{"id":41123,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/loan-agreement-windmere-corp-and-salton-maxim-houseware-inc.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"loan-agreement-windmere-corp-and-salton-maxim-houseware-inc","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/finance\/loan-agreement-windmere-corp-and-salton-maxim-houseware-inc.html","title":{"rendered":"Loan Agreement &#8211; Windmere Corp. and Salton\/Maxim Houseware Inc."},"content":{"rendered":"<pre>\n\n                                LOAN AGREEMENT\n                                --------------\n\n\n        THIS LOAN AGREEMENT (the 'Agreement') is made and entered into as of\nthe ____ day of April, 1996 by and between WINDMERE CORPORATION, a Florida\ncorporation ('Windmere'), and SALTON\/MAXIM HOUSEWARES, INC., a Delaware\ncorporation ('Salton\/Maxim').  Capitalized terms used in this Agreement and not\notherwise defined herein shall have the meanings set forth in the Stock\nPurchase Agreement, dated as of February 27, 1996 (the 'Stock Purchase\nAgreement'), by and between Windmere and Salton\/Maxim.\n\n        WHEREAS, Windmere and Salton\/Maxim are parties to that certain Stock\nPurchase Agreement pursuant to which Windmere will acquire certain shares of\nSalton\/Maxim's common stock; and\n\n        WHEREAS, in connection with working capital purposes and for its other\ncorporate purposes, Salton\/Maxim seeks to obtain, and Windmere has agreed to\nprovide, a loan in the principal amount of Three Million Two Hundred Fifty-Four\nthousand Two Hundred Eighty-Six Dollars ($3,254,286).\n\n        NOW, THEREFORE, in consideration of the mutual covenants and promises\nherein contained, and for other good and valuable consideration, it is agreed\nas follows:\n\n                                  SECTION 1\n\n                         AMOUNT AND TERMS OF THE LOAN\n                         ----------------------------\n\n        1.1     Loan.  Windmere hereby agrees, upon the terms and subject to the\nconditions hereof and of the Note (as hereinafter defined), to extend a loan to\nSalton\/Maxim (the 'Loan') in the principal amount of Three Million Two Hundred\nFifty-Four Thousand Two Hundred Eighty-Six Dollars ($3,254,286).\n\n        1.2     Repayment of Loan.  On the closing Date and as a condition to\nconsummation of the transactions contemplated by the Stock Purchase Agreement,\nthe entire unpaid principal balance of the Loan, together with all interest\naccrued and unpaid thereon, shall be due and payable in full; provided,\nhowever, that, upon request from Salton\/Maxim, Windmere shall apply the cash\nportion of the Purchase Price against the total amount outstanding and due on\nthe Closing Date.  In the event the Stock Purchase Agreement is terminated for\nany reason in accordance with its terms, (i) the entire unpaid principal\nbalance of the Loan, together with all interest accrued and unpaid thereon,\nshall be due and payable on September 30, 1996, and (ii) Salton\/Maxim shall\nissue to Windmere options to purchase up to 75,000 shares of Salton\/Maxim's\ncommon stock, which shall be immediately exercisable at an exercise price of\n$3.00 per share, and which option shall be subject to such other terms and\nconditions as are applicable to the options which have been granted during the\ntwo (2) years prior to the date hereof to executive officers of Salton\/Maxim\npursuant to their respective stock option agreements.\n\n        1.3.    Prepayment.  Salton\/Maxim shall have the right to prepay all or\nany portion of the outstanding principal balance of the Loan, form time to time\nat any time, upon two (2) business days advance written notice to Windmere,\nwithout premium or penalty; provided that, at the time of any such prepayment,\nSalton\/Maxim shall pay to Windmere all interest accrued and unpaid on that\nportion of the principal balance of the Loan being prepaid.\n\n        1.4.    Interest.  The Loan shall bear interest at the rate of eight\npercent (8%) per annum.  Interest shall be calculated on the basis of a 365-day\nyear and actual days elapsed.\n\n        1.5     Note and Loan Documents.  All obligations of Salton\/Maxim to\nWindmere under the Loan shall be evidenced by a promissory note of Salton\/Maxim\nmade payable to the order of Windmere in the principal amount of Three Million\nTwo Hundred Fifty-Four Thousand Two Hundred Eighty-Six Dollars ($3,254,286), in\nthe form attached hereto as Exhibit A (the 'Note').  this Agreement and all\ninstruments and documents executed in connection with the Loan, including\nwithout limitation the Note and any other agreements, contracts, security\nagreements, assignments and other documents executed to secure the Loan, are\nreferred to in this Agreement as the 'Loan Documents'.