Document:

Amended & Restated Security Agreement

 

Exhibit 10.2

AMENDED AND RESTATED SECURITY AGREEMENT

     THIS AMENDED AND RESTATED SECURITY AGREEMENT (this “Agreement,” dated as of December
23, 2005, among APPLICA INCORPORATED., a Florida corporation (the “Borrower”), the
Guarantors identified below (individually a “Guarantor” and collectively the
“Guarantors”; the Guarantors together with the Borrower, individually an “Obligor”
and collectively the “Obligors”); and BANK OF AMERICA, N.A., in its capacity as the
administrative and collateral agent for Lenders (in such capacity, together with its successors in
such capacity, the “Agent”).

WITNESSETH:

     WHEREAS, pursuant to that Credit Agreement dated as of December 28, 2001, among the Borrower,
certain Affiliates and Subsidiaries of Borrower, the Agent, and certain other parties (including
all annexes, exhibits and schedules thereto, as from time to time amended, the “Original Credit
Agreement”), certain of the financial institutions party thereto as “Lenders” made the loans
and issued or participated in letters of credit to or for the benefit of Borrower upon the terms
set forth therein;

     WHEREAS, the Original Credit Agreement was amended and restated pursuant to the terms of an
Amended and Restated Credit Agreement dated November 17, 2004 (including all annexes, exhibits and
schedules thereto, as from time to time amended, the “First Amended Credit Agreement”),
pursuant to which certain of the financial institutions party thereto as “Lenders” made loans and
issued or participated in letters-of-credit to or for the benefit of Borrower upon the terms set
forth therein;

     WHEREAS, Borrower, the Guarantors, certain other Affiliates and Subsidiaries of Borrower, the
Agent, the Lenders party thereto and certain other parties have agreed to amend and restate the
First Amended Credit Agreement pursuant to a certain Second Amended and Restated Credit Agreement
dated as of December 23, 2005 (together with all annexes, exhibits and schedules thereto, as from
time to time amended, restated, supplemented or otherwise modified, the “Second Amended Credit
Agreement”) and pursuant to the terms thereof the Lenders have agreed to continue making loans
and issue or participate in letters of credit upon the terms and conditions set forth therein.

     WHEREAS, Obligors are parties with Agent to a certain Security Agreement dated as of December
28, 2001 (as at any time amended, the “Original Security Agreement”), pursuant to which, among
other things, each Obligor granted to Agent, for its benefit and the ratable benefit of Lenders, a
security interest in and Lien upon all or substantially all of the property of each Obligor as
described therein;

     WHEREAS, in order to induce Agent and Lenders to extend credit to Borrower (which inure to the
direct and indirect benefit of Guarantors) under the Second Amended Credit

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Agreement, Obligors are willing to amend and restate the Original Security Agreement so that,
as so amended and restated, it shall read as hereinafter set forth;

     NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained and for
other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

     1. DEFINITIONS; RULES OF CONSTRUCTION.

          (a) As used herein, the following terms shall have the following meanings given to them (terms
defined in the singular to have the same meaning when used in the plural and vice versa):

          “Account” shall have the meaning given to “account” in the UCC and shall include any
right to payment for the sale or lease of Goods or rendition of services, whether or not they have
been earned by performance.

          “Chattel Paper” shall have the meaning given to “chattel paper” in the UCC and shall
include Electronic Chattel Paper.

          “Commercial Tort Claim” shall have the meaning given to “commercial tort claim” in the
UCC.

          “Deposit Account” shall have the meaning given to “deposit account” in the UCC.

          “Document” shall have the meaning given to “document” in the UCC and shall include,
for each Obligor, all of such Obligor’s bills-of-lading, warehouse receipts or other documents of
title.

          “Electronic Chattel Paper” shall have the meaning given to “electronic chattel paper”
in the UCC.

          “Equipment” shall have the meaning given to “equipment” in the UCC and shall include,
for each Obligor, all machinery, equipment, furniture, furnishings, fixtures, and other tangible
personal property (except Inventory) of such Obligor, including embedded software, motor vehicles
with respect to which a certificate of title has been issued, aircraft, dies, tools, jigs, molds
and office equipment, as all of such types of property leased by such Obligor and all of such
Obligor’s rights and interests with respect thereto under such leases (including options to
purchase); together with all present and future additions and accessions thereto, replacements
therefor, component and auxiliary parts and supplies used or to be used in connection therewith,
and all substitutes for any of the foregoing, and all manuals, drawings, instructions, warranties
and rights with respect thereto; wherever any of the foregoing is located.

          “General Intangible” shall have the meaning given to the term “general intangible” in
the UCC and shall include, for each Obligor, all of choses in action (other than as against Agent,
Bank or any Lender in connection with the Loan Documents) and causes of action and all

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other intangible personal property of such Obligor of every kind and nature (other than
Accounts), including all contract rights, payment intangibles, Proprietary Rights, corporate
or other business records, inventions, designs, blueprints, plans, specifications, patents, patent
applications, trademarks, service marks, trade names, trade secrets, goodwill, copyrights, computer
software, customer lists, registrations, licenses, franchises, tax refund claims, any funds which
may become due to such Obligor in connection with the termination of any employee benefit plan or
any rights thereto and any other amounts payable to such Obligor from any employee benefit plan,
rights and claims against carriers and shippers, rights to indemnification, business interruption
insurance and proceeds thereof, property, casualty or any similar type of insurance and any
proceeds thereof, proceeds of insurance covering the lives of key employees on which such Obligor
is beneficiary, rights to receive dividends, distributions, cash, Instruments and other property in
respect of or in exchange for pledged equity interests or Investment Property and any letter of
credit, guarantee, claim, security interest or other security held by or granted to such Obligor.

          “Goods” shall have the meaning given to “goods” in the UCC and shall include embedded
software to the extent included in “goods” as defined in the UCC.

          “Instruments” shall have the meaning given to “instrument” in the UCC.

          “Inventory” shall have the meaning given to “inventory” in the UCC and shall include,
for each Obligor, all inventory, goods and merchandise, wherever located, to be furnished under any
contract of service or held for sale or lease, all returned goods, raw materials, work-in-process,
finished goods (including embedded software), other materials and supplies of any kind, nature or
description which are used or consumed in such Obligor’s business or used in connection with the
packing, shipping, advertising, selling or finishing of such goods or merchandise, and all
documents of title or other Documents representing such goods.

          “Investment Property” shall have the meaning given to the term “investment property”
in the UCC and shall include, for each Obligor, all (a) securities, whether certificated or
uncertificated, (b) securities entitlements, (c) securities accounts, (d) commodity contracts, and
(e) commodity accounts of such Obligor.

