SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 4, 1996
FIRST ALERT, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-23630 04-3157075
(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification No.)
organization)
3901 Liberty Street Road, Aurora, Illinois 60504-8122
(Address of principal executive offices)
Registrant's telephone number, including area code: (708) 851-7330
N/A
(Former name or former address, if changed since last report)
Exhibit Index located at Page 2
<PAGE>
Items 1, 3 through 6 and 8 are not included because they are not applicable.
Item 2. Acquisition or Disposition of Assets.
On September 4, 1996, registrant's wholly-owned subsidiary, BRK Brands,
Inc. entered into Amendment No. 2 to Credit Agreement and Waiver (the "Second
Amendment"). The Second Amendment effected certain amendments and waivers to the
Credit Agreement among BRK Brands, Inc., The First National Bank of Chicago,
individually, as LC issuer and agent ("Agent") and the other lenders named
therein dated as of March 28, 1994, including an increase in the amount
available to be borrowed from $70,000,000 to $85,000,000. As part of the Second
Amendment, BRK Brands, Inc. granted a security interest to the Agent on behalf
of the lenders in all of its assets. In addition, registrant pledged the stock
of its two wholly-owned subsidiaries, BRK Brands, Inc. and THL-FA IP Corp., to
secure the obligations of registrant under a guaranty of the obligations of BRK
Brands, Inc. to the lenders under the Credit Agreement. Similarly, Electronica
BRK de Mexico, S.A. de C.V., a wholly owned subsidiary of BRK Brands, Inc.,
agreed to pledge all of its assets to secure repayment of advances under the
Credit Agreement.
Item 7. Financial Statements and Exhibits.
(a) Financial Statements - Not Applicable
(b) Pro Forma Financial Information - Not Applicable
(c) Exhibits (executed copies) - The following execution
copies of Exhibits to this Form 8-K are hereby filed:
Exhibit Exhibit Sequentially
Number Numbered
Page
2.1 Amendment No. 2 to Credit 5
Agreement and Waiver dated
as of September 3, 1996 by
and among BRK Brands,
Inc., The First National Bank
of Chicago, individually, as
LC Issuer and as agent, and
the other financial institutions
signatory thereto
In accordance with Item 601(b) (2) of Regulation S-K, the Schedules, Exhibits
and other documents referred to in the Second Amendment have not been filed as
part of the Exhibits to this Current Report on Form 8-K. The registrant agrees
to furnish supplementally a copy of such documents to the Commission upon
request.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
FIRST ALERT, INC.
/s/Michael Rohl
September 13, 1996 By: Michael Rohl
Vice President and
Chief Financial Officer
EXHIBIT 2.1
AMENDMENT NO. 2 TO CREDIT AGREEMENT AND WAIVER
This Amendment and Waiver (this "Amendment") is entered into as of
September 3, 1996 by and among BRK Brands, Inc., a Delaware corporation (the
"Borrower"), The First National Bank of Chicago, individually, as LC Issuer and
as agent (the "Agent"), and the other financial institutions signatory hereto.
RECITALS
A. The Borrower, the Agent, the LC Issuer and the Lenders are party to
that certain Credit Agreement dated as of March 28, 1994 (as previously amended,
the "Credit Agreement"). Unless otherwise specified herein, capitalized terms
used in this Amendment shall have the meanings ascribed to them by the Credit
Agreement.
B. The Borrower, the Agent, the LC Issuer and the Lenders wish
to amend the Credit Agreement and waive certain of the provisions thereof, all
on the terms and conditions set forth below.
Now, therefore, in consideration of the mutual execution hereof and
other good and valuable consideration, the parties hereto agree as follows:
1. Initial Amendments to Credit Agreement. Upon the
"Effective Date" (as defined below) the Credit Agreement is hereby amended as
follows:
(a) The definitions of "Borrower Loan Documents",
"Consolidated Income Before Interest and Taxes", "Consolidated Interest
Expense", "Consolidated Leverage Ratio", "Consolidated Tangible Net
Worth", "Eurodollar Rate", "Floating Rate", "Loan Documents" and
"Material Adverse Effect" in Article I of the Credit Agreement are
amended in their entirety to read as follows:
"Borrower Loan Documents" means this Agreement, the Notes,
the Borrower Security Documents and any and all Facility LC
Application Agreements.
