<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14D-1
(Amendment No. 1)
TENDER OFFER STATEMENT
Pursuant to Section 14(d)(1) of the Securities Exchange Act of 1934
----------------
Signature Brands USA, Inc.
(Name of Subject Company)
Java Acquisition Corp.
Sunbeam Corporation
(Bidders)
----------------
Common Stock, par value $.01 per share
(Title of Class of Securities)
----------------
82667N 10 1
(CUSIP Number of Class of Securities)
----------------
David C. Fannin, Esq.
Sunbeam Corporation
1615 South Congress Avenue
Suite 200
Delray Beach, Florida 33445
Telephone: (561) 243-2100
Facsimile: (561) 243-2100
(Name, Address and Telephone Number of Person authorized to
Receive Notices and Communications on Behalf of Bidders)
Copy to:
Blaine V. Fogg, Esq.
Skadden, Arps, Slate, Meagher & Flom LLP
919 Third Avenue, Suite 46-80
New York, New York 10022
Telephone: (212) 735-3000
Facsimile: (212) 735-2000
CALCULATION OF FILING FEE
Transaction Valuation* $93,932,966.
Amount of Filing Fee $18,787
- ----------
* Estimated for purposes of calculating the amount of the filing fee only. This
amount assumes the purchase of 11,385,814 shares of common stock, $.01 par
value (the "Shares"), of Signature Brands USA, Inc., at a price of $8.25 per
Share in cash. Such number of Shares represents the 9,186,761 Shares
outstanding as of March 5, 1998 and assumes the issuance prior to the
consummation of the Offer of 2,199,053 Shares upon the exercise of
outstanding options and warrants. The amount of the filing fee calculated in
accordance with Regulation 240.0-11 of the Securities Exchange Act of 1934,
as amended, equals 1/50th of one percent of the value of the transaction.
[x/] Check box if any part of the fee is offset as provided by Rule 0-11 (a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the Form
or Schedule and the date of its filing.
Amount Previously Paid: 18,787
Form or Registration No.: Schedule 14D-1
Filing Party: Sunbeam Corporation and Java Acquisition Corp.
Date Filed: March 6, 1998
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1
<PAGE>
This Amendment No. 1 to the Tender Offer Statement on Schedule 14D-1
amends and supplements the Tender Offer Statement on Schedule 14D-1 originally
filed on March 6, 1998 (the "Schedule 14D-1") by Java Acquisition Corp., a
Delaware corporation ("Purchaser") and a wholly owned indirect subsidiary of
Sunbeam Corporation, a Delaware corporation ("Parent"), with respect to
Purchaser's offer to purchase all of the outstanding shares of common stock, par
value $.01 per share (the "Shares"), of Signature Brands USA, Inc., a Delaware
corporation (the "Company"), at $8.25 per Share, net to the seller in cash,
without interest, upon the terms and subject to the conditions set forth in the
Offer to Purchase dated March 6, 1998 (the "Offer to Purchase") a copy of which
was filed as Exhibit (a)(1) to the Schedule 14D-1, as supplemented by the
supplement thereto dated March 26, 1998 (the "Supplement") and in the related
Letter of Transmittal, a copy of which was filed as Exhibit (a)(2) to the
Schedule 14D-1(which together, with any amendments and supplements thereto,
constitute the "Offer").
Unless otherwise defined herein, all capitalized terms used herein shall have
the respective meanings given to such terms in the Offer to Purchase, the
Supplement and the Schedule 14D-1.
ITEM 4. Source and Amount of Funds or Other Consideration.
(a)-(b) Item 4 is hereby amended and supplemented by reference to Section 10
of the Supplement, which Section is incorporated herein by reference.
ITEM 10. Additional Information.
Item 10(c) is hereby amended and supplemented by reference to Section 15 of
the Supplement, which Section is incorporated herein by reference.
ITEM 11. Materials to be Filed as Exhibits.
Item 11 is hereby amended to add the following exhibits:
(a)(9) First Supplement to the Offer to Purchase dated March 26, 1998.
(a)(10) Press Release of Parent dated March 25, 1998.
(a)(11) Press Release of Parent dated March 26, 1998.
(b)(1) Commitment letter among a group of financial institutions,
including Morgan Stanley Senior Funds, Inc., provided to Parent
on March 24, 1998.
2
<PAGE>
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify that
the information set forth in this statement is true, complete and correct.
Date: March 26, 1998
JAVA ACQUISITION CORP.
By: /s/ David C. Fannin
-- ---------------------
Name: David C. Fannin
Title: Executive Vice President and
General Counsel
SUNBEAM CORPORATION
By: /s/ David C. Fannin
-- ----------------------
Name: David C. Fannin
Title: Executive Vice President and
General Counsel
3
<PAGE>
INDEX TO EXHIBITS
Exhibit
Number Exhibit
------ -------
*(a)(1) Offer to Purchase dated March 6, 1998.
*(a)(2) Letter of Transmittal.
*(a)(3) Notice of Guaranteed Delivery.
*(a)(4) Letter to Brokers, Dealers, Commercial Banks, Trust Companies and
Other Nominees.
*(a)(5) Letter to Clients for use by Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees.
*(a)(6) Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
*(a)(7) Press Release of Parent dated March 2, 1998.
*(a)(8) Press Release of Parent dated March 9, 1998.
(a)(9) First Supplement to the Offer to Purchase dated March 6, 1998.
(a)(10) Press Release of Parent dated March 25, 1998.
(a)(11) Press Release of Parent dated March 26, 1998.
(b)(1) Commitment Letter among a group of financial institutions,
including Morgan Stanley Senior Funds, Inc., provided to Parent
on March 24, 1998.
*(c)(1) Agreement and Plan of Merger, dated as of February 28, 1998, by
and among Parent, Purchaser and the Company.
*(c)(2) Stock Purchase Agreement, dated as of February 28, 1998, by and
among Parent, Purchaser and the Major Sellers.
*(c)(3) Confidentiality Agreement, dated as of February 17, 1998, by and
between Parent and the Company.
- -------------------------------------
* Previously filed.
4
<PAGE>
FIRST SUPPLEMENT
TO THE
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
SIGNATURE BRANDS USA, INC.
AT
$8.25 NET PER SHARE
BY
JAVA ACQUISITION CORP.,
A WHOLLY OWNED INDIRECT SUBSIDIARY OF
SUNBEAM CORPORATION
------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON THURSDAY, APRIL 2, 1998, UNLESS THE OFFER IS EXTENDED.
------------------------
THE OFFER IS BEING MADE PURSUANT TO AN AGREEMENT AND PLAN OF MERGER, DATED AS OF
FEBRUARY 28, 1998 (THE 'MERGER AGREEMENT'), BY AND AMONG SUNBEAM CORPORATION
('PARENT'), JAVA ACQUISITION CORP. AND SIGNATURE BRANDS USA, INC. (THE
'COMPANY'). THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE MERGER
AGREEMENT, THE OFFER AND THE MERGER AND HAS DETERMINED THAT THE TERMS
OF THE OFFER AND THE MERGER ARE FAIR TO, AND IN THE BEST INTERESTS
OF, THE COMPANY'S STOCKHOLDERS AND RECOMMENDS THAT STOCKHOLDERS
ACCEPT THE OFFER AND TENDER THEIR SHARES
PURSUANT TO THE OFFER.
