relevant maturities for
purposes of determining the rate of interest for such Eurodollar Rate
Loan as provided in this Agreement; or
(b) the relevant rates of interest referred to in the definition of
"Interbank Offered Rate" in Section 1.1 upon the basis of which the
Eurodollar Rate for such Interest Period is to be determined do not
adequately reflect the cost to the Lenders of making or maintaining such
Eurodollar Rate Loan for such Interest Period;
then the Agent shall give the Authorized Representative prompt notice thereof,
and so long as such condition remains in effect, the Lenders shall be under no
obligation to make Eurodollar Rate Loans that are subject to such condition, or
to convert Base Rate Loans into Eurodollar
33
38
Rate Loans, and the Borrower shall on the last day(s) of the then current
Interest Period(s) for outstanding Eurodollar Rate Loans, as applicable,
convert such Eurodollar Rate Loans into another Eurodollar Rate Loan if such
Eurodollar Rate Loan is not subject to the same or similar condition, or Base
Rate Loans, if available hereunder. The Agent shall give the Authorized
Representative notice describing in reasonable detail any event or condition
described in this Section 5.2 promptly following the determination by the Agent
that the availability of Eurodollar Rate Loans is, or is to be, suspended as a
result thereof.
V.3. Illegality. Notwithstanding any other provision of this Agreement, in
the event that it becomes unlawful for any Lender to honor its obligation to
make or maintain Eurodollar Rate Loans hereunder, then such Lender shall
promptly notify the Borrower thereof (with a copy to the Agent) and such
Lender's obligation to make or continue Eurodollar Rate Loans, or to convert
Base Rate Loans into Eurodollar Rate Loans, shall be suspended until such time
as such Lender may again make and maintain Eurodollar Rate Loans, and such
Lender's outstanding Eurodollar Rate Loans shall be converted into Base Rate
Loans in accordance with Section 2.8 or earlier if required by applicable law.
The conversion of any Eurodollar Rate Loans into Base Rate Loans shall apply
only to any Lender who is affected by such restrictions and who has provided
the notice described above, and the obligation of the other Lenders to make,
and to convert Base Rate Loans into, Eurodollar Rate Loans shall not be
affected by such restrictions. In the event that the obligation of some, but
not all, of the Lenders to make, or to convert Base Rate Loans into, Eurodollar
Rate Loans is so suspended, then any request by the Borrower during the
pendency of such suspension for a Eurodollar Rate Loan shall be deemed a
request for such Eurodollar Rate Loan from the Lender(s) not subject to such
suspension and for a Base Rate Loan from the Lender(s) who are subject to such
suspension, in each case in the respective amounts based on the Lenders'
respective Applicable Commitment Percentages.
V.4. Compensation. The Borrower shall promptly pay to each Lender, upon
the request of such Lender, such amount or amounts as shall be sufficient (in
the reasonable determination of Lender) to compensate it for any loss, cost or
expense incurred by it as a result of:
(a) any payment, prepayment or conversion of a Eurodollar Rate Loan
on a date other than the last day of the Interest Period for such
Eurodollar Rate Loan, including without limitation any conversion
required pursuant to Sections 5.1, 5.2 or 5.3; or
(b) any failure by the Borrower to borrow or convert a Eurodollar
Rate Loan on the date for such borrowing or conversion specified in the
relevant Borrowing Notice or Interest Rate Selection Notice under Article
II;
such compensation to include, without limitation, an amount equal to the
excess, if any, of (i) the amount of interest which would have accrued on the
principal amount so paid, prepaid or converted or not borrowed for the period
from the date of such payment, prepayment or
34
39
conversion or failure to borrow or convert to the last day of the then current
Interest Period for such Loan (or, in the case of a failure to borrow or
convert, the Interest Period for such Loan which would have commenced on the
date scheduled for such borrowing or conversion) at the applicable rate of
interest for such Eurodollar Rate Loan provided for herein over (ii) the
Interbank Offered Rate (as reasonably determined by the Agent) for Dollar
deposits of amounts comparable to such principal amount and maturities
comparable to such period. A determination of a Lender as to the amounts
payable pursuant to this Section 5.4 shall be conclusive, provided that such
determinations are made on a reasonable basis. The Lender requesting
compensation under this Section 5.4 shall promptly furnish to the Authorized
Representative and the Agent calculations in reasonable detail setting forth
such Lender's determination of the amount of such compensation.
V.5. Alternate Loan and Lender. In the event any Lender suspends the
making of any Eurodollar Rate Loan pursuant to this Article V (herein a
"Restricted Lender"), the Restricted Lender's Commitment Percentage of any
Eurodollar Rate Loan shall bear interest at the Base Rate or the Eurodollar
Rate for which the suspension does not apply, as selected by Borrower, until
the Restricted Lender once again makes available the applicable Eurodollar Rate
Loan. Notwithstanding the provisions of Sections 2.2(b), interest shall be
payable to the Restricted Lender in respect of Loans to which the suspension
applies at the time and manner as paid to those Lenders making available
Eurodollar Rate Loans.
V.6. Taxes. (a) All payments by the Borrower of principal of, and interest
on, the Loans and all other amounts payable hereunder shall be made free and
clear of and without deduction for any present or future excise, stamp or other
taxes, fees, duties, levies, imposts, charges, deductions, withholdings or
other charges of any nature whatsoever imposed by any taxing authority, but
excluding (i) franchise taxes, (ii) any taxes (other than withholding taxes)
that would not be imposed but for a connection between a Lender or the Agent
and the jurisdiction imposing such taxes (other than a connection arising
solely by virtue of the activities of such Lender or the Agent pursuant to or
in respect of this Agreement or any other Loan Document), (iii) any taxes
imposed on or measured by any Lender's assets, net income, receipts or branch
profits, and (iv) any taxes arising after the Closing Date solely as a result
of or attributable to a Lender changing its designated lending office after the
date such Lender becomes a party hereto (such non-excluded items being
collectively called "Taxes"). In the event that any withholding or deduction
from any payment to be made by the Borrower hereunder is required in respect of
any Taxes pursuant to any applicable law, rule or regulation, then the Borrower
will
(x) pay directly to the relevant authority the full amount required
to be so withheld or deducted;
(y) promptly forward to the Agent an official receipt or other
documentation satisfactory to the Agent evidencing such payment to such
authority; and
(z) pay to the Agent for the account of each Lender such additional
amount
35
40
or amounts as is necessary to ensure that the net amount actually
received by each Lender will equal the full amount such Lender would have
received had no such withholding or deduction been required.
(b) Prior to the date that any Lender or participant organized under the
laws of a jurisdiction outside the United States becomes a party hereto, such
Person shall deliver to the Borrower and the Agent such certificates, documents
or other evidence, as required by the Code or Treasury Regulations issued
pursuant thereto, properly completed, currently effective and duly executed by
such Lender or participant establishing that payments to it hereunder and under
the Notes are (i) not subject to United States Federal backup withholding tax
and (ii) not subject to United States Federal withholding tax under the Code
because such payment is either effectively connected with the conduct by such
Lender or participant of a trade or business in the United States or totally
exempt from United States Federal withholding tax by reason of the application
of the provisions of a treaty to which the United States is a party or such
Lender is otherwise exempt.
(c) If the Borrower fails to pay any Taxes when due to the appropriate
taxing authority or fails to remit to the Agent, for the account of the
respective Lender, the required receipts or other required documentary
evidence, the Borrower shall indemnify the Lenders for any incremental Taxes,
interest or penalties that may become payable by any Lender as a result of any
such failure. For purposes of this Section 5.6, a distribution hereunder by the
Agent or any Lender to or for the account of any Lender shall be deemed a
payment by or on behalf of the Borrower.
36
41
ARTICLE VI
Conditions to Making Loans and Issuing Letters of Credit
VI.1. Conditions of Initial Advance. The obligation of the Lenders to make
initial Advance under the Revolving Credit Facility, and of the Issuing Bank to
issue any Letter of Credit, is subject to the conditions precedent that:
(a) the Agent shall have received on the Closing Date, in form and
substance satisfactory to the Agent and Lenders, the following:
(i) executed originals of each of this Agreement, the Notes,
the initial Facility Guaranties, the Security Instruments, the LC
Account Agreement and the other Loan Documents, together with all
schedules and exhibits thereto;
(ii) the favorable written opinion or opinions with respect to
the Loan Documents and the transactions contemplated thereby of
counsel to the Credit Parties dated the Closing Date, addressed to
the Agent and the Lenders and satisfactory to ▇▇▇▇▇ ▇▇▇▇▇ Mulliss &
▇▇▇▇▇, L.L.P., special counsel to the Agent, substantially in the
form of Exhibit G;
(iii) resolutions of the boards of directors or other
appropriate governing body (or of the appropriate committee
thereof) of each Credit Party certified by its secretary or
assistant secretary as of the Closing Date, approving and adopting
the Loan Documents to be executed by such Person, and authorizing
the execution and delivery thereof;
(iv) specimen signatures of officers of each Credit Party
executing the Loan Documents on behalf of such Credit Party,
certified by the secretary or assistant secretary of such Credit
Party;
(v) the charter documents of each Credit Party certified as of
a recent date by the Secretary of State of its state of
organization;
(vi) the bylaws of each Credit Party certified as of the
Closing Date as true and correct by its secretary or assistant
secretary;
(vii) certificates issued as of a recent date by the
Secretaries of State of the respective jurisdictions of formation
of each Credit Party as to the due existence and good standing of
each Credit Party;
(viii) appropriate certificates of qualification to do
business, good standing and, where appropriate, authority to
conduct business under assumed name, issued in respect of each
Credit Party as of a recent date by the Secretary
37
42
of State or comparable official of each jurisdiction in which the
failure to be qualified to do business or authorized so to conduct
business could have a Material Adverse Effect;
(ix) notice of appointment of the initial Authorized
Representative(s);
(x) certificate of an Authorized Representative dated the
Closing Date demonstrating compliance with the financial covenants
contained in Section 8.12 as of the Closing Date, substantially in
the form of Exhibit H;
(xi) evidence of all insurance required by the Loan Documents;
(xii) an initial Borrowing Notice, if any, Borrowing Base
Certificate, and, if elected by the Borrower, Interest Rate
Selection Notice;
(xiii) evidence of the filing of Uniform Commercial Code
financing statements reflecting the filing in all places required
by applicable law to perfect the Liens of the Agent under the
Security Instruments as a first priority Lien as to items of
Collateral in which a security interest may be perfected by the
filing of financing statements, and such other documents and/or
evidence of other actions as may be necessary under applicable law
to perfect the Liens of the Agent under the Security Instruments as
a first priority Lien in and to such other Collateral as the Agent
may require.
(xiv) landlord estoppal and waiver letters for the warehouse
facilities located in Tennessee and Nevada;
(xv) such other documents, instruments, certificates and
opinions as the Agent or any Lender may reasonably request on or
prior to the Closing Date in connection with the consummation of
the transactions contemplated hereby; and
(b) In the good faith judgment of the Agent and the Lenders:
(i) there shall not have occurred or become known to the Agent
or the Lenders any event, condition, situation or status since the
date of the information contained in the financial and business
projections, budgets, pro forma data and forecasts concerning the
Credit Parties delivered to the Agent prior to the Closing Date
that has had or could reasonably be expected to result in a
Material Adverse Effect;
(ii) no litigation, action, suit, investigation or other
arbitral, administrative or judicial proceeding shall be pending or
threatened which could reasonably be likely to result in a Material
Adverse Effect; and
38
43
(iii) the Borrower, the Parent and their Subsidiaries shall
have received all approvals, consents and waivers, and shall have
made or given all necessary filings and notices as shall be
required to consummate the transactions contemplated hereby without
the occurrence of any default under, conflict with or violation of
(A) any applicable law, rule, regulation, order or decree of any
Governmental Authority or arbitral authority or (B) any agreement,
document or instrument to which any of the Borrower, the Parent or
any Subsidiary of the Borrower or the Parent is a party or by which
any of them or their properties is bound; and
(iv) there shall not have occurred or exist (A) an engagement
in hostilities by the United States of America or other national or
international emergency or calamity, (B) a general suspension of or
material limitation on trading on the New York Stock Exchange or
other national securities exchange, (C) the declaration of a
general banking moratorium by any applicable Governmental Authority
or the imposition by any applicable Governmental Authority of any
material limitation on transactions of the type contemplated by the
Loan Documents, or (D) any other material disruption of financial
or capital markets that could reasonably be expected to adversely
affect the transactions contemplated under the Loan Documents.
VI.2. Conditions of Loans and Letter of Credit. The obligations of the
Lenders to make any Loans, and the Issuing Bank to issue Letters of Credit,
hereunder on or subsequent to the Closing Date are subject to the satisfaction
of the following conditions:
(a) the Agent shall have received a Borrowing Notice if required by
Article II;
(b) the representations and warranties of the Borrower, the Parent
and their Subsidiaries set forth in Article VII and in each of the other Loan
Documents shall be true and correct in all material respects on and as of the
date of such Advance, with the same effect as though such representations and
warranties had been made on and as of such date, except to the extent that such
representations and warranties expressly relate to an earlier date and except
that the financial statements referred to in Section 7.6(a)(i) shall be deemed
to be those financial statements most recently delivered to the Agent and the
Lenders pursuant to Section 8.1 from the date financial statements are
delivered to the Agent and the Lenders in accordance with such Section;
(c) in the case of the issuance of a Letter of Credit, the Borrower
shall have executed and delivered to the Issuing Bank an Application and
Agreement for Letter of Credit in form and content acceptable to the Issuing
Bank together with such other instruments and documents as it shall request;
39
44
(d) at the time of (and after giving effect to) each Advance or the
issuance of a Letter of Credit, no Default or Event of Default specified in
Article X shall have occurred and be continuing; and
(e) immediately after giving effect to:
(i) a Loan, the aggregate principal balance of all outstanding
Loans for each Lender shall not exceed such Lender's Revolving
Credit Commitment;
(ii) a Letter of Credit or renewal thereof, the aggregate
principal balance of all outstanding Participations in Letters of
Credit and Reimbursement Obligations (or in the case of the Issuing
Bank, its remaining interest after deduction of all Participations
in Letters of Credit and Reimbursement Obligations of other
Lenders) for each Lender and in the aggregate shall not exceed,
respectively, (X) such Lender's Letter of Credit Commitment or (Y)
the Total Letter of Credit Commitment;
(iv) a Loan or a Letter of Credit or renewal thereof, the sum
of Letter of Credit Outstandings plus Revolving Credit Outstandings
shall not exceed the Total Revolving Credit Commitment or the
Borrowing Base.
40
45
ARTICLE VII
Representations and Warranties
The Borrower represents and warrants with respect to itself, the Parent
and their respective Subsidiaries (which representations and warranties shall
survive the delivery of the documents mentioned herein and the making of
Loans), that:
VII.1. Organization and Authority.
(a) The Borrower, the Parent and each Subsidiary is a corporation
duly organized and validly existing under the laws of the jurisdiction of
its formation;
(b) The Borrower, the Parent and each Subsidiary (x) has the
requisite power and authority to own its properties and assets and to
carry on its business as now being conducted and as contemplated in the
Loan Documents, and (y) is qualified to do business in every jurisdiction
in which failure so to qualify would have a Material Adverse Effect;
(c) The Borrower has the power and authority to execute, deliver and
perform this Agreement and the Notes, and to borrow hereunder, and to
execute, deliver and perform each of the other Loan Documents to which it
is a party;
(d) Each Credit Party has the power and authority to execute,
deliver and perform the applicable Facility Guaranty and each of the
other Loan Documents to which it is a party; and
(e) When executed and delivered, each of the Loan Documents to which
the Borrower or any other Credit Party is a party will be the legal,
valid and binding obligation or agreement, as the case may be, of the
Borrower or such Credit Party, enforceable against the Borrower or such
Credit Party in accordance with its terms, subject to the effect of any
applicable bankruptcy, moratorium, insolvency, reorganization or other
similar law affecting the enforceability of creditors' rights generally
and to the effect of general principles of equity (whether considered in
a proceeding at law or in equity).
VII.2. Loan Documents. The execution, delivery and performance by the
Borrower and each other Credit Party of each of the Loan Documents to which it
is a party:
(a) have been duly authorized by all requisite corporate action
(including any required shareholder approval) of the Borrower and each
other Credit Party required for the lawful execution, delivery and
performance thereof;
(b) do not violate any provisions of (i) applicable law, rule or
regulation, (ii)
41
46
any judgment, writ, order, determination, decree or arbitral award of any
Governmental Authority or arbitral authority binding on the Borrower or
any other Credit Party or its properties, or (iii) the charter documents
or bylaws of the Borrower or any other Credit Party;
(c) does not and will not be in conflict with, result in a breach of
or constitute an event of default, or an event which, with notice or
lapse of time or both, would constitute an event of default, under any
contract, indenture, agreement or other instrument or document to which
Borrower or any other Credit Party is a party, or by which the properties
or assets of Borrower or any other Credit Party are bound; and
(d) does not and will not result in the creation or imposition of
any Lien upon any of the properties or assets of Borrower or any other
Credit Party except any Liens in favor of the Agent and the Lenders
created by the Security Instruments.
VII.3. Solvency. The Borrower and each other Credit Party is Solvent
after giving effect to the transactions contemplated by the Loan Documents.
VII.4. Subsidiaries and Stockholders. Neither the Borrower, nor the Parent
has any Subsidiaries other than those Persons listed as Subsidiaries in
Schedule 7.4 and additional Subsidiaries created or acquired after the Closing
Date in compliance with Section 8.11; Schedule 7.4 states as of the date hereof
the organizational form of each entity, the authorized and issued
capitalization of each Subsidiary listed thereon, the number of shares or other
equity interests of each class of capital stock or interest issued and
outstanding of each such Subsidiary and the number and/or percentage of
outstanding shares or other equity interest (including options, warrants and
other rights to acquire any interest) of each such class of capital stock or
other equity interest owned by Borrower, by Parent or by any such Subsidiary;
the outstanding shares or other equity interests of each such Subsidiary have
been duly authorized and validly issued and are fully paid and nonassessable;
and Borrower, the Parent and each such Subsidiary owns beneficially and of
record all the shares and other interests it is listed as owning in Schedule
7.4, free and clear of any Lien.
VII.5. Ownership Interests. Neither the Borrower nor Parent owns any
interest in any Person other than the Persons listed in Schedule 7.4 and
additional Subsidiaries created or acquired after the Closing Date in
compliance with Section 8.11.
VII.6. Financial Condition.
(a) The Borrower has heretofore furnished to each Lender an audited
consolidated and related consolidating balance sheet of the Parent and
its Subsidiaries (including Borrower) as at December 31, 1995 and the
notes thereto and the related consolidated statements of income,
stockholders' equity and cash flows for the fiscal year then ended as
examined and certified by the Parent's independent certified public
accountants, and unaudited consolidated and consolidating interim
financial statements
42
47
of the Parent and its Subsidiaries (including Borrower) consisting of a
consolidated and consolidating balance sheets and related consolidated
and consolidating statements of income, stockholders' equity and cash
flows, in each case without notes, for and as of the end of the six month
period ending June 30, 1996. Except as set forth therein, such financial
statements (including the notes thereto) present fairly the financial
condition of the Parent and its Subsidiaries (including Borrower) as of
the end of such fiscal year and 6 month period and results of their
operations and the changes in its stockholders' equity for the fiscal
year and interim period then ended, all in conformity with GAAP applied
on a Consistent Basis, subject however, in the case of unaudited interim
statements to year end audit adjustments;
(b) since June 30, 1996 there has been no material adverse change in
the condition, financial or otherwise, of the Parent and its Subsidiaries
or the Borrower and its Subsidiaries or in the businesses, properties,
performance, prospects or operations of the Borrower, the Parent or their
Subsidiaries, nor have such businesses or properties been materially
adversely affected as a result of any fire, explosion, earthquake,
accident, strike, lockout, combination of workers, flood, embargo or act
of God; and
(c) except as set forth in the financial statements referred to in
Section 7.6(a) or in Schedule 7.6, neither Parent, Borrower nor any
Subsidiary of Parent or Borrower has incurred, other than in the ordinary
course of business, any material Indebtedness, Contingent Obligation or
other commitment or liability which remains outstanding or unsatisfied.
VII.7. Title to Properties. The Borrower, the Parent and each of their
Subsidiaries has good and marketable title to all its real and personal
properties, subject to no transfer restrictions or Liens of any kind, except
for the transfer restrictions and Liens described in Schedule 7.7.
VII.8. Taxes. Except as set forth in Schedule 7.8, the Borrower, the
Parent and each of their Subsidiaries has filed or caused to be filed all
federal, state and local tax returns which are required to be filed by it and,
except for taxes and assessments being contested in good faith by appropriate
proceedings diligently conducted and against which reserves reflected in the
financial statements described in Section 7.6(a) and satisfactory to the
Borrower's independent certified public accountants have been established, have
paid or caused to be paid all taxes as shown on said returns or on any
assessment received by it, to the extent that such taxes have become due.
VII.9. Other Agreements. Neither the Borrower, the Parent nor any of
their Subsidiaries is:
(a) a party to or subject to any judgment, order, decree, agreement,
lease or instrument, or subject to other restrictions, which individually
or in the aggregate could reasonably be expected to have a Material
Adverse Effect; or
43
48
(b) in default in the performance, observance or fulfillment of any
of the obligations, covenants or conditions contained in any agreement or
instrument to which the Borrower, the Parent or any Subsidiary is a
party, which default has, or if not remedied within any applicable grace
period could reasonably be likely to have, a Material Adverse Effect.
VII.10. Litigation. Except as set forth in Schedule 7.10, there is no
action, suit, investigation or proceeding at law or in equity or by or before
any governmental instrumentality or agency or arbitral body pending, or, to the
knowledge of the Borrower, threatened by or against the Borrower, the Parent or
any of their Subsidiaries or affecting the Borrower, the Parent or any of their
Subsidiaries or any properties or rights of the Borrower, the Parent or any of
their Subsidiaries, which could reasonably be expected to have a Material
Adverse Effect.
VII.11. Margin Stock. The proceeds of the borrowings made hereunder will
be used by the Borrower only for the purposes expressly authorized herein. None
of such proceeds will be used, directly or indirectly, for the purpose of
purchasing or carrying any margin stock or for the purpose of reducing or
retiring any Indebtedness which was originally incurred to purchase or carry
margin stock or for any other purpose which might constitute any of the Loans
under this Agreement a "purpose credit" within the meaning of said Regulation U
or Regulation X (12 C.F.R. Part 224) of the Board. Neither the Borrower nor any
agent acting in its behalf has taken or will take any action which might cause
this Agreement or any of the documents or instruments delivered pursuant hereto
to violate any regulation of the Board or to violate the Securities Exchange
Act of 1934, as amended, or the Securities Act of 1933, as amended, or any
state securities laws, in each case as in effect on the date hereof.
VII.12. Investment Company. Neither the Borrower, the Parent nor any of
their Subsidiaries is an "investment company," or an "affiliated person" of, or
"promoter" or "principal underwriter" for, an "investment company", as such
terms are defined in the Investment Company Act of 1940, as amended (15 U.S.C.
