<PAGE>
                                                                  EXHIBIT 10.18

                      SECOND AMENDMENT TO CREDIT AGREEMENT


         THIS SECOND AMENDMENT TO CREDIT AGREEMENT (this "Second Amendment")
dated as of January 17, 2003 is by and among APPLICA INCORPORATED (the
"Borrower"), a Florida corporation, and each of its Subsidiaries identified on
the signature pages hereof, the Lenders identified on the signature pages
hereof and BANK OF AMERICA, N.A., as administrative agent for the Lenders (in
such capacity, the "Agent"). Terms used herein but not otherwise defined herein
shall have the meanings provided to such terms in the Credit Agreement (as
hereinafter defined).

                                   WITNESSETH

         WHEREAS, the Borrower, the Subsidiaries, the Lenders and Bank of
America, N.A., in its capacity as Agent are parties to that certain Credit
Agreement, dated as of December 28, 2001, amended April 26, 2002 (as further
amended, modified, supplemented, extended or restated from time to time, the
"Credit Agreement");

         WHEREAS, Applica Consumer Products, Inc., a Florida corporation
("Applica Consumer Products"), a Subsidiary party to the Credit Agreement,
desires to enter into a factoring arrangement with THE CIT GROUP/COMMERCIAL
SERVICES, INC. and in connection therewith Borrower desires to obtain
additional revolving loans in respect of balance owing to Applica Consumer
Products from time to time under such factoring arrangement; and

         WHEREAS, the Lenders are willing to consent to such factoring
arrangements subject to the terms and conditions specified in this Second
Amendment to amend certain terms of the Credit Agreement as set forth herein;

         NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

                  1.       The Credit Agreement is hereby amended as follows:

                  (a) by adding to Annex A to the Credit Agreement in proper
alphabetical location new definitions as follows:

                  "Amount Due From Factor" means at any date of determination
         thereof, an amount equal to the credit balance due to Applica Consumer
         Products under the Factoring Agreement on such date as reflected on
         any applicable Factor Status Report delivered to the Agent, less,
         without duplication, the Factor Reserve, or, in the absence of


<PAGE>

         the timely delivery to the Agent of a Factor Status Report on any
         date, an amount determined by Agent in sole and absolute discretion.

                  "Credit Risk" means, with respect to any Factored Account,
         the risk that such Account is not paid, in whole or in part, due to
         the Account Debtor's financial inability to pay.

                  "Factor" means The CIT Group/Commercial Services, Inc., a New
         York corporation, and its successors and assigns.

                  "Factor Assignment Agreement" means the Assignment of
         Factoring Credit Balances and Intercreditor Agreement, dated January
         17, 2003, among Applica Consumer Products, Factor and Agent.

                  "Factor Risk Account" means an Account, or any portion
         thereof, submitted by Applica Consumer Products to Factor under the
         Factoring Agreement with respect to which a Factor bears the Credit
         Risk on such date and which is not otherwise scheduled on Factor's
         books as in dispute or a deduction.

                  "Factor Reserve" means the amount which at any time may be
         charged to Applica Consumer Products under the Factoring Agreement or
         withheld from sums otherwise due to Applica Consumer Products under
         the Factoring Agreement, including, without limitation, (i) interest,
         (ii) fees, (iii) commissions, (iv) ledger debt, (v) deductions, (vi)
         charge backs, (vii) reserves taken by Factor, (viii) deductions for
         credit loss sharing, (vix) any customer deductions, (vx) any Factor
         Risk Accounts which are not paid in full because of a dispute (real or
         alleged), (vxi) any Account with respect to which Applica Consumer
         Products has breached any of the warranties or representations set
         forth in the Factoring Agreement, (vxii) any early payment
         anticipation deducted by a customer on any account, (vxiii) any
         Account with respect to which Factor does not have the Credit Risk
         which is not paid in full when due for any reason, and (vxiv) payments
         received by Factor on client risk accounts receivable which Factor is
         required at any time or for any reason to turnover or return
         (including, without limitation, payments made by Factor in connection
         with preference claims asserted in a bankruptcy or other insolvency
         proceeding), which amount is determined based upon statements provided
         by Factor or, in the absence of such current statements, as determined
         by the Agent in its reasonable discretion.

                  "Factor Status Report" means status or similar reports or
         accountings issued by Factor from time to time under the Factoring
         Agreement and setting forth the status of the Factor Risk Accounts and
         any other Account factored under the Factoring Agreement.

                  "Factoring Agreement" means the Factoring Agreement, dated
         January 17, 2003, between Applica Consumer Products and Factor, as
         amended.


                                      -2-
<PAGE>

                  "Non-Factored Eligible Account" means an Account which arises
         in the ordinary course of Borrower's business from the sale of
         Inventory, which is due from an Account Debtor none of whose Accounts
         has been assigned to Factor under the Factoring Agreement, and which
         in all other respects constitutes an Eligible Account.