          “Letter-of-Credit Right” shall have the meaning given to “letter-of-credit right” in
the UCC and shall include, for each Obligor, rights to payment or performance under a letter of
credit, whether or not such Obligor, as beneficiary, has demanded or is entitled to demand payment
or performance (other than any Letter of Credit issued for the account of such Obligor pursuant to
the Second Amended Credit Agreement).

          “Payment Account” means each bank account established pursuant to this Agreement, to
which the proceeds of Accounts and other Collateral are deposited or credited, and which is
maintained in the name of the Agent or such Obligor, as the Agent may determine, on terms
acceptable to the Agent.

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          “Payment Intangible” shall have the meaning given to “payment intangible” in the UCC.

          “Proprietary Rights” means, for each Obligor, such Obligor’s now owned and hereafter
arising or acquired licenses, franchises, permits, patents, patent rights, copyrights, works which
are the subject matter of copyrights, trademarks, service marks, trade names, trade styles, patent,
trademark and service mark applications, and all licenses and rights related to any of the
foregoing, and all other rights under any of the foregoing, all extensions, renewals, reissues,
divisions, continuations, and continuations-in-part of any of the foregoing, and all rights to sue
for past, present and future infringement of any of the foregoing.

          “Software” shall have the meaning given to “software” in the UCC (other than software
embedded in any category of Goods), including all computer programs and all supporting information
provided in connection with a transaction related to any program.

          “Supporting Obligation” shall have the meaning given to “supporting obligation” in the
UCC.

          “UCC” means the Uniform Commercial Code, as in effect from time to time, of the State
of New York or of any other state the laws of which are required as a result thereof to be applied
with respect to the issue of perfection or enforcement of security interests in any Collateral.

          “Uniform Commercial Code Jurisdiction” means any jurisdiction that has adopted
“Revised Article 9” of the UCC on or after July 1, 2001.

     All other capitalized terms used but not otherwise defined in this Agreement (including the
Recitals hereto) have the meanings given to them in the Second Amended Credit Agreement or in Annex
A thereto. All other undefined terms contained in this Agreement, unless the context indicates
otherwise, have the meanings provided for by the UCC to the extent the same are used or defined
therein.

          (b) As used herein, the terms, “herein,” “hereof;” and “hereunder” and other words of similar
import refer to this Agreement as a whole and not to any particular section, paragraph or
subdivision. Any pronoun used shall be deemed to cover all genders. All references to statutes
shall include all related rules and implementing regulations and any amendments of same and any
successors statutes, rules and regulations; to any agreement, instrument or other document
(including any of the Loan Documents) shall include any and all modifications and supplements
thereto and any and all restatement, extensions or renewals thereof; and to “including” and
“include” shall be understood to mean “including, without limitation” (and, for purposes of this
Agreement, the parties agreed that the rule of ejusdem generis shall not be applicable to limit a
general statement, which is followed by or referable to an enumeration of specific matters to
matters similar to the matters specifically mentioned).

     2. GRANT OF SECURITY INTERESTS.

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          (a) To secure the payment and performance of all Obligations (as defined in the Second Amended
Credit Agreement), including all Revolving Loans, all LC Obligations, all
indemnification obligations under the Loan Documents and all liabilities and obligations of
each Guarantor under the Subsidiary Guaranty, each Obligor hereby grants to the Agent, for the
benefit of Agent and the Lenders, a continuing security interest in, Lien on, assignment of and
right of set-off against all of the following property of such Obligor, whether now owned or
existing or hereafter created, acquired or arising and wherever located:

     (i) all Accounts;

     (ii) all Goods, including all Equipment and Inventory;

     (iii) all Chattel Paper;

     (iv) all Documents;

     (v) all Instruments;

     (vi) all Supporting Obligations;

     (vii) all General Intangibles (including Payment Intangibles and
Software);

     (viii) all Letter-of-Credit Rights;

     (ix) all Investment Property;

     (x) all money, cash, cash equivalents, securities and other property of any
kind of any Obligor held directly or indirectly by Agent or any Lender;

     (xi) all Deposit Accounts, credits, and balances with the Agent or any Lender
or any of their Affiliates or any other financial institution with which any Obligor
maintains deposits, including any Payment Accounts;

     (xiii) all books, records and other property related to or referring to any of
the foregoing, including books, records, account ledgers, data processing records,
computer software and other property and General Intangibles at any time evidencing
or relating to any of the foregoing;

     (xiv) the Commercial Tort Claims in which an Obligor is a plaintiff and which
are described in Schedule IV attached hereto; and

     (xv) all accessions to, substitutions for and replacements, products and
proceeds of any of the foregoing, including, but not limited to, proceeds of any
insurance policies, claims against third parties, and condemnation or requisition
payments with respect to all or any of the foregoing.

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All of the foregoing, together with, all equity interests in Subsidiaries to the extent pledged to
Agent and all other property of any Obligor in which Agent or any Lender may at any time be granted
a Lien as security for the Obligations, are herein collectively referred to as the “Collateral”;
provided, however, that the Collateral shall not include any rights or interests of
an Obligor in any contract if under the terms of such contract, or any applicable law with respect
to such contract, the valid grant of a security interest therein to Agent is prohibited and such
prohibition has not been or is not waived or the consent of the other party to such contract has
not been or is not otherwise obtained or under applicable law such prohibition cannot be waived;
provided, further, that the foregoing exclusion shall in no way be interpreted (i)
to apply if any such prohibition is ineffective or unenforceable under the UCC (including Sections
9-406, 9-407, 9-408 or 9-409) or any other applicable law or (ii) so as to limit, impair or
otherwise affect Agent’s unconditional continuing security interest in and Lien upon any rights or
interests of such Obligor in or to monies due or to become due under any such contract (including
any Accounts).

          (b) All of the Obligations shall be secured by all of the Collateral.

     3. PERFECTION AND PROTECTION OF SECURITY INTEREST.

          (a) Obligors shall, at their expense, perform all steps requested by the Agent at any time to
perfect, maintain, protect, and enforce the Agent’s Liens, including: (i) filing and recording
financing or continuation statements, and amendments thereof, in form and substance reasonably
satisfactory to the Agent; (ii) delivering to the Agent warehouse receipts covering any portion of
the Collateral located in warehouses and for which warehouse receipts are issued and certificates
of title covering any portion of the collateral for which certificates of title have been issued,
unless the Agent shall have obtained a Collateral Access Agreement in form and substance acceptable
to the Agent from any applicable warehouseman; (iii) upon the occurrence of an Event of Default,
transferring Inventory to warehouses or other locations designated by the Agent; (iv) placing
notations on each Obligor’s books of account to disclose the validity, perfection and priority of
Agent’s security interest; and (v) taking such other steps as are deemed reasonably necessary by
the Agent to maintain and protect the Agent’s Liens.