Section 80a-1, et seq.). The application of the proceeds of the Loans and
repayment thereof by the Borrower and the performance by the Borrower and the
other Credit Parties of the transactions contemplated by the Loan Documents
will not violate any provision of said Act, or any rule, regulation or order
issued by the Securities and Exchange Commission thereunder, in each case as in
effect on the date hereof.
VII.13. Patents, Etc. The Borrower, the Parent and each of their
Subsidiaries owns or has the right to use, under valid license agreements or
otherwise, all material patents, licenses, franchises, trademarks, trademark
rights, trade names, trade name rights, trade secrets and copyrights necessary
to or used in the conduct of its businesses as now conducted and as
contemplated by the Loan Documents, without known conflict with any patent,
license, franchise, trademark, trade secret, trade name, copyright, other
proprietary right of any other Person.
44
49
VII.14. No Untrue Statement. Neither (a) this Agreement nor any other Loan
Document or certificate or document executed and delivered by or on behalf of
the Borrower or any other Credit Party in accordance with or pursuant to any
Loan Document nor (b) any statement, representation, or warranty provided to
the Agent in connection with the negotiation or preparation of the Loan
Documents contains any misrepresentation or untrue statement of material fact
or omits to state a material fact necessary, in light of the circumstance under
which it was made, in order to make any such warranty, representation or
statement contained therein not misleading.
VII.15. No Consents, Etc. Neither the respective businesses or properties
of the Borrower, the Parent or any of their Subsidiaries, nor any relationship
between the Borrower, the Parent or any of their Subsidiaries and any other
Person, nor any circumstance in connection with the execution, delivery and
performance of the Loan Documents and the transactions contemplated thereby, is
such as to require a consent, approval or authorization of, or filing,
registration or qualification with, any Governmental Authority or any other
Person on the part of the Borrower, the Parent or any of their Subsidiaries as
a condition to the execution, delivery and performance of, or consummation of
the transactions contemplated by the Loan Documents, which, if not obtained or
effected, would be reasonably likely to have a Material Adverse Effect, or if
so, such consent, approval, authorization, filing, registration or
qualification has been duly obtained or effected, as the case may be.
VII.16. Employee Benefit Plans.
(a) The Borrower, the Parent and each ERISA Affiliate is in
compliance with all applicable provisions of ERISA and the regulations
and published interpretations thereunder and in compliance with all
Foreign Benefit Laws with respect to all Employee Benefit Plans except
for any required amendments for which the remedial amendment period as
defined in Section 401(b) of the Code has not yet expired. Each Employee
Benefit Plan that is intended to be qualified under Section 401(a) of the
Code has been determined by the Internal Revenue Service to be so
qualified, and each trust related to such plan has been determined to be
exempt under Section 501(a) of the Code. No material liability has been
incurred by the Borrower, the Parent or any ERISA Affiliate which remains
unsatisfied for any taxes or penalties with respect to any Employee
Benefit Plan or any Multiemployer Plan;
(b) Neither the Borrower, the Parent nor any ERISA Affiliate has (i)
engaged in a nonexempt prohibited transaction described in Section 4975
of the Code or Section 406 of ERISA affecting any of the Employee Benefit
Plans or the trusts created thereunder which could subject any such
Employee Benefit Plan or trust to a material tax or penalty on prohibited
transactions imposed under Internal Revenue Code Section 4975 or ERISA,
(ii) incurred any accumulated funding deficiency with respect to any
Employee Benefit Plan, whether or not waived, or any other liability to
the PBGC which remains outstanding other than the payment of premiums and
there are no
45
50
premium payments which are due and unpaid, (iii) failed to make a
required contribution or payment to a Multiemployer Plan, or (iv) failed
to make a required installment or other required payment under Section
412 of the Code, Section 302 of ERISA or the terms of such Employee
Benefit Plan;
(c) No Termination Event has occurred or is reasonably expected to
occur with respect to any Pension Plan or Multiemployer Plan, and neither
the Borrower, the Parent nor any ERISA Affiliate has incurred any unpaid
withdrawal liability with respect to any Multiemployer Plan;
(d) The present value of all vested accrued benefits under each
Employee Benefit Plan which is subject to Title IV of ERISA, did not, as
of the most recent valuation date for each such plan, exceed the then
current value of the assets of such Employee Benefit Plan allocable to
such benefits;
(e) To the best of the Borrower's knowledge, each Employee Benefit
Plan subject to Title IV of ERISA, maintained by the Borrower, the Parent
or any ERISA Affiliate, has been administered in accordance with its
terms in all material respects and is in compliance in all material
respects with all applicable requirements of ERISA and other applicable
laws, regulations and rules;
(f) The consummation of the Loans and the issuance of the Letters of
Credit provided for herein will not involve any prohibited transaction
under ERISA which is not subject to a statutory or administrative
exemption; and
(g) No material proceeding, claim, lawsuit and/or investigation
exists or, to the best knowledge of the Borrower after due inquiry, is
threatened concerning or involving any Employee Benefit Plan.
VII.17. No Default. As of the date hereof, there does not exist any
Default or Event of Default hereunder.
VII.18. Hazardous Materials. (a) The Borrower, the Parent and each of
their Subsidiaries is in compliance with all applicable Environmental Laws in
all material respects, and has been issued and maintains all required federal,
state and local permits, licenses, certificates and approvals pertaining to
Hazardous Materials that are germane to the conduct of its business. Neither
the Borrower, the Parent nor any of their Subsidiaries has been notified of any
pending or threatened action, suit, proceeding or investigation which, and
neither the Borrower, the Parent nor any of their Subsidiaries is aware of any
facts, which (i) calls into question, or could reasonably be expected to call
into question, compliance by the Borrower, the Parent or any of their
Subsidiaries with any Environmental Laws, (ii) seeks, or could reasonably be
expected to form the basis of a meritorious proceeding to seek, to suspend,
revoke or terminate any license, permit, certification or approval pertaining
to Hazardous Material that is germane to the conduct of its business, or (iii)
seeks to cause, or could
46
51
reasonably be expected to form the basis of a meritorious proceeding to cause,
any property of the Borrower, the Parent or any of their Subsidiaries to be
subject to any restrictions on ownership, use, occupancy or transferability
under any Environmental Law;
(b) Neither the Borrower, the Parent nor any of their Subsidiaries, nor,
to the best of Borrower's knowledge, any previous owner or operator of any real
property owned or operated by the Borrower, the Parent or any of their
Subsidiaries or any other Person, has managed, generated, stored, released,
treated, or disposed of any Hazardous Material on any portion of such property,
or transferred or caused to be transferred any Hazardous Material from such
property to any other location except in compliance with all Environmental
Laws. Except for Hazardous Materials necessary for the routine maintenance of
the Properties owned or operated by the Borrower, the Parent and their
Subsidiaries and as used in the ordinary course of the Borrower's, the Parent's
or their Subsidiaries' business, which Hazardous Material shall be used in
accordance with all applicable Environmental Laws, the Borrower covenants it
shall, and shall cause the Parent and each of their Subsidiaries to, not permit
any Hazardous Materials to be brought on to the real property owned or operated
by the Borrower, the Parent and their Subsidiaries, or if so brought or found
located thereon, shall be immediately removed, with proper disposal, and all
environmental cleanup requirements shall be diligently undertaken pursuant to
all Environmental Laws.
VII.19. Employment Matters. (a) None of the employees of the Borrower, the
Parent or any of their Subsidiaries is subject to any collective bargaining
agreement and there are no strikes, work stoppages, election or decertification
petitions or proceedings, unfair labor charges, equal opportunity proceedings,
or other material labor/employee related controversies or proceedings pending
or, to the best knowledge of the Borrower, threatened against the Borrower, the
Parent or any such Subsidiary or between the Borrower, the Parent or any such
Subsidiary and any of their employees, other than employee grievances arising
in the ordinary course of business which could not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect; and
(b) Except to the extent a failure to maintain compliance would not have a
Material Adverse Effect, the Borrower, the Parent and each of their
Subsidiaries is in compliance in all respects with all applicable laws, rules
and regulations pertaining to labor or employment matters, including without
limitation those pertaining to wages, hours, occupational safety and taxation
and there is neither pending or threatened any litigation, administrative
proceeding nor, to the knowledge of the Borrower, any investigation, in respect
of such matters which, if decided adversely, could reasonably be likely,
individually or in the aggregate, to have a Material Adverse Effect.
VII.20. RICO. Neither the Borrower, the Parent nor any of their
Subsidiaries is engaged in or has engaged in any course of conduct that could
subject any of their respective properties to any Lien, seizure or other
forfeiture under any criminal law, racketeer influenced and corrupt
organizations law, civil or criminal, or other similar laws.
47
52
ARTICLE VIII
Affirmative Covenants
Until the Revolving Credit Termination Date, unless the Required Lenders
shall otherwise consent in writing, the Borrower will, and where applicable
will cause the Parent and each Subsidiary of the Borrower and the Parent to:
VIII.1. Financial Reports, Etc. (a) As soon as practical and in any event
(i) within 90 days of the end of the fiscal year of the Parent deliver or cause
to be delivered to the Agent financial statements of the Parent and its
Subsidiaries (including Borrower) on a consolidated and consolidating basis in
form and content acceptable to the Agent, setting forth comparative financial
statements for the preceding fiscal year, all prepared in accordance with GAAP
and in the case of the consolidated statements containing an unqualified
opinion of independent certified public accountants acceptable to the Agent,
together with a certificate of the chief financial officer of the Parent
demonstrating compliance with Section 8.12 hereof (which certificate shall be
in the form of Exhibit H attached hereto); (ii) within 45 days of the end of
each fiscal quarter of the Parent, other than the last, of each fiscal year
deliver to the Agent financial statements of the Parent and its Subsidiaries
(including the Borrower) on a consolidated and consolidating basis in form and
content acceptable to the Agent for the period from the beginning of the fiscal
year through the end of such reporting period, all prepared in accordance with
GAAP subject to normal year end adjustments and certified by the chief
financial officer of Parent to be accurate and correct, together with a
certificate of the chief financial officer of Parent containing computations
for such quarter comparable to that required pursuant to subparagraph (a)(i)
herein; (iii) within 15 days following the last day of each calendar month
deliver to the Agent (A) a summary and aging of Eligible Receivables, (B) a
summary of Eligible Inventory and (C) a Borrowing Base Certificate to the Bank
in the form of Exhibit I attached hereto; (iv) within five days of receipt
thereof a copy of any management letter furnished to Parent by its public
accountants; (v) within five days of mailing or filing any report filed with
the Securities and Exchange Commission or any stock exchange and (vi) upon any
officer of the Borrower obtaining knowledge of any litigation or other
proceedings being instituted against the Borrower, the Parent or any of their
Subsidiaries, or any attachment, levy, execution or other process being
instituted against any assets of the Borrower, the Parent or any of their
Subsidiaries, making a claim or claims in an aggregate amount greater than
$1,000,000 not otherwise covered by insurance, promptly deliver to the Agent
written notice thereof stating the nature and status of such litigation,
dispute, proceeding, levy, execution or other process.
(b) promptly, from time to time, deliver or cause to be delivered to the
Agent and each Lender such other information regarding the Parent's, the
Borrower's and any of their Subsidiaries' operations, business affairs and
financial condition as the Agent or such Lender may reasonably request;
The Agent and the Lenders are hereby authorized to deliver a copy of any
such
48
53
financial or other information delivered hereunder to the Lenders (or any
affiliate of any Lender) or to the Agent, to any Governmental Authority having
jurisdiction over the Agent or any of the Lenders pursuant to any written
request therefor or in the ordinary course of examination of loan files, or to
any other Person who shall acquire or consider the assignment of, or
acquisition of any participation interest in, any Obligation permitted by this
Agreement.
VIII.2. Maintain Properties. Maintain all properties necessary to their
operations in good working order and condition, make all needed repairs,
replacements and renewals to such properties, and maintain free from Liens all
trademarks, trade names, patents, copyrights, trade secrets, know-how, and
other intellectual property and proprietary information (or adequate licenses
thereto), in each case as are reasonably necessary to conduct their business as
currently conducted or as contemplated hereby, all in accordance with customary
and prudent business practices.
VIII.3. Existence, Qualification, Etc. Do or cause to be done all things
necessary to preserve and keep in full force and effect their existence and all
material rights and franchises, and maintain their licenses or qualifications
to do business as foreign corporations and good standing in each jurisdiction
in which their ownership or lease of property or the nature of their business
makes such license or qualification necessary except where the failure to so
qualify would not have a Material Adverse Effect.
VIII.4. Regulations and Taxes. Comply in all material respects with or
contest in good faith all statutes and governmental regulations and pay all
taxes, assessments, governmental charges, claims for labor, supplies, rent and
any other obligation which, if unpaid, would become a Lien against any of their
properties except liabilities being contested in good faith by appropriate
proceedings diligently conducted and against which adequate reserves acceptable
to the Parent's independent certified public accountants have been established
unless and until any Lien resulting therefrom attaches to any of their property
and becomes enforceable against any of their creditors.
VIII.5. Insurance. (a) Keep all of their insurable properties adequately
insured at all times with responsible insurance carriers against loss or damage
by fire and other hazards to the extent and in the manner as are customarily
insured against by similar businesses owning such properties similarly
situated, (b) maintain general public liability insurance at all times with
responsible insurance carriers against liability on account of damage to
persons and property and (c) maintain insurance under all applicable workers'
compensation laws (or in the alternative, maintain required reserves if
self-insured for workers' compensation purposes) such policies of insurance to
have such limits, deductibles, exclusions, co-insurance and other provisions
providing no less coverages than are maintained by similar businesses that are
similarly situated,in any manner. such insurance policies to be in form
reasonably satisfactory to the Agent. Each of the policies of insurance
described in this Section 8.5 shall provide that the insurer shall give the
Agent not less than thirty (30) days' prior written notice before any such
policy shall be terminated, lapse or be altered
49
54
VIII.6. True Books. Keep true books of record and account in which full,
true and correct entries will be made of all of their dealings and
transactions, and set up on their books such reserves as may be required by
GAAP with respect to doubtful accounts and all taxes, assessments, charges,
levies and claims and with respect to its business in general, and include such
reserves in interim as well as year-end financial statements.
VIII.7. Right of Inspection. Permit any Person designated by any Lender or
the Agent to visit and inspect any of the properties, corporate books and
financial reports of the Parent, the Borrower or any of their Subsidiaries and
to discuss their affairs, finances and accounts with their principal officers
and independent certified public accountants, all at reasonable times, at
reasonable intervals and with reasonable prior notice.
VIII.8. Observe all Laws. Conform to and duly observe in all material
respects all laws, rules and regulations and all other valid requirements of
any Governmental Authority with respect to the conduct of their business.
VIII.9. Covenants Extending to Other Persons. Cause each of its
Subsidiaries, the Parent and each of the Parent's Subsidiaries to do with
respect to itself, its business and its assets, each of the things required of
the Borrower in Sections 8.2 through 8.9 inclusive.
VIII.10. Officer's Knowledge of Default. Upon any officer of the Borrower
or the Parent obtaining knowledge of any Default or Event of Default hereunder
or under any other obligation of the Borrower, the Parent or any of their
Subsidiaries to any Lender, or any event, development or occurrence which could
reasonably be expected to have a Material Adverse Effect, cause such officer or
an Authorized Representative to promptly notify the Agent of the nature
thereof, the period of existence thereof, and what action the Borrower, the
Parent or such Subsidiary proposes to take with respect thereto.
VIII.11. New Subsidiaries. Upon the acquisition or creation of any
Domestic Subsidiary of the Parent or the Borrower, cause to be delivered to the
Agent for the benefit of the Lenders each of the following:
(a) a Facility Guaranty executed by such Subsidiary substantially in
the form of Exhibit J;
(b) a Security Agreement of such Subsidiary substantially in the
form of Exhibit K, together with such Uniform Commercial Code financing
statements on Form UCC-1 or otherwise duly executed by such Subsidiary as
"Debtor" and naming the Agent for the benefit of the Lenders as "Secured
Party", in form, substance and number sufficient in the reasonable
opinion of the Agent and its special counsel to be filed in all Uniform
Commercial Code filing offices in all jurisdictions in which filing is
necessary or advisable to perfect in favor of the Agent for the benefit
of the Lenders the Lien on Collateral conferred under such Security
Instrument to the extent such Lien may be perfected by Uniform Commercial
Code filing;
50
55
(c) current copies of the charter documents, including partnership
agreements and certificate of limited partnership, if applicable, and
bylaws of such Subsidiary, minutes of duly called and conducted meetings
(or duly effected consent actions) of the Board of Directors, partners,
or appropriate committees thereof (and, if required by such charter
documents, bylaws or by applicable law, of the shareholders) of such
Subsidiary authorizing the actions and the execution and delivery of
documents described in this Section 8.11.
VIII.12. Financial Covenants.
(a) Consolidated Tangible Net Worth. Maintain at all times
Consolidated Tangible Net Worth equal to the sum of (i) $143,000,000 plus
(ii) 50% of Consolidated Net Income for each quarterly period subsequent
to June 30, 1996 plus (iii) the aggregate net proceeds of any equity
offering (including net proceeds under any stock option or executive
compensation plan) received by Parent after June 30, 1996; and
(b) Consolidated Interest Coverage Ratio. Maintain at all times a
Consolidated Interest Coverage Ratio of not less than 2.00 to 1.00.
51
56
ARTICLE IX
Negative Covenants
Until the Revolving Credit Termination Date, unless the Required Lenders
shall otherwise consent in writing, the Borrower will not, nor will it permit
the Parent or any of their Domestic Subsidiaries to:
IX.1. Negative Covenants.
(a) Sell, lease, transfer or dispose of all or any part of their
United States assets except in the ordinary course of business and except
for Year End Domestic Receivables Transactions;
(b) Incur, create, assume or permit to exist aggregate Indebtedness
in excess of 10% of Consolidated Tangible Net Worth, however evidenced,
or guarantee, assume or endorse or otherwise become or remain liable in
connection with any Contingent Obligation, other than (i) the
Indebtedness evidenced by the Note and Indebtedness approved by the Agent
and (ii) Indebtedness listed on Schedule 7.6;
(c) Enter into any agreement, contract, binding commitment or other
arrangement providing for any Acquisition or for forming any joint
venture, or take any action to solicit the tender of securities or
proxies in respect thereof in order to effect any Acquisition, unless
(i), in the case of an Acquisition, the Person to be (or whose assets are
to be) acquired does not oppose such Acquisition and the line or lines of
business of the Person to be acquired are substantially the same as one
or more line or lines of business conducted by the Borrower, the Parent
or their Subsidiaries, (ii), in the case of an Acquisition or the forming
of a joint venture, no Default or Event of Default shall have occurred
and be continuing either immediately prior to or immediately after giving
effect to such Acquisition or joint venture and the Borrower shall have
furnished to the Agent, only in the event such Acquisitions and joint
ventures have exceeded $5,000,000 during any fiscal year, (A) pro forma
historical financial statements as of the end of the most recently
completed fiscal year of the Borrower after giving effect to such
Acquisition or joint venture and (B) a certificate in the form of Exhibit
H prepared on a historical pro forma basis giving effect to such
Acquisition or joint venture, which certificate shall demonstrate that no
Default or Event of Default would exist immediately after giving effect
thereto, (iii), in the case of an Acquisition, the Person acquired shall
be a wholly-owned Subsidiary, or be merged into the Borrower, the Parent
or any of their Subsidiaries, immediately upon consummation of the
Acquisition (or if assets are being acquired, the acquiror shall be the
Borrower, the Parent or any of their Subsidiaries) and (iv), in the case
of an Acquisition or a joint venture, such Acquisitions and joint
ventures have not exceeded 25% of Consolidated Tangible Net Worth during
any fiscal year;
52
57
(d) Incur, create or permit to exist any Lien, charge or other
encumbrance of any nature whatsoever with respect to any property or
assets now owned or hereafter acquired by the Borrower, the Parent or any
of their Subsidiaries, except for Liens in favor of the Agent and the
Lenders created pursuant to the Security Instruments, purchase money
security interests, and Liens listed on Schedule 7.7;
(e) Make any redemption, conversion, exchange, retirement or similar
payment, purchase or other acquisition (collectively a "Restricted
Payment") for value, direct or indirect, of any shares of any class of
stock of Parent now or hereafter outstanding, provided, however, that the
Parent may purchase it's stock in an aggregate amount no greater than an
amount equal to 15% of Consolidated Tangible Net Worth;
(f) Change its fiscal year from that of a calendar year.
