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EXHIBIT 4.40
AMENDMENT NO. 2 TO LOAN AND SECURITY AGREEMENT
As of March 29, 2000
Congress Financial Corporation
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▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Congress Financial Corporation ("Lender"), Waxman Consumer Products
Group Inc., a Delaware corporation ("Waxman Group"), WOC Inc., a Delaware
corporation ("WOC"), Western American Manufacturing, Inc., a Delaware
corporation ("WAMI"), WAMI Sales, Inc., a Delaware corporation ("WAMI Sales",
and together with Waxman Group, WOC and WAMI, each individually, a "Borrower"
and collectively, "Borrowers"), Waxman Industries, Inc., a Delaware corporation
("Waxman Industries"), Waxman USA Inc., a Delaware corporation ("Waxman USA")
and TWI, International, Inc., a Delaware corporation ("TWI", and together with
Waxman Industries and Waxman USA, each individually, a "Guarantor" and
collectively, "Guarantors") have entered into certain financing arrangements
pursuant to which Lender may make loans and advances and provide other financial
accommodations to Borrowers as set forth in the Loan and Security Agreement,
dated as of June 17, 1999, by and among Lender, Borrowers and Guarantors (as
amended by Amendment No. 1 to Loan and Security Agreement dated as of December
8, 1999, as amended hereby and as the same may hereafter be further amended,
modified, supplemented, extended, renewed, restated or replaced, the "Loan
Agreement"), and other agreements, documents and instruments referred to therein
or at any time executed and/or delivered in connection therewith or related
thereto (all of the foregoing, together with the Loan Agreement, as the same now
exist or may hereafter be amended, modified, supplemented, extended, renewed,
restated or replaced, being collectively referred to herein as the "Financing
Agreements").
Borrowers and Guarantors have requested that Lender (a) temporarily
increase the amount of the Maximum Credit from $20,000,000 to $22,000,000 and
(b) modify the definition of Eligible Accounts with respect to WAMI. Lender is
willing to agree to such requests, subject to the terms and conditions contained
herein.
In consideration of the foregoing, and the agreements and covenants
contained herein, and other good and valuable consideration, the adequacy and
sufficiency of which are hereby acknowledge, the parties hereto agree as
follows:
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1. AMENDMENTS.
1.1 ADDITIONAL DEFINITION. As used herein, the term "Indenture
Borrowing Base" means, at any time, the lesser of (a) the maximum principal
amount of Loans permitted to be outstanding at such time under the Senior
Deferred Coupon Note Indenture and (b) the the maximum principal amount of Loans
permitted to be outstanding at such time under the Senior Note Indenture, and
the Loan Agreement is hereby amended to include such term as so defined.
1.2 AMENDMENTS TO DEFINITIONS.
(a) ELIGIBLE ACCOUNTS. Section 1.21(n) of the Loan Agreement is
hereby amended by deleting "▇▇▇▇▇▇▇ Inc." and replacing it with "any account
debtor whose chief executive office is located in the United States of America."
(b) MAXIMUM CREDIT. Section 1.48 of the Loan Agreement is hereby
hereby amended by deleting the phrase "the amount of $20,000,000" and replacing
it with "(a) $22,000,000 for the period from March 29, 2000 to the earlier of
(i) July 31, 2000 or (ii) the date on which Lender receives, in immediately
available funds, at least $9,900,000 of proceeds from the sale of the Pledged
Shares and (b) $20,000,000 at all times thereafter."
1.3 AMENDMENT TO SECTION 2.1(C). Section 2.1(c) of the Loan Agreement
is amended by deleting "the Maximum Credit" from each place it appears and
replacing it with "the lesser of the Maximum Credit and the Indenture Borrowing
Base."
1.4 INTERPRETATION. For purposes of this Amendment, unless otherwise
defined herein, all terms used herein, including, but not limited to, those
terms used in the recitals above, shall have the respective meanings assigned to
such terms in the Loan Agreement.
2. AMENDMENT FEE. In addition to all other fees, charges, interests and
expenses payable by Borrowers to Lender under the Loan Agreement and the other
Financing Agreements, Borrowers shall jointly and severally pay to Lender a fee
for entering into this Amendment in the amount of $30,000, which amount is fully
earned and payable as of the date hereof and may be charged directly to any
Borrower's loan account(s) maintained by Lender.
3. REPRESENTATIONS, WARRANTIES AND COVENANTS. Each Borrower and
Guarantor, jointly and severally, represents, warrants and covenants with and to
Lender as follows, which representations, warranties and covenants are
continuing and shall survive the execution and delivery hereof, the truth and
accuracy of, or compliance with each, together with the representations,
warranties and covenants in the other Financing Agreements, being a continuing
condition of the making or providing of any Loans or Letter of Credit
Accommodations by Lender to Borrowers:
3.1 This Amendment has been duly authorized, executed and delivered by
Borrowers and Guarantors, and the agreements and obligations of Borrowers and
Guarantors contained
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herein and in the Loan Agreement as amended hereby constitute legal, valid and
binding obligations of Borrowers and Guarantors enforceable against Borrowers
and Guarantors in accordance with their respective terms.