------------------------
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY TENDERED
AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER THAT NUMBER OF SHARES
WHICH, WHEN ADDED TO SHARES BENEFICIALLY OWNED BY PARENT (IF ANY),
REPRESENTS AT LEAST 51% OF THE SHARES OUTSTANDING (ASSUMING EXERCISE OF
ALL OUTSTANDING OPTIONS AND WARRANTS) ON THE DATE SHARES ARE ACCEPTED
FOR PAYMENT. THE OFFER IS ALSO SUBJECT TO THE OTHER CONDITIONS SET
FORTH IN THE OFFER TO PURCHASE. SEE SECTION 14 OF
THE OFFER TO PURCHASE.
------------------------
IMPORTANT
Any stockholder who desires to tender all or any portion of such
stockholder's Shares should either (i) complete and sign the Letter of
Transmittal (or facsimile thereof) in accordance with the instructions in the
Letter of Transmittal, have such stockholder's signature thereon guaranteed if
required by Instruction 1 to the Letter of Transmittal, mail or deliver the
Letter of Transmittal (or a facsimile thereof) and any other required documents
to the Depositary and either deliver the certificates for such Shares to the
Depositary or tender such Shares pursuant to the procedures for book-entry
transfer set forth in Section 3 of the Offer to Purchase or (ii) request such
stockholder's broker, dealer, commercial bank, trust company or other nominee to
effect the transaction for such stockholder. Any stockholder whose Shares are
registered in the name of a broker, dealer, commercial bank, trust company or
other nominee must contact such broker, dealer, commercial bank, trust company
or other nominee to tender such Shares.
A stockholder who desires to tender Shares and whose certificates
representing such Shares are not immediately available, or who cannot comply
with the procedures for book-entry transfer on a timely basis, or who cannot
deliver all required documents to the Depositary prior to the expiration of the
Offer, may tender such Shares by following the procedures for guaranteed
delivery set forth in Section 3 of the Offer to Purchase.
Questions and requests for assistance or for additional copies of this
Supplement, the Offer to Purchase, the Letter of Transmittal, the Notice of
Guaranteed Delivery and other related materials may be directed to the
Information Agent or to the Dealer Manager at their respective addresses and
telephone numbers set forth on the back cover of this Supplement. A stockholder
also may contact brokers, dealers, commercial banks or trust companies for
assistance concerning the Offer.
------------------------
THE DEALER MANAGER FOR THE OFFER IS:
MORGAN STANLEY & CO.
INCORPORATED
March 26, 1998
<PAGE>
To the Holders of Common Stock of
SIGNATURE BRANDS USA, INC.:
INTRODUCTION
The following information amends and supplements the Offer to Purchase
dated March 6, 1998 (the 'Offer to Purchase') of Java Acquisition Corp., a
Delaware corporation ('Purchaser') and a wholly owned indirect subsidiary of
Sunbeam Corporation, a Delaware corporation ('Parent'), pursuant to which the
Purchaser is offering to purchase all outstanding shares of common stock, par
value $.01 per share (the 'Shares'), of Signature Brands USA, Inc., a Delaware
corporation (the 'Company'), at a price of $8.25 per Share (the 'Offer Price'),
net to the seller in cash, without interest, upon the terms and subject to the
conditions set forth in the Offer to Purchase and in the related Letter of
Transmittal (which, together with any amendments or supplements hereto or
thereto, collectively constitute the 'Offer').
The terms and conditions previously set forth in the Offer to Purchase
remain applicable in all respects to the Offer and this Supplement should be
read in conjunction with the Offer to Purchase. Unless the context requires
otherwise, capitalized terms used but not defined in this Supplement shall have
the meanings ascribed to them in the Offer to Purchase.
THE OFFER TO PURCHASE, THIS SUPPLEMENT AND THE RELATED LETTER OF
TRANSMITTAL CONTAIN IMPORTANT INFORMATION AND SHOULD BE READ IN THEIR ENTIRETY
BEFORE ANY DECISION IS MADE WITH RESPECT TO THE OFFER.
10. SOURCE AND AMOUNT OF FUNDS
Section 10 of the Offer to Purchase is supplemented and amended in its
entirety to read as follows:
The Offer is not conditioned upon financing. The total amount of funds
required by Purchaser to consummate the Offer and the Merger, including the
refinancing of approximately $168 million of debt presently owed by the Company,
the payment of $5.5 million in prepayment penalties in connection with such
refinancing and the payment of the fees and expenses of the Offer and the
Merger, is estimated to be approximately $258 million. Purchaser will obtain all
such funds from Parent in the form of capital contributions and/or loans. Parent
will obtain such funds (i) from the proceeds of the sale of $2.014 billion
principal amount at maturity of Parent's Zero Coupon Convertible Senior
Subordinated Debentures Due 2018 (the 'Debentures') which were sold on March 25,
1998 (yielding net proceeds to Parent of approximately $727 million) in a
private placement to qualified institutional buyers (as defined under Rule 144A
under the Securities Act) and to a limited number of other institutional
accredited investors (as defined in Rule 501 under the Securities Act) and (ii)
from borrowings under a $2 billion credit facility (the 'New Credit Facility'),
to be provided to Parent, Coleman Company, Inc., First Alert, Inc., and the
Company by a group of financial institutions, including Morgan Stanley Senior
Funds, Inc. ('MSSF') pursuant to a commitment letter provided by MSSF to Parent
on March 24, 1998 (the 'Commitment Letter').
The Debentures were sold at an issue price of $372.43 per $1,000 principal
amount at maturity, which represents a yield to maturity of 5.0% per annum
(computed on a semi-annual bond equivalent basis) calculated from March 25,
1998. The Debentures are convertible, at the option of the holder, at any time
after 90 days from original issuance and prior to maturity unless previously
redeemed or purchased by Parent, into common stock, par value $.01 per share, of
Parent ('Parent Common Stock'), at the rate of 6.575 shares per $1,000 principal
amount at the maturity of the Debentures. The Debentures are not secured; are
not redeemable by Parent prior to March 25, 2003, and thereafter are redeemable
at the option of Parent for cash at redemption prices equal to the issue price
plus accrued original issue discount to the date of redemption; and may be
redeemed for cash at the option of the holder if there is a Fundamental Change
(as defined) at a price equal to the issue price plus accrued original issue
discount to the date of redemption, subject to adjustment in certain
circumstances. Parent will purchase Debentures, at the option of the holder, at
March 25 , 2003, March 25, 2008 and March 25, 2013, at purchase prices equal to
the issue price plus accrued original issue discount to such dates. Parent may,
at its option, pay such purchase price in cash or Parent Common Stock, or any
combination thereof.