\n\n\n                                  SECTION 2\n                        REPRESENTATIONS AND WARRANTIES\n                        ------------------------------\n\n        To induce Windmere to enter into this Agreement and to make the Loan\ncontemplated hereby, Salton\/Maxim represents and warrants to Windmere that:\n\n        2.1     Organization, Standing, Power, Etc.  Salton\/Maxim is a\ncorporation duly organized, validly existing and in good standing under the\nlaws of the State of Delaware, and has all necessary power and authority to own\nits properties, to carry on its business as now being conducted and to execute,\ndeliver and perform this Agreement and all other Loan Documents to which it is\na party.\n\n        2.2     Authorization.  The execution, delivery and performance by\nSalton\/Maxim of this Agreement, the borrowings hereunder and the execution,\ndelivery and performance of each of the Loan Documents to which it is a party:\n\n                (a)     have been duly authorized by all requisite corporate\naction, including, without limitation, by the Board of Directors of\nSalton\/Maxim;\n\n                (b)     will not violate any provisions of law, or\nSalton\/Maxim's Certificate of Incorporation, as amended to the date hereof; and\n\n                (c)     except as set forth in Schedule 2.2, will not violate\nor be in conflict with, result in a breach of, or constitute a default under,\nany material indenture, agreement or other instrument to which Salton\/Maxim is\na party or by which Salton\/Maxim or any of its properties is bound, or any\norder, writ, injunction or decree of any court of governmental institution\n(other than such violations, breaches and defaults as shall have been waived\nprior to the funding of the Loan).\n\n        2.3     Enforceability.  This Agreement and all other Loan Documents to\nwhich Salton\/Maxim is a party referred to herein, when executed and delivered\nby Salton\/Maxim hereunder or thereunder, will constitute legal, valid and\nbinding obligations of Salton\/Maxim, enforceable against it in accordance with\ntheir respective terms.\n\n        2.4     Use of Proceeds.  The proceeds of the Loan shall  be used for\nworking capital and for other corporate purposes, and Salton\/Maxim will not use\nany portion of such proceeds for the benefit of any person other than\nSalton\/Maxim and its wholly-owned subsidiaries.\n\n\n                                     - 2 -\n\n                                  SECTION 3\n\n                             CONDITIONS PRECEDENT\n                             --------------------\n\n        The obligations of Windmere under this Agreement are subject to the\nfollowing conditions precedent:\n\n        3.1     Supporting Documents.  Windmere shall have received from\nSalton\/Maxim on or prior to the date of funding under the Loan:\n\n                (a)     a certificate of the Secretary of Salton\/Maxim dated as\nof the date of the funding under the Loan, certifying as to:  (i) resolutions\nof the Board of Directors of Salton\/Maxim authorizing the execution, delivery\nand performance of this Agreement, the borrowing hereunder, and the execution\nand delivery to Windmere of the other Loan Documents to which it is a party,\nand the full force and effect of such resolutions on the date of the funding\nunder the Loan, and (ii) the incumbency and signature of each of the officers\nof Salton\/Maxim signing this Agreement and the other Loan Documents to which it\nis a party;\n\n                (b)     the Note, duly executed by Salton\/Maxim; and\n\n                (c)     the Security Agreement, substantially in the form\nattached hereto as Exhibit B, duly executed by Salton\/Maxim.\n\n        3.2     Representations and Warranties.  The representations and\nwarranties of Salton\/Maxim contained herein shall be true and correct in all\nmaterial respects as of the date of funding under the Loan, and Windmere shall\nhave received from Salton\/Maxim on or prior to such date a certificate of the\nChairman of the Board, the President or the Executive Vice President of\nSalton\/Maxim certifying to such effect.\n\n                                  SECTION 4\n\n\n                            AFFIRMATIVE COVENANTS\n                            ---------------------\n\n        Salton\/Maxim covenants and agrees with Windmere, that from the date\nhereof and so long as this Agreement remains in effect, or any obligations\nunder the Note remain outstanding and unpaid, unless Windmere shall otherwise\nconsent in writing delivered to Salton\/Maxim, it shall:\n\n        4.1     Existence.  Do or cause to be done all things necessary to\npreserve, renew and keep in full force and effect the existence of\nSalton\/Maxim.\n\n        4.2     Notice.  Give prompt written notice to Windmere of all Events\nof Default (as defined below) or any default of which Salton\/Maxim becomes\naware, under any of the terms and provisions of this Agreement, the Loan\nDocuments or Senior Indebtedness (as defined below).\n\n        4.3      Books and Records.  