"Consolidated Income Before Interest and Taxes"
means, for any period of four consecutive fiscal quarters of
the Borrower, the sum of (i) Consolidated Net Income for such
period (before provision for income taxes), plus (ii)
Consolidated Interest Expense for such period, less (iii)
equity earnings of unconsolidated Subsidiaries of the Borrower
for such period plus (iv) solely for periods ending prior to
January 1, 1997, any First Alert Charges deducted in the
computation of Consolidated Net Income for such
<PAGE>
period, all determined on a consolidated basis for the
Borrower and its Subsidiaries in accordance with Agreement
Accounting Principles.
"Consolidated Interest Expense" means, for any period
of four consecutive fiscal quarters of the Borrower, total
interest expense (whether paid or accrued) of the Borrower and
its Subsidiaries for such period determined in accordance with
Agreement Accounting Principles including, without limitation,
such interest expense as may be attributable to Capitalized
Leases, as well as all commissions, discounts and other fees
and charges owed with respect to Letters of Credit and net
costs under any interest rate swap, exchange or cap agreements
but, solely for periods ending prior to January 1, 1997,
excluding the interest component of any First Alert Charges,
which interest accrued during such period, and excluding any
one time fees and expenses related to the Amendment No. 2 and
Waiver to this Credit Agreement dated as of September 3, 1996.
"Consolidated Leverage Ratio" means, as of any date
of determination, the ratio of (i) the aggregate amount of all
Indebtedness (other than Rate Hedging Obligations) of the
Borrower and its Subsidiaries as of such date to (ii) the sum
of (a) the amount of the preceding clause (i) plus (b) the
consolidated common shareholders' equity of the Borrower and
its Subsidiaries determined in accordance with Agreement
Accounting Principles as of such date plus (c) solely for
periods ending prior to January 1, 1997, the outstanding
amount of any First Alert Charges deducted in the computation
of the amount in preceding clause (b).
"Consolidated Tangible Net Worth" means, as of any
date of determination, the consolidated common shareholders'
equity of the Borrower and its Subsidiaries determined in
accordance with Agreement Accounting Principles, less their
consolidated Intangible Assets plus, solely for periods ending
prior to January 1, 1997, the outstanding amount of any First
Alert Charges deducted in the computation of such consolidated
common shareholders equity. For purposes of this definition
"Intangible Assets" means the amount (to the extent reflected
in determining such consolidated stockholders' equity) of (i)
all write-ups (other than write-ups resulting from foreign
currency translations and write-ups of assets of a going
concern business made within twelve months after the
acquisition of such business) subsequent to December 31, 1993
in the book value of any asset owned by the Borrower or any
Subsidiary, (ii) all investments in unconsolidated
Subsidiaries and all equity investments in Persons which are
not Subsidiaries and (iii) all unamortized debt discount and
expense, unamortized deferred charges, goodwill, patents,
trademarks, service marks, trade names, copyrights,
organization or developmental expenses and other intangible
items.
<PAGE>
"Eurodollar Rate" means, with respect to a Eurodollar
Advance for the relevant Eurodollar Interest Period, the sum
of (i) the quotient of (a) the Eurodollar Base Rate applicable
to such Eurodollar Interest Period, divided by (b) one minus
the Reserve Requirement (expressed as a decimal) applicable to
such Eurodollar Interest Period, plus (ii) 1.50% per annum in
respect of that portion of the Advances at any time
aggregating up to an amount equal to $70,000,000 minus the L/C
Obligations at such time and (b) 2.00% per annum in respect of
that portion of the Advances at any time aggregating in excess
of an amount equal to $70,000,000 minus the L/C Obligations at
such time. The Eurodollar Rate shall be rounded to the next
higher multiple of 1/16 of 1% if the rate is not such a
multiple.
"Floating Rate" means, for any day, a rate per annum
equal to the Alternate Base Rate plus (a) .25% per annum in
respect of that portion of the Advance at any time aggregating
up to an amount equal to $70,000,000 minus the L/C Obligations
at such time and (b) .75% per annum in respect of that portion
of the Advances at any time aggregating in excess of an amount
equal to $70,000,000 minus the L/C Obligations at such time.