53
58
ARTICLE X
Events of Default and Acceleration
X.1. Events of Default. If any one or more of the following events (herein
called "Events of Default") shall occur for any reason whatsoever (and whether
such occurrence shall be voluntary or involuntary or come about or be effected
by operation of law or pursuant to or in compliance with any judgment, decree
or order of any court or any order, rule or regulation of any Governmental
Authority), that is to say:
(a) if default shall be made in the due and punctual payment of the
principal of any Loan, Reimbursement Obligation or other Obligation, when
and as the same shall be due and payable whether pursuant to any
provision of Article II or Article III, at maturity, by acceleration or
otherwise; or
(b) if default shall be made in the due and punctual payment of any
amount of interest on any Loan, Reimbursement Obligation or other
Obligation or of any fees or other amounts payable to any of the Lenders,
the Issuing Bank or the Agent on the date on which the same shall be due
and payable; or
(c) if a default shall be made in the performance or observance of,
or shall occur under, any covenant, agreement or provision contained in
this Agreement or the Notes (other than as described in clauses (a) or
(b) above) and such default shall continue for 30 or more days after the
earlier of receipt of notice of such default by the Authorized
Representative from the Agent or an officer of the Borrower becomes aware
of such default, or if a default shall be made in the performance or
observance of, or shall occur under, any covenant, agreement or provision
contained in any of the other Loan Documents (beyond any applicable grace
period, if any, contained therein) or in any instrument or document
evidencing or creating any obligation, guaranty, or Lien in favor of the
Agent or any of the Lenders or delivered to the Agent or any of the
Lenders in connection with or pursuant to this Agreement or any of the
Obligations, or if any Loan Document ceases to be in full force and
effect (other than in accordance with its terms in the absence of default
or with the consent of the Agent and the Lenders), or if without the
written consent of the Lenders, this Agreement or any other Loan Document
shall be disaffirmed or shall terminate, be terminable or be terminated
or become void or unenforceable for any reason whatsoever (other than in
accordance with its terms in the absence of default or with the consent
of the Agent and the Lenders); or
(d) if there shall occur (i) a default, which is not waived, in the
payment of any principal, interest, premium or other amount with respect
to any Indebtedness (other than the Loans and other Obligations) of the
Borrower, the Parent or any of their Subsidiaries in an amount not less
than $50,000 in the aggregate outstanding, or (ii) a default, which is
not waived, in the performance, observance or fulfillment of any term
54
59
or covenant contained in any agreement or instrument under or pursuant to
which any such Indebtedness may have been issued, created, assumed,
guaranteed or secured by the Borrower, the Parent or any of their
Subsidiaries, or (iii) any other event of default as specified in any
agreement or instrument under or pursuant to which any such Indebtedness
may have been issued, created, assumed, guaranteed or secured by the
Borrower, the Parent or any of their Subsidiaries, and such default or
event of default shall continue for more than the period of grace, if
any, therein specified, or such default or event of default shall permit
the holder of any such Indebtedness (or any agent or trustee acting on
behalf of one or more holders) to accelerate the maturity thereof; or
(e) if any representation, warranty or other statement of fact
contained in any Loan Document or in any writing, certificate, report or
statement at any time furnished to the Agent or any Lender by or on
behalf of the Borrower, the Parent or any of their Subsidiaries pursuant
to or in connection with any Loan Document, or otherwise, shall be false
or misleading in any material respect when given; or
(f) if the Borrower, the Parent or any of their Subsidiaries shall
be unable to pay its debts generally as they become due; file a petition
to take advantage of any insolvency statute; make an assignment for the
benefit of its creditors; commence a proceeding for the appointment of a
receiver, trustee, liquidator or conservator of itself or of the whole or
any substantial part of its property; file a petition or answer seeking
liquidation, reorganization or arrangement or similar relief under the
federal bankruptcy laws or any other applicable law or statute; or
(g) if a court of competent jurisdiction shall enter an order,
judgment or decree appointing a custodian, receiver, trustee, liquidator
or conservator of the Borrower, the Parent or any of their Subsidiaries
or of the whole or any substantial part of its properties and such order,
judgment or decree continues unstayed and in effect for a period of sixty
(60) days, or approve a petition filed against the Borrower, the Parent
or any of their Subsidiaries seeking liquidation, reorganization or
arrangement or similar relief under the federal bankruptcy laws or any
other applicable law or statute of the United States of America or any
state, which petition is not dismissed within sixty (60) days; or if,
under the provisions of any other law for the relief or aid of debtors, a
court of competent jurisdiction shall assume custody or control of the
Borrower, the Parent or any of their Subsidiaries or of the whole or any
substantial part of any of its properties, which control is not
relinquished within sixty (60) days; or if there is commenced against the
Borrower, the Parent or any of their Subsidiaries any proceeding or
petition seeking reorganization, arrangement or similar relief under the
federal bankruptcy laws or any other applicable law or statute of the
United States of America or any state which proceeding or petition
remains undismissed for a period of sixty (60) days; or if the Borrower,
the Parent or any of their Subsidiaries takes any action to indicate its
consent to or approval of any such proceeding or petition; or
55
60
(h) if (i) one or more judgments or orders where the amount not
covered by insurance (or the amount as to which the insurer denies
liability) is in excess of $1,000,000 is rendered against the Borrower,
the Parent or any of their Subsidiaries, or (ii) there is any attachment,
injunction or execution against any of the Borrower's, the Parent's or
their Subsidiaries' or properties for any amount in excess of $1,000,000
in the aggregate; and such judgment, attachment, injunction or execution
remains unpaid, unstayed, undischarged, unbonded or undismissed for a
period of thirty (30) days; or
(i) if the Borrower, the Parent or any of their Subsidiaries shall
suspend all or any part of its operations material to the conduct of the
business of the Borrower, the Parent or such Subsidiary; or
(j) if the Borrower or the Parent merges or dissolves (except that a
Subsidiary may be merged into another Subsidiary or the Borrower);
(k) if there shall occur and not be waived an Event of Default as
defined in any of the other Loan Documents; or
(l) if any Person or group of Persons acting in concert, other than
the owners of more than 10% of outstanding securities of the Parent as of
July 28, 1996 having voting rights in the election of directors, shall
own or control, directly or indirectly, more than 30% of the outstanding
securities of the Parent having voting rights in the election of
directors, in each case to be determined on a fully diluted basis and
taking into account any outstanding securities or contract rights
exercisable, exchangeable or convertible into equity interests;
then, and in any such event and at any time thereafter, if such Event of
Default or any other Event of Default shall have not been waived,
either or both of the following actions may be taken: (i) the
Agent, with the consent of the Required Lenders, may, and at the
direction of the Required Lenders shall, declare any obligation of
the Lenders and the Issuing Bank to make further Loans or to issue
additional Letters of Credit terminated, whereupon the obligation
of each Lender to make further Loans and of the Issuing Bank to
issue additional Letters of Credit, hereunder shall terminate
immediately, and (ii) the Agent shall at the direction of the
Required Lenders, at their option, declare by notice to the
Borrower any or all of the Obligations to be immediately due and
payable, and the same, including all interest accrued thereon and
all other obligations of the Borrower to the Agent and the Lenders,
shall forthwith become immediately due and payable without
presentment, demand, protest, notice or other formality of any
kind, all of which are hereby expressly waived, anything contained
herein or in any instrument evidencing the Obligations to the
contrary notwithstanding; provided, however, that notwithstanding
the above, if there shall occur an Event
56
61
of Default under clause (g) or (h) above, then the obligation of
the Lenders to make Loans and of the Issuing Bank to issue Letters
of Credit hereunder shall automatically terminate and any and all
of the Obligations shall be immediately due and payable without the
necessity of any action by the Agent or the Required Lenders or
notice to the Agent or the Lenders;
the Borrower shall, upon demand of the Agent or the Required
Lenders, deposit cash with the Agent in an amount equal to the
amount of any Letter of Credit Outstandings, as collateral security
for the repayment of any future drawings or payments under such
Letters of Credit, and such amounts shall be held by the Agent
pursuant to the terms of the LC Account Agreement; and
the Agent and each of the Lenders shall have all of the rights
and remedies available under the Loan Documents or under any
applicable law.
X.2. Agent to Act. In case any one or more Events of Default shall occur
and not have been waived, the Agent may, and at the direction of the Required
Lenders shall, proceed to protect and enforce their rights or remedies either
by suit in equity or by action at law, or both, whether for the specific
performance of any covenant, agreement or other provision contained herein or
in any other Loan Document, or to enforce the payment of the Obligations or any
other legal or equitable right or remedy.
X.3. Cumulative Rights. No right or remedy herein conferred upon the
Lenders or the Agent is intended to be exclusive of any other rights or
remedies contained herein or in any other Loan Document, and every such right
or remedy shall be cumulative and shall be in addition to every other such
right or remedy contained herein and therein or now or hereafter existing at
law or in equity or by statute, or otherwise.
X.4. No Waiver. No course of dealing between the Borrower and any Lender
or the Agent or any failure or delay on the part of any Lender or the Agent in
exercising any rights or remedies under any Loan Document or otherwise
available to it shall operate as a waiver of any rights or remedies and no
single or partial exercise of any rights or remedies shall operate as a waiver
or preclude the exercise of any other rights or remedies hereunder or of the
same right or remedy on a future occasion.
X.5. Allocation of Proceeds. If an Event of Default has occurred and not
been waived, and the maturity of the Notes has been accelerated pursuant to
Article X, all payments received by the Agent hereunder, in respect of any
principal of or interest on the Obligations or any other amounts payable by the
Borrower hereunder, shall be applied by the Agent in the following order:
(a) amounts due to the Lenders pursuant to Sections 2.10, 3.3, 3.4
and 12.5;
57
62
(b) amounts due to the Agent pursuant to Section 11.11;
(c) payments of interest on Loans and Reimbursement Obligations, to
be applied for the ratable benefit of the Lenders;
(d) payments of principal of Loans and Reimbursement Obligations, to
be applied for the ratable benefit of the Lenders;
(e) payments of cash amounts to the Agent in respect of outstanding
Letters of Credit pursuant to Section 10.1;
(f) amounts due to the Lenders pursuant to Sections 3.2(g) and 12.9;
(g) payments of all other amounts due under any of the Loan
Documents, if any, to be applied for the ratable benefit of the Lenders;
(h) any surplus remaining after application as provided for herein,
to the Borrower or otherwise as may be required by applicable law.
58
63
ARTICLE XI
The Agent
XI.1. Appointment. Each Lender hereby irrevocably designates and appoints
NationsBank as the Agent for the Lenders under this Agreement, and each of the
Lenders hereby irrevocably authorizes NationsBank as the Agent for such Lender,
to take such action on its behalf under the provisions of this Agreement and
the other Loan Documents and to exercise such powers as are expressly delegated
to the Agent by the terms of this Agreement and such other Loan Documents,
together with such other powers as are reasonably incidental thereto. The Agent
shall not have any duties or responsibilities, except those expressly set forth
herein, or any fiduciary relationship with any of the Lenders, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities
shall be read into this Agreement or any other Loan Document or otherwise exist
against the Agent.
XI.2. Attorneys-in-fact. The Agent may execute any of its duties under the
Loan Documents by or through agents or attorneys-in-fact and shall be entitled
to advice of counsel concerning all matters pertaining to such duties. The
Agent shall not be responsible for the negligence, gross negligence or willful
misconduct of any agents or attorneys-in-fact selected by it with reasonable
care.
XI.3. Limitation on Liability. Neither the Agent nor any of its officers,
directors, employees, agents or attorneys-in-fact shall be liable to the
Lenders for any action lawfully taken or omitted to be taken by it or them
under or in connection with the Loan Documents except for its or their own
gross negligence or willful misconduct. Neither the Agent nor any of its
affiliates shall be responsible in any manner to any of the Lenders for any
recitals, statements, representations or warranties made by the Borrower, the
Parent, any of their Subsidiaries, or any officer or representative thereof
contained in any Loan Document, or in any certificate, report, statement or
other document referred to or provided for in or received by the Agent under or
in connection with any Loan Document, or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of any Loan Document,
or for any failure of the Borrower, the Parent or any of their Subsidiaries to
perform its obligations under any Loan Document, or for any recitals,
statements, representations or warranties made, or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of any collateral.
The Agent shall not be under any obligation to any of the Lenders to ascertain
or to inquire as to the observance or performance of any of the terms,
covenants or conditions of any Loan Document on the part of the Borrower, the
Parent or any of their Subsidiaries or to inspect the properties, books or
records of the Borrower, the Parent or any of their Subsidiaries.
XI.4. Reliance. The Agent shall be entitled to rely, and shall be fully
protected in relying, upon any Note, writing, resolution, notice, consent
certificate, affidavit, letter, cablegram, telegram, telefacsimile or telex
message, statement, order or other document or conversation believed by it to
be genuine and correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal counsel (including,
59
64
without limitation, counsel to any Credit Party), independent accountants and
other experts selected by the Agent. The Agent may deem and treat the payee of
any Note as the owner thereof for all purposes unless an Assignment shall have
been filed with and accepted by the Agent. The Agent shall be fully justified
in failing or refusing to take any action under the Loan Documents unless it
shall first receive advice or concurrence of the Lenders or the Required
Lenders as provided in this Agreement or it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense which may
be incurred by it by reason of taking or continuing to take any such action.
The Agent shall in all cases be fully protected in acting, or in refraining
from acting, under the Loan Documents in accordance with a request of the
Required Lenders, and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Lenders and all present and
future holders of the Notes.
XI.5. Notice of Default. The Agent shall not be deemed to have knowledge
or notice of the occurrence of any Default or Event of Default hereunder unless
the Agent has received notice from a Lender, the Authorized Representative or
the Borrower referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default". In the event
that the Agent receives such a notice, the Agent shall promptly give notice
thereof to the Lenders. The Agent shall take such action with respect to such
Default or Event of Default as shall be reasonably directed by the Required
Lenders; provided that, unless and until the Agent shall have received such
directions, the Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Event of Default as it
shall deem advisable in the best interests of the Lenders.
XI.6. No Representations. Each Lender expressly acknowledges that neither
the Agent nor any of its affiliates has made any representations or warranties
to it and that no act by the Agent hereafter taken, including any review of the
affairs of the Borrower, the Parent or their Subsidiaries, shall be deemed to
constitute any representation or warranty by the Agent to any Lender. Each
Lender represents to the Agent that it has, independently and without reliance
upon the Agent or any other Lender, and based on such documents and information
as it has deemed appropriate, made its own appraisal of and investigation into
the financial condition, creditworthiness, affairs, status and nature of the
Borrower, Parent and their Subsidiaries and made its own decision to enter into
this Agreement. Each Lender also represents that it will, independently and
without reliance upon the Agent or any other Lender, and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit analysis, appraisals and decisions in taking or not taking
action under the Loan Documents and to make such investigation as it deems
necessary to inform itself as to the status and affairs, financial or
otherwise, of the Borrower, the Parent and their Subsidiaries. Except for
notices, reports and other documents expressly required to be furnished to the
Lenders by the Agent hereunder, the Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the affairs, financial condition or business of the Borrower, the
Parent and their Subsidiaries which may come into the possession of the Agent
or any of its affiliates.
60
65
XI.7. Indemnification. Each of the Lenders agree to indemnify the Agent in
its capacity as such (to the extent not reimbursed by the Borrower or any other
Credit Party and without limiting any obligations of the Borrower or any other
Credit Party to do so), ratably according to the respective principal amount of
the Notes held by them (or, if no Notes are outstanding, ratably in accordance
with their respective Applicable Commitment Percentages as then in effect) from
and against any and all liabilities, obligations, losses (excluding any losses
suffered by the Agent as a result of Borrower's or any other Credit Party's
failure to pay any fee owing to the Agent), damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever which may at any time (including without limitation at any time
following the payment of the Notes) be imposed on, incurred by or asserted
against the Agent in any way relating to or arising out of any Loan Document or
any other document contemplated by or referred to therein or the transactions
contemplated thereby or any action taken or omitted by the Agent under or in
connection with any of the foregoing; provided that no Lender shall be liable
for the payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from the Agent's gross negligence or willful misconduct. The
agreements in this subsection shall survive the Revolving Credit Termination
Date and the termination of this Agreement.
XI.8. Lender. The Agent and its affiliates may make loans to, accept
deposits from and generally engage in any kind of business with the Borrower,
the Parent and their Subsidiaries as though it were not the Agent hereunder.
With respect to its Loans made or renewed by it and any Note issued to it, the
Agent shall have the same rights and powers under this Agreement as any Lender
and may exercise the same as though it were not the Agent, and the terms
"Lender" and "Lenders" shall, unless the context otherwise indicates, include
the Agent in its individual capacity.
XI.9. Resignation. If the Agent shall resign as Agent under this
Agreement, then the Required Lenders may appoint, with the consent, so long as
there shall not have occurred and be continuing a Default or Event of Default,
of the Borrower, which consent shall not be unreasonably withheld, a successor
Agent for the Lenders, which successor Agent shall be a commercial bank
organized under the laws of the United States or any state thereof, having a
combined surplus and capital of not less than $500,000,000, whereupon such
successor Agent shall succeed to the rights, powers and duties of the former
Agent and the obligations of the former Agent shall be terminated and canceled,
without any other or further act or deed on the part of such former Agent or
any of the parties to this Agreement; provided, however, that the former
Agent's resignation shall not become effective until such successor Agent has
been appointed and has succeeded of record to all right, title and interest in
any collateral held by the Agent; provided, further, that if the Required
Lenders and, if applicable, the Borrower cannot agree as to a successor Agent
within ninety (90) days after such resignation, the Agent shall appoint a
successor Agent which satisfies the criteria set forth above in this Section
11.9 for a successor Agent and the parties hereto agree to execute whatever
documents are necessary to effect such action under this Agreement or any other
document executed pursuant to this Agreement; provided, however that in such
event all provisions of the Loan Documents,
61
66
shall remain in full force and effect. After any retiring Agent's resignation
hereunder as Agent, the provisions of this Article XI shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was Agent
under this Agreement.
XI.10. Sharing of Payments, etc. Each Lender agrees that if it shall,
through the exercise of a right of banker's lien, set-off, counterclaim or
otherwise, obtain payment with respect to its Obligations (other than pursuant
to Article V) which results in its receiving more than its pro rata share of
the aggregate payments with respect to all of the Obligations (other than any
payment expressly provided hereunder to be distributed on other than a pro rata
basis and payments pursuant to Article V), then (a) such Lender shall be deemed
to have simultaneously purchased from the other Lenders a share in their
Obligations so that the amount of the Obligations held by each of the Lenders
shall be pro rata and (b) such other adjustments shall be made from time to
time as shall be equitable to insure that the Lenders share such payments
ratably; provided, however, that for purposes of this Section 11.10 the term
"pro rata" shall be determined with respect to both the Revolving Credit
Commitment of each Lender and to the Total Revolving Credit Commitments after
subtraction in each case of amounts, if any, by which any such Lender has not
funded its share of the outstanding Loans and Obligations. If all or any
portion of any such excess payment is thereafter recovered from the Lender
which received the same, the purchase provided in this Section 11.10 shall be
rescinded to the extent of such recovery, without interest. The Borrower
expressly consents to the foregoing arrangements and agrees that each Lender so
purchasing a portion of the other Lenders' Obligations may exercise all rights
of payment (including, without limitation, all rights of set-off, banker's lien
or counterclaim) with respect to such portion as fully as if such Lender were
the direct holder of such portion.
62
67
ARTICLE XII
Miscellaneous
XII.1. Assignments and Participations. (a) At any time after the Closing
Date each Lender may, with the prior consent of the Agent and (so long as no
Default or Event of Default shall have occurred and be continuing) the
Borrower, which consents shall not be unreasonably withheld, assign to one or
more banks or financial institutions all or a portion of its rights and
obligations under the Loan Documents (including, without limitation, all or a
portion of any Note payable to its order); provided, that (i) each such
assignment shall be of a constant and not a varying percentage of all of the
assigning Lender's rights and obligations under the Revolving Credit Facility
and Letter of Credit Facility, (ii) for each assignment involving the issuance
and transfer of a Note, the assigning Lender shall execute an Assignment and
Acceptance and the Borrower hereby agrees to execute a replacement Note to give
effect to the assignment, (iii) the amount of Revolving Credit Commitment and
Letter of Credit Commitment which shall be assigned is a minimum of $5,000,000,
and, if greater, an amount which is an integral multiple of $1,000,000, (iv)
such assignee shall have an office located in the United States, and (v) no
consent of the Borrower or the Agent shall be required in connection with any
assignment by a Lender to another Lender or to an affiliate of any Lender. Upon
such execution, delivery, approval and acceptance, from and after the effective
date specified in each Assignment and Acceptance, (x) the assignee thereunder
shall be a party hereto and, to the extent that rights and obligations
hereunder or under any such Note have been assigned or negotiated to it
pursuant to such Assignment and Acceptance, have the rights and obligations of
a Lender hereunder and a holder of such Note and (y) the assignor thereunder
shall, to the extent that rights and obligations hereunder or under such Note
have been assigned or negotiated by it pursuant to such Assignment and
Acceptance, relinquish its rights and be released from its obligations under
this Agreement. Any Lender who makes an assignment shall pay to the Agent a
one-time administrative fee of $3,500 which fee shall not be reimbursed by the
Borrower.
(b) By executing and delivering an Assignment and Acceptance, the Lender
assignor thereunder and the assignee thereunder confirm to and agree with each
other and the other parties hereto as follows: (i) the assignment made under
such Assignment and Acceptance is made under such Assignment and Acceptance
without recourse; (ii) such assigning Lender makes no representation or
warranty and assumes no responsibility with respect to the financial condition
of the Borrower, the Parent or their Subsidiaries or the performance or
observance by the Borrower or any other Credit Party of any of its obligations
under any Loan Document or any other instrument or Document furnished pursuant
hereto; (iii) such assignee confirms that it has received a copy of this
Agreement, together with copies of the financial statements delivered pursuant
to Section 7.6(a) or Section 8.1, as the case may be, and such other Loan
Documents and other documents and information as it has deemed appropriate to
make its own credit analysis and decision to enter into such Assignment and
Acceptance; (iv) such assignee will, independently and without reliance upon
the Agent, such assigning Lender or any other Lender and based on such
documents and information as it shall
63
68
deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under any Loan Document; (v) such assignee appoints
and authorizes the Agent to take such action as agent on its behalf and to
exercise such powers under the Loan Documents as are delegated to the Agent by
the terms hereof and thereof, together with such powers as are reasonably
incidental thereto; and (vi) such assignee agrees that it will perform in
accordance with their terms all of the obligations which by the terms of the
Loan Documents are required to be performed by it as a Lender and a holder of
such Notes.
(c) The Agent shall maintain at its address referred to herein a copy of
each Assignment and Acceptance delivered to and accepted by it.
(d) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender, the Agent shall give prompt notice thereof to Borrower.
(e) Nothing herein shall prohibit any Lender from pledging or assigning,
without notice to or consent of the Borrower and without the payment of the
administrative fee referred to in Section 11.1(a), any Note to any Federal
Reserve Bank in accordance with applicable law or to any affiliate of any such
Lender.
(f) Each Lender may sell participations at its expense to one or more
banks or other entities as to all or a portion of its rights and obligations
under this Agreement; provided, that (i) such Lender's obligations under this
Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such
obligations, (iii) such Lender shall remain the holder of any Note issued to it
for the purpose of this Agreement, (iv) such participations shall be minimum
amount of $2,500,000 and, if greater, an amount which is an integral multiple
of $500,000 and shall include an allocable portion of such Lender's
Participation, (v) Borrower, the Agent and the other Lenders shall continue to
deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement and with regard to any and all
payments to be made under this Agreement; provided, that the participation
agreement between a Lender and its participants may provide that such Lender
will obtain the approval of such participant prior to such Lender's agreeing to
any amendment or waiver of any provisions of any Loan Document which would (A)
extend the maturity of any Note, (B) reduce the interest rates hereunder or (C)
increase the Revolving Credit Commitment or Letter of Credit Commitment of the
Lender granting the participation, and (vi) the sale of any such participations
which require Borrower to file a registration statement with the United States
Securities and Exchange Commission or under the securities regulations or laws
of any state shall not be permitted.
(g) The Borrower may not assign, nor shall it cause, suffer or permit any
other Credit Party to assign any rights, powers, duties or obligations under
this Agreement or the other Loan Documents without the prior written consent of
all the Lenders.
XII.2. Notices. Any notice shall be conclusively deemed to have been
received by any party hereto and be effective (i) on the day on which delivered
(including hand delivery by
64
69
commercial courier service) to such party (against receipt therefor), (ii) on
the date of receipt at such address, telefacsimile number or telex number as
may from time to time be specified by such party in written notice to the other
parties hereto or otherwise received), in the case of notice by telegram,
telefacsimile or telex, respectively (where the receipt of such message is
verified by return), or (iii) on the fifth Business Day after the day on which
mailed, if sent prepaid by certified or registered mail, return receipt
requested, in each case delivered, transmitted or mailed, as the case may be,
to the address, telex number or telefacsimile number, as appropriate, set forth
below or such other address or number as such party shall specify by notice
hereunder:
(a) if to the Borrower:
Windmere Corporation
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Chief Financial Officer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telefacsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
Windmere-Durable Holdings, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Chief Financial Officer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telefacsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(b) if to the Agent:
NationsBank, National Association (South)
Independence Center, ▇▇▇▇ ▇▇▇▇▇
▇▇▇-▇▇▇-▇▇-▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Agency Services
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telefacsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
NationsBank, National Association (South)
NationsBank Tower
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
65
70
Attention: Corporate Finance
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telefacsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(c) if to the Lenders:
At the addresses set forth on the signature pages hereof and
on the signature page of each Assignment and Acceptance;
(d) if to any other Credit Party, at the address set forth on the
signature page of the Facility Guaranty or Security Instrument
executed by such Credit Party, as the case may be.