Keep and maintain full and accurate\naccounts and records of its operations according to generally accepted\naccounting principles consistently applied, and permit Windmere or any of its\ndesignated officers, employees, agents and representatives, to have access\nthereto, and to make examination thereof, to make audits, and to inspect and\notherwise check the properties, real, personal and mixed, of Salton\/Maxim at\nall reasonable times upon reasonable notice.\n\n        4.4     Guaranties by Subsidiaries.  During the term hereof,\nSalton\/Maxim shall cause each of its subsidiaries, if and when formed, to\nexecute a guaranty in form and substance reasonably satisfactory to Windmere.\n\n                                    - 3 -\n\n\n                                  SECTION 5\n\n\n                                 THE CLOSING\n\n\n        5.1     Funding Date.  The funding of the Loan hereunder shall occur on\nthe business day designated by Salton\/Maxim to Windmere in writing at least two\nbusiness days prior thereto; provided, that all conditions precedent have been\nsatisfied.\n\n                                  SECTION 6\n\n\n                              EVENTS OF DEFAULT\n\n        6.1     Events of Default.  Upon an occurrence of the following events\n(each, an 'Event of Deault'), the principal amount outstanding, plus all\ninterest accrued thereon, shall be immediately due and payable upon the\ndelivery by Windmere to Salton\/Maxim notice hereof.\n\n        (a)     Nonpayment of principal and interest hereunder when and as the\n                same shall become due hereunder;\n\n        (b)     The failure by Salton\/Maxim to observe or perform any term,\n                covenant or condition contained in the Loan Documents, and \n                such failure shall not have been cured within the period of \n                grace, if any, provided therein;\n\n        (c)     The entry by Salton\/Maxim of any agreement providing for any \n                merger, consolidation, reorganization, liquidation, winding\n                up, or dissolution (or if Salton\/Maxim suffers any liquidation\n                or dissolution), or if Salton\/Maxim conveys, sells, assigns,\n                leases, transfers, or otherwise disposes of, in one transaction\n                or a series of transactions, substantially all of its business,\n                property or assets, whether now owned or hereafter acquired,\n                except for a merger in which Salton\/Maxim is the surviving\n                entity;\n\n        (d)     Voluntary or involuntary bankruptcy, reorganization,\n                insolvency, arrangement, receivership or similar proceedings\n                are commenced by or against Salton\/Maxim, and such proceedings\n                continue undismissed for 60 days;\n\n        (e)     One or more final judgments (for which no appeal may be taken)\n                for the payment of money in excess of $1,000,000 in the\n                aggregate  are outstanding against Salton\/Maxim or against any\n                property or assets, and any such judgment has remained unpaid,\n                unvacated, unbonded or unstayed by appeal or otherwise for a\n                period of 30 days from the date of its entry; or\n\n        (f)     Salton\/Maxim fails to pay principal, interest or premium with\n                respect to any Senior Indebtedness of Salton\/Maxim in an\n                aggregate principal amount greater than Five Hundred\n                Thousand Dollars ($500,000,) or fails to perform, observe\n                or fulfill any term or covenant contained in any agreement or\n                instrument under or pursuant to which any such Senior\n                Indebtedness may have been issued, created, assumed, guaranteed\n                or secured by Salton\/Maxim, and such default continues beyond\n                the period of grace, if any, specified therein and permits the\n                holder of such Senior Indebtedness to accelerate the maturity\n                thereof.\n\n\n\n                                     -4-\n\n\n                                  SECTION 7\n\n                                SUBORDINATION\n\n\n\n        7.1     Subordination.  Payments under this Agreement are subordinated\nto repayment of all Senior Indebtedness (as defined in the next sentence), but\nonly to the extent and in the manner provided in this Section 7.1.  'Senior\nIndebtedness' shall mean all indebtedness owed by Salton\/Maxim to Foothill\nCapital Corporation ('Foothill') pursuant to that certain Loan and Security\nAgreement, dated as of July 28, 1994, as amended (the 'Foothill Facility'), by\nand between Foothill and Salton\/Maxim and all indebtedness owed to LaSalle\nNational Bank ('LaSalle') pursuant to that certain Loan and Security Agreement,\ndated as of December 30, 1991, as amended (the 'LaSalle Facility') by and\nbetween LaSalle and Salton\/Maxim.  