FIRST SUPPLEMENTAL INDENTURE AND GUARANTEE
FIRST SUPPLEMENTAL INDENTURE AND GUARANTEE (this "Supplemental
Indenture"), dated as of October 14, 1998, among Holmes Motor Corp. (the
"Guaranteeing Restricted Subsidiary"), a Domestic Restricted Subsidiary of
Holmes Products Corp., a Massachusetts corporation (the "Company"), the other
Guarantors (as defined in the Indenture referred to herein) and State Street
Bank and Trust Company, as trustee under the indenture referred to below (the
"Trustee").
W I T N E S S E T H
WHEREAS, the Company has heretofore executed and delivered to the Trustee
an Indenture (the "Indenture"), dated as of November 26, 1997 under which have
been issued an aggregate principal amount of $105.0 million of 9 7/8% Senior
Subordinated Notes due 2007 (the "Notes");
WHEREAS, the Guaranteeing Restricted Subsidiary has been created by the
Company as provided in Sections 4.17 and 11.04 of the Indenture;
WHEREAS, the Indenture provides that under certain circumstances the
Guaranteeing Restricted Subsidiary shall execute and deliver to the Trustee a
supplemental indenture pursuant to which such Guaranteeing Restricted Subsidiary
shall unconditionally guarantee all of the Company's Obligations under the Notes
and the Indenture on the terms and conditions set forth herein (the "Note
Guarantee"); and
WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is
authorized to execute and deliver this Supplemental Indenture.
NOW THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the
Guaranteeing Restricted Subsidiary, the Company, the other Guarantors and the
Trustee mutually covenant and agree for the equal and ratable benefit of the
Holders of the Notes as follows:
1. CAPITALIZED TERMS. Capitalized terms used herein without definition
shall have the meanings assigned to them in the Indenture. The term "Guarantor"
as used herein shall include the Guaranteeing Restricted Subsidiary.
2. AGREEMENT TO GUARANTEE. The Guaranteeing Restricted Subsidiary hereby
agrees as follows:
(a) Along with all the Guarantors named in the Indenture, to jointly and
severally Guarantee to each Holder of a Note authenticated and
delivered by the Trustee and to the Trustee and its successors and
assigns, irrespective of the validity and enforceability of the
Indenture, the Notes or the obligations of the Company hereunder or
thereunder, that:
(i) the principal of and premium, interest and Liquidated
Damages, if any, on the Notes will be promptly paid
in full when due, whether at maturity, by
acceleration, redemption or otherwise, and interest
on the overdue principal of, premium, interest and
Liquidated Damages, if any, on the Notes, if any, if
lawful, and all other obligations of the Company to
the Holders or the Trustee hereunder or thereunder
will be promptly paid in full or performed, all in
accordance with the terms hereof and thereof; and
(ii) in case of any extension of time of payment or
renewal of any Notes or any of such other
Obligations, the same will be promptly paid in full
when due or performed in accordance with the terms of
the extension or renewal, whether at stated maturity,
by acceleration or otherwise. Failing payment when
due of any amount so guaranteed or any performance so
guaranteed for whatever reason, the Guarantors shall
be jointly and severally obligated to pay the same
immediately.
(b) The obligations hereunder shall be unconditional,
irrespective of the validity, regularity or enforceability
of the Notes or the Indenture, the absence of any action to
enforce the same, any waiver or consent by any Holder of
the Notes with respect to any provisions hereof or thereof,
the recovery of any judgment against the Company, any
action to enforce the same or any other circumstance which
might otherwise constitute a legal or equitable discharge
or defense of a Guarantor.
(c) The following is hereby waived: diligence, presentment, demand of
payment, filing of claims with a court in the event of insolvency or
bankruptcy of the Company, any right to require a proceeding first
against the Company, protest, notice and all demands whatsoever.
(d) This Note Guarantee shall not be discharged except by complete
performance of the Obligations contained in the Notes and the
Indenture.
(e) If any Holder or the Trustee is required by any court or otherwise
to return to the Company, the Guarantors, or any custodian, trustee,
liquidator or other similar official acting in relation to either
the Company or the Guarantors, any amount paid by either to the
Trustee or such Holder, this
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Note Guarantee, to the extent theretofore discharged, shall be
reinstated in full force and effect.
(f) The Guaranteeing Restricted Subsidiary shall not be entitled to any
right of subrogation in relation to the Holders in respect of any
obligations guaranteed hereby until payment in full of all
Obligations guaranteed hereby.
(g) As between the Guarantors, on the one hand, and the Holders
and the Trustee, on the other hand, (x) the maturity of the
Obligations guaranteed hereby may be accelerated as
provided in Article 6 of the Indenture for the purposes of
this Note Guarantee, notwithstanding any stay, injunction
or other prohibition preventing such acceleration in
respect of the Obligations guaranteed hereby, and (y) in
the event of any declaration of acceleration of such
Obligations as provided in Article 6 of the Indenture, such
Obligations (whether or not due and payable) shall
forthwith become due and payable by the Guarantors for the
purpose of this Note Guarantee.
(h) The Guarantors shall have the right to seek contribution from any
non-paying Guarantor so long as the exercise of such right does not
impair the rights of the Holders under the Note Guarantee.
(i) Pursuant to Section 11.03 of the Indenture, after giving
effect to any maximum amount and any other contingent and
fixed liabilities that are relevant under any applicable
Bankruptcy or fraudulent conveyance laws, and after giving
effect to any collections from, rights to receive
contribution from or payments made by or on behalf of any
other Guarantor in respect of the Obligations of such other
Guarantor under Article 11 of the Indenture the Obligations
of the Guarantors shall be limited to the maximum amount as
shall result in the Obligations of such Guarantor under its
Note Guarantee not constituting a fraudulent transfer or
conveyance.