XII.3. Setoff. The Borrower agrees that the Agent and each Lender shall
have a lien for all the Obligations of the Borrower upon all deposits or
deposit accounts, of any kind, or any interest in any deposits or deposit
accounts thereof, now or hereafter pledged, mortgaged, transferred or assigned
to the Agent or such Lender or otherwise in the possession or control of the
Agent or such Lender (other than for safekeeping) for any purpose for the
account or benefit of the Borrower and including any balance of any deposit
account or of any credit of the Borrower with the Agent or such Lender, whether
now existing or hereafter established, hereby authorizing the Agent and each
Lender from and after the occurrence of a Default or Event of Default at any
time or times with or without prior notice to apply such balances or any part
thereof to such of the Obligations of the Borrower to the Lenders then past due
and in such amounts as they may elect, and whether or not the collateral or the
responsibility of other Persons primarily, secondarily or otherwise liable may
be deemed adequate. For the purposes of this paragraph, all remittances and
property shall be deemed to be in the possession of the Agent or such Lender as
soon as the same may be put in transit to it by mail or carrier or by other
bailee.
XII.4. Survival. All covenants, agreements, representations and warranties
made herein shall survive the making by the Lenders of the Loans and the
issuance of the Letters of Credit and the execution and delivery to the Lenders
of this Agreement and the Notes and shall continue in full force and effect so
long as any of Obligations remain outstanding or any Lender has any commitment
hereunder or the Borrower has continuing obligations hereunder unless otherwise
provided herein. Whenever in this Agreement any of the parties hereto is
referred to, such reference shall be deemed to include the successors and
permitted assigns of such party and all covenants, provisions and agreements by
or on behalf of the Borrower which are contained in the Loan Documents shall
inure to the benefit of the successors and permitted assigns of the Lenders or
any of them.
XII.5. Expenses. The Borrower agrees (a) to pay or reimburse the Agent for
all its reasonable out-of-pocket costs and expenses incurred in connection with
the preparation, negotiation and execution of, and any amendment, supplement or
modification to, any of the Loan Documents (including due diligence expenses
and travel expenses relating to closing), and the consummation of the
transactions contemplated thereby, including the reasonable fees
66
71
and disbursements of counsel to the Agent, (b) to pay or reimburse the Agent
and the Lenders for all their costs and expenses incurred in connection with
the enforcement or preservation of any rights under the Loan Documents,
including the reasonable fees and disbursements of their counsel and any
payments in indemnification or otherwise payable by the Lenders to the Agent
pursuant to the Loan Documents, and (c) to pay, indemnify and hold the Agent
and the Lenders harmless from any and all recording and filing fees and any and
all liabilities with respect to, or resulting from any failure to pay or delay
in paying, documentary, stamp, excise and other similar taxes, if any, which
may be payable or determined to be payable in connection with the execution and
delivery of any of the Loan Documents, or consummation of any amendment,
supplement or modification of, or any waiver or consent under or in respect of,
any Loan Document.
XII.6. Amendments. No amendment, modification or waiver of any provision
of any Loan Document and no consent by the Lenders to any departure therefrom
by the Borrower or any other Credit Party shall be effective unless such
amendment, modification or waiver shall be in writing and signed by the Agent,
shall have been approved by the Required Lenders through their written consent,
and the same shall then be effective only for the period and on the conditions
and for the specific instances and purposes specified in such writing;
provided, however, that, no such amendment, modification or waiver
(i) which changes, extends or waives any provision of Section
2.6, Section 11.9 or this Section 12.6, the amount of or the due
date of any scheduled installment of or the rate of interest
payable on any Obligation, which changes the definition of
"Required Lenders", which permits an assignment by any Credit Party
of its Obligations under any Loan Document, which reduces the
required consent of Lenders provided hereunder, which increases,
decreases (other than pursuant to the express terms hereof) or
extends (other than pursuant to the express terms hereof) the
Revolving Credit Commitment or Letter of Credit Commitment of any
Lender, or which waives any condition to the making of any Loan,
shall be effective unless in writing and signed by each of the
Lenders;
(ii) which releases Collateral or the guaranty obligation
under any Facility Guaranty (other than pursuant to the express
terms hereof or thereof) shall be effective unless with the written
consent of each of the Lenders; or
(iii) which affects the rights, privileges or obligations of
the Issuing Bank as issuer of Letters of Credit, shall be effective
unless signed in writing by the Issuing Bank;
(iv) which affects the rights, privileges, immunities or
indemnities of the Agent shall be effective unless in writing and
signed by the Agent.
Notwithstanding any provision of the other Loan Documents to the contrary, as
between the
67
72
Agent and the Lenders, execution by the Agent shall not be deemed conclusive
evidence that the Agent has obtained the written consent of the Required
Lenders. No notice to or demand on the Borrower in any case shall entitle the
Borrower to any other or further notice or demand in similar or other
circumstances, except as otherwise expressly provided herein. No delay or
omission on any Lender's or the Agent's part in exercising any right, remedy or
option shall operate as a waiver of such or any other right, remedy or option
or of any Default or Event of Default.
XII.7. Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an
original, and it shall not be necessary in making proof of this Agreement to
produce or account for more than one such fully-executed counterpart.
XII.8. Termination. The termination of this Agreement shall not affect any
rights of the Borrower, the Lenders or the Agent or any obligation of the
Borrower, the Lenders or the Agent, arising prior to the effective date of such
termination, and the provisions hereof shall continue to be fully operative
until all transactions entered into or rights created or obligations incurred
prior to such termination have been fully disposed of, concluded or liquidated
and the Obligations arising prior to or after such termination have been
irrevocably paid in full. The rights granted to the Agent for the benefit of
the Lenders under the Loan Documents shall continue in full force and effect,
notwithstanding the termination of this Agreement, until all of the Obligations
have been paid in full after the termination hereof (other than Obligations in
the nature of continuing indemnities or expense reimbursement obligations not
yet due and payable, which shall continue) or the Borrower has furnished the
Lenders and the Agent with an indemnification satisfactory to the Agent and
each Lender with respect thereto. All representations, warranties, covenants,
waivers and agreements contained herein shall survive termination hereof until
payment in full of the Obligations unless otherwise provided herein.
Notwithstanding the foregoing, if after receipt of any payment of all or any
part of the Obligations, any Lender is for any reason compelled to surrender
such payment to any Person because such payment is determined to be void or
voidable as a preference, impermissible setoff, a diversion of trust funds or
for any other reason, this Agreement shall continue in full force and the
Borrower shall be liable to, and shall indemnify and hold the Agent or such
Lender harmless for, the amount of such payment surrendered until the Agent or
such Lender shall have been finally and irrevocably paid in full. The
provisions of the foregoing sentence shall be and remain effective
notwithstanding any contrary action which may have been taken by the Agent or
the Lenders in reliance upon such payment, and any such contrary action so
taken shall be without prejudice to the Agent or the Lenders' rights under this
Agreement and shall be deemed to have been conditioned upon such payment having
become final and irrevocable.
XII.9. Indemnification; Limitation of Liability. In consideration of the
execution and delivery of this Agreement by the Agent and each Lender and the
extension of credit under the Loans, the Borrower hereby indemnifies,
exonerates and holds the Agent and each Lender and each of their respective
affiliates, officers, directors, employees, agents and advisors
68
73
(collectively, the "Indemnified Parties") free and harmless from and against
any and all claims, actions, causes of action, suits, losses, costs,
liabilities and damages, and expenses incurred in connection therewith
(irrespective of whether any such Indemnified Party is a party to the action
for which indemnification hereunder is sought), including reasonable attorneys'
fees and disbursements (collectively, the "Indemnified Liabilities") that may
be incurred by or asserted or awarded against any Indemnified Party, in each
case arising out of or in connection with or by reason of, or in connection
with the execution, delivery, enforcement, performance or administration of
this Agreement and the other Loan Documents, or any transaction financed or to
be financed in whole or in part, directly or indirectly, with the proceeds of
any Loan or Letter of Credit, whether or not such action is brought against the
Agent or any Lender, the shareholders or creditors of the Agent or any Lender
or an Indemnified Party or an Indemnified Party is otherwise a party thereto
and whether or not the transactions contemplated herein are consummated, except
to the extent such claim, damage, loss, liability or expense is found in a
final, non-appealable judgment by a court of competent jurisdiction to have
resulted from such Indemnified Party's gross negligence or willful misconduct,
and if and to the extent that the foregoing undertaking may be unenforceable
for any reason, the Borrower hereby agrees to make the maximum contribution to
the payment and satisfaction of each of the Indemnified Liabilities which is
permissible under applicable law. The Borrower agrees that no Indemnified Party
shall have any liability (whether direct or indirect, in contract or tort or
otherwise) to it, to the Parent or to any of their Subsidiaries, or any
security holders or creditors thereof arising out of, related to or in
connection with the transactions contemplated herein, except to the extent that
such liability is found in a final non-appealable judgment by a court of
competent jurisdiction to have resulted from such Indemnified Party's gross
negligence or willful misconduct; provided, however, in no event shall any
Indemnified Party be liable for consequential, indirect or special, as opposed
to direct, damages.
XII.10. Severability. If any provision of this Agreement or the other Loan
Documents shall be determined to be illegal or invalid as to one or more of the
parties hereto, then such provision shall remain in effect with respect to all
parties, if any, as to whom such provision is neither illegal nor invalid, and
in any event all other provisions hereof shall remain effective and binding on
the parties hereto.
XII.11. Entire Agreement. This Agreement, together with the other Loan
Documents, constitutes the entire agreement among the parties with respect to
the subject matter hereof and supersedes all previous proposals, negotiations,
representations, commitments and other communications between or among the
parties, both oral and written, with respect thereto.
XII.12. Agreement Controls. In the event that any term of any of the Loan
Documents other than this Agreement conflicts with any express term of this
Agreement, the terms and provisions of this Agreement shall control to the
extent of such conflict.
XII.13. Usury Savings Clause. Notwithstanding any other provision herein,
the aggregate interest rate charged under any of the Notes, including all
charges or fees in connection therewith deemed in the nature of interest under
applicable law shall not exceed the
69
74
Highest Lawful Rate (as such term is defined below). If the rate of interest
(determined without regard to the preceding sentence) under this Agreement at
any time exceeds the Highest Lawful Rate (as defined below), the outstanding
amount of the Loans made hereunder shall bear interest at the Highest Lawful
Rate until the total amount of interest due hereunder equals the amount of
interest which would have been due hereunder if the stated rates of interest
set forth in this Agreement had at all times been in effect. In addition, if
when the Loans made hereunder are repaid in full the total interest due
hereunder (taking into account the increase provided for above) is less than
the total amount of interest which would have been due hereunder if the stated
rates of interest set forth in this Agreement had at all times been in effect,
then to the extent permitted by law, the Borrower shall pay to the Agent an
amount equal to the difference between the amount of interest paid and the
amount of interest which would have been paid if the Highest Lawful Rate had at
all times been in effect. Notwithstanding the foregoing, it is the intention of
the Lenders and the Borrower to conform strictly to any applicable usury laws.
Accordingly, if any Lender contracts for, charges, or receives any
consideration which constitutes interest in excess of the Highest Lawful Rate,
then any such excess shall be canceled automatically and, if previously paid,
shall at such Lender's option be applied to the outstanding amount of the Loans
made hereunder or be refunded to the Borrower. As used in this paragraph, the
term "Highest Lawful Rate" means the maximum lawful interest rate, if any, that
at any time or from time to time may be contracted for, charged, or received
under the laws applicable to such Lender which are presently in effect or, to
the extent allowed by law, under such applicable laws which may hereafter be in
effect and which allow a higher maximum nonusurious interest rate than
applicable laws now allow.
XII.14. GOVERNING LAW; WAIVER OF JURY TRIAL.
(A) THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (OTHER THAN THOSE
SECURITY INSTRUMENTS WHICH EXPRESSLY PROVIDE THAT THEY SHALL BE GOVERNED
BY THE LAWS OF ANOTHER JURISDICTION) SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF FLORIDA APPLICABLE TO
CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH STATE.
(A) THE BORROWER HEREBY EXPRESSLY AND IRREVOCABLY AGREES AND
CONSENTS THAT ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING
TO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREIN MAY BE
INSTITUTED IN ANY STATE OR FEDERAL COURT SITTING IN FLORIDA AND, BY THE
EXECUTION AND DELIVERY OF THIS AGREEMENT, THE BORROWER EXPRESSLY WAIVES
ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE
IN, OR TO THE EXERCISE OF JURISDICTION OVER IT AND ITS PROPERTY BY, ANY
SUCH COURT IN ANY SUCH SUIT, ACTION OR PROCEEDING, AND THE BORROWER
HEREBY IRREVOCABLY SUBMITS GENERALLY AND
70
75
UNCONDITIONALLY TO THE JURISDICTION OF ANY SUCH COURT IN ANY SUCH SUIT,
ACTION OR PROCEEDING.
(B) THE BORROWER AGREES THAT SERVICE OF PROCESS MAY BE MADE BY
PERSONAL SERVICE OF A COPY OF THE SUMMONS AND COMPLAINT OR OTHER LEGAL
PROCESS IN ANY SUCH SUIT, ACTION OR PROCEEDING, OR BY REGISTERED OR
CERTIFIED MAIL (POSTAGE PREPAID) TO THE ADDRESS OF THE BORROWER PROVIDED
IN SECTION 12.2, OR BY ANY OTHER METHOD OF SERVICE PROVIDED FOR UNDER THE
APPLICABLE LAWS IN EFFECT IN THE STATE OF FLORIDA.
(C) NOTHING CONTAINED IN SUBSECTIONS (A) OR (B) HEREOF SHALL
PRECLUDE THE AGENT OR ANY LENDER FROM BRINGING ANY SUIT, ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENT IN THE COURTS
OF ANY JURISDICTION WHERE THE BORROWER OR ANY OF THE BORROWER'S PROPERTY
OR ASSETS MAY BE FOUND OR LOCATED. TO THE EXTENT PERMITTED BY THE
APPLICABLE LAWS OF ANY SUCH JURISDICTION, THE BORROWER HEREBY IRREVOCABLY
SUBMITS TO THE JURISDICTION OF ANY SUCH COURT AND EXPRESSLY WAIVES, IN
RESPECT OF ANY SUCH SUIT, ACTION OR PROCEEDING, OBJECTION TO THE EXERCISE
OF JURISDICTION OVER IT AND ITS PROPERTY BY ANY SUCH OTHER COURT OR
COURTS WHICH NOW OR HEREAFTER MAY BE AVAILABLE UNDER APPLICABLE LAW.
(D) IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS OR
REMEDIES UNDER OR RELATED TO ANY LOAN DOCUMENT OR ANY AMENDMENT,
INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR THAT MAY IN THE FUTURE BE
DELIVERED IN CONNECTION THEREWITH, THE BORROWER, THE AGENT AND THE
LENDERS HEREBY AGREE, TO THE EXTENT PERMITTED BY APPLICABLE LAW, THAT ANY
SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A
JURY AND HEREBY IRREVOCABLY WAIVE, TO THE EXTENT PERMITTED BY APPLICABLE
LAW, ANY RIGHT SUCH PERSON MAY HAVE TO TRIAL BY JURY IN ANY SUCH ACTION
OR PROCEEDING.
[Signatures on following pages]
71
76
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
made, executed and delivered by their duly authorized officers as of the day
and year first above written.
WINDMERE CORPORATION
WITNESS:
By:
------------------------- -------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------- Title: Treasurer
NATIONSBANK, NATIONAL ASSOCIATION
(SOUTH), AS AGENT AND LENDER
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
NATIONAL BANK OF CANADA, AS LENDER
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
Address:
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, Vice President
Tel: (▇▇▇) ▇▇▇-▇▇▇▇; Fax: (▇▇▇) ▇▇▇-▇▇▇▇
77
EXHIBIT A
Applicable Commitment Percentages
Up to and Including January 31, 1997
Lender Revolving Applicable
Credit Commitment
Commitment Percentage
---------- ----------
NationsBank, National
Association (South) $17,000,000 56.666666667%
National Bank of
Canada 13,000,000 43.333333333%
---------- ------------
$30,000,000 100%
Applicable Commitment Percentages
After January 31, 1997
Lender Revolving Applicable
Credit Commitment
Commitment Percentage
---------- ----------
NationsBank, National
Association (South) $11,333,340 56.666666667%
National Bank of
Canada 8,666,660 43.333333333%
----------- ------------
$20,000,000 100%
A-1
78
EXHIBIT B
Form of Assignment and Acceptance
DATED ________________ , ___
Reference is made to the Credit Agreement dated as of October 11, 1996
(the "Agreement") among Windmere Corporation, a Florida corporation (the
"Borrower"), the Lenders (as defined in the Agreement), and NationsBank,
National Association (South), as Agent for the Lenders ("Agent"). Unless
otherwise defined herein, terms defined in the Agreement are used herein with
the same meanings.
_____ (the "Assignor") and _______________________________ (the "Assignee")
agree as follows:
1. The Assignor hereby sells and assigns to the Assignee, and the Assignee
hereby purchases and assumes from the Assignor, WITHOUT RECOURSE, a _______% (1)
interest in and to all of the Assignor's rights and obligations under the
Agreement as of the Effective Date (as defined below), including, without
limitation, such percentage interest in the Loans owing to the Assignor on the
Effective Date, and evidenced by the Note held by the Assignor.
2. The Assignor (i) represents and warrants that, as of the date hereof,
(A) the aggregate principal amount of Loans owing to it (without giving effect
to the assignments thereof which have not yet become effective) is $__________
under a Note dated ____________, 19__ in the principal amount of $_________ and
(B) the aggregate principal amount of the Participations purchased by it
(without giving effect to the assignments thereof which have not yet become
effective) is $_________; (ii) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim; (iii) makes no representation
or warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Agreement or
any of the Loan Documents or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Agreement or any of the Loan Documents
or any other instrument or document furnished pursuant thereto; (iv) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Borrower, the Parent or any Subsidiary of the
Borrower or the Parent or the performance or observance by the Borrower or any
other Credit Party of any of their obligations under any of the Loan Documents
or any other instrument or document furnished pursuant thereto and (v) attaches
hereto the Note referred to in paragraph 1 above and requests that the Agent
exchange such Note for replacement Notes as follows: a Note dated
_____________, 19__ in the principal amount of $________________, payable to
the order of
(1) Specify percentage in no more than 4 decimal points.
B-1
79
the Assignor, and a Note, dated ____________________________ 19__, in the
principal amount of $_________________ payable to the order of the Assignee.
3. The Assignee (i) confirms that it has received a copy of the Agreement,
together with copies of the financial statements referred to in Section 8.1
thereof and such other documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into this Assignment and
Acceptance; (ii) agrees that it will, independently and without reliance upon
the Agent, the Assignor, or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the Agreement; (iii)
appoints and authorizes the Agent to take such actions on its behalf and to
exercise such powers under the Loan Documents as are delegated to the Agent by
the terms thereof, together with such powers as are reasonably incidental
thereto; (iv) will perform all of the obligations which by the terms of the
Agreement are required to be performed by the Lender; and (v) specifies as its
address for notices the office set forth beneath its name on the signature
pages hereof.
4. The effective date for this Assignment and Acceptance shall be
_____________________________ (the "Effective Date"). Following the execution
of this Assignment and Acceptance, it will be delivered to the Agent for
acceptance and recording by the Agent.
5. Upon such acceptance and recording, as of the Effective Date, (i) the
Assignee shall be a party to the Agreement and, to the extent provided in this
Assignment and Acceptance, have the rights and obligations of a Lender
thereunder and under the Loan Documents and (ii) the Assignor shall, to the
extent provided in this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Agreement and the other Loan Documents.
6. Upon such acceptance and recording, from and after the Effective Date,
the Agent shall make all payments under the Agreement and Note in respect of
the interest assigned hereby (including, without limitation, all payments of
principal, interest, commitment fees and letter of credit fees with respect
thereto) to the Assignee. The Assignor and Assignee shall make all appropriate
adjustments in payments under the Agreement and the Notes for periods prior to
the Effective Date directly between themselves.
B-2
80
7. This Assignment and Acceptance shall be governed by and construed in
accordance with, the laws of the State of Florida.
[NAME OF ASSIGNOR]
By:
------------------------------
Name:
-------------------------
Title:
------------------------
Notice Address:
------------------
------------------
------------------
After the Effective Date
Outstanding Loans: $
-----------
Outstanding LC
Participations: $
-----------
[NAME OF ASSIGNEE]
By:
------------------------------
Name:
--------------------------
Title:
-------------------------
Notice Address/Lending Office
Wire transfer Instructions:
After the Effective Date
Outstanding Loans: $
---------
Outstanding LC
Participations: $
---------
B-3
81
Accepted this ____ day of _______, 19___
NATIONSBANK, NATIONAL ASSOCIATION,
(SOUTH), as Agent
By:
------------------------------
Name:
--------------------------
Title:
-------------------------
Consented to:
WINDMERE CORPORATION
By:
------------------------------
Name:
--------------------------
Title:
-------------------------
B-4
82
EXHIBIT C
Notice of Appointment (or Revocation) of Authorized
Representative
Reference is hereby made to the Credit Agreement dated as of October 11,
1996 (the "Agreement") among Windmere Corporation, a Florida corporation (the
"Borrower"), the Lenders (as defined in the Agreement), and NationsBank,
National Association (South), as Agent for the Lenders ("Agent"). Capitalized
terms used but not defined herein shall have the respective meanings therefor
set forth in the Agreement.
The Borrower hereby nominates, constitutes and appoints each individual
named below as an Authorized Representative under the Loan Documents, and
hereby represents and warrants that (i) set forth opposite each such
individual's name is a true and correct statement of such individual's office
(to which such individual has been duly elected or appointed), a genuine
specimen signature of such individual and an address for the giving of notice,
and (ii) each such individual has been duly authorized by the Borrower to act
as Authorized Representative under the Loan Documents:
Name and Address Office Specimen Signature
----------------- ------------------- -------------------
-----------------
-----------------
----------------- ------------------- -------------------
-----------------
-----------------
Borrower hereby revokes (effective upon receipt hereof by the Agent) the prior
appointment of ________________ as an Authorized Representative.
This the ___ day of __________________, 19__.
----------------------------
By:
-------------------------
Title:
----------------------
C-1
83
EXHIBIT D
Form of Borrowing Notice
To: NationsBank, National Association (South),
as Agent
Reference is hereby made to the Credit Agreement dated as of October __,
1996 (the "Agreement") among Windmere Corporation (the "Borrower"), the Lenders
(as defined in the Agreement), and NationsBank, National Association (South),
as Agent for the Lenders ("Agent"). Capitalized terms used but not defined
herein shall have the respective meanings therefor set forth in the Agreement.