"Loan Documents" means this Agreement, the Notes, the
First Alert Guaranty, any and all Facility LC Application
Agreements, the Borrower Security Documents, the Other
Security Documents and the other documents and agreements
contemplated hereby and executed by the Borrower, its
Subsidiaries or First Alert in favor of the Agent or any
Lender.
"Material Adverse Effect" means a material adverse
effect on (a) the business, Property, condition (financial or
other) or results of operations of the Borrower and its
Subsidiaries taken as a whole, (b) the ability of the
Borrower, First Alert or any Subsidiary to perform its
obligations under the Loan Documents to which it is a party or
(c) the validity or enforceability of any of the Loan
Documents or any material rights or remedies of the Agent, the
LC Issuer or the Lenders thereunder.
(b) The following definitions are added to Article I of
the Credit Agreement in appropriate alphabetical order:
"Borrower Intellectual Property Assignment" means,
collectively, the Copyright Assignment, Patent Assignment and
Trademark Assignment, each in form and substance reasonably
satisfactory to the Agent, dated as of the Effective Date and
duly executed and delivered by the Borrower in favor of the
Agent, for the benefit of the Lenders and the LC Issuer, in
each case as the same may be amended, supplemented or
otherwise modified from time to time.
<PAGE>
"Borrower Pledge Agreement" means that certain Pledge
Agreement in form and substance reasonably satisfactory to the
Agent, dated as of the Effective Date, duly executed and
delivered by the Borrower pledging all of the outstanding
capital stock of BRK Mexico and 65% of the outstanding capital
stock of BRK Electronics U.K. Limited to the Agent, for the
benefit of the Lenders and the LC Issuer, as the same may be
amended, supplemented or otherwise modified from time to time.
"Borrower Security Agreement" means that certain
Security Agreement, in form and substance satisfactory to the
Agent, dated as of the Effective Date and duly executed and
delivered by the Borrower in favor of the Agent, for the
benefit of the Lenders and the LC Issuer, as the same may be
amended, supplemented or otherwise modified from time to time.
"Borrower Security Documents" means the Borrower
Security Agreement, the Borrower Pledge Agreement and the
Borrower Intellectual Property Assignment.
"BRK Mexico" means Electronica BRK de Mexico,
S.A.de C.V., a corporation organized under the laws of Mexico.
"Collateral" means, collectively, the Property of the
Borrower, its Subsidiaries and First Alert which is pledged,
assigned or mortgaged to the Agent, for the benefit of the
Lenders and the LC Issuer, pursuant to the Security Documents
(including property placed in trust pursuant to the Mexican
Security Documents).
"Effective Date" has the meaning ascribed to such
term by the Amendment No. 2 and Waiver to this Credit
Agreement dated as of September 3, 1996.
"First Alert Charges" means (a) accrued and unpaid
amounts owing to First Alert from the Borrower in respect of
the use by the Borrower and its Subsidiaries of intellectual
property rights of First Alert and (b) accrued and unpaid
interest accruing upon such amounts.
"First Alert Pledge Agreement" means that certain
Pledge Agreement in form and substance satisfactory to the
Agent, dated as of the Effective Date and duly executed and
delivered by First Alert pledging the stock of the Borrower
and THL-FA IP Corp. to the Agent, for the benefit of the
Lenders and the LC Issuer, as the same may be amended,
supplemented or otherwise modified from time to time.
"Mexican Security Documents" is defined in
Section 6.24.
<PAGE>
"Other Security Documents" means the Subsidiary
Guaranty, the First Alert Pledge Agreement and the Mexican
Security Documents.
"Security Documents" means the Borrower Security
Documents and the Other Security Documents.
"Subsidiary Guaranty" means that certain Guaranty in
form and substance satisfactory to the Agent, dated as of the
Effective Date, duly executed and delivered by BRK Mexico in
favor of the Agent, for the benefit of the Lenders and the LC
Issuer, as the same may be amended, supplemented or otherwise
modified from time to time.
(c) Section 2.5 of the Credit Agreement is amended by
substituting for the first sentence thereof the following:
"(a) The Borrower agrees to pay to the Agent for the
pro rata account of the Lenders according to their
Percentages, a commitment fee (i) of 0.25% per annum on the
average daily amount of the Available Aggregate Commitment
from the date hereof to but excluding the Effective Date and
(ii) of 0.35% per annum on the average daily amount of the
Available Aggregate Commitment from the Effective Date to and
including the Facility Termination Date, payable on each
Payment Date hereafter and on the Facility Termination Date."
