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Exhibit 2.2
AMENDMENT AGREEMENT NO. 4
TO THE CREDIT AGREEMENT
This AMENDMENT AGREEMENT NO. 4 TO THE CREDIT AGREEMENT (the "Amendment
Agreement"), dated as of August 21, 1997 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 (as
successor by merger to NationsBank, National Association (South)), a national
banking association organized and existing under the laws of the United States,
and NATIONAL BANK OF CANADA, as Lenders (such financial institutions are
hereinafter referred to individually as a "Lender" or collectively as the
"Lenders"), and NATIONSBANK, NATIONAL ASSOCIATION (as successor by merger to
NationsBank, National Association (South)), in its capacity as agent for the
Lenders (in such capacity, the "Agent");
W I T N E S S E T H:
WHEREAS, the Borrower, the Agent and the Lenders have entered into that
certain Credit Agreement dated as of October 11, 1996, as amended by Amendment
Agreement No. 1 to the Credit Agreement dated as of January 31, 1997, by
Amendment Agreement No. 2 to the Credit Agreement dated as of May 15, 1997 and
by Amendment Agreement No. 3 to the Credit Agreement dated as of July 27, 1997
(as so amended, the "Credit Agreement"); and
WHEREAS, the Agent, the Lenders and each of the domestic Affiliates and
domestic Subsidiaries of the Borrower party thereto have entered into a Guaranty
and Suretyship Agreement dated as of October 11, 1996, pursuant to which such
Affiliates and Subsidiaries of the Borrower have guaranteed the Borrower's
Obligations under the Credit Agreement; and
WHEREAS, Windmere Consumer Products, Inc., an Affiliate of the
Borrower, the Agent and the Lenders has entered into a Guarantee and Suretyship
Agreement dated as of the date hereof pursuant to which Windmere Consumer
Products, Inc. has guaranteed the Borrower's Obligations under the Credit
Agreement; and
WHEREAS, the Borrower has requested that the Agent and the Lenders
amend the Credit Agreement; and
WHEREAS, upon the terms and conditions contained herein, the Agent and
the Lenders are willing to amend the Credit Agreement;
NOW, THEREFORE, in consideration of the premises and conditions herein
set forth, it is hereby agreed as follows:
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1. CREDIT AGREEMENT AMENDMENT. Subject to the conditions hereof, the
Credit Agreement is hereby amended, effective as of the date hereof, as follows:
(a) Section 1.1 to the Credit Agreement is hereby amended by
amending and restating the following definitions, each in its entirety as
follows:
"'Borrowing Base' means, as of the date of determination
thereof, (i) Eligible Receivables multiplied by 85% plus (ii)
Eligible Inventory multiplied by 40% (the "Eligible Inventory
Amount") provided that if the date of determination is between July
15 and December 15 of any year, the Eligible Inventory amount
determined in subsection (ii) above shall be Eligible Inventory
multiplied by 50%; provided further, that the Eligible Inventory
amount determined at any time shall not exceed $20,000,000;"
"'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 which would be treated as intangible assets under GAAP other
than and (ii) any prepaid advertising credits; provided, however,
that in determining the amount of goodwill, where capital stock of
the Borrower is a part of the consideration paid in connection with
one or more Acquisitions, there may be included in Consolidated
Tangible Net Worth up to $5,000,000 of goodwill, so long as the fair
market value of capital stock of the Borrower given as consideration
equals the amount of goodwill so included."
"'Default Rate' means (i) with respect to each Eurodollar Rate
Loan, until the 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, (iii) with respect to Money Market
Loans, at a rate of interest per annum which shall be two percent
(2%) above the Money Market Rate and (iv) in any case, the maximum
rate permitted by applicable law, if lower;"
"'Eligible Inventory' means that domestic inventory of the
Borrower and the Guarantors 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 or the Guarantors and located in
Miami, Florida, (b) the warehouse located at 0000 Xxxxxxxxx 00xx
Xxxxxx, Xxxxx, Xxxxxxx and (c) public warehouses located in (v)
Xxxxxxx, Nevada, (w) Kent, Washington, (x) Pennsauken, New Jersey,
(y) Largo, Florida and (z) Memphis, Tennessee; and
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(ii) inventory that is unfinished;"
"'Eligible Receivables' means those trade accounts receivable
of the (a) Borrower, (b) the Parent, (c) the Domestic Subsidiaries
of each of the Borrower and the Parent and (d) Windmere Consumer
Products, Inc., 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 a person not a United States or
Canadian citizen or corporation, partnership or other entity
organized under the laws of the United States or province of Canada
or the Commonwealth of Canada whose principal office is not located
either within the United States or Canada.