The Borrower through its Authorized Representative hereby gives notice to
the Agent that Loans of the type and amount set forth below be made on the date
indicated:
Type of Loan Interest Aggregate
(check one) Period(1) Amount(2) Date of Loan(3)
------------ --------- --------- --------------
Revolving Loan
---------------
Base Rate Loan --------- --------- -------------
Eurodollar Rate Loan
--------- --------- -------------
-----------------------
(1) For any Eurodollar Rate Loan, one, two, three or six months.
(2) Must be $500,000 or if greater an integral multiple of $100,000, unless a
Base Rate Refunding Loan.
(3) At least three (3) Business Days later if a Eurodollar Rate Loan;
The Borrower hereby requests that the proceeds of Loans described in this
Borrowing Notice be made available to the Borrower as follows: [insert
transmittal instructions] .
The undersigned hereby certifies that:
1. No Default or Event of Default exists either now or after giving effect
to the borrowing described herein; and
2. All the representations and warranties set forth in Article VII of the
Agreement and in the Loan Documents (other than those expressly stated to refer
to a particular date) are true and correct as of the date hereof except that
the reference to the financial statements in Section 7.6(a) of the Agreement
are to those financial statements most recently delivered to
D-1
84
you pursuant to Section 8.1 of the Agreement (it being understood that any
financial statements delivered pursuant to Section 8.1(a)(ii) have not been
certified by independent public accountants) and attached hereto are any
changes to the Schedules referred to in connection with such representations
and warranties.
3. All conditions contained in the Agreement to the making of any Loan
requested hereby have been met or satisfied in full .
WINDMERE CORPORATION
BY:
--------------------------------------
Authorized Representative
DATE:
-------------------------------------
D-2
85
EXHIBIT E
Form of Interest Rate Selection Notice
To: NationsBank, National Association
(South), as Agent
Reference is hereby made to the Credit Agreement dated as of October __,
1996 (the "Agreement") among Windmere Corporation (the "Borrower"), the Lenders
(as defined in the Agreement), and NationsBank, National Association (South),
as Agent for the Lenders ("Agent"). Capitalized terms used but not defined
herein shall have the respective meanings therefor set forth in the Agreement.
The Borrower through its Authorized Representative hereby gives notice to
the Agent of the following selection of a type of Loan and Interest Period:
Type of Loan Interest Aggregate
(check one) Period(1) Amount(2) Date of Loan(3)
------------ --------- --------- --------------
Revolving Loan
---------------
Base Rate Loan --------- --------- -------------
Eurodollar Rate Loan
--------- --------- -------------
-----------------------
(1) For any Eurodollar Rate Loan [or Segment], one, two, three or six months.
(2) Must be $500,000 or if greater an integral multiple of $100,000, unless a
Base Rate Refunding Loan.
(3) At least three (3) Business Days later if a Eurodollar Rate Loan.
WINDMERE CORPORATION
BY:
------------------------------
Authorized Representative
DATE:
----------------------------
▇-▇
▇▇
▇▇▇▇▇▇▇ ▇
Form of Note
Promissory Note
(Revolving Loan)
$-------------- ---------, --------------
______ __, 199_
FOR VALUE RECEIVED, WINDMERE CORPORATION, a Florida corporation having its
principal place of business located in Miami Lakes, Florida (the "Borrower"),
hereby promises to pay to the order of __________________________________ (the
"Lender"), in its individual capacity, at the office of NATIONSBANK, NATIONAL
ASSOCIATION (SOUTH), as agent for the Lenders (the "Agent"), located at One
Independence Center, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇-▇▇▇-▇▇-▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (or at such other place or places as the Agent may designate in
writing) at the times set forth in the Credit Agreement dated as of October 11,
1996 among the Borrower, the financial institutions party thereto
(collectively, the "Lenders") and the Agent (the "Agreement" -- all capitalized
terms not otherwise defined herein shall have the respective meanings set forth
in the Agreement), in lawful money of the United States of America, in
immediately available funds, the principal amount of ___________ DOLLARS
($__________) or, if less than such principal amount, the aggregate unpaid
principal amount of all Loans made by the Lender to the Borrower pursuant to
the Agreement on the Revolving Credit Termination Date or such earlier date as
may be required pursuant to the terms of the Agreement, and to pay interest
from the date hereof on the unpaid principal amount hereof, in like money, at
said office, on the dates and at the rates provided in Article II of the
Agreement. All or any portion of the principal amount of Loans may be prepaid
or required to be prepaid as provided in the Agreement.
If payment of all sums due hereunder is accelerated under the terms of the
Agreement or under the terms of the other Loan Documents executed in connection
with the Agreement, the then remaining principal amount and accrued but unpaid
interest shall bear interest which shall be payable on demand at the rates per
annum set forth in the proviso to Section 2.2 (a) of the Agreement. Further, in
the event of such acceleration, this Note shall become immediately due and
payable, without presentation, demand, protest or notice of any kind, all of
which are hereby waived by the Borrower.
In the event any amount evidenced by this Note is not paid when due at any
stated or accelerated maturity, the Borrower agrees to pay, in addition to the
principal and interest, all costs of collection, including reasonable
attorneys' fees, and interest due hereunder thereon at the rates set forth
above.
F-1
87
Interest hereunder shall be computed as provided in the Agreement.
This Note is one of the Notes in the aggregate principal amount of
$30,000,000 referred to in the Agreement and is issued pursuant to and entitled
to the benefits and security of the Agreement to which reference is hereby made
for a more complete statement of the terms and conditions upon which the Loans
evidenced hereby were or are made and are to be repaid. This Note is subject to
certain restrictions on transfer or assignment as provided in the Agreement.
All Persons bound on this obligation, whether primarily or secondarily
liable as principals, sureties, guarantors, endorsers or otherwise, hereby
waive to the full extent permitted by law the benefits of all provisions of law
for stay or delay of execution or sale of property or other satisfaction of
judgment against any of them on account of liability hereon until judgment be
obtained and execution issues against any other of them and returned satisfied
or until it can be shown that the maker or any other party hereto had no
property available for the satisfaction of the debt evidenced by this
instrument, or until any other proceedings can be had against any of them, also
their right, if any, to require the holder hereof to hold as security for this
Note any collateral deposited by any of said Persons as security. Protest,
notice of protest, notice of dishonor, diligence or any other formality are
hereby waived by all parties bound hereon.
F-2
88
IN WITNESS WHEREOF, the Borrower has caused this Note to be made, executed
and delivered by its duly authorized representative as of the date and year
first above written, all pursuant to authority duly granted.
WINDMERE CORPORATION
WITNESS:
By:
----------------------------------------
-------------------------- Name:
-------------------------- ---------------------------------
Title:
--------------------------------------
F-3
89
ACKNOWLEDGEMENT OF EXECUTION ON BEHALF OF
WINDMERE CORPORATION
STATE OF NORTH CAROLINA
COUNTY OF MECKLENBURG
Before me, the undersigned, a Notary Public in and for said County and
State on this ____ day of ___________, 199_ A.D., personally appeared
___________________ known to be the _________ of Windmere Corporation (the
"Borrower"), who, being by me duly sworn, says he works at
____________________________________, _____________, and that by authority duly
given by, and as the act of, the Borrower, the foregoing and annexed Note dated
October 11, 1996, was signed by him as said ______________ on behalf of the
Borrower.
Witness my hand and official seal this ___ day of October, 1996.
-----------------------------------
Notary Public
(SEAL)
My commission expires: __________
F-4
90
AFFIDAVIT OF _________________
The undersigned, being first duly sworn, deposes and says that:
1. He is an ________________________ of _____________________
____________________________ (the "Bank") and works at ___________
_____________________________________________.
2. The Note of Windmere Corporation to the Bank in the principal amount of
$_____________, dated October 11, 1996 was executed before him and delivered to
him on behalf of the Bank in _________________________ on __________, 199__.
This the ___ day of ________, 1996.
-----------------------------------
Name:
Acknowledgement of Execution
STATE OF NORTH CAROLINA
COUNTY OF MECKLENBURG
Before me, the undersigned, a Notary Public in and for said County and
State on this ___ day of ________, 199_ A.D., personally appeared
_________________ who before me affixed his signature to the above Affidavit.
Witness my hand and official seal this ___ day of ________, 199_.
-----------------------------------
Notary Public
(SEAL)
My Commission Expires: __________
F-5
91
EXHIBIT G
Form of Opinion of Borrower's Counsel
G-1
92
EXHIBIT H
Compliance Certificate
As of ________, 19__
To: NationsBank, National Association (South)
Reference is hereby made to the Credit Agreement dated as of October 11,
1996 (the "Agreement") among Windmere Corporation (the "Borrower"), the lenders
party thereto from time to time and NationsBank, National Association (South)
as agent (the "Agent"). Capitalized terms used but not defined herein shall
have the respective meanings therefor set forth in the Agreement. The Borrower
through its Authorized Representative hereby certifies to you as of the date
set forth above as follows:
1. Calculations:
A. Compliance with Section 8.12 (a) of the
Agreement: Consolidated Tangible Net Worth
Consolidated Tangible Net Worth $_______________
REQUIRED: $143,000,000 PLUS 50% OF CUMULATIVE CONSOLIDATED NET INCOME
SINCE JUNE 30, 1996 THROUGH THE LAST DAY OF THE FISCAL QUARTER FOR WHICH
FINANCIAL STATEMENTS HAVE BEEN DELIVERED TO THE LENDERS PLUS THE
AGGREGATE NET PROCEEDS OF ANY EQUITY OFFERING (INCLUDING NET PROCEEDS
UNDER ANY STOCK OPTION OR EXECUTIVE COMPENSATION PLAN)
- Base $
-----------------
- Cumulative Consolidated
Net Income $
-----------------
- 50% of Cumulative
Consolidated Net Income $
-----------------
- Aggregate Net Proceeds from
Equity Offering $
-----------------
Required: $
-----------------
H-1
93
B. Compliance with Section 8.12(b) of the
Agreement: Consolidated Interest
Coverage Ratio
1. Consolidated Net Income $
-----------------
2. Consolidated Interest Expense $
-----------------
3. Income Tax Expense $
-----------------
4. Sum of Items 1, 2 and 3 $
-----------------
5. Ratio of Item 4 to Item 2 _____ to 1.00
REQUIRED: AT ANY TIME DURING ANY PERIOD OF FOUR CONSECUTIVE FISCAL QUARTERS
THE CONSOLIDATED INTEREST COVERAGE RATIO SHALL NOT BE LESS THAN 2.00 TO 1.00.
2. No Default
A. To the best knowledge of the undersigned, during the fiscal quarter
ended as of the date set forth above, (a) no Default or Event of
Default specified in the Agreement has occurred or (b) the following
Default or Event of Default has occurred:
---------------------------------------------------
---------------------------------------------------
---------------------------------------------------
B. The Borrower proposes to take the following action with
respect to any such Default or Event of Default described
above:
----------------------------------------------
---------------------------------------------------
---------------------------------------------------
---------------------------------------------------
(Note, if no Default or Event of Default has occurred, insert
"Not Applicable").
The undersigned Authorized Representative hereby certifies that the
information set forth above is true, correct and complete as of the date
hereof.
IN WITNESS WHEREOF, I have executed this Certificate this ___ day of
_________, 19____.
WINDMERE CORPORATION
By:
-------------------------------------
Authorized Representative
H-2
94
EXHIBIT I
Form of Borrowing Base Certificate
The undersigned Authorized Representative of Windmere Corporation hereby
certifies as follows:
(a) Eligible Receivables as of this date:
Total $__________________ x 80% = $_______________
(b) Eligible Inventory as of this date:
Total $__________________ x 40% = $_______________(not
(a) + (b) = $______________
EXECUTED THIS DAY OF , 199 .
---- ------------------ --
WINDMERE CORPORATION
By:
-----------------------------------
Authorized Representative
I-1
95
EXHIBIT J-1
GUARANTY AND SURETYSHIP AGREEMENT
(Domestic Subsidiaries/Affiliates)
THIS GUARANTY AND SURETYSHIP AGREEMENT, dated as of October 11, 1996 (the
"Guaranty"), made by WINDMERE HOLDINGS CORPORATION, a Delaware corporation,
LITTER MAID, INC., a Florida corporation, WINDMERE FAN PRODUCTS, INC., a
Florida corporation, JERDON PRODUCTS, INC., a Florida corporation, BAY BOOKS &
TAPES, INC., a Florida corporation, CONSUMER PRODUCTS AMERICAS, INC., a Florida
corporation, FORTUNE PRODUCTS, INC., a Florida corporation, EDI MASTERS, INC.,
a Florida corporation (collectively the "Guarantors" and individually a
"Guarantor") to NATIONSBANK, NATIONAL ASSOCIATION (SOUTH), a national banking
association, as Agent (the "Agent"), the Issuing Bank (as defined in the
Agreement referenced below), and the Lenders (as defined below). Except as
otherwise defined herein, terms used herein and defined in the Agreement
referred to below shall be used herein as so defined.
W I T N E S S E T H:
WHEREAS, Windmere Corporation (the "Borrower"), the Lenders party thereto
(the "Lenders"; together with the Agent and the Issuing Bank, the "Secured
Parties") and the Agent have entered into a Credit Agreement dated as of the
date hereof (as at any time amended, modified or supplemented, the
"Agreement"); and
WHEREAS, each of the Guarantors is an affiliated company with the
Borrower;
WHEREAS, the financial success of the Guarantors is dependant upon the
prosperity of the Borrower and each of the Guarantors will materially benefit
from the Loans made to the Borrower pursuant to the Agreement and the Letters
of Credit to be issued thereunder;
NOW, THEREFORE, in consideration of the premises and in order to induce
the Agent and the Lenders to enter into the Agreement and to make the Loans
pursuant to the Agreement and to induce the Issuing Bank to issue the Letters
of Credit, the Guarantors hereby agree as follows:
1. GUARANTY AND SURETY. Each of the Guarantors does hereby, absolutely and
unconditionally, jointly and severally, for the benefit of Secured Parties,
guarantee and become surety for the full and timely payment when due (whether
by acceleration or otherwise) (including amounts which, but for the operation
of the automatic stay under Section 362(a) of the Bankruptcy Code (or any
successor statute), would become due) of:
J-1
96
A. all indebtedness, obligations and liabilities (direct, by way of
guarantee or otherwise) of the Borrower, now or hereafter existing, under
or in connection with the Agreement, any other Loan Document and any
other instruments evidencing any of the foregoing, and whether of
principal, interest (including interest which, but for the filing of a
petition in bankruptcy with respect to the Borrower, would accrue), fees,
expenses or otherwise; and
B. all other indebtedness, obligations and liabilities of the
Borrower under written financing arrangements stated by the Guarantors
and the Secured Parties to be guaranteed hereby;
in each case whether direct or indirect, joint or several, absolute or
contingent, liquidated or unliquidated, now or hereafter existing, extended,
renewed, replaced, refinanced or restructured, whether or not from time to time
decreased or extinguished and later increased, created or incurred (all
indebtedness, obligations and liabilities of the Borrower described in this
Section 1 are collectively referred to as the "Secured Obligations"); provided,
however, that the liability of any Guarantor with respect to the Secured
Obligations shall not exceed at any time the Maximum Amount (as hereinafter
defined) for such Guarantor less the amounts, if any, collected by or on behalf
of the Secured Parties from such Guarantor pursuant to any other loan documents
executed by such Guarantor. The "Maximum Amount" with respect to a Guarantor
means 95% of (a) the fair salable value of the assets of such Guarantor
(including the fair salable value of the amounts received or receivable by such
Guarantor pursuant to the terms of Section 7 hereof) as of the date hereof
minus (b) the total liabilities of such Guarantor (including contingent
liabilities, but excluding liabilities of such Guarantor under this Guaranty
and the other Loan Documents executed by such Guarantor) as of the date hereof;
provided, however, that if the calculation of the Maximum Amount with respect
to such Guarantor in the manner provided above as of the date payment is
required of such Guarantor pursuant to this Guaranty would result in a greater
positive number, then the Maximum Amount shall be deemed to be such greater
positive number.
1. GUARANTY OF PAYMENT. This is a guaranty of payment and not merely of
collection. In the event of any default by the original obligor in payment or
otherwise on any of the Secured Obligations, the Guarantors will pay all or any
portion of the Secured Obligations due or thereafter becoming due, whether by
acceleration or otherwise, without offset of any kind whatsoever, without the
Secured Parties first being required to make demand upon the original obligor
or pursue any of their rights against the original obligor, or against any
other Person, including other guarantors (whether or not party to this
Guaranty); and without being required to liquidate or realize on any collateral
security. In any right of action accruing to the Secured Parties, the Secured
Parties may elect to proceed against (a) any Guarantor together with the
original obligor; (b) any Guarantor and the original obligor individually; (c)
any Guarantor only without having first commenced any action against the
original obligor.
2. RIGHT TO DEAL WITH SECURED OBLIGATIONS. Subject to the terms and
conditions
J-2
97
of the Agreement, the Agent, for the benefit of the Lenders and the Issuing
Bank, without notice to any of the Guarantors, may deal with any Secured
Obligations and any collateral security therefor in such manner as it may deem
advisable and may renew or extend the Secured Obligations or any part thereof;
accept partial payment, or settle, release, compound, or compromise the same;
demand additional collateral security therefor, and substitute or release the
same; and may compromise or settle with or release and discharge from liability
any of the Guarantors or any other guarantor of any Secured Obligation, or any
other Person liable to the Secured Parties for all or any portion of the
obligations of any original obligor; all without impairing the liability of
each of the Guarantors hereunder.
3. WAIVER OF SUBROGATION. Each Guarantor hereby unconditionally waives
with respect to this Guaranty any right of subrogation, indemnity,
reimbursement or contribution from the Borrower.
4. OTHER WAIVERS. Each Guarantor hereby unconditionally waives with
respect to this Guaranty: (a) notice of acceptance of this Guaranty by the
Secured Parties and any notice of the incurring by the Borrower or any other
Guarantor of any Secured Obligation; (b) presentment for payment, notice of
nonpayment, demand, protest, notice of protest and notice of dishonor or
default to any party including the Borrower and the Guarantors; (c) all other
notices to which the Borrower and the Guarantors may be entitled but which may
legally be waived; (d) demand for payments as a condition of liability under
this Guaranty; (e) any disability of the original obligor or defense available
to the original obligor, including absence or cessation of the original
obligor's liability for any reason whatsoever; (f) any defense or circumstances
which might otherwise constitute a legal or equitable discharge of a guarantor
or surety; and (g) all rights under any state or federal statute dealing with
or affecting the rights of creditors.
5. SUBORDINATION. Each Guarantor hereby unconditionally subordinates all
present and future debts, liabilities or obligations of the Borrower to such
Guarantor to the Secured Obligations, and all amounts due under such debts,
liabilities, or obligations shall be collected and paid over to the Agent, on
behalf of the Secured Parties on account of the Secured Obligations. Each
Guarantor, at the request of the Agent on behalf of the Secured Parties, shall
execute such further documents in favor of the Agent for the benefit of the
Secured Parties to further evidence and support the purpose of this Section 6.
Notwithstanding the foregoing, prior to the occurrence of an Event of Default
(as defined herein), each Guarantor shall be entitled to receive payments from
the Borrower with respect to the provision of services rendered to the Borrower
on a basis no more favorable to the Guarantor than would be obtained in a
comparable arm's length transaction with a Person not affiliated with or
related to the Borrower.
6. CONTRIBUTION. If any Guarantor makes a payment in respect of the
Secured Obligations, it shall have the rights of contribution set forth below
against the other Guarantors; provided, however, that such Guarantor shall not
enforce its right of contribution until all of the Secured Obligations shall
have been paid in full. If any Guarantor makes a
J-3
98
payment in respect of the Secured Obligations which is smaller in proportion to
its tangible net worth (with respect to each Guarantor, as determined in the
most recent audit conducted pursuant to the Agreement, its "Net Worth") than
the payments made by the other Guarantors are in proportion to their respective
Net Worth, the Guarantor making such proportionately smaller payment shall,
when permitted by the preceding sentence, pay to the other Guarantors an amount
such that the net payments made by the Guarantors in respect of the Secured
Obligations shall be shared among the Guarantors pro rata in proportion to
their respective Net Worth. Notwithstanding anything to the contrary contained
in this Section 7, no liability that shall accrue pursuant to this Section 7
shall be paid nor shall it be deemed owed until all of the Secured Obligations
shall be paid in full. Each Guarantor waives any other rights of contribution
available under any other applicable law, statute or agreement.
7. REPRESENTATIONS AND WARRANTIES. Each Guarantor hereby affirms, repeats
and ratifies to the Secured Parties that each of the representations and
warranties contained in the Agreement and made by the Borrower with respect to
the Guaranties is true and correct.
8. COVENANTS. Each Guarantor hereby repeats and ratifies each of the
covenants set forth in Articles VIII and IX of the Agreement; and affirms that
it will perform each of the covenants set forth in Articles VIII and IX of the
Agreement.
9. NO WAIVER BY SECURED PARTIES. No failure or delay on the part of the
Secured Parties in exercising any right, power or privilege hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, power or privilege hereunder preclude any other or further exercise
thereof, or the exercise of any other right, power or privilege. Failure by the
Secured Parties to insist upon strict performance hereof shall not constitute a
relinquishment of their right to demand strict performance at another time.
Receipt by the Secured Parties of any payment by any person on any Secured
Obligation, with knowledge of a default on any Secured Obligation or of a
breach of this Guaranty, or both, shall not be construed as a waiver of the
default or breach.
10. CONTINUING GUARANTY; TERMINATION. THIS GUARANTY IS A CONTINUING
GUARANTY AND SHALL CONTINUE IN FULL FORCE AND EFFECT UNTIL SUCH TIME AS ALL
SECURED OBLIGATIONS SHALL HAVE BEEN PAID IN FULL AND THE SECURED PARTIES SHALL
BE UNDER NO FURTHER OBLIGATION TO LEND OR ADVANCE FUNDS TO THE BORROWER
CONSTITUTING SECURED OBLIGATIONS.
11. BENEFITS OF AGREEMENT. This Guaranty is freely assignable and
transferable by the Secured Parties to any assignee and transferee of any
Secured Obligation; however, the duties and obligations of the Guarantors may
not be delegated or transferred by the Guarantors without the written consent
of the Agent. The rights and privileges of the Secured Parties shall inure to
the benefit of their successors and assigns, and the duties and obligations of
the Guarantors shall bind their respective successors and assigns.
J-4
99
12. EXPENSES; INDEMNITY. The Guarantors will upon demand pay to the
Secured Parties the amount of any and all reasonable expenses, including the
reasonable fees and expenses of their counsel and of any experts and agents,
which they may reasonably incur in connection with enforcement of this Guaranty
or the failure by the Guarantors to perform or observe any of the provisions
hereof. The Guarantors agree to indemnify and hold harmless the Secured Parties
from and against any and all claims, demands, losses, judgments and liabilities
(including liabilities for penalties) of whatsoever kind or nature, growing out
of or resulting from this Guaranty or the exercise by the Secured Parties of
any right or remedy granted to it hereunder or the Agreement, in the absence of
gross negligence or willful misconduct on the part of the Secured Parties. If
and to the extent that the obligations of any of the Guarantors under this
Section 13 are unenforceable for any reason, the Guarantors hereby agree to
make the maximum contribution to the payment and satisfaction of such
obligations which is permissible under applicable law.