Salton\/Maxim shall not further amend or\notherwise modify the Foothill Facility or the LaSalle Facility without the\nprior written consent (which consent shall not be unreasonably withheld) of \nWindmere.\n\n                (a)     Upon any payment or distribution of the assets of \nSalton\/Maxim, whether in cash, property or securities, from any source\nwhatsoever, to creditors upon any dissolution, winding-up, total or partial\nliquidation, reorganization, composition, arrangement or adjustment of\nSalton\/Maxim or its securities (whether voluntary or involuntary, or in\nbankruptcy, insolvency, reorganization, liquidation or receivership\nproceedings, or upon as assignment for the benefit of creditors, or any other\nmarshalling of the assets and liabilities of Salton\/Maxim or otherwise),\nFoothill and LaSalle shall be entitled to receive payment in full in cash of\nall amounts due or to become due in respect of the Senior Indebteness before\nany payment is made pursuant to the terms of this Agreement or the Loan\nDocuments.\n\n                (b)     For a period, commencing on the date on which Salton\n\/Maxim receives from Foothill or LaSalle notice that an 'Event of\nDefault' (as defined in the Foothill Facility or the LaSalle Facility, as the\ncase may be) has occurred and ending on the date on which such Event of Default\nhas been cured, no payment shall be made to Windmere pursuant to the terms of\nthis Agreement or the Loan Documents.\n\n                (c)     Windmere or any subsequent holder of this Note, by its\nacceptance of this Note, agrees that during any Payment Blockage Period, it\nwill not ask, demand, sue for, take or receive from Salton\/Maxim, by set-off or\nin any other manner, any money which may now or hereafter be owing by\nSalton\/Maxim under this Note.\n\n                                  SECTION 8\n\n                                MISCELLANEOUS\n\n        8.1     Notices.  Any notice required to be given by either party to\nthe other shall be deemed given if in writing and actually delivered by an\novernight courier of national repute or deposited in the United States mail in\nregistered or certified form with return receipt requested, postage paid,\naddressed to the notified party at:\n\n        If to Windmere:                 Windmere Corporation\n                                        5980 Miami Lakes Drive\n                                        Miami Lakes, Florida  33014-9867\n                                        Attention:  Burton A Honig, \n                                        Vice President - Finance\n\n\n        If to Salton\/Maxim:             Salton\/Maxim Housewares, Inc.\n                                        550 Business Center Drive\n                                        Mount Prospect, Illinois  60056\n                                        Attention:  President\n\n\n\n\n                                     -5-\n\n        8.2     Survival of Representation.  All covenants, agreements, \nrepresentations and warranties made herein and in the Loan Documents shall\nsurvive the execution of this Agreement, and the execution and delivery to\nWindmere of the Note, and shall continue in full force and effect so long as\nany obligation of Salton\/Maxim created hereunder is outstanding and unpaid.\n\n        8.3     Effect of Delay.  Neither any failure nor any delay on the part\nof Windmere in exercising any right, power or privilege hereunder or under the\nLoan Documents shall operate as a waiver thereof, nor shall a single or partial\nexercise thereof preclude any other or further exercise of any other right,\npower or privelege.\n\n        8.4     Modification and Waivers.  No modification or waiver of any\nprovision of this Agreement nor consent to any departure by Salton\/Maxim\ntherefrom shall in any event be effective unless the same shall be in writing\nand signed by Windmere, and such waiver or consent shall be effective only in\nthe specific instance and for the purpose for which given.  No notice to or\ndemand on Salton\/Maxim in any case shall thereby entitle it to any other or\nfurther notice or demand in the same, similar or other circumstances.\n\n        8.5     Disclaimer.  Windmere shall incur no liability to Salton\/Maxim\nin acting upon any advice received by Windmere, whether oral or written, which\nwindmere believes in good faith to have been given by an officer or other\nperson authorized or act on behalf of Salton\/Maxim or in otherwise acting in\ngood faith under this Agreement.\n\n        8.6     Remedies Cumulative.  Any rights or remedies of Windmere\nhereunder, or under any other writing shall be cumulative and in addition to\nevery other right or remedy contained therein or herein, now in existence or\nexisting hereafter, at law or in equity, by statute or otherwise.  Upon the\noccurrence of an Event of Default, Windmere, may proceed to enforce any of its\nrights and remedies against Salton\/Maxim, or against any collateral given as\nsecurity for the obligations of Salton\/Maxim, and Windmere may enforce such\nrights and remedies simultaneously, or in such order and at such time, or from\ntime to time, as Windmere, in its sole discretion shall determine.