          (b) Promptly after the Agent’s request therefor, Obligors shall deliver to Agent all
Collateral consisting of negotiable Documents, certificated securities (accompanied by stock powers
executed in blank), Chattel Paper and Instruments.

          (c) Obligors shall, in accordance with the terms of the Second Amended Credit Agreement,
obtain or use their commercially reasonable efforts to obtain waivers or subordinations of Liens
from landlords and mortgagees.

          (d) If required by the terms of the Second Amended Credit Agreement and not waived by Agent in
writing (which waiver may be revoked), Obligors shall obtain authenticated control agreements from
each issuer of uncertificated securities, securities intermediary, or commodities intermediary
issuing or holding any financial assets or commodities to or for any Obligor.

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          (e) If an Obligor is or becomes the beneficiary of a letter of credit (other than those issued
for the account of an Obligor pursuant to the Second Amended Credit Agreement), such Obligor shall
promptly notify Agent thereof and enter into a tri-party agreement with Agent and the issuer and/or
confirmation bank with respect to Letter-of-Credit Rights assigning such Letter-of-Credit Rights to
Agent and directing all payments thereunder to the Payment Account, all in form and substance
reasonably satisfactory to Agent.

          (f) Obligors shall take all steps necessary to grant the Agent control of all Electronic
Chattel Paper in accordance with the UCC and all “transferable records” as defined in the Uniform
Electronic Transactions Act.

          (g) Each Obligor hereby irrevocably authorizes Agent at any time and from time to time during
the term of the Second Amended Credit Agreement to file in any filing office in any Uniform
Commercial Code Jurisdiction any initial financing statements and amendments thereto that (a)
indicate the Collateral (i) as all assets of such Obligor or words of similar effect, regardless of
whether any particular asset comprised in the Collateral falls within the scope of Article 9 of the
UCC or such jurisdiction, or (ii) as being of an equal or lesser scope or with greater detail, and
(b) contain any other information required by part 5 of Article 9 of the UCC for the sufficiency or
filing office acceptance of any financing statement or amendment, including (i) whether such
Obligor is an organization, the type of organization and any organization identification number
issued to such Obligor, and (ii) in the case of a financing statement filed as a fixture filing or
indicating Collateral as as-extracted collateral or timber to be cut, a sufficient description of
real property to which the Collateral relates. Obligors agree to furnish any such information to
Agent promptly upon written request. Each Obligor also ratifies its authorization for Agent to have
filed in any Uniform Commercial Code Jurisdiction any like initial financing statements or
amendments thereto if filed prior to the date hereof.

          (h) Each Obligor shall promptly notify Agent of any Commercial Tort Claim acquired by it and,
unless otherwise consented in writing by Agent, such Obligor shall enter into a supplement to this
Agreement, granting to Agent a security interest in such Commercial Tort Claim.

          (i) From time to time, Obligors shall, upon Agent’s written request, execute and deliver
confirmatory written instruments pledging to Agent, for the benefit of Agent and the Lenders, the
Collateral, but Obligors’ failure to do so shall not affect or limit any security interest or any
other Liens or rights of Agent or any Lender in and to the Collateral. So long as the Second
Amended Credit Agreement is in effect and until all Obligations have been fully satisfied and the
Commitments have been terminated, Agent’s security interests and other Liens shall continue in full
force and effect in all Collateral (whether or not deemed eligible for the purpose of calculating
the Availability or as the basis for any advance, loan, extension of credit, or other financial
accommodation).

          (j) No Reincorporation. No Obligor shall reincorporate or reorganize itself under the
laws of any jurisdiction other than the jurisdiction in which it is incorporated or organized as of
the date hereof or change its type of entity as identified on Schedule II without

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executing all necessary documents, instruments, financing statements, amendments
thereto, assignments and/or other writings as Agent may reasonably request to protect or enforce
Agent’s and Lenders’ security interest in the Collateral.

          (k) Terminations Amendments Not Authorized. Each Obligor acknowledges that it is not
authorized to file any amendment or termination statement with respect to any UCC-1 financing
statement filed pursuant to the Loan Documents without the prior written consent of Agent and
agrees that it will not do so without the prior written consent of Agent, subject to the rights of
Obligors under Section 9-509(d)(2) of the UCC. All UCC-1 financing statements heretofore filed
with respect any of the Collateral under the Original Security Agreement shall continue in full
force and effect.

          (1) No Restriction on Payments to Agent. No Obligor shall enter into any Contract that
restricts or prohibits the grant to Agent of a security interest in Accounts, Chattel Paper,
Instruments or Payment Intangibles or the proceeds of the foregoing.

     4. LOCATION OF COLLATERAL.

          Each Obligor represents and warrants to Agent and the Lenders that: (A) Schedule I is
a correct and complete list, for each Obligor, of the location of the chief executive office, books
and records, and Collateral (other than In-Transit Inventory) of such Obligor, and the locations of
all of the other places of business of such Obligor; and (B) Schedule I correctly
identifies any of such facilities and locations that are not owned by an Obligor and sets forth the
names of the owners and lessors or sublessors of such facilities and locations. Each Obligor agrees
that it will not (i) maintain any Collateral (other than In-Transit Inventory) at any location
other than those locations listed for such Obligor on Schedule I, (ii) otherwise change or
add to any of such locations, or (iii) change the location of its chief executive office from the
location identified in Schedule I, unless it gives the Agent at least thirty (30) days
prior written notice thereof and executes any and all financing statements and other documents that
the Agent reasonably requests in connection therewith.

     5. JURISDICTION OF ORGANIZATION.

          As to each Obligor, Schedule II hereto identifies such Obligor’s name as of the
Closing Date as it appears in official filings in the state of its incorporation or other
organization, the type of entity of such Obligor (including corporation, partnership, limited
partnership or limited liability company), organizational identification number issued by such
Obligor’s state of incorporation or organization or a statement that no such number has been
issued and the jurisdiction in which such Obligor is incorporated or organized.

     6. TITLE TO, LIENS ON, AND SALE AND USE OF COLLATERAL.

          Each Obligor represents and warrants to the Agent and the Lenders that each Obligor has rights
in and the power to transfer all of the Collateral free and clear of all Liens whatsoever, except
for Permitted Liens; and agrees that the Agent’s Liens in the Collateral will not be subject to any
prior Lien except for those Liens identified in clauses (a), (c), (d), (g) or (i)

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of the definition of Permitted Liens; and (c) each Obligor will use, store, and maintain the
Collateral with all reasonable care and will use such Collateral for lawful purposes only.