13. AMENDMENTS, WAIVERS AND CONSENTS. No amendment or waiver of any
provision of this Guaranty or consent to any departure by any of the Guarantors
herefrom shall in any event be effective unless the same shall be in writing
and signed by each Guarantor and the Agent on behalf of the Secured Parties,
and then such amendment, waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.
14. ADDRESSES FOR NOTICES. All notices and other communications provided
for hereunder shall be in writing (including telecopy communication) and shall
be sent by registered or certified mail, return receipt requested, or first
class express mail or overnight courier, or by telecopy, in all cases with
charges prepaid, and shall be effective when delivered against a receipt
therefor or when telecopy transmission is confirmed, as the case may be. All
notices shall be sent to the applicable party at the address stated on the
signature page hereof, as set forth in the Agreement, or in accordance with the
last unrevoked written direction from such party to the other parties hereto.
15. INTERPRETATION; PARTIAL INVALIDITY. Whenever possible each provision
of this Guaranty shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Guaranty shall be
prohibited by or invalid under such law, such provision shall be ineffective to
the extent of such prohibition or invalidity, without invalidating the
remainder of such provision or the remaining provisions of this Guaranty.
16. MISCELLANEOUS; REMEDIES CUMULATIVE. Unless the context of this
Guaranty otherwise clearly requires, references to the plural include the
singular, the singular the plural and the part the whole and "or" has the
inclusive meaning represented by the phrase "and/or." The section headings used
herein are for convenience of reference only and shall not define, limit or
extend the provisions of this Guaranty. All remedies hereunder are cumulative
and are not exclusive of any other rights and remedies of the Secured Parties
provided by law or under the Agreement, the other Loan Documents or other
applicable agreements or instruments. The making of the Loans and issuance of
the Letters of Credit to the Borrower pursuant to the Agreement shall be
conclusively presumed to have been made or extended, respectively, in
J-5
100
reliance upon the obligations of the Guarantors incurred pursuant to this
Guaranty.
17. GOVERNING LAW. This Guaranty shall in all respects be governed by the
law of the State of Florida. Each of the Guarantors hereby (i) submits to the
jurisdiction and venue of the state and federal courts of Florida for the
purposes of resolving disputes hereunder or under any of the other Loan
Documents to which it is a party or for the purpose of collection and (ii)
waives trial by jury in connection with any such litigation.
18. REPAYMENT OR RECOVERY. If claim is ever made upon the Secured Parties
for repayment or recovery of any amount or amounts received in payment or on
account of any of the Secured Obligations and the Secured Parties repay all or
part of said amount by reason of (a) any judgment, decree or order of any court
or administrative body having jurisdiction over such payee or any of its
property, or (b) any settlement or compromise of any such claim effected by
such Secured Parties with any such claimant (including the original obligor),
then and in such event each Guarantor agrees that any such judgment, decree,
order, settlement or compromise shall be binding upon it, notwithstanding any
revocation hereof or the cancellation of any Note or other instrument
evidencing any Secured Obligation or any security therefor, and each Guarantor
shall be and remain liable to the Secured Parties for the amount so repaid or
recovered to the same extent as if such amount had never originally been
received by the Secured Parties.
19. SET-OFF. In addition to any rights now or hereafter granted under
applicable law and not by way of limitation of any such rights, upon the
occurrence of an Event of Default (as defined herein), each of the Guarantors
agrees that the Agent, for the benefit of the Secured Parties, shall have a
lien for all the liabilities of such Guarantor upon all deposits or deposit
accounts, of any kind, or any interest in any deposits or deposit accounts
thereof, now or hereafter pledged, mortgaged, transferred or assigned to the
Agent or otherwise in the possession or control of the Agent, (other than for
safekeeping) for any purpose for the account or benefit of such Guarantor and
including any balance of any deposit account or of any credit of the Guarantor
with the Agent, whether now existing or hereafter established, hereby
authorizing the Agent, for the benefit of the Secured Parties, at any time or
times with or without prior notice to apply such balances or any part thereof
to such of the liabilities of such Guarantor to the Secured Parties then past
due and in such amounts as it may elect, and whether or not the Collateral or
the responsibility of other Persons primarily, secondarily or otherwise liable
may be deemed adequate. For the purposes of this paragraph, all remittances and
property shall be deemed to be in the possession of the Agent as soon as the
same may be put in transit to it by mail or carrier or by other bailee.
20. EVENTS OF DEFAULT. The following shall constitute Events of Default
("Events of Default") under this Guaranty:
A. The occurrence of an Event of Default (as defined in the
Agreement); or
B. Failure by any of the Guarantors to perform, observe or comply
with any term, covenant, condition or provision contained in this
Guaranty within 10 days
J-6
101
after notice thereof by the Agent; or
C. Any warranty, representation or other written statement made by
any Guarantor herein or in any instrument furnished by any Guarantor to
the Secured Parties pursuant to this Guaranty shall be false or
misleading in any material respect on the date as of which it is made.
21. AGREEMENT CONTROLS. In the event that any term of this Guaranty
conflicts with any term of the Agreement, then the terms of the Agreement shall
control.
J-7
102
IN WITNESS WHEREOF, each Guarantor has caused this Agreement to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.
Witness: WINDMERE HOLDINGS CORPORATION
-----------------------
By:
-------------------------
Name:
-------------------------
-----------------------
Address: BORROWER TO SUPPLY
Telecopy No:
J-8
103
Witness: WINDMERE FAN PRODUCTS, INC.
-----------------------
By:
-------------------------
Name:
-------------------------
-----------------------
Address:
Telecopy No:
J-9
104
Witness: LITTER MAID, INC.
------------------------
By:
--------------------------
Name:
------------------------
------------------------
Address:
Telecopy No:
J-10
105
Witness: BAY BOOKS & TAPES, INC.
------------------------
By:
---------------------------
Name:
--------------------------
------------------------
Address:
Telecopy No:
J-11
106
Witness: JERDON PRODUCTS, INC.
-------------------------
By:
---------------------------
Name:
-------------------------
-------------------------
Address:
Telecopy No:
J-12
107
Witness: CONSUMER PRODUCTS AMERICAS, INC.
-------------------------
By:
---------------------------
Name:
-------------------------
-------------------------
Address:
Telecopy No:
J-13
108
Witness: FORTUNE PRODUCTS, INC.
-------------------------
By:
---------------------------
Name:
-------------------------
-------------------------
Address:
Telecopy No:
J-14
109
Witness: EDI MASTERS, INC.
-------------------------
By:
---------------------------
Name:
-------------------------
-------------------------
Address:
Telecopy No:
J-15
110
EXHIBIT J-2
GUARANTY AND SURETYSHIP AGREEMENT
(Parent)
THIS GUARANTY AND SURETYSHIP AGREEMENT, dated as of October 11, 1996 (the
"Guaranty"), made by WINDMERE-DURABLE HOLDINGS, INC., a Florida corporation,
(the "Guarantor") to NATIONSBANK, NATIONAL ASSOCIATION (SOUTH), a national
banking association, as Agent (the "Agent"), the Issuing Bank (as defined in
the Agreement referred to below) and the Lenders (as defined below). Except as
otherwise defined herein, terms used herein and defined in the Agreement
referred to below shall be used herein as so defined.
W I T N E S S E T H:
WHEREAS, Windmere Corporation (the "Borrower"), the Lenders party thereto
(the "Lenders"; together with the Agent and the Issuing Bank, the "Secured
Parties") and the Agent have entered into a Credit Agreement dated as of the
date hereof (as at any time amended, modified or supplemented, the
"Agreement"); and
WHEREAS, the Borrower is a direct, wholly-owned Subsidiary of the
Guarantor, and the Guarantor will materially benefit from the Loans made to the
Borrower pursuant to the Agreement and the Letters of Credit to be issued
thereunder;
NOW, THEREFORE, in consideration of the premises and in order to induce
the Agent and the Lenders to enter into the Agreement and to make the Loans
pursuant to the Agreement and to induce the Issuing Bank to issue the Letters
of Credit, the Guarantor hereby agrees as follows:
1. GUARANTY AND SURETY. Guarantor does hereby, absolutely and unconditionally,
for the benefit of Secured Parties, guarantee and become surety for the full
and timely payment when due (whether by acceleration or otherwise) (including
amounts which, but for the operation of the automatic stay under Section 362(a)
of the Bankruptcy Code (or any successor statute), would become due) of:
A. all indebtedness, obligations and liabilities (direct, by way of
guarantee or otherwise) of the Borrower, now or hereafter existing, under
or in connection with the Agreement, any other Loan Document and any
other instruments evidencing any of the foregoing, and whether of
principal, interest (including interest which, but for the filing of a
petition in bankruptcy with respect to the Borrower, would accrue), fees,
expenses or otherwise; and
J-16
111
B. all other indebtedness, obligations and liabilities of the
Borrower under written financing arrangements stated by the Guarantor and
the Secured Parties to be guaranteed hereby;
in each case whether direct or indirect, joint or several, absolute or
contingent, liquidated or unliquidated, now or hereafter existing, extended,
renewed, replaced, refinanced or restructured, whether or not from time to time
decreased or extinguished and later increased, created or incurred (all
indebtedness, obligations and liabilities of the Borrower described in this
Section 1 are collectively referred to as the "Secured Obligations").
1. GUARANTY OF PAYMENT. This is a guaranty of payment and not merely of
collection. In the event of any default by the original obligor in payment or
otherwise on any of the Secured Obligations, the Guarantor will pay all or any
portion of the Secured Obligations due or thereafter becoming due, whether by
acceleration or otherwise, without offset of any kind whatsoever, without the
Secured Parties first being required to make demand upon the original obligor
or pursuing any of their rights against the original obligor, or against any
other Person, including other guarantors (whether or not party to this
Guaranty); and without being required to liquidate or realize on any collateral
security. In any right of action accruing to the Secured Parties, the Secured
Parties may elect to proceed against (a) any Guarantor together with the
original obligor; (b) any Guarantor and the original obligor individually; (c)
any Guarantor only without having first commenced any action against the
original obligor.
2. RIGHT TO DEAL WITH SECURED OBLIGATIONS. Subject to the terms and
conditions of the Agreement, the Agent, for the benefit of the Lenders and the
Issuing Bank, without notice to the Guarantor, may deal with any Secured
Obligations and any collateral security therefor in such manner as it may deem
advisable and may renew or extend the Secured Obligations or any part thereof;
accept partial payment, or settle, release, compound, or compromise the same;
demand additional collateral security therefor, and substitute or release the
same; and may compromise or settle with or release and discharge from liability
the Guarantor or any other guarantor of any Secured Obligation, or any other
Person liable to the Secured Parties for all or any portion of the obligations
of any original obligor; all without impairing the liability of the Guarantor
hereunder.
3. WAIVER OF SUBROGATION. The Guarantor hereby unconditionally waives
with respect to this Guaranty any right of subrogation, indemnity,
reimbursement or contribution from the Borrower.
4. OTHER WAIVERS. The Guarantor hereby unconditionally waives with
respect to this Guaranty: (a) notice of acceptance of this Guaranty by the
Secured Parties and any notice of the incurring by the Borrower of any Secured
Obligation; (b) presentment for payment, notice of nonpayment, demand, protest,
notice of protest and notice of dishonor or default to any party including the
Borrower and the Guarantor; (c) all other notices to which the
J-17
112
Borrower and the Guarantor may be entitled but which may legally be waived; (d)
demand for payments as a condition of liability under this Guaranty; (e) any
disability of the original obligor or defense available to the original
obligor, including absence or cessation of the original obligor's liability for
any reason whatsoever; (f) any defense or circumstances which might otherwise
constitute a legal or equitable discharge of a guarantor or surety; and (g) all
rights under any state or federal statute dealing with or affecting the rights
of creditors.
5. SUBORDINATION. The Guarantor hereby unconditionally subordinates all
present and future debts, liabilities or obligations of the Borrower to the
Guarantor to the Secured Obligations, and all amounts due under such debts,
liabilities, or obligations shall be collected and paid over to the Agent on
behalf of the Secured Parties on account of the Secured Obligations. The
Guarantor, at the request of the Agent, on behalf of the Secured Parties, shall
execute such further documents in favor of such Secured Parties to further
evidence and support the purpose of this Section 6. Notwithstanding the
foregoing, prior to the occurrence of an Event of Default (as defined herein),
the Guarantor shall be entitled to receive payments from the Borrower with
respect to the provision of services rendered to the Borrower on a basis no
more favorable to the Guarantor than would be obtained in a comparable arm's
length transaction with a Person not affiliated with or related to the
Borrower.
6. REPRESENTATIONS AND WARRANTIES. The Guarantor hereby affirms, repeats
and ratifies to the Secured Parties that each of the representations and
warranties contained in the Agreement and made by the Borrower with respect to
the Guarantor is true and correct.
7. COVENANTS. The Guarantor hereby repeats and ratifies each of the
covenants set forth in Articles VIII and IX of the Agreement; and affirms that
it and each of its Subsidiaries (including the Borrower) as applicable, will
perform each of the covenants set forth in Articles VIII and IX of the
Agreement.
8. FINANCIAL INFORMATION, REPORTS, ETC. The Guarantor shall deliver or
cause to be delivered (without duplication) to the Agent and each Lender
hereunder any financial reports, accountant's letters, registration statements,
proxy statements, management letters and other reports, documents and
information required to be delivered by the Guarantor, the Borrower or any
other Person to the Agent or any Lender pursuant to Article VIII or IX of the
Agreement.
9. NO WAIVER BY SECURED PARTIES. No failure or delay on the part of the
Secured Parties in exercising any right, power or privilege hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, power or privilege hereunder preclude any other or further exercise
thereof, or the exercise of any other right, power or privilege. Failure by the
Secured Parties to insist upon strict performance hereof shall not constitute a
relinquishment of their right to demand strict performance at another time.
Receipt by the Secured Parties of any payment by any person on any Secured
Obligation, with knowledge of a default on any Secured Obligation or of a
breach of this Guaranty, or both, shall not be construed as a waiver of the
default or breach.
J-18
113
10. CONTINUING GUARANTY; TERMINATION. THIS GUARANTY IS A CONTINUING
GUARANTY AND SHALL CONTINUE IN FULL FORCE AND EFFECT UNTIL SUCH TIME AS ALL
SECURED OBLIGATIONS SHALL HAVE BEEN PAID IN FULL AND THE SECURED PARTIES SHALL
BE UNDER NO FURTHER OBLIGATION TO LEND OR ADVANCE FUNDS TO THE BORROWER
CONSTITUTING SECURED OBLIGATIONS.
11. BENEFITS OF AGREEMENT. This Guaranty is freely assignable and
transferable by the Secured Parties to any assignee and transferee of any
Secured Obligation; however, the duties and obligations of the Guarantor may
not be delegated or transferred by the Guarantor without the written consent of
the Agent. The rights and privileges of the Secured Parties shall inure to the
benefit of their successors and assigns, and the duties and obligations of the
Guarantor shall bind its respective successors and assigns.
12. EXPENSES; INDEMNITY. The Guarantor will upon demand pay to the Secured
Parties the amount of any and all reasonable expenses, including the reasonable
fees and expenses of their counsel and of any experts and agents, which they
may reasonably incur in connection with enforcement of this Guaranty or the
failure by the Guarantor to perform or observe any of the provisions hereof.
The Guarantor agrees to indemnify and hold harmless the Secured Parties from
and against any and all claims, demands, losses, judgments and liabilities
(including liabilities for penalties) of whatsoever kind or nature, growing out
of or resulting from this Guaranty or the exercise by the Secured Parties of
any right or remedy granted to them hereunder or under the Agreement, in the
absence of gross negligence or willful misconduct on the part of the Secured
Parties. If and to the extent that the obligations of the Guarantor under this
Section 13 are unenforceable for any reason, the Guarantor hereby agrees to
make the maximum contribution to the payment and satisfaction of such
obligations which is permissible under applicable law.
13. AMENDMENTS, WAIVERS AND CONSENTS. No amendment or waiver of any
provision of this Guaranty or consent to any departure by any of the Guarantor
herefrom shall in any event be effective unless the same shall be in writing
and signed by Guarantor and the Agent, on behalf of the Secured Parties, and
then such amendment, waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.
14. ADDRESSES FOR NOTICES. All notices and other communications provided
for hereunder shall be in writing (including telecopy communication) and shall
be sent by registered or certified mail, return receipt requested, or first
class express mail or overnight courier, or by telecopy, in all cases with
charges prepaid, and shall be effective when delivered against a receipt
therefor or when telecopy transmission is confirmed, as the case may be. All
notices shall be sent to the applicable party at the address stated on the
signature page hereof, or as set forth in the Agreement, or in accordance with
the last unrevoked written direction from such party to the other parties
hereto.
▇-▇▇
▇▇▇
▇▇. INTERPRETATION; PARTIAL INVALIDITY. Whenever possible each provision
of this Guaranty shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Guaranty shall be
prohibited by or invalid under such law, such provision shall be ineffective to
the extent of such prohibition or invalidity, without invalidating the
remainder of such provision or the remaining provisions of this Guaranty.
16. MISCELLANEOUS; REMEDIES CUMULATIVE. Unless the context of this
Guaranty otherwise clearly requires, references to the plural include the
singular, the singular the plural and the part the whole and "or" has the
inclusive meaning represented by the phrase "and/or." The section headings used
herein are for convenience of reference only and shall not define, limit or
extend the provisions of this Guaranty. All remedies hereunder are cumulative
and are not exclusive of any other rights and remedies of the Secured Parties
provided by law or under the Agreement, the other Loan Documents or other
applicable agreements or instruments. The making of the Loans to the Borrower
pursuant to the Agreement shall be conclusively presumed to have been made or
extended, respectively, in reliance upon the obligations of the Guarantor
incurred pursuant to this Guaranty.
17. GOVERNING LAW. This Guaranty shall in all respects be governed by the
law of the State of Florida. The Guarantor hereby (i) submits to the
jurisdiction and venue of the state and federal courts of Florida for the
purposes of resolving disputes hereunder or under any of the other Loan
Documents to which it is a party or for the purpose of collection and (ii)
waives trial by jury in connection with any such litigation.
18. REPAYMENT OR RECOVERY. If claim is ever made upon the Secured Parties
for repayment or recovery of any amount or amounts received in payment or on
account of any of the Secured Obligations and the Secured Parties repay all or
part of said amount by reason of (a) any judgment, decree or order of any court
or administrative body having jurisdiction over such payee or any of its
property, or (b) any settlement or compromise of any such claim effected by the
Secured Parties with any such claimant (including the original obligor), then
and in such event the Guarantor agrees that any such judgment, decree, order,
settlement or compromise shall be binding upon it, notwithstanding any
revocation hereof or the cancellation of any Note or other instrument
evidencing any Secured Obligation or any security therefor, and the Guarantor
shall be and remain liable to the Secured Parties for the amount so repaid or
recovered to the same extent as if such amount had never originally been
received by the Secured Parties.
19. SET-OFF. In addition to any rights now or hereafter granted under
applicable law and not by way of limitation of any such rights, upon the
occurrence of an Event of Default (as defined herein), the Guarantor agrees
that the Agent, for the benefit of the Secured Parties, shall have a lien for
all the liabilities of Guarantor upon all deposits or deposit accounts, of any
kind, or any interest in any deposits or deposit accounts thereof, now or
hereafter pledged, mortgaged, transferred or assigned to the Agent or otherwise
in the possession or control of the Agent, for the benefit of the Secured
Parties, (other than for safekeeping) for any purpose for the account or
benefit of Guarantor and including any balance of any deposit account or of any
credit of the Guarantor with the Agent, for the benefit of the Secured Parties,
whether now
J-20
115
existing or hereafter established, hereby authorizing the Agent, for the
benefit of the Secured Parties, at any time or times with or without prior
notice to apply such balances or any part thereof to such of the liabilities of
Guarantor to the Secured Parties then past due and in such amounts as it may
elect, and whether or not the Collateral or the responsibility of other Persons
primarily, secondarily or otherwise liable may be deemed adequate. For the
purposes of this paragraph, all remittances and property shall be deemed to be
in the possession of the Agent as soon as the same may be put in transit to it
by mail or carrier or by other bailee.
20. EVENTS OF DEFAULT. The following shall constitute Events of Default
("Events of Default") under this Guaranty:
A. The occurrence of an Event of Default (as defined in the
Agreement); or
B. Failure by the Guarantor to perform, observe or comply with any
term, covenant, condition or provision contained in this Guaranty within
10 days after notice thereof by the Agent; or
C. Any warranty, representation or other written statement made by
Guarantor herein or in any instrument furnished by Guarantor to the
Secured Parties pursuant to this Guaranty shall be false or misleading in
any material respect on the date as of which it is made.
21. AGREEMENT CONTROLS. In the event that any term of this Guaranty
conflicts with any term of the Agreement, then the terms of the Agreement shall
control.
IN WITNESS WHEREOF, Guarantor has caused this Agreement to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.
Witness: WINDMERE-DURABLE HOLDINGS, INC.
-------------------------
By:
---------------------------
Name:
-------------------------
-------------------------
Address:
Telecopy No:
J-21
116
EXHIBIT K-1
SECURITY AGREEMENT - ACCOUNTS AND INVENTORY
(BORROWER)
THIS SECURITY AGREEMENT, made and entered into as of October 11, 1996, by
WINDMERE CORPORATION, a Florida corporation (herein called the "Borrower"), to
NATIONSBANK, NATIONAL ASSOCIATION (SOUTH), a national banking association, as
Agent (the "Agent"), the Issuing Bank (as defined in the Agreement referenced
below) and the Lenders (as defined below). Except as otherwise defined herein,
terms used herein and defined in the Agreement referred to below, shall be used
herein as so defined.
W I T N E S S E T H:
WHEREAS, the Borrower, the Lenders party thereto (the "Lenders"; together
with the Agent and the Issuing Bank, the "Secured Parties") have entered into a
Credit Agreement of even date herewith (herein called the "Agreement"),
pursuant to which the Lenders have agreed to make Loans to the Borrower and the
Issuing Bank has agreed to issue Letters of Credit on behalf of the Borrower in
the total aggregate amount of up to $30,000,000; and
WHEREAS, the Lenders are not willing to make the Loans as described above
and the Issuing Bank is not willing to issue the Letters of Credit unless the
Borrower secures the indebtedness evidenced by the Note by the Collateral of
the Borrower hereinafter described;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and promises herein contained, the parties hereto agree as follows:
1. Grant of Security Interest. As collateral security for the payment of
all indebtedness of the Borrower evidenced by the Note, as the same may be
extended, amended or substituted, and payment of all of the Borrower's
liabilities and Obligations under the Agreement, the other Loan Documents and
the Note (the "Liabilities"), Borrower hereby pledges and assigns to the Agent,
for the benefit of the Secured Parties, and hereby grants to the Agent,for the
benefit of the Secured Parties, a continuing security interest in, all of
Borrower's right, title and interest in, to and under the following property,
wherever located, whether now or hereafter existing (all of such property being
referred to collectively as the "Collateral"):
"Inventory" of Borrower, which means and includes, all domestic
finished Inventory (as defined in the Uniform Commercial Code
governing the perfection of such Inventory).