\n\n        8.7     Application of Payments.  Payments received by Windmere from\nSalton\/Maxim, whether direct or otherwise, shall be applied first against\nexpenses, next against interest accrued on the Loan, and next in reduction of\nthe outstanding principal balance of the Loan, except that during the\ncontinuance of any Event of Default, Windmere may apply such payments in any\norder of priority determined by Windmere in its exclusive judgment.\n\n        8.8     Construction.  This Agreement shall be governed, and construed\nin accordance with the laws of the State of Florida, regardless of the laws that\nmight otherwise govern under the applicable principles of conflicts of law\nthereof.\n\n        8.9     Counterparts.  This Agreement may be executed in two or more\ncounterparts, each of which shall constitute but one instrument, and shall\nbecome effective when copies hereof, when taken together, bear the signatures\nof Windmere and Salton\/Maxim.\n\n        8.10    Severability of Provisions.  Any provision of this Agreement\nwhich is unenforceable in any jurisdiction shall, as to such jurisdiction, be\nineffective only to the extent of such unenforceablity, without invalidating the\nremaining provisions hereof or affecting the validity or enforceability of such\nprovision in any other jurisdiction.\n\n        8.11    Headings.  Section headings in this Agreement are included\nherein for convenience of reference only and shall not constitute a part of\nthis Agreement for any other purpose.\n\n        8.12    Successors and Assigns:  Assignment.  All of the terms and\nprovisions of this Agreement shall be binding upon and shall inure to the\nbenefit of the parties hereto and their respective successors and assigns,\n\n\n\n\n                                     -6-\n        \n\nexcept that Salton\/Maxim shall not have the right to assign its rights\nhereunder or any interest herein.  Windmere may assign or otherwise transfer\nits rights and obligations hereunder to any person or entity, and such other\nperson or entity shall thereon become vested with all the benefits in respect\nthereof granted to Windmere herein or otherwise.\n\n\n                                   * * * *\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n                                    - 7 -\n\n        IN WITNESS WHEREOF, the parties hereto have executed this Agreement as\nof the date first above written.\n\n\n\n                                      WINDMERE CORPORATION\n\n\n\n                                      BY:    Harry D. Schulman\n                                            --------------------------------\n                                             Name:  Harry D. Schulman\n                                             Title: Senior Vice President\n\n\n\n                                      SALTON\/MAXIM HOUSEWARES, INC.\n\n\n\n                                      BY:    \n                                            --------------------------------\n                                             Name:   \n                                             Title:  \n\n\n\n\n\n\n\n                                    - 8 -\n\n\n\n        IN WITNESS WHEREOF, the parties hereto have executed this Agreement as\nof the date first above written.\n\n\n\n                                      WINDMERE CORPORATION\n\n\n\n                                      BY:\n                                            --------------------------------\n                                             Name:\n                                             Title:\n\n\n\n                                      SALTON\/MAXIM HOUSEWARES, INC.\n\n\n\n                                      BY:    William B. Rue\n                                            --------------------------------\n                                             Name:   William B. Rue\n                                             Title:  Senior Vice President\/COO\n\n\n\n\n\n\n\n                                    - 8 -\n\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[6726,8750],"corporate_contracts_industries":[9393],"corporate_contracts_types":[9560,9567],"class_list":["post-41123","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-applica-inc","corporate_contracts_companies-salton-inc","corporate_contracts_industries-consumer__appliances","corporate_contracts_types-finance","corporate_contracts_types-finance__loan"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/41123","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=41123"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=41123"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=41123"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=41123"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}