                  (b) by deleting the definition of "Borrowing Base" set forth
in Annex A to the Credit Agreement and by restating such definition as follows:

                      "Borrowing Base" means, at any time, an amount equal to:

                      (a)      (i) 85% of the Net Amount of Non-Factored
                               Eligible Accounts;

                                         plus

                               (ii) the lesser of:

                                    (A) $15,000,000 or
                                    (B) 85% of the Amount Due From Factor;

                                         plus

                               (iii) the lesser of

                                    (A) $100,000,000 or
                                    (B) the lesser of (I) 70% of the Cost Value
                               of Eligible Inventory or (II) 85% of the Net
                               Orderly Liquidation Value;

                                         minus;

                      (b) without duplication, the Reserves and the Factor
                          Reserve.

                      Notwithstanding the foregoing, in no event shall the
             aggregate amount of Revolving Loans outstanding at any date (a) as
             measured by Eligible Inventory comprised of In-Transit Inventory
             exceed (i) $24,500,000 with respect to In-Transit Inventory
             destined for a United States port of entry, or (ii) $3,500,000 with
             respect to In-Transit Inventory destined for a Canadian port of
             entry, or (b) as measured by Eligible Non-Factored Accounts and
             Eligible Inventory of Applica Canada exceed the Applica Canada
             Sublimit.

                      For purposes of the calculation of the Borrowing Base, (1)
             the value of Non-Factored Eligible Accounts and Eligible Inventory
             shall be calculated based on Dollar Equivalents at any date of
             determination, and (2) the value of Eligible Inventory consisting
             of In-Transit Inventory shall be net of all duty, freight, taxes,
             costs, insurance and other charges and expenses which customarily
             pertain to such In-Transit Inventory.

         2.       The effectiveness of this Second Amendment is subject to the
satisfaction of each of the following conditions (in form and substance
satisfactory to the Agent):


                                      -3-
<PAGE>

                  (a)      The Agent shall have received executed counterparts
         of this Factor Intercreditor Agreement duly executed by the Factor,
         the Loan Parties, and the Agent; and

                  (b)      The Agent shall have received executed counterparts
         of this Second Amendment duly executed by the Loan Parties, the Agent
         and the Lenders; and.

                  (c)      The Agent shall have received such additional
         agreements, certificates or documents as it may reasonably request in
         connection with this Second Amendment.

         3.       The Borrower and the Guarantors represent and warrant to the
Agent and the Lenders that (i) the representations and warranties of the Loan
Parties set out in Article 6 of the Credit Agreement are true and correct as of
the date hereof (except those which expressly relate to an earlier period),
(ii) no event has occurred and is continuing which constitutes a Default or
Event of Default and (iii) no Loan Party has any counterclaims, offsets,
credits or defenses to the Loan Documents and the performance of its
obligations thereunder, or if any Loan Party has any such claims,
counterclaims, offsets, credits or defenses to the Loan Documents or any
transaction related to the Loan Documents, same are hereby waived, relinquished
and released in consideration of the Agent's and the Lenders' execution and
delivery of this Second Amendment.

         4.       The Guarantors (i) acknowledge and consent to all of the
terms and conditions of this Second Amendment, (ii) affirm all of their
obligations under the Loan Documents and (iii) agree that this Second Amendment
and all documents executed in connection herewith do not operate to reduce or
discharge the Guarantors' obligations under Article 13 of the Credit Agreement
or the other Loan Documents.

         5.       The Borrower and the Guarantors hereby represent and warrant
to the Agent and the Lenders as follows:

                  (i)      Each Loan Party has taken all necessary action to
         authorize the execution, delivery and performance of this Second
         Amendment.

                  (ii)     This Second Amendment has been duly executed and
         delivered by the Loan Parties and constitutes each of the Loan
         Parties' legal, valid and binding obligations, enforceable in
         accordance with its terms, except as such enforceability may be
         subject to (i) bankruptcy, insolvency, reorganization, fraudulent
         conveyance or transfer, moratorium or similar laws affecting
         creditors' rights generally and (ii) general principles of equity
         (regardless of whether such enforceability is considered in a
         proceeding at law or in equity).

                  (iii)    No consent, approval, authorization or order of, or
         filing, registration or qualification with, any court or governmental
         authority or third party is required in connection with the execution,
         delivery or performance by any Loan Party of this Second


                                      -4-
<PAGE>

         Amendment.

         6.       Except as modified hereby, all of the terms and provisions of
the Credit Agreement (including Schedules and Exhibits) and the other Loan
Documents, and the obligations of the Loan Parties under the Credit Agreement
and the other Loan Documents, are hereby ratified and confirmed and shall
remain in full force and effect.