(d) Section 2.5 of the Credit Agreement is further
amended by adding a new Section 2.5(b) as follows:
"(b) On January 31, 1997, the Aggregate Commitment
shall automatically be reduced to $70,000,000 (with a
corresponding ratable reduction in the Commitment of each
Lender). The Borrower will make a mandatory prepayment of the
Advances on such date in such amount, if any, as may be
necessary to reduce the aggregate outstanding principal
balance of the Advances and LC Obligations to $70,000,000.
Such prepayment shall be subject to Section 3.4 and shall be
made together with accrued interest on the amount pre-paid."
(e) Section 2.19(d) of the Credit Agreement is amended by
deleting therefrom the two references to ".75%" and replacing them with
references to "1.50%".
(f) Section 5.2 of the Credit Agreement is amended by
inserting the following as a new second sentence thereof:
"The Borrower has the corporate power and authority and the
legal right to assign, pledge and grant a security interest in
the Collateral which it owns in
<PAGE>
the manner and for the purpose contemplated by the Borrower
Security Documents."
(g) The words "as of the date of this Agreement" in the first
and sixth lines of Section 5.7 of the Credit Agreement and line 5 of
Section 5.14 of the Credit Agreement are deleted and replaced with the
words "as of the Effective Date".
(h) New Sections 5.17 and 5.18 are added to the Credit
Agreement as follows:
"5.17 Security. The provisions of the Security
Documents are effective (or, in the case of the Mexican
Security Documents, upon their execution will be effective) to
create and give the Agent, for the benefit of the LC Issuer
and the Lenders, as security for the repayment of the
obligations secured thereby, a legal, valid and enforceable
Lien (which priority is subject only to prior Liens permitted
by such agreements) upon all right, title and interest of the
Borrower, its Subsidiaries and First Alert in any and all of
the Collateral described therein. The Pledge Agreements are
effective to create and give the Agent, for the benefit of the
LC Issuer and the Lenders, as security for the repayment of
the obligations secured thereby, a legal, valid and
enforceable first priority Lien upon and security interest in
the capital stock pledged thereby.
5.18 Insurance. Schedule 5.18 attached hereto
completely and accurately summarizes the property and casualty
insurance in existence and carried by the Borrower and its
Subsidiaries. The amounts and risks covered by such insurance
are consistent with sound business practice. The summary on
such Schedule 5.18 includes the insurer's or insurers'
name(s), policy number(s), expiration date(s), amount(s) of
coverage, type(s) of coverage, exclusion(s), and deductibles.
This summary also includes similar information, and describes
any reserves, relating to any self-insurance program that is
in effect."
(i) Section 5.8 of the Credit Agreement is amended by changing
its title to "Subsidiaries and Capitalization" and adding the following
at the conclusion thereof:
"As of the Effective Date, (a) the authorized capital stock of
the Borrower consists of 3,000 shares of common stock, par
value $.01 per share, of which 100 shares are outstanding and
(b) the authorized capital stock of IP Corp. consists of 3,000
shares of common stock, par value $.01 per share, of which 100
shares are outstanding. No authorized but unissued or treasury
shares of capital stock of the Borrower or IP Corp. are
subject to any option, warrant, right to call or commitment of
any kind or character. Neither the Borrower nor IP Corp. has
any outstanding right issued to any Person to subscribe for or
to purchase, or any options for the purchase of, or any
agreements
<PAGE>
providing for the issuance (contingent or otherwise) of, or
any calls, commitments or claims of any character relating to
any of its capital stock."
(j) Section 6.16(vi) of the Credit Agreement is amended
in its entirety to read as follows:
"(vi) Additional loans, capital contributions and
other Investments made subsequent to the date of this
Agreement in either Subsidiaries identified in Schedule "1"
hereto or in new international marketing and distribution
Subsidiaries; provided, that the appropriate amount of such
Investments made during the term of this Agreement does not
exceed $8,000,000 and the aggregate amount of such Investments
made on or after the Effective Date shall not exceed
$500,000."