1
<PAGE>
It is presently expected that the New Credit Facility will be entered into
on March 30, 1998 and, in any event, prior to the Initial Expiration Date for
the Offer, which is 12:00 Midnight, New York City time, on Thursday April 2,
1998. The New Credit Facility will provide for up to $1.4 billion in term loans
and $600 million in revolving credit loans. Borrowings under the term loans will
mature on a seven or eight and one-half year amortization schedule (depending on
the term loan), subject to certain mandatory repayments customary for term loans
under credit facilities of a similar nature, and revolving credit borrowings
will mature seven years from the closing of the New Credit Facility. Interest on
borrowings under the New Credit Facility will accrue, at Parent's option, at the
London Interbank Offered Rate plus an agreed upon interest margin or at the Base
Rate of the Administrative Agent for the term loan (generally the higher of the
prime commercial lending rate of the Administrative Agent or the Federal Funds
Rate plus 1/2 of 1%) plus an agreed upon interest margin. Borrowings under the
New Credit Facility will be secured by a pledge of the stock of certain of
Parent's subsidiaries (including the Purchaser) and, at the lender's request, by
security interests in substantially all of the assets of Parent and its
subsidiaries (including the Company following the Merger). In addition,
borrowings under the New Credit Facility will be guaranteed by certain of
Parent's wholly-owned U.S. subsidiaries (including the Company following the
Merger) and such subsidiary guarantees will be secured as described above. To
the extent borrowings are made by any subsidiaries of Parent, the obligations of
such subsidiaries will be guaranteed by Parent.
It is anticipated that the Debentures and borrowings under the Term Loan
will be repaid from funds generated internally by Parent and its subsidiaries
(including the Company after the Merger), although Parent may in the future
refinance these financings.
THE DEBENTURES WERE SOLD IN A TRANSACTION NOT REGISTERED UNDER THE
SECURITIES ACT WHICH ANTICIPATES RESALES PURSUANT TO RULE 144A TO QUALIFIED
INSTITUTIONAL BUYERS. THE DEBENTURES AND THE PARENT COMMON STOCK ISSUABLE UPON
CONVERSION OF THE DEBENTURES MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES
ABSENT REGISTRATION OR AN APPLICABLE EXEMPTION FROM REGISTRATION. THE FOREGOING
DOES NOT CONSTITUTE AN OFFER TO PURCHASE OR A SOLICITATION OF AN OFFER TO BUY
ANY SUCH SECURITIES.
15. CERTAIN LEGAL MATTERS
Section 15 of the Offer to Purchase is supplemented by adding the
following:
Antitrust. Parent and the Company filed their Notification and Report
Forms with respect to the Offer under the HSR Act on March 6, 1998. The waiting
period under the HSR Act with respect to the Offer expired at 11:59 p.m., New
York City time, on March 25, 1998.
JAVA ACQUISITION CORP.
March 26, 1998
2
<PAGE>
Facsimile copies of the Letter of Transmittal, properly completed and duly
executed, will be accepted. The Letter of Transmittal, certificates for Shares
and any other required documents should be sent or delivered by each stockholder
of the Company or his broker, dealer, commercial bank, trust company or other
nominee to the Depositary, at one of the addresses set forth below:
The Depositary for the Offer is:
THE BANK OF NEW YORK
<TABLE>
<S> <C> <C>
BY MAIL: FACSIMILE TRANSMISSION: BY HAND OR OVERNIGHT COURIER:
(for Eligible Institutions Only)
(212) 815-6213
Tender & Exchange Department Tender & Exchange Department
P.O. Box 11248 101 Barclay Street
Church Street Station Receive and Deliver Window
New York, New York 10286-1248 New York, New York 10286
FOR CONFIRMATION TELEPHONE:
(800) 507-9357
</TABLE>
Any questions or requests for assistance or additional copies of this
Supplement, the Offer to Purchase, the Letter of Transmittal, the Notice of
Guaranteed Delivery and the Guidelines for Certification of Taxpayer
Identification on Substitute Form W-9 may be directed to the Information Agent
or the Dealer Manager at the address and telephone numbers set forth below.
Stockholders may also contact their broker, dealer, commercial bank or trust
company for assistance concerning the Offer.
The Information Agent for the Offer is:
HILL & KNOWLTON
466 LEXINGTON AVENUE
NEW YORK, NEW YORK 10017
(800) 755-3002
The Dealer Manager for the Offer is:
MORGAN STANLEY & CO.
INCORPORATED
1585 BROADWAY
NEW YORK, NY 10036
(212) 761-6094 (CALL COLLECT)
<PAGE>
Exhibit (a)(10)
FOR IMMEDIATE RELEASE
SUNBEAM CORPORATION ANNOUNCES SUCCESSFUL PRIVATE
PLACEMENT OF $750 MILLION OF CONVERTIBLE DEBENTURES
Delray Beach, FL, (March 25, 1998) - Sunbeam Corporation
(NYSE:SOC) announced that it closed today a private placement of $750 Million
($2.014 billion principal amount at maturity) Zero Coupon Convertible
Debentures. Net proceeds to Sunbeam will be approximately $727 Million. The
Debentures were offered and sold only to qualified institutional buyers and
other institutional accredited investors at a price of $372.43 per $1,000
principal amount at maturity, representing an original issue discount of
62.757%. The Debentures have a yield to maturity of 5% per annum and are
convertible into Sunbeam common shares at a conversion rate of 6.575 shares
per $1,000 principal amount of Debentures at maturity.
Proceeds of the offering will be used to finance a portion of
the acquisition costs of the Company's recently announced acquisitions of The
Coleman Company, First Alert, Inc. and Signature Brands USA, Inc. and for other
corporate purposes, including the repayment of outstanding indebtedness.
Al Dunlap, Sunbeam's Chairman and CEO, stated, "The
overwhelming response of the investment community to this offering reflects a
high level of
<PAGE>
confidence in Sunbeam's strategic direction and its prospects for the future.
The initial offering of Debentures was substantially over-subscribed, and the
Company decided to increase the size of the offering by 50% from $500 Million
in gross proceeds to $750 Million. We are in the process of creating a
powerful 'house of brands' at Sunbeam with the recently announced acquisitions
of Coleman, Signature Brands and First Alert, and obviously the markets agree
with our strategy to become the global leader in durable branded consumer
products through acquisitions which are selective, opportunistic and
accretive."
The balance of the debt financing for the acquisitions of
Coleman, First Alert and Signature Brands will be in the form of a senior
credit facility through a syndicate being led by Morgan Stanley Dean Witter,
Bank of America and First Union. The credit facility, which will consist of
$1.4 Billion in term loans and a $600 Million revolving credit facility, is
expected to close in the next several days. In addition to financing the three
acquisitions, proceeds of all components of the Company's financings will be
available to invest in the business, as well as for possible future
acquisitions.
The Debentures have not been registered under the Securities
Act of 1933 and may not be offered or sold in the United States absent
registration or an applicable exemption from registration requirements.
2
<PAGE>
Cautionary Statements - Statements contained in this press
release, including statements relating to the Company's expectations regarding
anticipated performance in the future, are "forward looking statements," as
such term is defined in the Private Securities Litigation Reform Act of 1995.
Actual results could differ materially from the Company's statements in this
release regarding its expectations, goals, or projected results, due to
various factors, including those set forth in the Company's Cautionary
Statements contained in its Form 10-K for the year ended December 28, 1997,
filed with the Securities and Exchange Commission.
Sunbeam Corporation is a leading consumer products company
that designs, manufactures and markets, nationally and internationally, a
diverse portfolio of brand name consumer products. The Company's Sunbeam(R)
and Oster(R) brands have been household names for generations, both
domestically and abroad, and the Company is a market leader in many of its
product categories.