(iv) receivables of any customer more than 50% of which
receivables due Borrower, the Parent, any Domestic Subsidiaries of
the Borrower or the Parent or Windmere Consumer Products, Inc. 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
(vi) any receivable which is subject to any offset,
deduction, defense, dispute or counterclaim;"
"'Stated Termination Date' means August 25, 1998 or such later
date as the parties may agree pursuant to Section 2.13;"
"'Total Revolving Credit Commitment' means a principal amount
equal to $45,000,000, such amount as reduced from time to time in
accordance with Section 2.7;"
(b) Section 1.1 is hereby amended by adding the following
definitions thereto in their appropriate alphabetical order:
"'Floating Rate' means (i) in the case of a Base Rate Loan the
Base Rate, and (ii) in the case of a Money Market Loan the Money
Market Rate;"
"'Floating Rate Loan' means a Loan which is either a Base Rate
Loan or a Money Market Loan;"
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"'Money Market Loan' means a Loan which bears interest at the
Money Market Rate;"
"'Money Market Rate' means the sum of (i) the greater of (x)
the one month Eurodollar Rate as determined by the Agent and (y) the
rate of interest announced daily by the Agent to be its money market
rate, plus (ii) the Applicable Margin;"
(c) Article II of the Agreement is hereby amended by deleting the
phrase "Base Rate Loan" and "Base Rate Loans" wherever it appears therein
and inserting in lieu thereof the phrase "Floating Rate Loan" and
"Floating Rate Loans," respectively.
(d) The second sentence of Section 2.1(c)(i) to the Credit
Agreement is hereby amended by inserting after the phrase "Base Rate" a
comma and the phrase "Money Market Rate".
(e) Section 8.12(a) to the Credit Agreement is hereby amended by
amending and restating such section in its entirety as follows:
"(a) Consolidated Tangible Net Worth. Maintain at all times
Consolidated Tangible Net Worth equal to the sum of (i) $146,855,500
plus (ii) 50% of Consolidated Net Income for each quarterly period
subsequent to September 30, 1997 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, 1997; and"
(f) Exhibit A to the Credit Agreement is hereby amended by
amending and restating such Exhibit in its entirety as set forth in
Exhibit A hereto.
(g) Exhibit I to the Credit Agreement is hereby amended by
amending and restating such Exhibit in its entirety as set forth in
Exhibit I hereto.
2. REPRESENTATIONS AND WARRANTIES. In order to induce the Agent and the
Lenders to enter into this Amendment Agreement, the Borrower hereby represents
and warrants that the Credit Agreement has been re-examined by the Borrower and
that except as disclosed by the Borrower in writing to the Lenders as of the
date hereof except:
(a) The representations and warranties made by the Borrower in
Article VII thereof are true on and as of the date hereof except that the
financial statements referred to in Section 7.6 shall be those most
recently furnished to the Agent pursuant to Section 8.1;
(b) There has been no material adverse change in the condition,
financial or otherwise, of the Borrower and its Subsidiaries since the
date of the most recent financial
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reports of the Borrower delivered to the Agent under Section 8.1 thereof,
other than changes in the ordinary course of business, none of which has
been a material adverse change;
(c) The business and properties of the Borrower and its Subsidiaries
are not, and since the date of the most recent financial reports of the
Borrower delivered to the Agent under Section 8.1 thereof, have not been,
adversely affected in any substantial way as the result of any fire,
explosion, earthquake, accident, strike, lockout, combination of workers,
flood, embargo, riot, activities of armed forces, war or acts of God or
the public enemy, or cancellation or loss of any major contracts; and
(d) After giving effect to this Amendment Agreement, no condition
exists which, upon the effectiveness of the amendment contemplated hereby,
would constitute a Default or an Event of Default on the part of the
Borrower under the Credit Agreement or the Notes, either immediately or
with the lapse of time or the giving of notice, or both.
3. CONDITIONS PRECEDENT. The effectiveness of this Amendment Agree-
ment is subject to the receipt by the Agent of the following:
(i) six counterparts of this Amendment Agreement duly
executed by all signatories hereto;
(ii) four counterparts of each of (a) the Security Agreement
executed by Windmere Consumer Products, Inc. in favor of the Agent,
(b) the Guaranty Agreement executed by Windmere Consumer Products,
Inc. in favor of the Agent, each in form and substance satisfactory
to the Agent and (c) the documents required pursuant to Section 8.11
of the Credit Agreement;
(iii) promissory notes executed by the Borrower in favor of
each of the Lenders in amounts equal to each Lender's Revolving
Credit Commitment;
(iv) resolutions of Board of Directors or other governing body
of the Borrower approving this Amendment Agreement certified by the
Secretary of the Borrower;
(v) opinion of counsel of the Borrower in form and substance
satisfactory to the Agent; and
(vi) copies of all additional agreements, instruments and
documents which the Agent may reasonably request, such documents,
when appropriate, to be certified by appropriate governmental
authorities.