(k) Section 6.18 of the Credit Agreement is amended by
adding a new Section 6.18(x) as follows:
"(x) Liens in favor of the Agent created
pursuant to the Security
Documents."
(l) Section 6.23 of the Credit Agreement is amended in
its entirety to read as follows:
"6.23. Minimum Consolidated Interest Coverage Ratio.
The Borrower will not, as of the last day of any fiscal
quarter of the Borrower, commencing with the fiscal quarter
ending June 30, 1994, permit the Consolidated Interest
Coverage Ratio for the period of four fiscal quarters (or, in
the case of the fiscal quarters ending September 30, 1996 and
December 31, 1996, for the period of one fiscal quarter)
ending on such day, (a) to be less than 3.0 to 1.0 for any
fiscal quarter ending on or prior to June 30, 1996, (b) to be
less than 6.9 to 1.0 for the fiscal quarter ending September
30, 1996; (c) to be less than 8.8 to 1.0 for the fiscal
quarter ending December 31, 1996; or (d) to be less than 3.0
to 1.0 for any fiscal quarter ending thereafter."
(m) A new Section 6.24 is added to the Credit Agreement
as follows:
"6.24 Collateral Matters.
(a) As soon as practicable, but in any event on or
prior to October 15, 1996, the Borrower shall, and shall cause
BRK Mexico to, execute and deliver to the Agent, or shall
cause to be executed and delivered to the Agent:
<PAGE>
(i) such documents and instruments
(including without limitation a guaranty trust (or
"fideicomiso de garantia") agreement) as may be
reasonably requested by the Agent in order that the
Agent, for the benefit of the Lenders and the L/C
Issuer, shall have a perfected (to the extent
applicable and available) first priority Lien upon
all of the inventory, machinery and equipment of the
Borrower from time to time located in Mexico, all of
the outstanding capital stock of BRK Mexico (other
than directors' qualifying shares), and all of the
inventory, machinery, equipment and rights in or in
respect of real property of BRK Mexico (such
documents and instruments, as from time to time
amended, are referred to as the "Mexican Security
Documents");
(ii) such related Lien searches and
opinions of counsel (including Mexican counsel) as
the Agent may reasonably request; and
(iii) such BRK Mexico charter documents,
by-laws, resolutions, incumbency certificates, stock
certificates, stock powers and related corporate
documentation as the Agent may reasonably request in
connection with the foregoing.
(b) As soon as practicable, but in any event on or
prior to September 30, 1996, the Borrower shall, and shall
cause BRK Electronics U.K. Limited ("BRK UK") to, execute and
deliver to the Agent or shall cause to be executed and
delivered to the Agent:
(i) such documents and instruments as may be
reasonably requested by the Agent in order that the
Agent, for the benefit of the Lenders and the L/C
Issuer, shall have a perfected first priority Lien
upon 65% of the outstanding capital stock of BRK UK;
(ii) such related opinions of counsel
(including British counsel) as the Agent may
reasonably request; and
(iii) such BRK UK charter documents,
by-laws, resolutions, incumbency certificates, stock
certificates, stock powers and related corporate
documentation as the Agent may reasonably request in
connection with the foregoing.
(c) As soon as practicable, but in any event on or
prior to September 20, 1996, the Borrower shall cause to be
delivered to the Agent any landlord estoppel, waiver and
consent forms called for by Section 4(k)
<PAGE>
of Amendment No. 2 to this Credit Agreement dated as of
September 3, 1996 but not delivered on the Effective Date.
(d) On or prior to September 27, 1996, the Borrower
shall cause Price Waterhouse LLP, its independent certified
public accountants, to prepare and deliver to the Lenders a
report on the U.S. and Mexican inventory and receivables of
the Borrower and BRK Mexico, which report shall be in form and
substance reasonably satisfactory to each of the Lenders and
shall be based upon such agreed upon procedures (not including
a physical inventory) as may be reasonably satisfactory to
each of the Lenders."
(n) Section 7.3 of the Credit Agreement is amended in
its entirety to read as follows:
"7.3 The breach by the Borrower of any of the
terms or provisions of Section 6.2, 6.3 or any of Sections
6.10 through 6.24."