# # #
Contact: Rich Goudis
Sunbeam Corporation
(561) 243-2143
3
<PAGE>
Exhibit (a)(11)
FOR IMMEDIATE RELEASE
SUNBEAM CORPORATION CLEARS HART SCOTT
ON ACQUISITIONS OF SIGNATURE BRANDS AND FIRST ALERT
Delray Beach, FL, (March 26, 1997) - Sunbeam Corporation
(NYSE:SOC) announced today that the required waiting periods under the Hart
Scott Rodino Antitrust Improvements Act for its acquisitions of First Alert,
Inc. and Signature Brands USA, Inc. have expired. As previously announced,
Sunbeam's offers to purchase shares of First Alert and Signature Brands will
expire at midnight on April 2, 1998, unless extended.
First Alert, Inc. is a leading producer of smoke detectors,
carbon monoxide detectors, fire extinguishers and other safety equipment for
the consumer. Signature Brands USA, Inc. is the leading producer of consumer
coffee makers, through its Mr. Coffee(R) brand, and a leading producer of home
and professional scales through its Health o meter(R) brand of products.
Albert J. Dunlap, Sunbeam's Chairman and CEO, stated, "We
are pleased to have received clearance to complete these two acquisitions. We
look forward to rapidly assimilating these excellent product lines and
powerful brands into the Sunbeam family of leading global branded durable
consumer products."
<PAGE>
Cautionary Statements - Statements contained in this press
release, including statements relating to the Company's expectations regarding
anticipated performance in the future, are "forward looking statements," as
such term is defined in the Private Securities Litigation Reform Act of 1995.
Actual results could differ materially from the Company's statements in this
release regarding its expectations, goals, or projected results, due to
various factors, including those set forth in the Company's Cautionary
Statements contained in its Form 10-K for the period ended December 28, 1997,
filed with the Securities and Exchange Commission.
Sunbeam Corporation is a leading consumer products company
that designs, manufactures and markets, nationally and internationally, a
diverse portfolio of brand name consumer products. The Company's Sunbeam(R)
and Oster(R) brands have been household names for generations, both
domestically and abroad, and the Company is a market leader in many of its
product categories.
# # #
Contact Rich Goudis
Sunbeam Corporation
(561) 243-2143
2
<PAGE>
Exhibit (b)(1)
CONFIDENTIAL
COMMITMENT LETTER
March 25, 1998
Sunbeam Corporation
1615 South Congress Avenue
Suite 200
Delray Beach, Florida 33445
Attention:
Dear Ladies and Gentlemen:
You have advised each of (i) Morgan Stanley Senior Funding, Inc. (together
with its affiliates, "MSSF"), (ii) Bank of America NT&SA ("BANTSA") and
BancAmerica Robertson Stephens ("BARS"; BARS and BANTSA are hereinafter
referred to collectively or, if the context so requires, singularly as "BA")
and (iii) First Union National Bank ("First Union Bank") and First Union
Capital Markets, a division of Wheat First Securities, Inc. ("First Union
Securities"; First Union Bank and First Union Securities are hereinafter
collectively or, if the context so requires, singularly as "First Union") that
Sunbeam Corporation ("Sunbeam") intends to acquire, directly or indirectly,
through one or more wholly-owned subsidiaries (the "Acquisition"): (a) 100% of
the capital stock of CLN Holdings Inc. and at least 82% of the capital stock
of The Coleman Company, Inc. ("Coleman") (for Sunbeam stock and up to
approximately $1.185 billion in cash and assumption of existing debt), (b)
control of Signature Brands USA, Inc. ("Signature") (for up to approximately
$250 million in cash and assumption of existing debt) and (c) control of First
Alert, Inc. ("First Alert"; together with Coleman and Signature, the
"Targets") (for up to approximately $175 million in cash and assumption of
existing debt). You have indicated to MSSF, BA and First Union that you are
seeking up to $2.0 billion in senior secured credit facilities (the "Senior
Facilities") to finance the payment of the consideration for the Acquisition,
to refinance existing indebtedness of Sunbeam and the Targets and their
subsidiaries, to pay related fees and expenses and to finance the ongoing
working capital and other general requirements of Sunbeam.
<PAGE>
MSSF is pleased to offer to commit to provide 40% of the Senior Facilities,
and each of BA and First Union is pleased to offer to commit to provide 30% of
the Senior Facilities, in each case on the terms and conditions outlined
herein and in the Summary of Terms and Conditions attached hereto (the "Term
Sheet"). The commitments of MSSF, BA and First Union hereunder are several and
not joint.
Each of MSSF, BA and First Union reserve the right to terminate its
obligations under the preceding paragraph if (i) the terms of the proposed
transactions are changed from those described herein and in the Term Sheet in
any respect determined by it to be material, (ii) any information submitted to
it is inaccurate, incomplete or misleading in any respect determined by it to
be material, (iii) any adverse change occurs in, or any additional information
is disclosed to or discovered by it (including information and conclusions
contained in any review or report required to be provided to it in connection
herewith) which it deems materially adverse in respect of, the condition
(financial and other), business, operations, assets, nature of assets,
liabilities or prospects of Sunbeam, the Targets or any of their respective
subsidiaries, the security for the Senior Facilities or the ability of Sunbeam
or any Target to fulfill any of its obligations under the Senior Facilities in
accordance with the terms thereof, (iv) any of the fees provided for in the
Fee Letters dated the date hereof and delivered herewith (the "Fee Letters")
are not paid when due, or (v) a material adverse change has occurred in
financial, banking or capital markets after the date of delivery of this
letter. In addition, from the date of acceptance of the offer set forth in
this letter until the earlier of the signing of the definitive financing
agreements and the termination of the commitments of MSSF, BA and First Union
under this letter, you will ensure that no financing for the Borrowers or any
of its subsidiaries or affiliates shall be syndicated or privately placed
which, in the reasonable judgment of MSSF, BA or First Union would have a
detrimental effect upon this transaction.
It is agreed that MSSF will act as Arranger and Syndication Agent (the
"Syndication Agent"), that First Union will act as Administrative Agent and
Co- Arranger (the "Administrative Agent"), and that BA will act as
Documentation Agent and Co-Arranger (the "Documentation Agent"; together with
the Syndication Agent and the Administrative Agent, the "Agents"), in each
case in respect of the Senior Facilities. The Agents will syndicate the Senior
Facilities to a group of financial institutions identified by the Agents in
consultation with you. Upon any acceptance by the Agents of commitments of
other lenders, the amount of the commitments of MSSF, BA and First Union will
be reduced ratably by the amount of any such commitments so accepted. The
Agents will, in consultation with you, manage all aspects of the syndication,
including its timing, the selection of potential lenders, the acceptance and
allocation of commitments and the amount and distribution of fees among
lenders. In accordance with market practice, an Information Package containing
relevant information concerning the
2
<PAGE>
Senior Facilities, Sunbeam and the Targets will be provided, on a confidential
basis, to potential lenders. The Agents shall be pleased to assist in the
preparation of such a package. You agree to cooperate, and to cause the
management of Sunbeam and the Targets to cooperate, with the Agents in
effecting the syndication of the Senior Facilities, including, without
limitation, participating in a reasonable number of lender group meetings held
in connection with such syndication.