     7. APPRAISALS.

     At such reasonable times as Agent may request in writing, the Borrower shall, at its expense,
provide Agent with appraisals or updates thereof (which, upon receipt, will promptly deliver the
same to the Lenders) of any or all of the Collateral from an appraiser, and prepared on a basis,
reasonably satisfactory to Agent, such appraisals and updates to include, without limitation,
information required by applicable law and regulation; provided, however, that so
long as no Event of Default exists, the Borrower shall be responsible for the expense of no more
than four (4) such appraisals in any calendar year.

     8. [RESERVED]

     9. COLLATERAL REPORTING.

          The Borrower shall provide Agent with the following documents at the following times in form
satisfactory to Agent: (a) on each Business Day, for the preceding Business Day, a schedule of each
Obligor’s Accounts created, credits given, cash collected and other adjustments to such Accounts
since the last such schedule; (b) on a monthly basis, by the twentieth day of the following month,
or more frequently if requested by the Agent in writing, (i) an aging of such Accounts, together
with a reconciliation to the corresponding Borrowing Base and to each Obligor’s general ledger;
(ii) an aging of each Obligor’s accounts payable; (iii) a detailed calculation of Eligible Accounts
and Eligible Inventory (including In-Transit Inventory); and (iv) Inventory reports by SKU and
location, together with a reconciliation to the corresponding Borrowing Base and to the applicable
general ledgers; (c) upon Agent’s written request and within a reasonable time after such request,
copies of invoices in connection with such Accounts, customer statements, credit memos, remittance
advices and reports, deposit slips, shipping and delivery documents in connection with such
Accounts and for Inventory and Equipment acquired by an Obligor, purchase orders and invoices; (d)
such other reports as to the Collateral of the Borrower or another Obligor as the Agent shall
reasonably request from time to time; and (e) with the delivery of each of the foregoing, a
certificate of the Borrower executed by a Responsible Officer certifying as to the accuracy and
completeness of the foregoing. If any Obligor’s records or reports of the Collateral are prepared
by an accounting service or other agent, such Obligor hereby authorizes such service or agent to
deliver such records, reports, and related documents to the Agent, for distribution to the Lenders.

     10. ACCOUNTS.

          (a) Each Obligor hereby represents and warrants to the Agent and the Lenders, with respect to
such Obligor’s Accounts, that: (i) each existing Account represents, and each future Account will
represent, a bona fide sale or lease and delivery of Inventory by such Obligor, or
rendition of services by such Obligor, in the ordinary course of such Obligor’s business; (ii) each
existing Account is, and each future Account will be, for a liquidated amount payable by the

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Account Debtor thereon on the terms set forth in the invoice therefor or in the schedule
thereof delivered to the Agent, without any offset, deduction, defense, or counterclaim except
those known to such Obligor and disclosed to the Agent and the Lenders pursuant to this Agreement;
(iii) no credit, discount, or extension, or agreement will be granted on any Account, except for
those immaterial credits, discounts or extensions granted by such Obligor in the ordinary course of
business or consistent with past practices or except as reported to Agent and the Lenders in
accordance with Section 9 of this Agreement; (iv) each copy of an invoice delivered to Agent by an
Obligor will be a genuine copy of the original invoice sent to the Account Debtor named therein;
and (v) all Inventory described in any invoice representing a sale of goods will have been
delivered to the Account Debtor and all services of the Borrower described in each invoice will
have been performed.

          (b) Obligors shall not re-date any invoice or sale, make sales on extended dating or extend or
modify any Account beyond that customary in such Obligor’s business. If an Obligor becomes aware of
any matter adversely affecting the collectibility in Agent may direct in writing. All collections
received in any lock-box or Payment Account or directly by an Obligor or Agent, and all funds in
any Payment Account or other account to which such collections are deposited, shall be subject to
the Agent’s control pursuant to the terms of any applicable Blocked Account Agreement. Agent or
Agent’s designee may, at any time after the occurrence of an Event of Default, notify any or all
Account Debtors in writing that the Accounts have been assigned to Agent and of Agent’s security
interest therein, and may collect them directly and charge the reasonable collection costs and
expenses to the Loan Account as a Revolving Loan. Upon the occurrence and during the continuance of
an Event of Default, Obligors, at Agent’s written request, shall execute and deliver to Agent such
documents as Agent shall require to grant Agent access to any post-office box in which collections
of Accounts are received.

          (b) If sales of Inventory are made or services are rendered for cash, each Obligor shall
immediately deliver to the Agent or deposit into a Payment Account the cash which such Obligor
receives.

          (c) All payments received by the Agent in a Payment Account or at any other bank account
designated by Agent in writing, will be the Agent’s sole property for its benefit and the benefit
of the Lenders and will be credited to the Loan Account in accordance with Section 3.7(a) of the
Second Amended Credit Agreement.

     12. INVENTORY; PERPETUAL INVENTORY.

          Each Obligor represents and warrants to the Agent and the Lenders and agrees with the Agent
and the Lenders that all of the Inventory owned by Obligors is and will be held for sale or lease,
or to be furnished in connection with the rendition of services, in the ordinary course of an
Obligor’s business, and is and will be fit for such purposes. Each Obligor agrees that all
Inventory produced by it in the United States of America will be produced in accordance with the
Federal Fair Labor Standards Act of 1938 and all rules, regulations, and orders thereunder.
Obligors will conduct a physical count of the Inventory at least once per Fiscal Year, which may be
included in any appraisal to be performed in accordance with

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Section 7 hereof, and after and during the continuation of an Event of Default, at such other times as
Agent requests in writing. Each Obligor will maintain a perpetual inventory reporting system at all
times. No Obligor will, without Agent’s written consent, sell any Inventory on a bill-and-hold,
guaranteed sale, sale and return, sale on approval, consignment, or other repurchase or return
basis.

     13. EQUIPMENT.

          Obligors shall promptly inform Agent of any material additions to or deletions from the
Equipment. Obligors shall not permit any Equipment to become a fixture with respect to real
property or to become an accession with respect to other personal property with respect to which
real or personal property Agent does not have a Lien. Obligors will not, without Agent’s prior
written consent (which consent shall not be unreasonably withheld), alter or remove any identifying
symbol or number on any of an Obligor’s Equipment constituting Collateral.

     14. DOCUMENTS, INSTRUMENTS, AND CHATTEL PAPER.

          Each Obligor represents and warrants to Agent and the Lenders that (a) all material Documents,
Instruments, and Chattel Paper describing, evidencing, or constituting Collateral, and all
signatures and endorsements thereon, are and will be complete, valid, and genuine, and (b) all
Goods evidenced by such Documents, Instruments, Letter-of-Credit Rights and Chattel Paper are and
will be owned by an Obligor, free and clear of all Liens other than Permitted Liens.