"Domestic Receivables" of Borrower, which means and includes all
trade accounts receivable, notes, bills, acceptances, choses in action,
chattel paper, instruments, documents, and other forms of obligations at
any time owing to the
K-1
▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ entity or payable within the United States,
the proceeds thereof and all of the Borrower's rights with respect to any
goods or services represented thereby, whether or not delivered or
performed, together with all customer lists, books and records, ledger
and account cards, computer tapes, software, disks, printouts and
records, whether now in existence or hereafter created, relating to
Domestic Receivables. "Account Debtor" means any person who is or who may
become obligated to Borrower under or on account of a Domestic
Receivable.
2. Security for Obligations. This Agreement (and the Collateral) secures
the prompt payment in full and performance when due of all the Obligations. In
addition, all advances, charges, costs and expenses, including reasonable
attorney's fees, incurred or paid by the Agent, for the benefit of the Secured
Parties, in exercising or enforcing any right, power or remedy conferred by
this Agreement, shall become a part of the Obligations secured hereby.
3. Borrower Remains Liable. Anything herein to the contrary
notwithstanding:
(a) the Borrower shall remain liable under all Domestic Receivables
and other Collateral to the extent set forth therein to perform all of
its duties and obligations thereunder to the same extent as if this
Agreement had not been executed;
(b) the exercise by the Agent or the other Secured Parties of any
rights hereunder shall not release the Borrower from any of its duties or
obligations under any of the Collateral; and
(c) neither the Agent, nor the other Secured Parties shall have any
obligation or liability under any Collateral by reason of this Agreement,
nor shall they be obligated to perform any of the obligations or duties
of the Borrower thereunder or to take any action to collect or enforce
any claim for payment assigned hereunder.
4. Security Interest Absolute. All rights and security interests of the
Agent, for the benefit of the Secured Parties, granted hereunder, and all
obligations of the Borrower hereunder, shall be absolute and unconditional,
irrespective of, and shall not be impaired or affected by:
(a) any lack of validity or enforceability of the Agreement, this
Security Agreement or any other Loan Document;
(b) any change in the corporate existence, structure or ownership of
the Borrower, or any bankruptcy or insolvency proceeding affecting the
Borrower or any property of the Borrower or any resulting release or
discharge of any Obligation contained in the Agreement, this Security
Agreement or any other Loan Document;
(c) the failure of the Secured Parties:
K-2
118
(i) to assert any claim or demand or to enforce any right
or remedy against the Borrower or any other Person under the
provisions of the Agreement, this Security Agreement or any other
Loan Document or under any applicable law, or
(ii) to exercise any right or remedy against any Collateral;
(d) any change in the time, manner, or place of payment of, or in
any other term of, all or any Obligations, or any other amendment,
modification, or waiver of, or any consent to or any departure from, the
Agreement, this Security Agreement, any other Loan Document or any other
Instrument relating to any thereof;
(e) any increase, reduction, limitation, impairment or termination
of the Obligations for any reason, including any claim of waiver,
release, surrender, alteration or compromise, and any defense or set-off,
counterclaim, recoupment or termination whatsoever by reason of the
invalidity, illegality, irregularity, compromise, unenforceability, or
lack of genuineness of, or any other event or occurrence affecting, any
of the Obligations (and the Borrower hereby waives any right to or claim
of any such defense or set-off, counterclaim, recoupment or termination);
(f) any sale, exchange, release, surrender or non-perfection of any
of the Collateral or any other collateral, or any release or amendment or
waiver of, or any consent to or any departure from, any guaranty held by
the Secured Parties securing or guaranteeing all or any of the
Obligations;
(g) any defense, set-off or counterclaim which may at any time be
available to or be asserted by the Borrower against the Secured Parties;
or
(h) any other circumstances which might otherwise constitute a
suretyship or other defense available to, or a legal or equitable
discharge of, the Borrower.
5. Protection of Collateral. The Agent may from time to time, at its
option, perform any act which the Borrower agrees hereunder to perform and
which the Borrower shall fail to perform after being requested in writing to so
perform and the Agent may from time to time take any other action which the
Agent reasonably deems necessary for the maintenance, preservation or
protection of any of the Collateral or of the security interests therein.
6. Agent Has No Duty. The powers conferred on the Agent hereunder are
solely to protect the Secured Parties' interest in the Collateral and shall not
impose any duty upon it to exercise any such powers. Except for duties imposed
by the U.C.C. upon secured creditors (unless otherwise modified hereby), the
Agent and the other Secured Parties shall have no duty as to any Collateral or
responsibility for taking any necessary steps to preserve rights against
K-3
119
prior parties or any other rights pertaining to any Collateral.
7. Maintenance of Security Interest. The Borrower will, from time to time,
upon the request of the Agent, deliver specific assignments of Collateral,
together with such other instruments and documents, financing statements,
amendments thereto, assignments or other writings as the Agent may reasonably
request to carry out the terms of this Security Agreement or to protect or
enforce the Secured Parties' security interest in the Collateral.
With respect to any and all Collateral to be secured and conveyed under
this Security Agreement, the Borrower agrees to do and cause to be done all
things necessary to perfect and keep in full force the security interest
granted in favor of the Secured Parties, including, but not limited to, the
prompt payment of all fees and expenses incurred in connection with any filings
made to perfect a security interest in the Collateral.
The Borrower agrees to make appropriate entries upon its financial
statements and its books and records disclosing the Secured Parties' security
interest in the Collateral.
8. Collateral.
(a) Inspection and Verification of Domestic Collateral. Any of the
Agent's officers, employees or agents shall have the right, at any time
or times hereafter, in the Agent's name or in the name of the Borrower,
to verify the validity, amount or any other matter relating to Domestic
Receivables by mail, telephone, telegraph or otherwise. The Agent (by any
of its officers, employees and/or agents) shall have the right, at any
time or times during Borrower's usual business hours and upon prior
reasonable notice to the Borrower, to inspect the Collateral, all records
related thereto (and to make extracts from such records), and the
premises upon which any of the Collateral is located, to discuss
Borrower's business affairs and finances with any Person, and to verify
the amount, quality, quantity, value and condition of, or any other
matter relating to, the Collateral.
(b) Records of Collateral. Borrower shall keep accurate and complete
records of the Collateral, and, upon request by the Agent, Borrower shall
deliver to the Agent, in form and substance acceptable to the Agent, a
detailed aged trial balance and records of all then existing Domestic
Receivables of Borrower specifying the names, addresses, face value,
dates of invoices for each Account Debtor and any other relevant
information and, upon demand, copies of proof of delivery and the
original copy of all documents, including, without limitation, repayment
histories and present status reports, relating to the Domestic
Receivables and such other matters and information relating to the status
of then existing Domestic Receivables as the Agent shall reasonably
request.
(c) Notice Regarding Disputed Domestic Receivables. In the event
any amounts due and owing in excess of $100,000 are in dispute between
any Account
K-4
120
Debtor and the Borrower relating to Domestic Receivables, the Borrower
shall provide the Agent with written notice thereof within 30 days of
becoming aware of the dispute explaining in detail the reason for the
dispute, all claims related thereto and the amount in controversy.
(d) Change of Name, Etc. The Borrower hereby covenants and agrees
that it will not change its name, identity or corporate structure in any
manner which might make any financing or continuation statement filed
hereunder seriously misleading within the meaning of Section 9-402(7) of
the U.C.C. (or any other then applicable provision of the U.C.C.) unless
the Borrower shall have given the Agent at least ninety (90) days' prior
written notice thereof and shall have taken all action (or made
arrangements to take such action substantially simultaneously with such
change if it is impossible to take such action in advance) necessary or
reasonably requested by the Agent to amend such financing statement or
continuation statement so that it is not seriously misleading.
9. Warranties Regarding Collateral.
(a) The Borrower warrants and represents that it is and will
continue to be the owner of the Collateral, now owned and upon the
acquisition of the same, free and clear of all encumbrances and security
interest, other than the security interest in favor of the Secured
Parties hereunder and Liens expressly permitted by the Agreement, and
that it will defend the Collateral and any products and proceeds thereof
against all claims and demands of all persons at any time claiming the
same or any interest therein adverse to the Secured Parties.
(b) The Borrower will not sell, exchange, lease, mortgage, encumber,
pledge (except as permitted herein), or otherwise dispose of the
Collateral, except in the ordinary course of business or pursuant to a
Year End Domestic Receivables Transaction or replace the same, without
the prior written consent of the Agent or as otherwise provided in the
Agreement.
(c) The chief place of business and chief executive office of the
Borrower is located at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇. As of the date hereof, the Collateral owned by the Borrower is
kept at the Borrower's chief executive office and at the other locations
specified in Schedule 1 attached hereto and incorporated herein by
reference. Records pertaining to the Collateral are kept at the same such
locations.
(d) The execution and delivery of this Security Agreement, together
with the filing of the UCC-1 Financing Statements identified in Schedule
2 attached hereto and incorporated herein by reference (each of which
Financing Statements is in proper form, and has been duly executed by the
Borrower and delivered to the Agent for the benefit of the Secured
Parties) will create a valid, enforceable and perfected security
K-5
121
interest in all the Collateral securing the Obligations, which security
interest will be a first priority security interest.
(e) The Borrower has not, since January 1, 1995, transacted
business, and does not transact business, under any names or trade names
other than as identified on Schedule 3 attached hereto.
10. Warranties and Representations Concerning Collateral. With respect to
the Collateral, Borrower warrants and represents to the Secured Parties that
the Secured Parties may rely on all statements, representations and records
made by Borrower, unless otherwise indicated in writing by Borrower, that:
(a) The Domestic Receivables are genuine, are in all respects what
they purport to be, are not evidenced by a judgment and, if evidenced by
an instrument or document, are only evidenced by one original instrument
or document;
(b) The Collateral has not been pledged to any Person other than to
the Secured Parties under this Security Agreement;
(c) To the best of Borrower's knowledge, there are no facts, events
or occurrences which in any way impair the validity or enforcement of the
Domestic Receivables or tend to reduce the amount payable thereunder;
(d) Borrower has no knowledge of any fact or circumstance which
would impair the validity or collectibility of any Domestic Receivable;
(e) To the best of Borrower's knowledge, there are no proceedings or
actions which are threatened or pending which might result in any
material adverse change in its financial condition;
(f) To the best of Borrower's knowledge, there are no setoffs,
counterclaims or disputes existing or asserted with respect to any
Domestic Receivable and Borrower has not made any agreement with any
Account Debtor thereunder for any deduction therefrom, all of which
discounts or allowances are reflected in the calculation of the face
value of each respective invoice related thereto;
(g) Domestic Receivables relating to Account Debtors represent bona
fide transactions completed for services rendered and/or goods delivered,
and, unless otherwise noted, are not known by the Borrower to be in
dispute; and
(h) To the best of Borrower's knowledge without any inquiry, all
Account Debtors under any Domestic Receivable (i) had the capacity to
contract at the time any contract or other document giving rise to the
Domestic Receivable was executed and (ii) are Solvent.
K-6
122
11. Remedies. All obligations of Borrower to the Secured Parties pursuant
to the Agreement may, at the option of the Secured Parties, be declared and
become immediately due and owing, if any representation or warranty of Borrower
made herein or pursuant hereto should prove untrue or misleading in any respect
or if Borrower violates any covenant or agreement contained herein which
violation remains unremedied for 10 days after notice thereof by the Agent, or
upon the occurrence of any Event of Default (as defined in the Agreement) and
the expiration of any applicable grace periods. Upon and after an Event of
Default, the Secured Parties shall have the following rights and remedies, the
exercise of any of which shall not operate to limit the availability of any
others:
(a) All of the rights and remedies of a secured party under the
Uniform Commercial Code of the state where such rights and remedies are
asserted, or under other applicable law, all of which rights and remedies
shall be cumulative, and none of which shall be exclusive, to the extent
permitted by law, in addition to any other rights and remedies contained
in this Security Agreement, the Agreement and in all of the other Loan
Documents;
(b) The right to open Borrower's mail addressed to Borrower in care
of the Agent and collect any and all amounts due to the Borrower from
Account Debtors;
(c) The right to (i) demand payment of the Domestic Receivables;
(ii) enforce payment of the Domestic Receivables, by legal proceedings or
otherwise; (iii) exercise all of Borrower's rights and remedies with
respect to the collection of the Domestic Receivables; (iv) settle,
adjust, compromise, extend or renew the Domestic Receivables; (v) settle,
adjust or compromise any legal proceedings brought to collect the
Domestic Receivables; (vi) if permitted by applicable law, sell or assign
the Collateral, upon such terms, for such amounts and at such time or
times as the Agent, on behalf of the Secured Parties, deems advisable;
(vii) discharge and release the Domestic Receivables; (viii) take
control, in any manner, of any item of payment of or proceeds derived
from the disposition of any Collateral; (ix) prepare, file and sign
Borrower' name on a Proof of Claim in Bankruptcy or similar document
against any Account Debtor; (x) prepare file and sign Borrower's name on
any notice of lien, assignment or satisfaction of lien, or similar
document in connection with the Collateral; (xi) endorse the name of the
Borrower upon any chattel paper, document, instrument, invoice, freight
▇▇▇▇, ▇▇▇▇ of lading or similar document or agreement relating to the
Collateral; (xii) use Borrower's stationery and sign the name of the
Borrower to verifications of the Domestic Receivables, and notices
thereof to Account Debtors; and (xiii) use the information recorded on or
contained in any data processing equipment and computer hardware and
software relating to the Domestic Receivables, to which the Borrower has
access;
(d) The right, through self-help or the assistance of a court, to
take possession of all Collateral, to the extent permitted by law. All
monies, or any part
K-7
123
thereof, received by the Secured Parties under this paragraph from time
to time shall be applied by the Secured Parties to the Liabilities
secured hereby and those owing under the Note;
(e) The right to sell or to otherwise dispose of all or any
Collateral in its then condition, at public or private sale or sales,
with such notice as may be required by law, in lots or in bulk, for cash
or on credit, all as the Agent, in its sole discretion, may deem
advisable; such sales may be adjourned from time to time with or without
notice. The Agent shall have the right to conduct such sales on
Borrower's premises or elsewhere and shall have the right to use
Borrower's premises without charge for such sales for such time or times
as they may see fit. The Agent is hereby granted a license or other right
to use, without charge, Borrower's labels, patents, copyrights, rights of
use of any name, trade secrets, trade names, trademarks and advertising
matter, or any property of a similar nature, as it pertains to the
Collateral, in advertising for sale and selling any Collateral and
Borrower's rights under all licenses and all franchise agreements shall
inure to the Agent's benefit, for the benefit of the Secured Parties. The
Agent, on behalf of the Secured Parties, shall have the right to sell,
lease or otherwise dispose of the Collateral, or any part thereof, for
cash, credit or any combination thereof, and any of the Secured Parties
may purchase all or any part of the Collateral at public or, if permitted
by law, private sale and, in lieu of actual payment of such purchase
price, may set off the amount of such price against the Liabilities of
the Borrower under the Agreement. The proceeds realized from the sale of
any Collateral shall be applied to (i) the reasonable costs and expenses,
including the reasonable fees and expenses of the Secured Parties'
attorneys, incurred by the Secured Parties for collection and for
acquisition, completion, protection, sale and delivery of the Collateral;
(ii) interest due upon the indebtedness due under the Note; (iii) the
principal of the indebtedness due under the Note; and (iv) all other
Obligations. If any deficiency shall arise, the Borrower shall remain
liable to the Secured Parties therefor; and
(f) The rights and remedies provided to the Secured Parties under
the Agreement and under any other Loan Documents.
12. Waiver. Neither the failure nor any delay on the part of the Secured
Parties to exercise any right, power or privilege hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right,
power or privilege preclude any other or further exercise of any other right,
power or privilege of the Secured Parties.
13. General. The descriptive section headings herein have been inserted
for convenience only and shall not be deemed to limit or otherwise offset the
construction of any provision hereof.
14. Governing Law. This Security Agreement shall be construed and its
performance governed in accordance with the laws of the State of Florida,
including to the
K-8
124
extent applicable, the Uniform Commercial Code of that State.
15. Benefits. This Security Agreement is freely assignable and
transferrable by the Secured Parties to any assignee and transferree of any
Secured Obligation, however, the duties and obligations of the Borrower may not
be delegated or transferred without the written consent of the Agent. The
rights and privileges of the Secured Parties shall inure to the benefit of
their successors and assigns, and the duties and obligations of the Borrower
shall bind its successors and assigns.
16. Notices. All notices and other communication provided for hereunder
shall be in the manner and to the addresses as set forth in the Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Security Agreement
to be duly executed by authority duly given as of the day and year first above
written.
WITNESS: WINDMERE CORPORATION
By:
------------------------- ---------------------------
Name:
-------------------------
NATIONSBANK, NATIONAL ASSOCIATION
(SOUTH), as Agent
By:
---------------------------
Title:
-------------------------
K-9
125
Schedule 1
Locations of Collateral and Records
WINDMERE CORPORATION
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ (▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇)
▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ (▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇)
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ (▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇)
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
K-10
126
Schedule 2
Filings
WINDMERE CORPORATION
Florida Secretary of State
Nevada Secretary of State
Tennesee Secretary of State
K-11
127
Schedule 3
Trade Names
None
K-12
128
EXHIBIT K-2
SECURITY AGREEMENT - ACCOUNTS AND INVENTORY
(GUARANTORS)
THIS SECURITY AGREEMENT, made and entered into as of October 11, 1996, by
WINDMERE-DURABLE HOLDINGS, INC., a Florida corporation (the "Parent"), WINDMERE
HOLDINGS CORPORATION , a Delaware corporation, LITTER MAID, INC., a Florida
corporation, BAY BOOKS & TAPES, INC., a Florida corporation, WINDMERE FAN
PRODUCTS, INC., a Florida corporation, JERDON PRODUCTS, INC., a Florida
corporation, CONSUMER PRODUCTS AMERICAS, INC., a Florida corporation, FORTUNE
PRODUCTS, INC., a Florida corporation, EDI MASTERS, INC., a Florida corporation
(with the Parent, collectively the "Guarantors" and individually a
"Guarantor"), to NATIONSBANK, NATIONAL ASSOCIATION (SOUTH), a national banking
association, as Agent (the "Agent"), the Issuing Bank (as defined in the
Agreement referenced below) and the Lenders (as defined below). Except as
otherwise defined herein, terms used herein and defined in the Agreement
referred to below, shall be used herein as so defined.
W I T N E S S E T H:
WHEREAS, Windmere Corporation, a Florida corporation (the "Borrower"), the
Lenders party thereto (the "Lenders"; together with the Agent and the Issuing
Bank, the "Secured Parties") have entered into a Credit Agreement of even date
herewith (herein called the "Agreement"), pursuant to which the Lenders have
agreed to make Loans to the Borrower and the Issuing Bank has agreed to issue
Letters of Credit on behalf of the Borrower in the total aggregate amount of up
to $30,000,000;
WHEREAS, the Borrower is a direct, wholly-owned Subsidiary of the Parent
and the Parent will materially benefit from the Loans made to the Borrower
pursuant to the Agreement and the Letters of Credit to be issued thereunder;
WHEREAS, the Parent has entered into that certain Guaranty and Suretyship
Agreement (Parent) dated as of the date hereof in favor of the Agent for the
benefit of the Secured Parties guaranteeing, among other things, the payment of
the Obligations (the "Parent Guaranty");
WHEREAS, each of the other Guarantors is an affiliated company with the
Borrower and the financial success of such Guarantors is dependant upon the
prosperity of the Borrower and each of such Guarantors will materially benefit
from the Loans made to the Borrower pursuant to the Agreement and the Letters
of Credit to be issued thereunder;
WHEREAS, each of such Guarantors has entered into that certain Guaranty
and Suretyship Agreement (Domestic Subsidiaries) dated as of the date hereof in
favor of the Agent for the benefit of the Secured Parties guaranteeing, among
other things, the payment of the
K-13
129
Obligations (the "Subsidiary Guaranty"; together with the Parent Guaranty,
the "Guaranties"); and
WHEREAS, the Lenders are not willing to make the Loans as described above
and the Issuing Bank is not willing to issue the Letters of Credit unless the
Guarantors secure the indebtedness evidenced by the Note and the obligations of
the Guarantors under the Guaranties by the Collateral of the Guarantors
hereinafter described;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and promises herein contained, the parties hereto agree as follows:
1. Grant of Security Interest. As collateral security for the payment of
all indebtedness of the Borrower evidenced by the Note, as the same may be
extended, amended or substituted, and payment of all of the Borrower's
liabilities and Obligations under the Agreement, the other Loan Documents and
the Note (the "Liabilities"), the Guarantors hereby pledge and assign to the
Agent, for the benefit of the Secured Parties, and hereby grant to the Agent,
for the benefit of the Secured Parties, a continuing security interest in, all
of the Guarantors' right, title and interest in, to and under the following
property, wherever located, whether now or hereafter existing (all of such
property being referred to collectively as the "Collateral"):
"Inventory" of each Guarantor, which means and includes all domestic
finished Inventory (as such term is defined in the Uniform Commercial
Code applicble to the perfection of such inventory).
"Domestic Receivables" of each Guarantor, which means and includes
all trade accounts receivable, notes, bills, acceptances, choses in
action, chattel paper, instruments, documents, and other forms of
obligations at any time owing to each Guarantor (or, in the case of
Windmere Holdings Corporation ("Holdings"), owing to the Borrower or any
of the Borrower's Domestic Subsidiaries and assigned to Holdings pursuant
to a Year End Domestic Receivables Transaction) from a United States
entity or payable within the United States, the proceeds thereof and all
of each Guarantor's rights with respect to any goods or services
represented thereby, whether or not delivered or performed, together with
all customer lists, books and records, ledger and account cards, computer
tapes, software, disks, printouts and records, whether now in existence
or hereafter created, relating to Domestic Receivables. "Account Debtor"
means any person who is or who may become obligated to a Guarantor under
or on account of a Domestic Receivable.
2. Security for Obligations. This Agreement (and the Collateral) secures
the prompt payment in full and performance when due of all the Obligations. In
addition, all advances, charges, costs and expenses, including reasonable
attorney's fees, incurred or paid by the Agent, for the benefit of the Secured
Parties, in exercising or enforcing any right, power or remedy conferred by
this Agreement, shall become a part of the Obligations secured hereby.
K-14
130
3. Guarantors Remain Liable. Anything herein to the contrary
notwithstanding:
(a) the Guarantors shall remain liable under all Domestic
Receivables and other Collateral to the extent set forth therein to
perform all of their duties and obligations thereunder to the same extent
as if this Security Agreement had not been executed;
(b) the exercise by the Agent or the other Secured Parties of any
rights hereunder shall not release the Guarantors from any of their
duties or obligations under any of the Collateral; and
(c) neither the Agent, nor the other Secured Parties shall have any
obligation or liability under any Collateral by reason of this Security
Agreement, nor shall they be obligated to perform any of the obligations
or duties of the Guarantors thereunder or to take any action to collect
or enforce any claim for payment assigned hereunder.