3. EXECUTION AND DELIVERY. The Guaranteeing Restricted Subsidiary agrees
that this Note Guarantee shall remain in full force and effect notwithstanding
any failure to endorse on each Note a notation of such Note Guarantee.
4. GUARANTOR MAY CONSOLIDATE, ETC. ON CERTAIN TERMS.
(a) A Guarantor may not consolidate with or merge with or into (whether
or not such Guarantor is the surviving Person) another corporation,
Person or entity whether or not affiliated with such Guarantor
unless:
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(i) subject to Section 11.05 of the Indenture, the Person
formed by or surviving any such consolidation or
merger (if other than a Guarantor or the Company)
unconditionally assumes all the obligations of such
Guarantor, pursuant to a supplemental indenture in
form and substance reasonably satisfactory to the
Trustee, under the Notes, the Indenture and the Note
Guarantee on the terms set forth herein or therein;
and
(ii) immediately after giving effect to such transaction, no
Default or Event of Default exists.
(b) In case of any such consolidation, merger, sale or
conveyance and upon the assumption by the successor
corporation, by supplemental indenture, executed and
delivered to the Trustee and satisfactory in form to the
Trustee, of the Note Guarantee endorsed upon the Notes and
the due and punctual performance of all of the covenants
and conditions of the Indenture to be performed by the
Guarantor, such successor corporation shall succeed to and
be substituted for the Guarantor with the same effect as if
it had been named herein as a Guarantor. Such successor
corporation thereupon may cause to be signed any or all of
the Note Guarantees to be endorsed upon all of the Notes
issuable hereunder which theretofore shall not have been
signed by the Company and delivered to the Trustee. All
the Note Guarantees so issued shall in all respects have
the same legal rank and benefit under the Indenture as the
Note Guarantees theretofore and thereafter issued in
accordance with the terms of the Indenture as though all of
such Note Guarantees had been issued at the date of the
execution hereof.
(c) Except as set forth in Articles 4 and 5 of the Indenture,
and notwithstanding clauses (a) and (b) above, nothing
contained in the Indenture or in any of the Notes shall
prevent any consolidation or merger of a Guarantor with or
into the Company or another Guarantor, or shall prevent any
sale or conveyance of the property of a Guarantor as an
entirety or substantially as an entirety to the Company or
another Guarantor.
5. RELEASES.
(a) In the event of a sale or other disposition of all of the
assets of any Guarantor, by way of merger, consolidation or
otherwise, or a sale or other disposition of all of the
capital stock of any Guarantor (other than to the Company
or another Guarantor), or in the case the Company
designates a Guarantor to be an Unrestricted Subsidiary in
accordance with the Indenture, then such Guarantor (in the
event of a sale or other disposition,
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by way of merger, consolidation or otherwise, of all of the
capital stock of such Guarantor) or the corporation
acquiring the property (in the event of a sale or other
disposition of all or substantially all of the assets of
such Guarantor) shall be released and relieved of any
obligations under its Note Guarantee; provided that the Net
Proceeds of such sale or other disposition are applied in
accordance with the applicable provisions of the Indenture,
including without limitation Section 4.10 of the Indenture.
Upon delivery by the Company to the Trustee of an Officers'
Certificate and an Opinion of Counsel to the effect that
such sale or other disposition was made by the Company in
accordance with the provisions of the Indenture, including
without limitation Section 4.10 of the Indenture, the
Trustee shall execute any documents reasonably required in
order to evidence the release of any Guarantor from its
obligations under its Note Guarantee.
(b) Any Guarantor not released from its obligations under its Note
Guarantee shall remain liable for the full amount of principal of
and interest on the Notes and for the other obligations of any
Guarantor under the Indenture as provided in Article 10 of the
Indenture.
6. NO RECOURSE AGAINST OTHERS. No past, present or future director,
officer, employee, incorporator, stockholder or agent of the Guaranteeing
Restricted Subsidiary, as such, shall have any liability for any obligations of
the Company or any Guarantor under the Notes, any Note Guarantees, the Indenture
or this Supplemental Indenture or for any claim based on, in respect of, or by
reason of, such obligations or their creation. Each Holder of the Notes by
accepting a Note waives and releases all such liability. The waiver and release
are part of the consideration for issuance of the Notes. Such waiver may not be
effective to waive liabilities under the federal securities laws and it is the
view of the SEC that such a waiver is against public policy.
7. NEW YORK LAW TO GOVERN. THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL
GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENT INDENTURE BUT WITHOUT GIVING
EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE
APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
8. COUNTERPARTS. The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.
9. EFFECT OF HEADINGS. The Section headings herein are for convenience
only and shall not affect the construction hereof.
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10. THE TRUSTEE. The Trustee shall not be responsible in any manner
whatsoever for or in respect of the validity or sufficiency of this Supplemental
Indenture or for or in respect of the recitals contained herein, all of which
recitals are made solely by the Guaranteeing Restricted Subsidiary, the other
Guarantors and the Company.
SIGNATURES
Dated as of the date first set forth above.
HOLMES MOTOR CORP.
By: /s/ Jordan A. Kahn
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Name: Jordan A. Kahn
Title: President
HOLMES PRODUCTS CORP.
By: /s/ Jordan A. Kahn
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Name: Jordan A. Kahn
Title: President
HOLMES MANUFACTURING CORP.
By: /s/ Jordan A. Kahn
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Name: Jordan A. Kahn
Title: President
HOLMES AIR (TAIWAN) CORP.
By: /s/ Jordan A. Kahn
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Name: Jordan A. Kahn
Title: President
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STATE STREET BANK AND TRUST
COMPANY, AS TRUSTEE
By: /s/ Andrew M. Sinasky
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Name: Andrew M. Sinasky
Title: Assistant Vice President
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