     15. VOTING OF INVESTMENT PROPERTY.

          (a) Until Agent shall have delivered a notice contemplated by clause (b) below, each Obligor
shall be entitled to vote or consent with respect to the Investment Property owned by it in any
manner not inconsistent with the terms of any Loan Document, and Agent will, if so requested,
execute appropriate revocable proxies therefor.

          (b) Upon the occurrence and during the continuance of an Event of Default, if and to the
extent that Agent shall so notify in writing the Obligor pledging the Investment Property in
question, only Agent shall be entitled to vote or consent or take any other action with respect to
such Investment Property (and such Obligor will, if so requested, execute appropriate proxies
therefor).

     16. POWER OF ATTORNEY.

          Each Obligor hereby appoints the Agent and the Agent’s designee as such Obligor’s attorney,
with power: (a) to endorse such Obligor’s name on any checks, notes, acceptances, money orders, or
other forms of payment or security that come into the Agent’s or any Lender’s possession; (b) to
sign such Obligor’s name on any invoice, bill of lading, warehouse receipt or other negotiable or
non-negotiable Document constituting Collateral, on drafts against customers, on assignments of
Accounts, on notices of assignment, financing statements and other public records and to file any
such financing statements by electronic means with or without a signature as authorized or required
by applicable law or filing procedure; (c) so long as any Event of Default has occurred and is
continuing, to notify the post office authorities to change the

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address for delivery of such Obligor’s mail to an address designated by the Agent and to
receive, open and dispose of all mail addressed to Obligors; (d) to send requests for verification
of Accounts to customers or Account Debtors; (e) upon the occurrence and during the continuance of
an Event of Default, to complete in such Obligor’s name or the Agent’s name, any order, sale or
transaction, obtain the necessary Documents in connection therewith, and collect the proceeds
thereof; (f) to clear Inventory through customs in such Obligor’s name, the Agent’s name or the
name of the Agent’s designee, and to sign and deliver to customs officials powers of attorney in
such Obligor’s name for such purpose; (g) to the extent that an Obligor’s authorization given in
Section 3(g) of this Agreement is not sufficient, to file such financing statements with respect to
this Agreement, with or without such Obligor’s signature, or to file a photocopy of this Agreement
in substitution for a financing statement, as the Agent may deem appropriate and to execute in such
Obligor’s name such financing statements and amendments thereto and continuation statements which
may require such Obligor’s signature; and (h) to do all things necessary to carry out the Second
Amended Credit Agreement and this Agreement. Each Obligor ratifies and approves all actions of such
attorney taken in accordance with the terms hereof and the Second Amended Credit Agreement of such
attorney. None of the Lenders or the Agent nor their attorneys will be liable for any acts or
omissions or for any error of judgment or mistake of fact or law except for their gross negligence
or willful misconduct. This power, being coupled with an interest, is irrevocable until the Second
Amended Credit Agreement and Commitments thereunder have been terminated and the Obligations have
been paid finally and in full.

     17. THE AGENT’S AND LENDERS’ RIGHTS, DUTIES AND LIABILITIES.

          (a) Obligors assume all responsibility and liability arising from or relating to the use,
sale, license or other disposition of the Collateral. The Obligations shall not be affected by any
failure of the Agent or any Lender to take any steps to perfect the Agent’s Liens or to collect or
realize upon the Collateral, nor shall loss of or damage to the Collateral release the Borrower or
any other Obligor from any of the Obligations. Following the occurrence and during the continuation
of an Event of Default, the Agent may (but shall not be required to), and at the direction of the
Required Lenders shall, without notice to or consent from Obligors, sue upon or otherwise collect,
extend the time for payment of, modify or amend the terms of, compromise or settle for cash,
credit, or otherwise upon any terms, grant other indulgences, extensions, renewals, compositions,
or releases, and take or omit to take any other action with respect to the Collateral, any security
therefor, any agreement relating thereto, any insurance applicable thereto, or any Person liable
directly or indirectly in connection with any of the foregoing, without discharging or otherwise
affecting the liability of any Obligor for the Obligations or under any Loan Document or any other
agreement now or hereafter existing between the Agent and/or any Lender and the Borrower and any
other Obligor, provided, however, that any amounts received pursuant to any actions
taken pursuant to this Section 17(a) shall be credited, net of costs of collection, to the
Obligations in accordance with the terms of the Second Amended Credit Agreement.

          (b) It is expressly agreed by Obligors that, anything herein to the contrary notwithstanding,
each Obligor shall remain liable under each of its contracts and each of its licenses (to the
extent such contracts and licenses remain in effect) to observe and perform all the

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conditions and obligations to be observed and performed by it thereunder. Neither Agent nor any
Lender shall have any obligation or liability under any contract or license by reason of or
arising out of this Agreement or the granting herein of a Lien thereon or the receipt by Agent or
any Lender of any payment relating to any contract or license pursuant hereto, except where Agent
has expressly agreed in writing otherwise. Neither Agent nor any Lender shall be required or
obligated in any manner to perform or fulfill any of the obligations of any Obligor under or
pursuant to any contract or license, or to make any payment, or to make any inquiry as to the
nature or the sufficiency of any payment received by it or the sufficiency of any performance by
any party under any contract or license, or to present or file any claims, or to take any action to
collect or enforce any performance or the payment of any amounts which may have been assigned to it
or to which it may be entitled at any time or times.

          (c) Agent may at any time after an Event of Default has occurred and be continuing (or if any
rights of set-off (other than set-offs against an Account arising under the contract giving rise to
the same Account) or contra accounts may be asserted with respect to the following), without prior
notice to Borrower, notify Account Debtors, and other Persons obligated on the Collateral that
Agent has a security interest therein, and that payments shall be made directly to Agent, for
itself and the benefit of Lenders. Upon the request of Agent, each Obligor shall so notify their
respective Account Debtors and other Persons obligated on Collateral. Once any such notice has been
given to any Account Debtor or other Person obligated on the Collateral, Obligors shall not give
any contrary instructions to such Account Debtor or other Person without Agent’s prior written
consent.

          (d) Agent may at any time, in Agent’s own name or in the name of an Obligor, communicate with
Account Debtors, parties to contracts and obligors in respect of Instruments to verify with such
Persons, to Agent’s satisfaction, the existence, amount and terms of Accounts, Payment Intangibles,
Instruments or Chattel Paper. If a Default or Event of Default shall have occurred and be
continuing, Obligors, at their own expense, shall cause the independent certified public
accountants then engaged by such Obligors to prepare and deliver to Agent and each Lender at any
time and from time to time, promptly upon Agent’s request, the following reports with respect to
each Obligor: (i) a reconciliation of all Accounts; (ii) an aging of all Accounts; (iii) trial
balances; and (iv) a test verification of such Accounts as Agent may request. Obligors, at their
own expense, shall deliver to Agent the results of each physical verification, if any, which any
Obligor may in its discretion have made, or caused any other Person to have made on its behalf. of
all or any portion of its Inventory.