(o) A new Section 7.17 is added to the Credit Agreement
as follows:
"7.17 Any Security Document shall for any reason fail
to create a valid and perfected, first priority security
interest in any collateral purported to be covered thereby,
except as permitted by the terms of such Security Document, or
any Security Document shall fail to remain in full force or
effect or any action shall be taken to discontinue or to
assert the invalidity or unenforceability of any Security
Document, in each case except as a result of actions taken by,
or consented to by, the Agent or the Required Lenders."
(p) Section 8.2(g) of the Credit Agreement is amended in
its entirety to read as follows:
"(g) Release First Alert from all or any portion of
its guaranty liability under the First Alert Guaranty, release
BRK Mexico from all or any portion of its liability under the
Subsidiary Guaranty or release all or any portion of the
Collateral from the Lien of the Security Documents."
(q) The third sentence of Section 10.1 of the Credit
Agreement is amended in its entirety to read as follows:
"The Agent shall not have a fiduciary duty in respect of the
Borrower or any Lender by reason of this Agreement, any other
Loan Document or any of the transactions contemplated
thereby."
(r) The signature pages of the Credit Agreement are
amended in their entirety to read as the signature pages
hereto.
<PAGE>
(s) Schedules 3 and 4 of the Credit Agreement are deleted and
replaced by Schedules 3 and 4 hereto and Schedule 5.18 hereto is added
as Schedule 5.18 of the Credit Agreement.
2. Consent and Waiver. Effective as of the Effective
Date:
(a) The Lenders hereby waive any Default or Unmatured Default
arising out of any breach of Section 6.23 with respect to the fiscal
quarter ending June 30, 1996.
(b) The Lenders waive any Default resulting from a breach of
the First Alert Guaranty arising out of the granting of the Lien to the
Agent in the stock of THL-FA IP Corp. as contemplated by the First
Alert Pledge Agreement.
3. Representations and Warranties of the Borrower. The
Borrower represents and warrants that:
(a) The Borrower has the corporate power and authority and
legal right to execute and deliver this Amendment and to perform its
obligations hereunder. The execution and delivery by the Borrower of
this Amendment and the performance of its obligations hereunder have
been duly authorized by proper corporate proceedings, and this
Amendment constitutes a legal, valid and binding obligation of the
Borrower enforceable against the Borrower in accordance with its terms,
except as enforceability may be limited by bankruptcy, insolvency or
similar laws affecting the enforcement of creditors' rights generally.
(b) Neither the execution and delivery by the Borrower of this
Amendment, nor the consummation of the transactions herein
contemplated, nor compliance with the provisions hereof will violate
any law, rule, regulation, order, writ, judgment, injunction, decree or
award binding on the Borrower or any of its Subsidiaries or the
Borrower's or any Subsidiary's articles of incorporation or by-laws or
the provisions of any material indenture, instrument or agreement to
which the Borrower or any of its Subsidiaries is a party or is subject,
or by which it, or its Property, is bound, or conflict with or
constitute a default thereunder, or result in the creation or
imposition of any Lien in, of or on the Property of the Borrower or a
Subsidiary pursuant to the terms of any such indenture, instrument or
agreement.
(c) No order, consent, approval, license, authorization, or
validation of, or filing, recording or registration with, or exemption
by, any governmental or public body or authority, or any subdivision
thereof, is required to authorize, or is required in connection with
the execution, delivery and performance of, or the legality, validity,
binding effect or enforceability of, this Amendment.
<PAGE>
(d) Each of the representations and warranties set forth in
Article V of the Credit Agreement (giving effect to the amendments to
the Credit Agreement set forth above) is true and correct in all
material respects on the date hereof as if made on the date hereof.
(e) Immediately upon giving effect to this Amendment, no
Default or Unmatured Default has occurred and is continuing.
4. Conditions to Occurrence of Effective Date. The amendments
set forth in Section 1 hereof shall become effective upon such date (the
"Effective Date"), which shall be not later than September 15, 1996, as all of
the following events or conditions have occurred or been satisfied:
(a) Amendment. This Amendment has been executed and
delivered by the Borrower, the Agent and each of the Lenders.