3.2 Neither the execution and delivery of this Amendment, or any other
agreements, documents or instruments in connection herewith, nor the
consummation of the transactions herein or therein contemplated, nor compliance
with the provisions hereof or thereof are in contravention of any law or
regulation or any order or decree of any court or Governmental Authority
applicable to Borrowers or Guarantors or any of their respective Subsidiaries in
any respect, or conflicts with or result in the breach of, or constitutes a
default in any respect under any mortgage, deed of trust, security agreement,
agreement or instrument (including, but not limited to, the Senior Note
Indenture and the Senior Deferred Coupon Note Indenture) to which any Borrower
or Guarantor is a party or may be bound, or violates any provision of the
Certificate of Incorporation or By-Laws of any Borrower or Guarantor.
3.3 No Event of Default or act, condition or event which with notice or
passage or time or both would constitute an Event of Default, exists or has
occurred and is continuing, except for the Event of Default arising from the
failure of Waxman Industries and its Subsidiaries to comply with Section 9.15 of
the Loan Agreement (the "Existing Default").
3.4 Each Borrower and each Guarantor is and, after giving effect to the
transactions contemplated hereby, will be solvent.
4. CONDITIONS PRECEDENT. The amendments set forth herein shall be
effective upon the satisfaction of each of the following conditions precedent in
a manner satisfactory to Lender:
4.1 the receipt by Lender of an original of this Amendment, duly
authorized, executed and delivered by Borrowers and Guarantors;
4.2 all requisite corporate action and proceedings in connection with
this Amendment shall be satisfactory in form and substance to Lender, and Lender
shall have received all information and copies of all documents, including
records of requisite corporate action and proceedings which Lender may have
requested in connection therewith, such documents where requested by Lender or
its counsel to be certified by appropriate corporate officers or governmental
authorities; and
4.3 no Event of Default shall have occurred and be continuing and no
event shall have occurred or condition be existing and continuing which, with
notice or passage of time or both, would constitute an Event of Default, except
for the Existing Default
5. GENERAL.
5.1 EFFECT OF THIS AMENDMENT. Except as modified pursuant hereto, no
other changes or modifications to the Financing Agreements are intended or
implied and in all other respects the
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Financing Agreements are hereby specifically ratified, restated and confirmed by
all parties hereto as of the date hereof. Nothing herein deemed to be a waiver
of the Existing Default, and Lender hereby reserves all of its rights and
remedies under the Loan Agreement, the other Financing Agreements and applicable
law. To the extent of conflict between the terms of this Amendment and the
Financing Agreements, the terms of this Amendment shall control.
5.2 FURTHER ASSURANCES. The parties hereto shall execute and deliver
such additional documents and take such additional action as may be necessary to
effectuate the provisions and purposes of this Amendment.
5.3 GOVERNING LAW. The rights and obligations hereunder of each of the
parties hereto shall be governed by and interpreted and determined in accordance
with the internal laws of the State of New York (without giving effect to
principles of conflicts of laws).
5.4 BINDING EFFECT. This Amendment is binding upon and shall inure to
the benefit of Lender, Borrowers, Guarantors and their respective successors and
assigns. The Loan Agreement and this Amendment shall be read and construed as
one agreement. This Amendment shall be deemed to be one of the Financing
Agreements.
5.5 COUNTERPARTS, ETC. This Amendment may be executed in one or more
counterparts, each of which when so executed shall be deemed to be an original
but all of which when taken together shall constitute one and the same
instrument. In making proof of this Amendment, it shall not be necessary to
produce or account for more than one counterpart hereof signed by each of the
parties hereto. This Amendment may be executed and delivered by telecopier with
the same force and effect as if it were a manually executed and delivered
counterpart.
Very truly yours,
WESTERN AMERICAN MANUFACTURING,
INC.
By: /S/ ▇▇▇▇ ▇▇▇▇▇▇
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Title: Secretary and Treasurer
WAXMAN CONSUMER PRODUCTS
GROUP, INC.
By: /S/ ▇▇▇▇ ▇▇▇▇▇▇
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Title: Treasurer
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[SIGNATURES CONTINUED FROM PREVIOUS PAGE]
WAXMAN USA INC.
By: /S/ ▇▇▇▇ ▇▇▇▇▇▇
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Title: Vice President-Finance
WOC INC.
By: /S/ ▇▇▇▇ ▇▇▇▇▇▇
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Title: Vice President-Finance
WAMI SALES, INC.
By: /S/ ▇▇▇▇ ▇▇▇▇▇▇
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Title: Secretary and Treasurer
WAXMAN INDUSTRIES, INC.
By: /S/ ▇▇▇▇ ▇▇▇▇▇▇
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Title: Vice President-Finance
TWI, INTERNATIONAL, INC.
By: /S/ ▇▇▇▇ ▇▇▇▇▇▇
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Title: Secretary and Treasurer
ACCEPTED AND AGREED:
CONGRESS FINANCIAL CORPORATION
By: ▇▇▇▇▇ ▇▇▇▇▇▇▇
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Title: VP
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