     18. PATENT, TRADEMARK AND COPYRIGHT COLLATERAL.

          (a) Obligors do not have any interest in, or title to, any patent, trademark or copyright
except as set forth in Schedule III hereto. This Agreement is effective to create a valid
and continuing Lien on and, upon filing of notifications of Agent’s Liens with the United States
Patent and Trademark Office, perfected Liens in favor of Agent with respect to each Obligor’s
patents and trademarks and such perfected Liens are enforceable as such as against any and all
creditors of and purchasers from Obligors. Upon filing of notifications of Agent’s Liens with the
United States Patent and Trademark Office and the filing of appropriate financing statements, all

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action necessary or desirable to protect and perfect Agent’s Lien on the patents or trademarks
each Obligor shall have been duly taken.

          (b) The Borrower shall notify Agent immediately if it knows or has reason to know that any
application or registration relating to any patent or trademark (now or hereafter existing) may
become abandoned or dedicated, or of any adverse determination or development (including the
institution of, or any such determination or development in, any proceeding in the United States
Patent and Trademark Office or any court) regarding an Obligor’s ownership of any patent, trademark
or copyright, its right to register the same, or to keep and maintain the same.

          (c) Within forty-five (45) days after the last day of each Fiscal Quarter of Obligors,
Obligors shall deliver to the Agent a schedule setting forth all material applications for the
registration of any patent, trademark or copyright with the United States Patent and Trademark
Office, the United States Copyright Office or any similar office or agency and, upon request of
Agent, Obligors shall execute and deliver any and all Patent and Trademark Agreements and all
Copyright Security Agreements as Agent may request to evidence Agent’s Lien on such patents,
trademarks or copyrights, and the General Intangibles of any Obligor relating thereto or
represented thereby.

          (d) Obligors shall take all actions reasonably necessary to maintain and pursue each
application, to obtain the relevant registration and to maintain the registration of each of the
patents, trademarks and copyrights (now or hereafter existing), including the filing of
applications for renewal, affidavits of use, affidavits of noncontestability and opposition and
interference and cancellation proceedings, unless the Borrower shall determine that such patent,
trademark or copyright is not material to the conduct of an Obligor’s business and shall so notify
Agent.

          (e) In the event that any of the patent, trademark or copyright Collateral is infringed upon,
or misappropriated or diluted by a third party, Borrower shall notify Agent promptly after Borrower
learns thereof. Borrower shall, unless it shall reasonably determine that such patent, trademark or
copyright Collateral is not material to the conduct of an Obligor’s business or operations,
promptly attempt to negotiate with such infringing party or sue for infringement, misappropriation
or dilution and to recover any and all damages for such infringement, misappropriation or dilution,
and, upon the occurrence and during the continuance of an Event of Default, shall take such other
actions as Agent shall deem appropriate under the circumstances to protect such patent, trademark
or copyright Collateral.

     19. INDEMNIFICATION.

          In any suit, proceeding or action brought by Agent or any Lender relating to any Collateral
for any sum owing with respect thereto or to enforce any rights or claims with respect thereto,
Obligors, jointly and severally, will save, indemnify and keep Agent and Lenders harmless from and
against all expense (including reasonable attorneys’ fees and expenses), loss or damage suffered by
reason of any defense, setoff, counterclaim, recoupment or reduction of liability whatsoever of the
Account Debtor or other Person obligated on the Collateral, arising out of a breach by an Obligor
of any obligation thereunder or arising out of any

- 14 -

 

other agreement, indebtedness or liability at
any time owing to, or in favor of, such obligor or its
successors from an Obligor, except in the case of Agent or any Lender, to the extent such
expense, loss, or damage is attributable solely to the gross negligence or willful misconduct of
Agent or such Lender as finally determined by a court of competent jurisdiction. All such
obligations of Obligors shall be and remain enforceable against and only against Obligors and shall
not be enforceable against Agent or any Lender.

     20. [RESERVED].

     21. NOTICE REGARDING COLLATERAL.

          Borrower will advise Agent promptly, in reasonable detail, (i) of any Lien (other than
Permitted Liens) or material claim made or asserted against any of the Collateral, and (ii) of the
occurrence of any other event which would have a Material Adverse Effect.

     22. REMEDIES; RIGHTS UPON DEFAULT.

          (a) In addition to all other rights and remedies granted to it under this Agreement, the
Second Amended Credit Agreement, the other Loan Documents and under any other instrument or
agreement securing, evidencing or relating to any of the Obligations, if any Event of Default shall
have occurred and be continuing, Agent may exercise all rights and remedies of a secured party
under the UCC. Without limiting the generality of the foregoing, Obligors expressly agree that in
any such event Agent, without demand of performance or other demand, advertisement or notice of any
kind (except the notice specified below of time and place of public or private sale) to or upon an
Obligor or any other Person (all and each of which demands, advertisements and notices are hereby
expressly waived to the maximum extent permitted by the UCC and other applicable law), may
forthwith enter upon the premises of any Obligor where any Collateral is located through self-help,
without judicial process, without first obtaining a final judgment or giving an Obligor or any
other Person notice and opportunity for a hearing on Agent’s claim or action and may collect,
receive, assemble, process, appropriate and realize upon the Collateral, or any part thereof, and
may forthwith sell, lease, license, assign, give an option or options to purchase, or sell or
otherwise dispose of and deliver said Collateral (or contract to do so), or any part thereof, in
one or more parcels at a public or private sale or sales, at any exchange at such prices as it may
deem acceptable, for cash or on credit or for future delivery without assumption of any credit
risk. Agent or any Lender shall have the right upon any such public sale or sales and, to the
extent permitted by law, upon any such private sale or sales, to purchase for the benefit of Agent
and Lenders, the whole or any part of said Collateral so sold, free of any right or equity of
redemption, which equity of redemption each Obligor hereby releases. Such sales may be adjourned
and continued from time to time with or without notice. Agent shall have the right to conduct such
sales on the premises of any Obligor or elsewhere and shall have the right to use any Obligor’s
premises without charge for such time or times as Agent deems necessary or advisable.