         7.       This Second Amendment may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an
original and it shall not be necessary in making proof of this Second Amendment
to produce or account for more than one such counterpart.

         8.       This Second Amendment shall be deemed to be a contract made
under, and for all purposes shall be construed in accordance with, the laws of
the State of Georgia.

         IN WITNESS WHEREOF, each of the parties hereto has caused a
counterpart of this Second Amendment to be duly executed and delivered as of
the date first above written.


                                     "BORROWER"


                                     APPLICA INCORPORATED, a Florida
                                     corporation



                                     By: /s/ Adam L. Kaplan
                                        --------------------------------
                                     Name:  Adam L. Kaplan
                                     Title: Treasurer


                                     "GUARANTORS"


                                     APPLICA CONSUMER PRODUCTS, INC., a
                                     Florida corporation



                                     By: /s/ Adam L. Kaplan
                                        ---------------------------------
                                     Name:  Adam L. Kaplan
                                     Title: Treasurer


                    [Signatures continued on following page]


                                      -5-
<PAGE>

                                     APPLICA CANADA CORPORATION, a
                                     Nova Scotia corporation



                                     By: /s/ Adam L. Kaplan
                                        --------------------------------------
                                     Name:  Adam L. Kaplan
                                     Title: Treasurer


                                     WD DELAWARE, INC., a Delaware corporation



                                     By: /s/ Adam L. Kaplan
                                        --------------------------------------
                                     Name:  Adam L. Kaplan
                                     Title: Treasurer


                                     HP INTELLECTUAL CORP., a Delaware
                                     corporation



                                     By: /s/ Adam L. Kaplan
                                        --------------------------------------
                                     Name:  Adam L. Kaplan
                                     Title: Treasurer


                                     WINDMERE HOLDINGS CORPORATION, a
                                     Delaware corporation



                                     By: /s/ Adam L. Kaplan
                                        --------------------------------------
                                     Name:  Adam L. Kaplan
                                     Title: Treasurer


                                     HP DELAWARE, INC., a Delaware corporation



                                     By: /s/ Adam L. Kaplan
                                        --------------------------------------
                                     Name:  Adam L. Kaplan
                                     Title: Treasurer


                    [Signatures continued on following page]


                                      -6-
<PAGE>

                                  HPG LLC, a Delaware limited liability company



                                  By: /s/ Adam L. Kaplan
                                     ------------------------------------
                                  Name:  Adam L. Kaplan
                                  Title: Treasurer


                                  HP AMERICAS, INC., a Delaware corporation



                                  By: /s/ Adam L. Kaplan
                                     ------------------------------------
                                  Name:  Adam L. Kaplan
                                  Title: Treasurer


                                  "AGENT"


                                  Bank of America, N.A., as the Agent



                                  By: /s/ Stuart A. Hall
                                     ------------------------------------
                                  Name: Stuart A. Hall
                                  Title: Vice President


                                  "LENDERS"


                                  Bank of America, N.A., as a Lender



                                  By: /s/ Stuart A. Hall
                                     ------------------------------------
                                  Name: Stuart A. Hall
                                  Title: Vice President

                    [Signatures continued on following page]


                                      -7-
<PAGE>

                                     FLEET CAPITAL CORPORATION, as a Lender



                                     By: /s/ Kristina Lee
                                     ------------------------------------
                                     Name: Kristina Lee
                                     Title: Vice President


                                     CONGRESS FINANCIAL CORPORATION
                                     (FLORIDA), as a Lender



                                     By: /s/ Joseph R. Blasetti
                                        ---------------------------------
                                     Name: Joseph R. Blasetti
                                     Title: A.V.P.


                                     LASALLE BUSINESS CREDIT, LLC, a Delaware
                                     limited liability company, successor by
                                     merger to LaSalle Business Credit, Inc., a
                                     Delaware corporation, as agent for Standard
                                     Federal Bank National Association, as a
                                     Lender



                                     By:       /s/ Patrick Aarons
                                        ---------------------------------
                                     Name: Patrick Aarons
                                     Title: Vice President


                                     GENERAL ELECTRIC CAPITAL
                                     CORPORATION, as a Lender



                                     By: /s/ Jeffrey D. Morse
                                        ---------------------------------
                                     Name: Jeffrey D. Morse
                                     Title: Duly Authorized Signatory


                                     PNC BANK, NATIONAL ASSOCIATION, as a
                                     Lender



                                     By: /s/ Jundie Cadiena
                                        ---------------------------------
                                     Name: Jundie Cadiena
                                     Title: Vice President


                                     HSBC BUSINESS CREDIT (USA), INC., as a
                                     Lender



                                     By: /s/ Jimmy Schwartz
                                        ---------------------------------
                                     Name: Jimmy Schwartz
                                     Title: Vice President


                                      -8-