You hereby represent and covenant that (a) all information, other than (x)
information of a general economic nature and (y) projections, pro forma
financial statements, financial models and business plans (the "Projections"),
concerning Sunbeam, the Targets or the Acquisition and the other transactions
contemplated hereby that has been or will be made available to any of us by
you or any of your representatives in connection with the transactions
contemplated hereby, taken as a whole, is or will be, when furnished, complete
and correct in all material respects and does not or will not, when furnished,
contain any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements contained therein not
materially misleading in light of the circumstances under which such
statements are made and (b) the Projections that have been or will be made
available to any of us by you or any of your representatives have been or will
be prepared in good faith based upon reasonable assumptions. You agree to
supplement such information, including, without limitation, the Projections,
from time to time so that the representations and warranties in the preceding
sentence remain correct in all material respects until the closing date under
the Senior Facilities. In arranging and syndicating the Senior Facilities,
each of us will use and rely on such information, including, without
limitation, the Projections, without independent verification thereof.
By your acceptance below, you hereby indemnify and hold harmless each of MSSF,
BA and First Union and the other lenders and each of their respective
directors, officers, employees, agents, attorneys, affiliates and controlling
persons (each an "Indemnified Person") from and against any and all losses,
claims, damages, liabilities (or actions or other proceedings commenced or
threatened in respect thereof) that arise out of, result from or in any way
relate to this letter, the Term Sheet, the Fee Letters or the other
transactions contemplated hereby or the providing or syndication of the Senior
Facilities, and to reimburse each Indemnified Person, upon its demand, for any
legal and/or other expenses incurred in connection with investigating,
defending or participating in any such loss, claim, damage, liability or
action or other proceeding (whether or not such Indemnified Person is a party
to any action or proceeding out of which such expenses arise), other than any
of the foregoing claimed by any Indemnified Person to the extent determined by
a court of competent jurisdiction to have resulted directly and primarily from
the gross negligence or willful misconduct of
3
<PAGE>
such Indemnified Person. None of MSSF, BA, First Union or any other lender
shall be responsible or liable to Sunbeam, the Targets or any other person for
consequential damages. In addition, you hereby agree to reimburse each of
MSSF, BA and First Union from time to time upon demand for its reasonable out
of pocket costs and expenses (including, without limitation, legal fees and
expenses, appraisal, consultant and other professional fees, and printing,
reproduction and document delivery costs) incurred in connection with the
syndication of the Senior Facilities and the preparation, review, negotiation,
execution and delivery of this letter, the Term Sheet, the Fee Letters, the
definitive financing agreements and any other documents relating to the
transactions contemplated hereby. Your obligations under this paragraph shall
survive any termination of this letter and shall be effective regardless of
whether definitive financing agreements are executed. If definitive financing
agreements are executed, your obligations under this paragraph shall be
superceded by the indemnification provisions in the definitive financing
agreements.
You acknowledge that MSSF, BA or First Union may be providing debt financing,
equity capital or other services (including financial advisory services) to
other companies in respect of which you or your affiliates may have
conflicting interests regarding the transactions described herein and
otherwise. None of MSSF, BA and First Union will use confidential information
obtained from you or any of your affiliates by virtue of the transactions
contemplated by this letter or its other relationships with you and your
affiliates in connection with the performance by it of services for other
companies, and will not furnish any such information to other companies. You
also acknowledge that none of MSSF, BA and First Union have any obligation to
use in connection with the transactions contemplated by this letter, or to
furnish to you or any of your affiliates, confidential information obtained
from other companies.
This letter, the Term Sheet and the Fee Letters are delivered to you on the
condition that they be kept confidential and not shown to or discussed with
any third party (other than on a confidential and need to know basis with your
counsel, board of directors, and your financial advisors, and except as
required by applicable law) without the prior approval of each of MSSF, BA and
First Union; provided that (i) this letter and the Term Sheet (but not the Fee
Letters or the terms and substance thereof) may be disclosed to each of the
Targets and its board of directors, officers, agents, advisors and employees
directly involved in the consideration of this matter on a confidential basis
and (ii) the foregoing restrictions shall cease to apply (except in respect of
the Fee Letters and their terms and substance) after this letter has been
accepted by you.
4
<PAGE>
The offer of MSSF, BA and First Union set forth in this letter will terminate
at 5:00 P.M. (New York City time) on March 25, 1998 unless you accept this
letter and the Fee Letters at or prior to that time by signing and returning
to MSSF, BA and First Union counterparts of this letter and the Fee Letters.
Each of MSSF, BA and First Union reserves the right to terminate such offer at
any time prior to your acceptance of this letter.
The commitments of MSSF, BA and First Union under this letter, if accepted by
you, will in any event terminate at 5:00 P.M. (New York City time) on April
15, 1998, if the initial borrowings under the Senior Facilities shall not have
occurred on or prior to such date.
This letter and the Fee Letters may be executed in any number of counterparts,
each of which shall be an original and all of which, when taken together,
shall constitute one agreement, and this letter, the Term Sheet and the Fee
Letters may not be assigned by you without the prior written consent of each
of MSSF, BA and First Union and may not be amended or any provision hereof or
thereof waived or modified except by an instrument in writing signed by each
of the parties hereto. This letter, the Term Sheet and the Fee Letters shall
be governed by and construed in accordance with the law of the State of New
York without reference to principles of conflicts of law.
If you are in agreement with the foregoing, please sign and return to the
undersigned one copy of this letter.
Very truly yours,
MORGAN STANLEY SENIOR FUNDING, INC.
BY: /s/ Michael A. Hart
- ------------------------
Name: Michael A. Hart
Title: Principal
BANK OF AMERICA NT&SA
BY: /s/ Jay R. Allen
- -------------------------------
Name: Jay R. Allen
Title: Senior Vice President
5
<PAGE>
BANCAMERICA ROBERTSON STEPHENS
BY: /s/ Robert Karen
- ------------------------
Name: Robert Karen
Title: Vice President
FIRST UNION NATIONAL BANK
BY: /s/ Tom Molitor
- -------------------------------
Name: Tom Molitor
Title: Senior Vice President
FIRST UNION CAPITAL MARKETS,
A DIVISION OF WHEAT FIRST SECURITIES, INC.
BY: /s/ Kimberley A. Quinn
- -----------------------------
Name: Kimberley A. Quinn
Title: Vice President
Accepted and agreed this
25th day of March, 1998
SUNBEAM CORPORATION
BY: /s/ Russell A. Kersh
- -----------------------------------
Name: Russell A. Kersh
Title: Vice Chairman, Executive Vice President
& Chief Financial Officer
6
<PAGE>
CONFIDENTIAL
SENIOR FACILITIES
SUMMARY OF TERMS AND CONDITIONS
(Capitalized terms used and not defined
herein have the meanings set forth in the letter
to which this summary is annexed)
Borrowers: Sunbeam Corporation ("Sunbeam") and its
successors, The Coleman Company, Inc.
("Coleman"), Signature Brands USA, Inc.
("Signature") and First Alert, Inc. ("First
Alert"). Upon the repayment, or assumption
thereof by Sunbeam, of loans (and all other
obligations relating thereto) made to any
of Coleman, Signature or First Alert, such
Borrower will be released from its
obligations as a Borrower.
Guarantors: Sunbeam shall guarantee all obligations
of Coleman, Signature and First Alert.
Upon repayment of loans made to such
entities or assumption thereof by
Sunbeam, Sunbeam will be released from
its guarantee. In addition, the Senior
Facilities will be guaranteed by
Subsidiaries of Sunbeam as set forth
herein.
Syndication Agent &
Arranger: Morgan Stanley Senior Funding, Inc. ("MSSF").
Co-Arrangers: BancAmerica Robertson Stephens and First
Union Capital Markets, a division of
Wheat First Securities, Inc.