          (b) Upon the occurrence and during the continuance of an Event of Default, each Obligor
further agrees, at Agent’s request, to assemble the Collateral and make it available

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to Agent at a place or places designated by Agent which are reasonably convenient to Agent and
Borrower, whether at an Obligor’s premises or elsewhere. Until Agent is able to effect a sale,
lease, or other disposition of Collateral, Agent shall have the right to hold or use Collateral, or
any part thereof, to the extent that it deems appropriate for the purpose of preserving Collateral
or its value or for any other purpose deemed appropriate by Agent. Agent shall have no obligation
to any Obligor to maintain or preserve the rights of an Obligor as against third parties with
respect to Collateral while Collateral is in the possession of Agent. Upon the occurrence and
during the continuance of an Event of Default, Agent may, if it so elects, seek the appointment of
one or more receivers or other custodians to take possession of any or all of the Collateral and to
enforce any of Agent’s remedies (for the benefit of Agent and Lenders) with respect to any such
appointment without prior notice or hearing as to any such appointment. Upon the occurrence and
during the continuance of an Event of Default, Agent shall apply the net proceeds of any such
collection, recovery, receipt, appropriation, realization or sale to the Obligations as provided in
the Second Amended Credit Agreement, and only after so paying over such net proceeds, and after the
payment by Agent of any other amount required by any provision of law, need Agent account for the
surplus, if any, to Borrower. Upon the occurrence and during the continuance of an Event of
Default, to the maximum extent permitted by applicable law, each Obligor waives all claims,
damages, and demands against Agent or any Lender arising out of the repossession, retention or sale
of the Collateral except such as arise solely out of the gross negligence or willful misconduct of
Agent or such Lender as finally determined by a court of competent jurisdiction. Each Obligor
agrees that ten (10) days prior notice by Agent of the time and place of any public sale or of the
time after which a private sale may take place is reasonable notification of such matters. Obligors
shall remain jointly and severally liable for any deficiency if the proceeds of any sale or
disposition of the Collateral are insufficient to pay all Obligations, including reasonable
attorneys’ fees or other expenses incurred by Agent or any Lender to collect such deficiency.

          (c) Except as otherwise specifically provided herein, each Obligor hereby waives presentment,
demand, protest or any notice (to the maximum extent permitted by applicable law) of any kind in
connection with this Agreement or any Collateral.

          (d) The net cash proceeds resulting from the collection, liquidation, sale, lease or other
disposition of the Collateral shall be applied first to the expenses (including all attorneys’
fees) of retaking, holding, storing, processing and preparing for sale, selling, collecting,
liquidating and the like, and then to the satisfaction of all Obligations in accordance with the
terms of the Second Amended Credit Agreement. Each Obligor shall be liable to Agent and the Lenders
and shall pay to Agent and the Lenders, on demand, any deficiency which may remain after such sale,
disposition, collection or liquidation of the Collateral. Agent shall remit to such Obligors or
other Person entitled thereto any surplus remaining after this Agreement has been terminated in
accordance with Section 25(f) hereof.

          (e) If an Event of Default under the Second Amended Credit Agreement has occurred and is
continuing: (i) Agent shall have for the benefit of the Lenders, in addition to all other rights of
Agent and the Lenders, the rights and remedies of a secured party under the Loan

- 16 -

 

Documents and the UCC; and (ii) Agent may sell and deliver any Collateral at public or
private sales, for cash, upon credit or otherwise, at such prices and upon such terms as Agent
deems advisable, in its sole discretion, and may, if Agent deems it reasonable, postpone or adjourn
any sale of the Collateral by an announcement at the time and place of sale or of such postponed or
adjourned sale without giving a new notice of sale. Without in any way requiring notice to be given
in the following manner, each Obligor agrees that any notice by Agent of sale, disposition or other
intended action hereunder or in connection herewith, whether required by the UCC or otherwise,
shall constitute reasonable notice to each Obligor if such notice is mailed by registered or
certified mail, return receipt requested, postage prepaid, or is delivered personally against
receipt, at least ten (10) days prior to such action to the Borrower’s address specified in or
pursuant to Section 13.8 of the Second Amended Credit Agreement. If any Collateral is sold on terms
other than payment in full at the time of sale, no credit shall be given against the Obligations
until Agent or the Lenders receive payment, and if the buyer defaults in payment, Agent may resell
the Collateral without further notice to the Borrower or any Obligor. Agent is hereby granted a
license or other right to use, without charge, each Obligor’s labels, patents, copyrights, name,
trade secrets, trade names, trademarks, and advertising matter, or any similar property, in
completing production of, advertising or selling any Collateral, and each Obligor’s rights under
all licenses and all franchise agreements shall inure to Agent’s benefit for such purpose.

     23. GRANT OF LICENSE TO USE INTELLECTUAL PROPERTY.

          For the purpose of enabling the Agent to exercise rights and remedies under Section 22 hereof
(including, without limiting the terms of Section 22 hereof, in order to take possession of, hold,
preserve, process, assemble, prepare for sale, market for sale, sell or otherwise dispose of
Collateral), solely for such purpose and solely during such time as Agent shall be lawfully
entitled to exercise such rights and remedies, each Obligor hereby grants to Agent, for the benefit
of Agent and the Lenders, a nonexclusive license (which shall be irrevocable for so long as any
Obligations remain outstanding and which shall be exercisable without payment of royalty or other
compensation to Obligors) to use, license or sublicense any intellectual property now owned or
hereafter acquired by an Obligor (other than any intellectual property in connection with the
Trademark License Agreement dated June 26, 1998 between Parent and The Black and Decker
Corporation, as amended (other than as set forth in the Trademark Use Agreement)), and wherever the
same may be located, and including in such license access to all media in which any of the licensed
items may be recorded or stored and to all computer software and programs used for the compilation
or printout thereof.

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     24. LIMITATION ON AGENT’S AND LENDERS’ DUTY IN RESPECT OF COLLATERAL

          The Agent and each Lender shall use reasonable care with respect to the Collateral in its
possession or under its control. Neither the Agent nor any Lender shall have any other duty as to
any Collateral in its possession or control or in the possession or control of any agent or nominee
of the Agent or such Lender, or any income thereon or as to the preservation of rights against
prior parties or any other rights pertaining thereto.

     25. AMENDMENT AND RESTATEMENT

          This Agreement amends and restates the Original Security Agreement and is not intended to
create or result in a novation or accord and satisfaction. The terms of the Original Security
Agreement, together with all rights, duties, remedies and covenants thereunder and the grant of
each security interest thereunder, shall continue in full force and effect in this Agreement, which
shall constitute the entire understanding of the parties hereto with respect to the subject matter
hereof. This Agreement is intended to confirm and continue the security interests granted pursuant
to the Original Security Agreement in the “Collateral” described therein, all of which security
interests shall continue in full force and effect pursuant to this Agreement, and this Agreement is
not intended to grant a new security interest in any Collateral with respect to which a security
interest was previously granted by Obligors pursuant to the Original Security Agreement. If and to
the extent that any types or items of property included within the definition of “Collateral” as
defined in this Agreement is broader or more expansive than the description of “Collateral” as
defined in the Original Security Agreement or the Collateral as described herein includes property
in which an Obligor had not previously granted a security interest to Agent under the Original
Security Agreement, then this Agreement shall grant a new security interest in such additional
types or items of property.