(b) Other Loan Documents. The parties thereto shall
have executed and delivered each of the following documents:
(i) the Borrower Intellectual Property Assignment;
(ii) the Borrower Pledge Agreement;
(iii) the Borrower Security Agreement;
(iv) the Subsidiary Guaranty;
(v) the First Alert Pledge Agreement (and First
Alert has delivered to the Agent stock
certificates evidencing the stock being pledged
by it pursuant thereto, duly endorsed in blank
or accompanied by a duly executed blank stock
power); and
(vi) a Note payable to the order of each Lender
in the amount of its Commitment as set forth
on the signature pages hereto (after receipt
of which each Lender will promptly return to
the Agent for delivery to the Borrower its
existing Note marked "Superseded and
Cancelled").
(c) Fees and Expenses. The Borrower has paid to the Agent for
the ratable account of the Lenders an up-front fee of $37,500 and has
paid all amounts then due pursuant to Section 6 below.
(d) Borrower By-Laws and Resolutions. The Agent has received
copies, certified by the Secretary or Assistant Secretary of the
Borrower, of its by-laws and of its Board of Directors' resolutions
authorizing the execution, delivery and performance of this
Amendment and the Borrower Security Documents to which it is a party;
(e) Borrower Incumbency. The Agent has received an
incumbency certificate, executed by the Secretary or Assistant
Secretary of the Borrower, which shall identify by name and title and
bear the signature of the officers of the Borrower authorized to sign
this
<PAGE>
Amendment and Borrower Security Documents, upon which certificate the
Agent and the Lenders shall be entitled to rely until informed of any
change in writing by the Borrower;
(f) Other Charter Documents; Good Standing Certificates.
Copies of the articles or certificates of incorporation (or
corresponding documents) of the Borrower, together with all amendments
thereto, both certified by the appropriate governmental officer in its
jurisdiction of incorporation, together with a good standing
certificate issued by the Secretary of State of the jurisdiction of its
incorporation and such other jurisdictions as shall be requested by the
Agent.
(g) First Alert By-Laws and Resolutions. Copies, certified by
the Secretary or Assistant Secretary of First Alert of its by-laws and
Board of Directors' resolutions of First Alert authorizing the
execution, delivery and performance of the Loan Documents to which it
is a party.
(h) First Alert Secretary's Certificates. An incumbency
certificate, executed by the Secretary or Assistant Secretary of First
Alert, which shall identify by name and title and bear the signature of
the officers of First Alert authorized to sign the Loan Documents to
which it is a party upon which certificate the Agent and the Lenders
shall be entitled to rely until informed of any change in writing by
the Borrower.
(i) Insurance Certificates. Insurance certificates or binders
for all insurance set forth on Schedule 5.18 naming the Agent, on
behalf of the Lenders and the LC Issuer, as loss payee for any casualty
policies and additional insured for any general liability policies in
form and substance acceptable to the Agent.
(j) Lien Searches; UCC Financing Statements. (i) Such duly
completed and executed UCC-1 financing statements and other documents
as the Agent shall have requested to perfect its security interest in
the Collateral; and (ii) copies of searches of financing statements
filed under the Uniform Commercial Code, together with tax lien,
judgment and other searches with respect to the assets of the Borrower,
in both cases in such jurisdictions as the Agent may request.
(k) Landlord Estoppel Waiver and Consent(s). To the extent
theretofore obtained, landlord estoppel, waiver and consents with
respect to the Borrower's leased facilities in Aurora, Illinois, El
Paso, Texas and such other locations as the Agent may reasonably
request, each in form and substance acceptable to the Agent.
(l) Legal Opinions. The Agent has received from Messrs.
Hutchins, Wheeler & Dittmar, counsel to the Borrower, opinions as to
such matters relating to this Amendment and the Loan Documents as the
Agent may reasonably request.
(m) Regulatory Approvals. All necessary regulatory approvals
and filings relating to the transactions contemplated hereby shall
have been obtained or made.
<PAGE>
(n) Other. The Agent has received such additional documents
as it may reasonably request in connection with the consummation of
the transactions contemplated by this Amendment.
5. Reference to and Effect Upon the Credit Agreement.
(a) Except as specifically amended above, the Credit Agreement
and the other Loan Documents shall remain in full force and effect and
are hereby ratified and confirmed.