Lenders: MSSF, Bank of America NT&SA ("BA"), First
Union National Bank ("First Union") and a
group of financial institutions
(collectively the "Lenders") acceptable to
the Borrower and the Agents.
Documentation Agent: BA
Administrative Agent: First Union (together with the
Syndication Agent and the Documentation
Agent, the "Agents").
Purpose: To provide part of the financing required
to consummate the Acquisition, to refinance
certain existing indebtedness, to pay
related fees and expenses, and to finance
ongoing working capital, permitted
acquisitions and other general requirements
of the Borrowers.
<PAGE>
Types and Amounts Revolving Credit Facility:
of Senior Facilities: $600,000,000 revolving credit facility, with
up to an amount to be determined available
for letters of credit and multicurrency
borrowings. The Lenders will agree to amend
the Senior Credit Facilities to provide for
a Competitive Bid feature following receipt
of an investment grade rating with respect
to Sunbeam's long-term debt or, if
Sunbeam's long-term debt is not rated, upon
achieving a leverage ratio at or below 2.0
to 1 for a specified period of time to be
agreed.
Term Loan A Facility:
$900,000,000 delayed draw term loan
facility, subject to reductions as set
forth below.
Term Loan B Facility:
$500,000,000 term loan facility, subject to
reductions as set forth below.
Initial Closing Date: The date of the execution
and delivery of definitive loan documents
for the Senior Facilities, which shall
occur on or before April 15, 1998 and shall
be the date of consummation of the
acquisition of control of Coleman.
Subsequent Closing The dates of consummation of the
Dates: acquisitions of Signature and
First Alert and of the repayment of
outstanding debt of Coleman, First Alert
and Signature (together with the Initial
Closing Date, each a "Closing Date").
Final Maturity: With respect to the Revolving
Credit Facility and the Term Loan A
Facility, seven years from the Initial
Closing Date. With respect to the Term Loan
B Facility, eight and a half years from the
Initial Closing Date.
Amortization: Revolving Credit Facility: The revolving
credit loans shall be repaid in full upon,
and all letters of credit shall expire
thirty days prior to, Final Maturity.
Term Loan Facilities: The Term Loan A
Facility shall be amortized in semi-annual
installments to be determined. The Term Loan
B Facility shall be amortized in semi-annual
installments aggregating 1% per annum each
of the first seven years, 63% in the eighth
year and 30% in the last six months of this
Facility.
2
<PAGE>
Availability: Revolving Credit Facility: Drawings may be
made at any time from the Initial Closing
Date to but excluding the Final Maturity of
the Revolving Credit Facility.
Term Loan Facilities: Drawings may be made
under the Term Loan A Facility during an
availability period to be agreed. A single
drawing under the Term Loan B Facility may
be made on the Closing Date relating to the
acquisition of Signature and First Alert.
Amounts prepaid or repaid may not be
borrowed.
Interest: Base Rate and LIBOR loans will be available,
as follows:
A. Base Rate Option
Interest shall be at the Base Rate of the
Administrative Agent plus the applicable
interest margin, payable quarterly in
arrears. The Base Rate is defined as the
higher of the Federal Funds Rate, as
published by the Federal Reserve Bank of
New York, plus 1/2 of 1%, or the prime
commercial lending rate of the
Administrative Agent (the "Prime Rate"), as
announced from time to time at its head
office. Interest will be calculated on the
basis of the actual number of days elapsed
in a year of 360 days; provided that
interest at the Prime Rate will be
calculated on the basis of a year of 365 or
366 days, as the case may be. Base Rate
borrowings and repayments shall be made
available on one business day's prior
notice and shall be in minimum amounts to
be agreed.
B. LIBOR
Interest shall be determined for periods
(subject to availability to each Lender)
("Interest Periods") of one, three or six
months (as selected by the Borrower) and
shall be at an annual rate equal to the
London Interbank Offered Rate ("LIBOR") for
the corresponding deposits of U.S. Dollars
plus the applicable interest margin. LIBOR
will be determined by the Reference Lenders
at the start of each Interest Period.
Interest will be paid at the end of each
Interest Period or quarterly, whichever is
earlier, and will be calculated on the
basis of the actual number of days elapsed
in a year of 360 days. LIBOR will be
adjusted for maximum statutory Regulation D
reserve requirements (if any). LIBOR
borrowings and repayments shall require
three business days' prior notice and shall
be in minimum amounts to be agreed.
3
<PAGE>
Reference Lenders: A representative sample of Lenders will be
selected as Reference Lenders to establish
LIBOR.
Interest Margins: Initial margins under each of the Revolving
Credit Facility and the Term Loan A
Facility will be .25% for Base Rate loans
and 1.50% for LIBOR loans. Initial margins
under the Term Loan B Facility will be .75%
for Base Rate loans and 2.00% for LIBOR
Loans. Upon delivery of a compliance
certificate for the first full fiscal
quarter of Sunbeam ended after the Initial
Closing Date (the "Grid Date"), margins
will be determined in accordance with the
attached Pricing Grid, based upon Sunbeam's
consolidated total leverage ratio.
Default Interest: 2.00% per annum in excess of the rate
(including the applicable interest margin)
otherwise applicable on any amount which is
not paid when due.
Letter of Credit Fees: For the account of each Lender, the
applicable margin for LIBOR loans, less the
fronting fee payable to the issuing bank;
and, in each case for the account of the
issuing bank, a fronting fee of 1/4% of and
all other reasonable and customary fees.
Commitment Fees: Initially, 3/8% per annum on the daily
aggregate unused amounts of the commitments
under the Facilities (other than the Term
Loan B Facility), payable to the
Administrative Agent, for the account of
the Lenders, from and after the Initial
Closing Date; beginning on the Grid Date,
rate to be determined in accordance with
the attached Pricing Grid. Accrued
commitment fees will be payable quarterly
in arrears (calculated on a 360 day basis).
4
<PAGE>
Mandatory Prepayments: An amount equal to (i) 100% of the net
proceeds in excess of $5,000,000 received
from the sale or disposition of all or any
part of any asset of Sunbeam or any of its
subsidiaries (with exceptions, including
(a) in the ordinary course of business and
for reinvestment of up to $20,000,000 per
year and (b) in connection with the
rationalization of existing and acquired
businesses up to an amount to be agreed),
(ii) 100% of the net proceeds received from
the issuance of debt (other than permitted
debt, which shall include, without
limitation, (a) the zero coupon convertible
senior subordinated debentures due 2018 of
Sunbeam, (b) up to $6,235,000 of general
obligation bonds of Sunbeam Products, Inc,
(c) up to $4,265,000 of Wayne County
Development Bonds, (d) local currency loans
to foreign subsidiaries, up to an aggregate
principal amount to be agreed and (e) up to
an amount to be agreed in connection with
accounts receivable financing) by Sunbeam
or any of its subsidiaries after the
Initial Closing Date, (iii) in the event
any tender for bonds of Sunbeam or the
Targets in connection with the Acquisition
("Tendered Bonds") results in more than
$1,000,000 of such Tendered Bonds remaining
outstanding, an amount equal to the face
amount of such Tendered Bonds remaining
outstanding after consummation of such
tender, (iv) 100% of all insurance
recoveries or condemnation awards in excess
of $5,000,000 not committed within 180 days
toward repair or replacement of the damaged
or condemned property or toward
environmental remediation costs and (v) for
each fiscal year of Sunbeam (beginning with
the fiscal year ending in 1998), the
Applicable Percentage of Excess Cash Flow
(to be defined in a manner satisfactory to
the Agents and Sunbeam) of Sunbeam and its
subsidiaries, computed on the basis of its
audited annual financial statements, shall
be applied to repay without penalty or
premium (except for LIBOR breakage costs,
if any): first, a proportionate part of the
outstanding loans under the Term Loan A
Facility and, to the extent the Term Loan B
Facility Lenders so elect, under the Term
Loan B Facility and second (once all the
Term Loan Facilities loans have been paid
in full), to provide cash collateral for
outstanding letters of credit under the
Revolving Credit Facility. Term Loan
Facilities prepayments shall be applied to
reduce scheduled amortization payments pro
rata across all maturities. The Applicable
Percentage of Excess Cash Flow shall be 50%
until the leverage ratio (to be defined in
a manner satisfactory to Sunbeam and the
Agents) is below a level to be determined,
and 25% thereafter.