4. Security Interest Absolute. All rights and security interests of the
Agent, for the benefit of the Secured Parties, granted hereunder, and all
obligations of the Guarantors hereunder, shall be absolute and unconditional,
irrespective of, and shall not be impaired or affected by:
(a) any lack of validity or enforceability of the Agreement, this
Security Agreement or any other Loan Document;
(b) any change in the corporate existence, structure or ownership of
the Guarantors, or any bankruptcy or insolvency proceeding affecting the
Guarantors or any property of the Guarantors or any resulting release or
discharge of any Obligation contained in the Agreement, this Security
Agreement or any other Loan Document;
(c) the failure of the Secured Parties:
(i) to assert any claim or demand or to enforce any right or
remedy against the Guarantors or any other Person under the
provisions of the Agreement, this Security Agreement or any other
Loan Document or under any applicable law, or
(ii) to exercise any right or remedy against any Collateral;
(d) any change in the time, manner, or place of payment of, or in
any other term of, all or any Obligations, or any other amendment,
modification, or waiver of, or any consent to or any departure from, the
Agreement, this Security Agreement, any other Loan Document or any other
Instrument relating to any thereof;
K-15
131
(e) any increase, reduction, limitation, impairment or termination
of the Obligations for any reason, including any claim of waiver,
release, surrender, alteration or compromise, and any defense or set-off,
counterclaim, recoupment or termination whatsoever by reason of the
invalidity, illegality, irregularity, compromise, unenforceability, or
lack of genuineness of, or any other event or occurrence affecting, any
of the Obligations (and the Guarantors hereby waive any right to or claim
of any such defense or set-off, counterclaim, recoupment or termination);
(f) any sale, exchange, release, surrender or non-perfection of any
of the Collateral or any other collateral, or any release or amendment or
waiver of, or any consent to or any departure from, any guaranty held by
the Secured Parties securing or guaranteeing all or any of the
Obligations;
(g) any defense, set-off or counterclaim which may at any time be
available to or be asserted by any of the Guarantors against the Secured
Parties; or
(h) any other circumstances which might otherwise constitute a
suretyship or other defense available to, or a legal or equitable
discharge of, the Guarantors.
5. Protection of Collateral. The Agent may from time to time, at its
option, perform any act which the Guarantors agree hereunder to perform and
which the Guarantors shall fail to perform after being requested in writing to
so perform and the Agent may from time to time take any other action which the
Agent reasonably deems necessary for the maintenance, preservation or
protection of any of the Collateral or of the security interests therein.
6. Agent Has No Duty. The powers conferred on the Agent hereunder are
solely to protect the Secured Parties' interest in the Collateral and shall not
impose any duty upon it to exercise any such powers. Except for duties imposed
by the U.C.C. upon secured creditors (unless otherwise modified hereby), the
Agent and the other Secured Parties shall have no duty as to any Collateral or
responsibility for taking any necessary steps to preserve rights against prior
parties or any other rights pertaining to any Collateral.
7. Maintenance of Security Interest. The Guarantors will, from time to
time, upon the request of the Agent, deliver specific assignments of
Collateral, together with such other instruments and documents, financing
statements, amendments thereto, assignments or other writings as the Agent may
reasonably request to carry out the terms of this Security Agreement or to
protect or enforce the Secured Parties' security interest in the Collateral.
With respect to any and all Collateral to be secured and conveyed under
this Security Agreement, the Guarantors agree to do and cause to be done all
things necessary to perfect and keep in full force the security interest
granted in favor of the Secured Parties, including, but not limited to, the
prompt payment of all fees and expenses incurred in connection with any filings
made to perfect a security interest in the Collateral.
K-16
132
The Guarantors agree to make appropriate entries upon their financial
statements and their books and records disclosing the Secured Parties' security
interest in the Collateral.
8. Collateral.
(a) Inspection and Verification of Collateral. Any of the Agent's
officers, employees or agents shall have the right, at any time or times
hereafter, in the Agent's name or in the name of the Guarantors, to
verify the validity, amount or any other matter relating to Domestic
Receivables by mail, telephone, telegraph or otherwise. The Agent (by any
of its officers, employees and/or agents) shall have the right, at any
time or times during Guarantors' usual business hours and upon prior
reasonable notice to the applicable Guarantors, to inspect the
Collateral, all records related thereto (and to make extracts from such
records), and the premises upon which any of the Collateral is located,
to discuss the Guarantors' business affairs and finances with any Person,
and to verify the amount, quality, quantity, value and condition of, or
any other matter relating to, the Collateral.
(b) Records of Collateral. Guarantors shall keep accurate and
complete records of the Collateral, and, upon request by the Agent, shall
deliver to the Agent, in form and substance acceptable to the Agent, a
detailed aged trial balance and records of all then existing Domestic
Receivables of Guarantors specifying the names, addresses, face value,
dates of invoices for each Account Debtor and any other relevant
information and, upon demand, copies of proof of delivery and the
original copy of all documents, including, without limitation, repayment
histories and present status reports, relating to the Domestic
Receivables and such other matters and information relating to the status
of then existing Domestic Receivables as the Agent shall reasonably
request.
(c) Notice Regarding Disputed Domestic Receivables. In the event any
amounts due and owing in excess of $100,000 are in dispute between any
Account Debtor and any Guarantor relating to Domestic Receivables, such
Guarantor shall provide the Agent with written notice thereof within 30
days of becoming aware of the dispute explaining in detail the reason for
the dispute, all claims related thereto and the amount in controversy.
(d) Change of Name, Etc. The Guarantors hereby covenant and agree
that they will not change their name, identity or corporate structure in
any manner which might make any financing or continuation statement filed
hereunder seriously misleading within the meaning of Section 9-402(7) of
the U.C.C. (or any other then applicable provision of the U.C.C.) unless
such Guarantor shall have given the Agent at least ninety (90) days'
prior written notice thereof and shall have taken all action (or made
arrangements to take such action substantially simultaneously with such
change if it is impossible to take such action in advance) necessary or
reasonably requested by the
K-17
133
Agent to amend such financing statement or continuation statement so that
it is not seriously misleading.
9. Warranties Regarding Collateral.
(a) The Guarantors warrant and represent that they are and will
continue to be the owners of the Collateral, now owned and upon the
acquisition of the same, free and clear of all encumbrances and security
interest, other than the security interest in favor of the Secured
Parties hereunder and Liens expressly permitted by the Agreement, and
that they will defend the Collateral and any products and proceeds
thereof against all claims and demands of all persons at any time
claiming the same or any interest therein adverse to the Secured Parties.
(b) The Guarantors will not sell, exchange, lease, mortgage,
encumber, pledge (except as permitted herein), or otherwise dispose of
the Collateral, except in the ordinary course of business or replace the
same, without the prior written consent of the Agent or as otherwise
provided in the Agreement.
(c) The chief places of business and chief executive offices of the
Guarantors are located at the addresses underneath their signatures
hereto. As of the date hereof, the Collateral owned by each Guarantor is
kept at such Guarantor's chief executive office and at the other
locations specified in Schedule 1 attached hereto and incorporated herein
by reference. Records pertaining to the Collateral are kept at the same
such locations.
(d) The execution and delivery of this Security Agreement, together
with the filing of the UCC-1 Financing Statements identified in Schedule
2 attached hereto and incorporated herein by reference (each of which
Financing Statements is in proper form, and has been duly executed by the
Guarantors and delivered to the Agent for the benefit of the Secured
Parties) will create a valid, enforceable and perfected security interest
in all the Collateral securing the Obligations, which security interest
will be a first priority security interest.
(e) No Guarantor has, since January 1, 1995, transacted business,
and does transact business, under any names or trade names other than as
identified on Schedule 3 attached hereto.
10. Warranties and Representations Concerning Collateral. With respect to
the Collateral, Guarantors warrant and represent to the Secured Parties that
the Secured Parties may rely on all statements, representations and records
made by Guarantors, unless otherwise indicated in writing by Guarantors, that:
(a) The Domestic Receivables are genuine, are in all respects what
they purport to be, are not evidenced by a judgment and, if evidenced by
an instrument or
K-18
134
document, are only evidenced by one original instrument or document;
(b) The Collateral has not been pledged to any Person other than
to the Secured Parties under this Security Agreement;
(c) To the best of Guarantors' knowledge, there are no facts, events
or occurrences which in any way impair the validity or enforcement of the
Domestic Receivables or tend to reduce the amount payable thereunder;
(d) No Guarantor has knowledge of any fact or circumstance which
would impair the validity or collectibility of any Domestic Receivable;
(e) To the best of Guarantors' knowledge, there are no proceedings
or actions which are threatened or pending which might result in any
material adverse change in any of their financial condition;
(f) To the best of each Guarantor's knowledge, there are no setoffs,
counterclaims or disputes existing or asserted with respect to any
Domestic Receivable and no Guarantor has made any agreement with any
Account Debtor thereunder for any deduction therefrom, all of which
discounts or allowances are reflected in the calculation of the face
value of each respective invoice related thereto;
(g) The Domestic Receivables relating to Account Debtors represent
bona fide transactions completed for services rendered and/or goods
delivered, and, unless otherwise noted, are not known by the Guarantors
to be in dispute; and
(h) To the best of Guarantors' knowledge without any inquiry, all
Account Debtors under the Domestic Receivables (i) had the capacity to
contract at the time any contract or other document giving rise to the
Domestic Receivable was executed and (ii) are Solvent.
11. Remedies. All obligations of Guarantors to the Secured Parties
pursuant to the Agreement may, at the option of the Secured Parties, be
declared and become immediately due and owing, if any representation or
warranty of any Guarantor made herein or pursuant hereto should prove untrue or
misleading in any respect or if any Guarantor violates any covenant or
agreement contained herein which violation remains unremedied for 10 days after
notice thereof by the Agent, or upon the occurrence of any Event of Default (as
defined in the Agreement) and the expiration of any applicable grace periods.
Upon and after an Event of Default, the Secured Parties shall have the
following rights and remedies, the exercise of any of which shall not operate
to limit the availability of any others:
(a) All of the rights and remedies of a secured party under the
Uniform Commercial Code of the state where such rights and remedies are
asserted, or under other applicable law, all of which rights and remedies
shall be cumulative, and none of which shall be exclusive, to the extent
permitted by law, in addition to any other rights
K-19
135
and remedies contained in this Security Agreement, the Agreement and in
all of the other Loan Documents;
(b) The right to open all Guarantors' mail addressed to such
Guarantor in care of the Agent and collect any and all amounts due to the
Guarantors from Account Debtors;
(c) The right to (i) demand payment of the Domestic Receivables;
(ii) enforce payment of the Domestic Receivables, by legal proceedings or
otherwise; (iii) exercise all of Guarantors' rights and remedies with
respect to the collection of the Domestic Receivables; (iv) settle,
adjust, compromise, extend or renew the Domestic Receivables; (v) settle,
adjust or compromise any legal proceedings brought to collect the
Domestic Receivables; (vi) if permitted by applicable law, sell or assign
the Collateral, upon such terms, for such amounts and at such time or
times as the Agent, on behalf of the Secured Parties, deems advisable;
(vii) discharge and release the Domestic Receivables; (viii) take
control, in any manner, of any item of payment of or proceeds derived
from the disposition of a Domestic Receivable; (ix) prepare, file and
sign the Guarantors' names on a Proof of Claim in Bankruptcy or similar
document against any Account Debtor; (x) prepare file and sign the
Guarantors' names on any notice of lien, assignment or satisfaction of
lien, or similar document in connection with the Collateral; (xi) endorse
the name of the Guarantors upon any chattel paper, document, instrument,
invoice, freight ▇▇▇▇, ▇▇▇▇ of lading or similar document or agreement
relating to the Collateral; (xii) use the Guarantors' stationery and sign
the name of the Guarantors to verifications of the Domestic Receivables,
and notices thereof to Account Debtors; and (xiii) use the information
recorded on or contained in any data processing equipment and computer
hardware and software relating to the Domestic Receivables, to which the
Guarantors have access;
(d) The right, through self-help or the assistance of a court, to
take possession of all Collateral, to the extent permitted by law. All
monies, or any part thereof, received by the Secured Parties under this
paragraph from time to time shall be applied by the Secured Parties to
the Liabilities secured hereby and those owing under the Note;
(e) The right to sell or to otherwise dispose of all or any
Collateral in its then condition, at public or private sale or sales,
with such notice as may be required by law, in lots or in bulk, for cash
or on credit, all as the Agent, in its sole discretion, may deem
advisable; such sales may be adjourned from time to time with or without
notice. The Agent shall have the right to conduct such sales on any
Guarantor's premises or elsewhere and shall have the right to use such
premises without charge for such sales for such time or times as it may
see fit. The Agent is hereby granted a license or other right to use,
without charge, Guarantors' labels, patents, copyrights, rights of use of
any name, trade secrets, trade names, trademarks and advertising matter,
or any property of a similar nature, as it pertains to the Collateral, in
advertising for sale and
K-20
136
selling any Collateral and Guarantors' rights under all licenses and all
franchise agreements shall inure to the Agent's benefit, for the benefit
of the Secured Parties. The Agent, on behalf of the Secured Parties,
shall have the right to sell, lease or otherwise dispose of the
Collateral, or any part thereof, for cash, credit or any combination
thereof, and any of the Secured Parties may purchase all or any part of
the Collateral at public or, if permitted by law, private sale and, in
lieu of actual payment of such purchase price, may set off the amount of
such price against the Liabilities of the Borrower under the Agreement.
The proceeds realized from the sale of any Collateral shall be applied to
(i) the reasonable costs and expenses, including the reasonable fees and
expenses of the Secured Parties' attorneys, incurred by the Secured
Parties for collection and for acquisition, completion, protection, sale
and delivery of the Collateral; (ii) interest due upon the indebtedness
due under the Note; (iii) the principal of the indebtedness due under the
Note; and (iv) all other Obligations. If any deficiency shall arise, the
Guarantors shall remain liable to the Secured Parties therefor; and
(f) The rights and remedies provided to the Secured Parties under
the Agreement, this Security Agreement and under any other Loan
Documents.
12. Waiver. Neither the failure nor any delay on the part of the Secured
Parties to exercise any right, power or privilege hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right,
power or privilege preclude any other or further exercise of any other right,
power or privilege of the Secured Parties.
13. General. The descriptive section headings herein have been inserted
for convenience only and shall not be deemed to limit or otherwise offset the
construction of any provision hereof.
14. Governing Law. This Security Agreement shall be construed and its
performance governed in accordance with the laws of the State of Florida,
including to the extent applicable, the Uniform Commercial Code of that State.
15. Benefits. This Security Agreement is freely assignable and
transferrable by the Secured Parties to any assignee and transferee of any
Secured Obligation, however, the duties and obligations of the Guarantors may
not be delegated or transferred without the written consent of the Agent. The
rights and privileges of the Secured Parties shall inure to the benefit of
their successors and assigns, and the duties and obligations of the Guarantors
shall bind their successors and assigns.
16. Notices. All notices and other communication provided for hereunder
shall be in the manner and to the addresses as set forth in the Guaranties.
K-21
137
IN WITNESS WHEREOF, the parties hereto have caused this Security Agreement
to be duly executed by authority duly given as of the day and year first above
written.
WITNESS: WINDMERE-DURABLE HOLDINGS, INC.
-------------------------
By:
-------------------------------
Name:
-----------------------------
K-22
138
Witness: WINDMERE HOLDINGS CORPORATION
-----------------------
By:
---------------------------
Name:
-------------------------
-----------------------
K-23
139
Witness: WINDMERE FAN CORPORATION
-----------------------
By:
---------------------------
Name:
-------------------------
-----------------------
K-24
140
Witness: LITTER MAID, INC.
------------------------
By:
---------------------------------
Name:
-------------------------------
------------------------
K-25
141
Witness: BAY BOOKS & TAPES, INC.
------------------------
By:
-----------------------------
Name:
---------------------------
------------------------
K-26
142
Witness: JERDON PRODUCTS, INC.
-------------------------
By:
------------------------------
Name:
---------------------------
-------------------------
K-27
143
Witness: CONSUMER PRODUCTS AMERICAS, INC.
-------------------------
By:
-------------------------
Name:
-----------------------
-------------------------
K-28
144
Witness: FORTUNE PRODUCTS, INC.
-------------------------
By:
-------------------------
Name:
-----------------------
-------------------------
K-29
145
Witness: EDI MASTERS, INC.
-------------------------
By:
-------------------------
Name:
-----------------------
-------------------------
K-30
146
NATIONSBANK, NATIONAL ASSOCIATION
(SOUTH), as Agent
By:
------------------------------------
Title:
---------------------------------
K-31
147
Schedule 1
Locations of Collateral and Records
WINDMERE-DURABLE HOLDINGS, INC.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ (▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇)
▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ (▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇)
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ (▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇)
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
WINDMERE HOLDINGS CORPORATION
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ (▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇)
▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ (▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇)
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ (▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇)
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
WINDMERE FAN PRODUCTS, INC.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ (▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇)
▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ (▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇)
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ (▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇)
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
JERDON PRODUCTS, INC.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ (▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇)
▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ (▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇)
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
K-32
148
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ (Public Warehouse)
Memphis, Tennessee
CONSUMER PRODUCTS AMERICAS, INC.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ (▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇)
▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ (▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇)
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ (▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇)
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
EDI MASTERS, INC.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ (▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇)
▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ (▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇)
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ (▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇)
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
LITTER MAID, INC.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ (▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇)
▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ (▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇)
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ (Public Warehouse)
Memphis, Tennessee
BAY BOOKS & TAPES, INC.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ (▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇)
▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ (▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇)
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
K-33
149
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ (▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇)
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
FORTUNE PRODUCTS, INC.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ (▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇)
▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ (▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇)
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ (▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇)
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
K-34
150
Schedule 2
Filings
WINDMERE-DURABLE HOLDINGS, INC.
Florida Secretary of State
Nevada Secretary of State
Tennesee Secretary of State
WINDMERE HOLDINGS CORPORATION
Delaware Secretary of State
Florida Secretary of State
Nevada Secretary of State
Tennesee Secretary of State
WINDMERE FAN PRODUCTS, INC.
Florida Secretary of State
Nevada Secretary of State
Tennesee Secretary of State
JERDON PRODUCTS, INC.
Florida Secretary of State
Nevada Secretary of State
Tennesee Secretary of State
CONSUMER PRODUCTS AMERICAS, INC.
Florida Secretary of State
Nevada Secretary of State
Tennesee Secretary of State
EDI MASTERS, INC.
Florida Secretary of State
Nevada Secretary of State
Tennesee Secretary of State
LITTER MAID, INC.
Florida Secretary of State
Nevada Secretary of State
Tennesee Secretary of State
BAY BOOKS & TAPES, INC.
Florida Secretary of State
Nevada Secretary of State
Tennesee Secretary of State
FORTUNE PRODUCTS, INC.
Florida Secretary of State
Nevada Secretary of State
Tennesee Secretary of State
K-35
151
Schedule 3
Trade Names
None
K-36
152
Schedule 4.3
Information Regarding Collateral
WINDMERE CORPORATION
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ (▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇)
▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ (▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇)
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ (▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇)
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
WINDMERE-DURABLE HOLDINGS, INC.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ (▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇)
▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ (▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇)
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ (▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇)
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
WINDMERE HOLDINGS CORPORATION
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ (▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇)
▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ (▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇)
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ (▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇)
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
WINDMERE FAN PRODUCTS, INC.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ (▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇)
▇▇▇▇▇▇, ▇▇▇▇▇▇
S-1
153
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ (▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇)
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ (▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇)
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
JERDON PRODUCTS, INC.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ (▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇)
▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ (▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇)
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ (▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇)
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
CONSUMER PRODUCTS AMERICAS, INC.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ (▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇)
▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ (▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇)
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ (▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇)
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
EDI MASTERS, INC.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ (▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇)
▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ (▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇)
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ (▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇)
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
LITTER MAID, INC.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ (Public Warehouse)
▇-▇
▇▇▇
▇▇▇▇▇▇, Nevada
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ (▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇)
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ (Public Warehouse)
Memphis, Tennessee
BAY BOOKS & TAPES, INC.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ (▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇)
▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ (▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇)
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ (▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇)
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
FORTUNE PRODUCTS, INC.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ (▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇)
▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ (▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇)
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ (Public Warehouse)
S-3
155
Schedule 7.4
Subsidiaries and Investments in Other Persons
Windmere-Durable Holdings, Inc.
Windmere Corporation
Windmere Holdings Corporation
Windmere Consumer Products, Inc. (Canada)
Eclat Investments, Ltd. (Foreign)
Litter Maid, Inc.
Investment in NewM-Tech
Investment in Salton/Maxim Housewares, Inc.
Consumer Products Americas, Inc.
Windmere Corporation
Bay Books & Tapes, Inc.
Jerdon Products, Inc.
Fortune Products, Inc.
Windmere Fan Products, Inc.
Paragon Industries (Foreign)
Investment in Breakroom of Tennessee, Inc.
Windmere Holdings, Inc.
Durable Europe, Ltd. (Foreign)
EDI Masters, Inc.
PPC Industries, Ltd. (Foreign)
Remdale Investments
Durable Electric, Ltd.
Durable Electrical Metal Factory Ltd.
Investment in PX Distributors, Inc.
S-4
156
Schedule 7.6
Indebtedness
(a) Dade County Industrial Development Authority Variable Rate Demand
Industrial Development Revenue Bonds (Windmere Corporation Project) Series
1985 ($7,500,000), and related documents thereto, including, but not
limited to, (i) Guaranty Agreement, dated as of May 1, 1985, between
Windmere Corporation and Bankers Trust Company, and (ii) Letter of Credit
Agreement, dated as of July 31, 1992, between Windmere Corporation and
NationsBank of Florida, N.A.
(b) Banking Facility or Facilities in an aggregate principal amount not to
exceed $8,000,000 granted by the Bank of East Asia, Limited or other
financial institution to Durable Electrical Metal Factory, Ltd. and/or
other Subsidiaries.
(c) Guarantee by Windmere Corporation of the Indebtedness described in (b)
above.
(d) Equipment leases existing at July 28, 1995.
(e) $5,000,000 Standby Letter of Credit from Bank of Tokyo Limited-Hong Kong
(through Miami office) to provide working capital.
(f) $3,000,000 8% promissory note to New M-Tech Corporation due April 15,
1998.
(g) $2,000,000 8% promissory note to New M-Tech Corporation due April 15,
2001.
(h) $800,000 8% convertible promissory note to ▇▇▇▇ ▇▇▇▇▇▇ due April 15, 2001
(assigned form New M-Tech Corporation).
(i) $1,200,000 8% convertible promissory note to ▇▇▇▇▇ Corporation due April
15, 2001 (assigned from New M-Tech Corporation).
(j) $10,847,620 8% promissory note to Salton/Maxim Housewares, Inc., due July
11, 2001.
S-5
157
Schedule 7.7
Liens
(a) those granted to Salton/Maxim Housewares, Inc. which are subordinated to
those granted hereunder.
S-6
158
Schedule 7.8
Tax Matters
None
S-7
159
Schedule 7.10
Litigation
S-8