All proceedings of the Borrower relating to the matters provided for herein
shall be satisfactory to the Lenders, the Agent and their counsel.
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4. ENTIRE AGREEMENT. This Amendment Agreement sets forth the entire
understanding and agreement of the parties hereto in relation to the subject
matter hereof and supersedes any prior negotiations and agreements among the
parties relative to such subject matter. No promise, condition, representation
or warranty, express or implied, not herein set forth shall bind any party
hereto, and no one of them has relied on any such promise, condition,
representation or warranty. Each of the parties hereto acknowledges that, except
as in this Amendment Agreement otherwise expressly stated, no representations,
warranties or commitments, express or implied, have been made by any party to
the other. None of the terms or conditions of this Amendment Agreement may be
changed, modified, waived or canceled orally or otherwise, except by writing,
signed by all the parties hereto, specifying such change, modification, waiver
or cancellation of such terms or conditions, or of any proceeding or succeeding
breach thereof.
5. CONSENT OF GUARANTORS. The Guarantors have joined in the execution of
this Amendment Agreement for the purposes of consenting hereto and for the
further purpose of confirming their guaranty of Obligations of Borrower as
provided in the Guaranty.
6. FULL FORCE AND EFFECT OF AGREEMENT. Except as hereby specifically
amended, modified or supplemented, the Credit Agreement and all other Loan
Documents are hereby confirmed and ratified in all respects and shall remain in
full force and effect according to their respective terms.
7. COUNTERPARTS. This Amendment Agreement may be executed in any number
of counterparts, each of which shall be deemed an original as against any party
whose signature appears thereon, and all of which shall together constitute one
and the same instrument.
8. GOVERNING LAW. THIS AMENDMENT AGREEMENT SHALL IN ALL RESPECTS BE
GOVERNED BY THE LAW OF THE STATE OF FLORIDA, WITHOUT REGARD TO ANY OTHERWISE
APPLICABLE PRINCIPLES OF CONFLICT OF LAWS. THE BORROWER 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 PURPOSES OF COLLECTION AND (II) WAIVES
TRIAL BY JURY IN CONNECTION WITH ANY SUCH LITIGATION.
9. ENFORCEABILITY. Should any one or more of the provisions of this
Amendment Agreement be determined to be illegal or unenforceable as to one or
more of the parties hereto, all other provisions nevertheless shall remain
effective and binding on the parties hereto.
10. CREDIT AGREEMENT. All references in any of the Loan Documents to the
Credit Agreement shall mean and include the Credit Agreement as amended hereby.
11. SUCCESSORS AND ASSIGNS. This Amendment Agreement shall be binding upon
and inure to the benefit of each of the Borrower, the Lenders, the Agent and
their respective
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successors, assigns and legal representatives; provided, however, that the
Borrower, without the prior consent of the Lenders, may not assign any rights,
powers, duties or obligations hereunder.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment
Agreement to be duly executed by their duly authorized officers, all as of the
day and year first above written.
WINDMERE CORPORATION
By:
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Name:
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Title:
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GUARANTORS:
WINDMERE-DURABLE HOLDINGS, INC.
By:
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Name:
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Title:
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WINDMERE HOLDINGS CORPORATION
By:
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Name:
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Title:
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WINDMERE HOLDINGS CORPORATION II
By:
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Name:
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Title:
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WINDMERE FAN PRODUCTS, INC.
By:
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Name:
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Title:
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LITTER MAID, INC.
By:
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Name:
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Title:
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BAY BOOKS & TAPES, INC.
By:
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Name:
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Title:
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JERDON PRODUCTS, INC.
By:
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Name:
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Title:
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CONSUMER PRODUCTS AMERICAS, INC.
By:
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Name:
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Title:
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FORTUNE PRODUCTS, INC.
By:
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Name:
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Title:
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EDI MASTERS, INC.
By:
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Name:
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Title:
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WINDMERE CONSUMER PRODUCTS, INC.
By:
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Name:
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Title:
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NATIONSBANK, NATIONAL ASSOCIATION,
as Agent and Lender
By:
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Name:
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Title:
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NATIONAL BANK OF CANADA, as Lender
By:
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Name:
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Title:
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EXHIBIT A
Applicable Commitment Percentages
Revolving Applicable
Credit Commitment
Lender Commitment Percentage
------ ---------- ----------
NationsBank, National
Association $25,000,000 55.000000000%
National Bank of
Canada 20,000,000 44.444444444%
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$45,000,000 100%
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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 85% = $_______________
(b) Eligible Inventory as of this date:
Total $__________________ x ___%* = $_______________(not
to exceed $20,000,000)
(a) + (b) = $______________
*40% during period December 16 through following July 14 and 50% at all
other times.
EXECUTED THIS ____ DAY OF __________________, 199__.
WINDMERE CORPORATION
By:
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Authorized Representative
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