5
<PAGE>
Voluntary Prepayments: Permitted in whole or in part, with prior
notice and without premium or penalty other
than payment of LIBOR breakage costs (if
any), subject to limitations as to minimum
amounts (to be determined) of prepayments.
Partial prepayments of the Term Loan
Facilities are to be applied in a manner
satisfactory to Sunbeam.
Voluntary Reduction of Permitted in whole or in part upon three
Commitments: business days' prior notice, subject to
minimum amounts to be agreed.
Security: The Senior Facilities, the guarantees
referred to below and any interest rate
protection provided by a Lender will be
secured by perfected first priority (i)
pledges of the stock of Sunbeam's direct
and indirect subsidiaries (subject to
limitations for tax purposes in the case of
foreign subsidiaries), and security
interests in all obligations owed to any
Borrower from any of its direct or indirect
subsidiaries, whether outstanding on the
Initial Closing Date or made thereafter,
and (ii) upon the request of the Requisite
Lenders, security interests in and liens
upon substantially all other assets
(subject to exceptions, including for
accounts receivables financing and for real
property securing or permitted to secure
industrial revenue bonds or other similar
debt, up to amounts to be agreed) now or
hereafter owned by Sunbeam and such
subsidiaries, including, but not limited
to, accounts receivable, inventory, general
intangibles and real property of Sunbeam
and such subsidiaries. Notwithstanding the
foregoing, no pledge of stock of CLN
Holdings, Coleman Worldwide, or Coleman or
any Coleman subsidiary shall be created
until the later of (i) consummation of the
second-step Coleman merger and (ii) the
redemption of the CLN Holdings notes and
the Coleman Worldwide LYONs; no pledge of
the stock of any of the Signature
subsidiaries shall be created until the
closing of the second-step Signature
merger, and no pledge of the stock of any
of the First Alert subsidiaries shall be
created until the closing of the
second-step First Alert merger.
6
<PAGE>
Guarantees: The Senior Facilities will be guaranteed,
on a joint and several basis, by all of
Sunbeam's direct and indirect subsidiaries
(subject to limitations for tax purposes in
the case of foreign subsidiaries) and, with
respect to loans made to Coleman, Signature
and First Alert, by Sunbeam. Such
guarantees will (i) if requested by the
Agents, provide for a complete waiver by
the guarantors thereunder of any rights to
subrogation, reimbursement or
indemnification, (ii) upon the request of
the Requisite Lenders, be secured by
substantially all assets owned by such
guarantors and (iii) be limited to the
largest amount that would not render the
obligations subject to avoidance under
applicable bankruptcy law. Notwithstanding
the foregoing, no guarantee will be given
by CLN Holdings, Coleman Worldwide, Coleman
or any Coleman subsidiary until the later
of the consummation of the second-step
Coleman merger and the redemption of the
CLN Holdings notes and the Coleman
Worldwide LYON's; no guarantee will be
given by Signature or any of its
subsidiaries until the consummation of the
second-step Signature merger, and no
guarantee will be given by First Alert or
any of its subsidiaries until the
consummation of the second- step First
Alert merger.
Documentation: The Senior Facilities will be subject to
the negotiation, execution and delivery of
a definitive credit agreement (including
schedules, exhibits and ancillary
documentation) and related security
agreements, guarantees and other supporting
documentation satisfactory to the Lenders.
Such credit agreement will contain
representations and warranties (including,
without limitation, as to the absence of a
material adverse change in the condition
(financial or otherwise), assets, nature of
assets, liabilities (including, without
limitation, tax, ERISA and environmental
liabilities) or prospects of Sunbeam and
its subsidiaries taken as a whole), funding
and yield protection provisions (including,
without limitation, a requirement for
compensation for the cost of compliance by
the Lenders with capital adequacy and
similar requirements), conditions
precedent, covenants, events of default and
other provisions determined by the Lenders
to be appropriate for transactions of this
type, including (without limitation) the
following:
A. Conditions Precedent: Conditions precedent to the initial
borrowings under the Senior Facilities will
include (without limitation):
7
<PAGE>
(i) The Lenders' review of and reasonable
satisfaction with the structure and final
terms and conditions of, and the
documentation relating to, among other
things, the Acquisition and the sale or
purchase of any securities issued in
connection therewith.
(ii) The Lenders' satisfaction with Sunbeam's
projections and pro forma financial
statements reflecting the forecasted
financial condition, income and expenses of
Sunbeam and its subsidiaries after giving
effect to the Acquisition, the borrowings
under the Senior Facilities, and the other
transactions contemplated hereby, and the
Lenders' satisfaction with the condition
(financial or otherwise), operations,
assets, nature of assets, management,
liabilities and prospects of the Targets,
Sunbeam and their subsidiaries.
(iii) The Lenders shall have completed their due
diligence and be satisfied with such
review, including, without limitation, with
respect to (a) Sunbeam's tax assumptions,
(b) the ownership, corporate,
organizational and legal structure of
Sunbeam and its subsidiaries, (c) the
collateral available to secure the Senior
Facilities, (d) the Targets' and Sunbeam's
material contracts, including all material
purchasing agreements, and (e) all
indemnities in favor of the Targets and
Sunbeam.
(iv) Simultaneously with the initial borrowing
under the Senior Facilities, Sunbeam shall
have (a) received net cash proceeds of at
least $750 million from the issuance of
zero coupon subordinated convertible notes,
all on terms and conditions satisfactory to
the Agents and (b) issued 14,099,749 shares
of common stock as partial consideration
for the acquisition of Coleman.
(v) All conditions to the acquisition of
Coleman shall have been met or waived with
the concurrence of the Lenders (not to be
unreasonably withheld).
8
<PAGE>
(vi) The Agents' and Lenders' review of and
reasonable satisfaction with solvency
certificates of officers of Sunbeam,
supporting the conclusions that, after
giving effect to the Acquisition, the
borrowings under the Senior Facilities and
the other transactions contemplated hereby,
none of the entities liable to the Lenders
is insolvent or will be rendered insolvent
thereby, will be left with unreasonably
small capital with which to engage in its
business or will have incurred debts beyond
its ability to pay such debts as they
mature.