(b) The execution, delivery and effectiveness of this
Amendment shall not operate as a waiver of any right, power or remedy
of the Agent, the LC Issuer or any Lender under the Credit Agreement or
any Loan Document, nor constitute a waiver of any provision of the
Credit Agreement or any Loan Document except as expressly provided in
Section 2 above. Upon the effectiveness of the amendment to the Credit
Agreement effected by this Amendment, each reference in the Credit
Agreement to "this Agreement", "hereunder", "hereof", "herein" or words
of similar import shall mean and be a reference to the Credit Agreement
as amended hereby.
6. Expenses. The Borrower hereby affirms its obligation under
Section 9.7 of the Credit Agreement to reimburse the Agent upon demand for all
costs, internal charges and out-of-pocket expenses (including reasonable
attorneys' fees and time charges of attorneys to the Agent, which attorneys may
be employees of the Agent) incurred in connection with this amendment. Such
costs shall include the fees and charges of Winston & Strawn and special foreign
counsel to the Agent and all filing fees, notarial costs, trustee fees and other
expenses incurred in connection with the pledge of the Collateral.
7. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AS OPPOSED TO
CONFLICTS OF LAWS PROVISIONS) OF THE STATE OF ILLINOIS BUT GIVING EFFECT
TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
8. Headings. Section headings in this Amendment are
included herein for convenience of reference only and shall not constitute a
part of this Amendment for any other purposes.
9. Counterparts. This Amendment may be executed in any
number of counterparts, each of which when so executed shall be deemed an
original but all such counterparts shall constitute one and the same instrument.
10. Additional Matters. As additional consideration for the
agreement by the Agent, the LC Issuer and the Lenders to the terms of this
Amendment, the Borrower hereby releases and discharges the Agent, the LC Issuer
and the Lenders, and their respective subsidiaries, affiliates and parent
companies, and the present and former directors, officers, employees, agents,
attorneys, advisers and representatives of each of the foregoing, together with
their respective successors and assigns, from any and all losses, claims,
damages, liabilities, deficiencies or expenses of any kind
<PAGE>
or nature whatsoever relating to or against any of them that are based upon or
arise out of any alleged act or omission to act by any of them which has
occurred on or prior to the Effective Date and which is related to or arises
under the Loan Documents or the transactions contemplated thereby. The Borrower
acknowledges and agrees that it does not have or maintain any defense, set-off,
counterclaim, or claim of avoidance of any nature to the Obligations or in
respect of any Loan Document.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Amendment as of the
date and year first above written.
BRK BRANDS, INC.
By: /s/Michael Rohl
Title: Vice President of Finance and
Chief Finanical Officer
3901 Liberty Street Road
Aurora, Illinois 60504-8122
Attention: Michael Rohl
Vice President of Finance
and Chief Financial Officer
Telephone: (630) 851-7330
Facsimile: (630) 851-7538
Commitments
$31,571,428.58 THE FIRST NATIONAL BANK OF CHICAGO,
Individually as a Lender, as LC Issuer
and as Agent
By: /s/ Stephen C. Price
Title: Vice President
One First National Plaza
Chicago, Illinois 60670
Attention: April Yebd
Mail Suite 0088
Telephone: (312) 732-4823
Facsimile: (312) 732-2715
$20,642,857.14 CAISSE NATIONALE DE CREDIT AGRICOLE,
Individually as a Lender and as Co-Agent
By: /s/ David Bouhl, F.V.P.
Title: Head of Corporate Banking-Chicago
55 East Monroe Street, Suite 4700
Chicago, Illinois 60603-5702
Attention: Dan Ruhl
Telephone: (312) 917-7513
Facsimile: (312) 372-2830
<PAGE>
$18,214,285.71 ABN AMRO BANK N.V.
By: /s/Mary L. Honda
Title: Vice President
By: /s/Scott J. Albert
Title: Vice President
135 South LaSalle Street, Suite 625
Chicago, Illinois 60674-9135
Attention: Mary Honda
Vice President
Telephone: (312) 904-5220
Facsimile: (312) 606-8425
$14,571,428.57 FLEET NATIONAL BANK
By: /s/Karl Harig
Title: Senior Vice President
40 Westminster Street
Providence, Rhode Island 02901
Attention: Richard A. Meringolo
Senior Vice President
Telephone: (401) 459-4913
Facsimile: (401) 459-4961
$85,000,000
<PAGE>