(vii) The Agents' satisfaction that (i) the
borrowings under the Senior Facilities and
the other funding for the Acquisition shall
be in full compliance with all legal
requirements, including (without
limitation) Regulations G, T, U and X of
the Board of Governors of the Federal
Reserve System and (ii) all necessary and
material licenses, permits and government
and third party consents and approvals in
connection with such borrowings and the
Acquisition shall have been obtained and
remain in effect.
(viii) Evidence reasonably satisfactory to the
Agents of compliance with all applicable
laws and regulations, including all
applicable environmental laws and
regulations, subject to exceptions which
are deemed immaterial by the Agents.
(ix) The Lenders' review of and satisfaction
with environmental risks (including the
potential levels of environmental
liabilities) with respect to the Targets,
Sunbeam and their subsidiaries.
(x) The Agents' receipt of favorable legal
opinions, including, without limitation,
opinions of Borrowers' and sellers'
counsel.
(xi) The Agents' satisfaction with all
litigation and proceedings against or
affecting the Targets, Sunbeam and their
subsidiaries deemed material by the Agents.
(xii) The Administrative Agent, for the benefit
of Lenders, shall have a perfected, first
priority security interest as required
above under the heading "Security",
supported by appropriate lien searches.
9
<PAGE>
(xiii) All reasonable costs, fees, expenses
(including, without limitation, legal fees
and expenses) and other compensation
payable to the Lenders or the Agents shall
have been paid to the extent due.
(xiv) The Agents' review of and reasonable
satisfaction with the form, scope and
substance of a pro forma balance sheet (as
of a date to be mutually agreed),
reflecting the transactions contemplated
hereby, of Sunbeam, prepared by an
accounting firm acceptable to the Agents.
(xv) Concurrently with the initial funding of
the Senior Facilities, the acquisition of
control of Coleman shall be consummated.
The conditions to the funding of each subsequent
extension of credit under the Senior Facilities shall
include all conditions which are appropriate for this
type of transaction, including, without limitation,
the absence of a default or unmatured default and the
restatement of all representations and warranties
and, in the case of the borrowings under the Term
Loan B Facility, consummation of the acquisition of
control of Signature or First Alert, as the case may
be, and conditions relevant to those acquisitions.
B. Covenants: Appropriate for this type of transaction, including,
without limitation:
(i) Financial and other information: certified
quarterly and audited annual financial
statements, annual budgets and such other
reports and compliance certificates, all at
Sunbeam's expense, as the Agents shall
reasonably specify.
(ii) Limitation on dispositions of assets and
changes of business and ownership.
(iii) Limitations on mergers or acquisitions.
(iv) Capital expenditures not to exceed an
amount to be agreed for each year during
the term of the Senior Facilities.
(v) Limitations on restricted payments,
including, without limitation, dividends,
prepayments, repurchases and redemptions
(with exceptions to include payment by
Sunbeam of dividends consistent with past
practice, so long as no default exists).
10
<PAGE>
(vi) Limitation on indebtedness (including
guarantees and other contingent
obligations).
(vii) Limitation on loans and investments.
(viii) Negative pledge.
(ix) Limitation on transactions with affiliates
(other than wholly-owned subsidiaries.
(x) Financial covenants to include maximum
leverage ratio, minimum interest coverage
ratio and minimum fixed charge coverage
ratio.
(xi) No modifications of Acquisition agreements
or other material documents which could
reasonably be expected to materially and
adversely affect the Lenders without the
consent of the Requisite Lenders.
(xii) Maintenance of adequate and customary
insurance coverage.
(xiii) Compliance with all applicable laws and
regulations, including, without limitation,
environmental matters, taxation and ERISA,
except where failure to do so, individually
or in the aggregate could not reasonably be
expected to materially and adversely affect
the Lenders.
(xiv) An interest rate protection program
acceptable to the Agents shall be in place
not later than 60 days after the Initial
Closing Date.
C. Events of Default: Appropriate for this type of transaction,
including (without limitation) nonpayment,
misrepresentation, breach of covenant,
cross-defaults, bankruptcy, ERISA,
judgments, collateral and change of
ownership or control.
11
<PAGE>
Assignments and Each Lender may assign all or a portion of
Participation: its loans and commitments under any of the
Senior Facilities, or sell participations
therein, to another person or persons
provided that (i) each such assignment
shall be in a minimum amount equal to
$5,000,000 (or, if less, shall be of all of
such Lender's loans and commitments) and
shall be subject to such limitations as may
be established by the Arranger (including,
without limitation, (x) assignment fees in
the amount of $3,000 to be paid by the
respective assignor or assignee to the
Administrative Agent, provided that such
fees shall be reduced to $1,500 in the case
of an assignment to an existing Lender and
shall be reduced to $0 in the case of an
assignment to an affiliate of the
respective Lender, and (y) the consent of
the Agents and, after the Agents have
notified Sunbeam that primary syndication
of the Senior Facilities has been
completed, Sunbeam, in each case not to be
unreasonably withheld or delayed) and (ii)
no purchaser of a participation shall have
the right to exercise or cause the selling
Lender to exercise voting rights in respect
of the Senior Facilities (except as to
certain basic issues). The Senior
Facilities shall provide for a mechanism
which will allow for each assignee to
become a direct signatory thereto and will
relieve the assigning Lender of its
obligations with respect to the assigned
portion of its loans and commitments.
During primary syndication, no assignment
fees will be charged and the Agents will
consult with Sunbeam concerning the
identity of the syndicate members.
Expenses: Sunbeam shall reimburse the Agents for all
"out of pocket" expenses, including, but
not limited to, legal fees incurred by the
Agents in negotiation, syndication, and
execution of the Senior Facilities and fees
payable by the Agents to third parties in
connection with the satisfaction of the
conditions precedent referred to above.
Indemnification: As specified in the Commitment Letter (with
appropriate additions and other
modifications for inclusion in the
definitive financing agreements).
Requisite Lenders: Lenders holding 51% of total commitments or
exposure under the Senior Facilities.
Governing Law: The law of the State of New York.
Each party to the credit documentation will
waive the right to trial by jury and will
consent to jurisdiction of the state and
federal courts located in the City of New
York.
12
<PAGE>
Agents' New York Davis Polk & Wardwell.
Counsel:
13
<PAGE>
SUNBEAM SENIOR CREDIT FACILITIES
Pricing Grid
<TABLE>
<CAPTION>
Revolving Credit Facility and Term Loan A Facility
Consolidated Total Interest Margins Letter of Commitment
Leverage Ratio LIBOR Base Rate Credit Fees Fee Rate
-------------- ----- --------- ----------- --------
<S> <C> <C> <C> <C>
greater than 5.25 to 1.0 1.750% 0.500% 1.500% .500%
greater than 4.75 to 1.0 1.500% 0.250% 1.250% .375%
greater than 4.25 to 1.0 1.250% 0% 1.000% .375%
greater than 3.75 to 1.0 1.125% 0% 1.000% .300%
greater than 3.25 to 1.0 1.000% 0% 0.750% .300%
greater than 2.75 to 1.0 0.750% 0% 0.500% .250%
less than
or equal to 2.75 to 1.0 0.625% 0% 0.500% .200%
</TABLE>
Term Loan B Facility
Consolidated Total Interest Margins
Leverage Ratio LIBOR Base Rate
-------------- ----- ---------
greater than 5.25:1 2.000% .750%
greater than 3.75:1 1.750% .500%
less than
or equal to 3.75:1 1.500% .250%
14