     26. MISCELLANEOUS.

          (a) Reinstatement. This Agreement shall remain in full force and effect and continue
to be effective should any petition be filed by or against the Borrower or any other Obligor for
liquidation or reorganization, should the Borrower or any other Obligor become insolvent or make an
assignment for the benefit of any creditor or creditors or should a receiver or trustee be
appointed for all or any significant part of any Obligor’s assets, and shall continue to be
effective or be reinstated, as the case may be, if at any time payment and performance of the
Obligations, or any part thereof, is, pursuant to applicable law, rescinded or reduced in amount,
or must otherwise be restored or returned by any obligee of the Obligations, whether as a “voidable
preference,” “fraudulent conveyance,” or otherwise, all as though such payment or performance had
not been made. In the event that any payment, or any part thereof, is rescinded, reduced, restored
or returned, the Obligations shall be reinstated and deemed reduced only by such amount paid and
not so rescinded, reduced, restored or returned.

          (b) Notices. Except as otherwise provided herein, whenever it is provided herein that
any notice, demand, request, consent, approval, declaration or other communication

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shall or may be
given to or served upon any of the parties by any other party, or whenever any of the parties
desires to give and serve upon any other party any communication with respect to this Agreement,
each such notice, demand, request, consent, approval, declaration or other communication shall be
in writing and shall be given in the manner, and deemed received, as provided for in the Second
Amended Credit Agreement and in Section 22(e) hereof.

          (c) Severability. Whenever possible, each provision of this Agreement shall be
interpreted in a manner as to be effective and valid under applicable law, but if any provision of
this Agreement shall be prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity without invalidating the remainder of
such provision or the remaining provisions of this Agreement. This Agreement is to be read,
construed and applied together with the Second Amended Credit Agreement and the other Loan
Documents which, taken together, set forth the complete understanding and agreement of the Agent,
the Lenders and Obligors with respect to the matters referred to herein and therein.

          (d) No Waiver; Cumulative Remedies. Neither the Agent nor any Lender shall by any act,
delay, omission or otherwise be deemed to have waived any of its rights or remedies hereunder, and
no waiver shall be valid unless in writing, signed by the Agent and then only to the extent therein
set forth. A waiver by the Agent of any right or remedy hereunder on any one occasion shall not be
construed as a bar to any right or remedy which the Agent would otherwise have had on any future
occasion. No failure to exercise nor any delay in exercising on the part of the Agent or any
Lender, any right, power or privilege hereunder, shall operate as a waiver thereof, nor shall any
single or partial exercise of any right, power or privilege hereunder preclude any other or future
exercise thereof or the exercise of any other right, power or privilege. The rights and remedies
hereunder provided are cumulative and may be exercised singly or concurrently, and are not
exclusive of any rights and remedies provided by law. None of the terms or provisions of this
Agreement may be waived, altered, modified or amended except by an instrument in writing, duly
executed by the Agent and Obligors.

          (e) Limitation by Law. All rights, remedies and powers provided in this Agreement may
be exercised only to the extent that the exercise thereof does not violate any applicable provision
of law, and all the provisions of this Agreement are intended to be subject to all applicable
mandatory provisions of law that may be controlling in accordance with Section 25(c) above.

          (f) Termination of this Agreement. Subject to Section 25(a) hereof, this Agreement
shall terminate upon the termination of all Commitments, the satisfactory cash collateralization of
all Letters of Credit and the payment in full of all other Obligations (other than contingent
Obligations for indemnification as to which no claim has been asserted and to the extent necessary
to satisfy the requirements of the last sentence of Section 22(d) hereof). Notwithstanding any
termination of this Agreement, such termination shall not operate to terminate any indemnification
obligation of any Obligor under this Agreement or any of the other Loan Documents, all of which
indemnification obligations shall survive any such termination.

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          (g) Successors and Assigns. This Agreement shall be binding upon Obligors and their
respective successors and assigns and shall inure to the benefit of the Agent and Lenders
(including each Person who hereafter becomes a Lender under the Second Amended Credit Agreement)
and their respective successors and assigns. No sales of participations, other sales, assignments,
transfers or other dispositions of any agreement governing or any instrument evidencing the
Obligations or any portion thereof or interest therein shall in any manner affect the security
interests and Liens granted hereunder to the Agent, for the benefit of the Agent and the Lenders.
No Obligor may assign, sell, hypothecate or otherwise transfer any interest in or obligation under
this Agreement.

          (h) Counterparts. This Agreement may be authenticated in any number of separate
counterparts, including facsimile copies, each of which shall collectively and
separately constitute one and the same agreement. This Agreement may be authenticated by
manual signature, facsimile or, if approved in writing by Agent, electronic means, all of which
shall be equally valid.

          (i) Governing Law; Forum; Service of Process. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED
IN ANY OF THE LOAN DOCUMENTS, IN ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE, THIS AGREEMENT AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY, AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND PERFORMED IN THAT STATE, AND ANY APPLICABLE LAWS OF THE UNITED STATES OF
AMERICA. EACH OBLIGOR HEREBY CONSENTS AND AGREES THAT THE STATE OR FEDERAL COURTS LOCATED IN STATES
OF NEW YORK, FLORIDA OR GEORGIA SHALL HAVE NON-EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY
CLAIMS OR DISPUTES BETWEEN OBLIGORS, AGENT AND LENDERS PERTAINING TO THIS AGREEMENT OR TO ANY
MATTER ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS,
PROVIDED, THAT AGENT, LENDERS AND OBLIGORS ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS
MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF THE STATES OF NEW YORK, FLORIDA OR GEORGIA AND,
PROVIDED, FURTHER, NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO PRECLUDE
AGENT FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION TO REALIZE ON THE
COLLATERAL OR ANY OTHER SECURITY FOR THE OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER
IN FAVOR OF AGENT OR ANY LENDER. EACH OBLIGOR EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH
JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND EACH OBLIGOR HEREBY WAIVES ANY
OBJECTION WHICH IT MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR
FORUM NON CONVENIENS AND HEREBY CONSENTS TO THE GRANTING OF SUCH LEGAL OR
EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT. EACH OBLIGOR HEREBY WAIVES PERSONAL
SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES

- 20 -

 

THAT SERVICE OF SUCH SUMMONS, COMPLAINTS AND OTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED
MAIL ADDRESSED TO OBLIGORS AT THE ADDRESS FOR BORROWER SET FORTH IN THE SECOND AMENDED CREDIT
AGREEMENT AND THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON THE EARLIER OF ACTUAL RECEIPT
THEREOF OR THREE (3) DAYS AFTER DEPOSIT IN THE U.S. MAILS, PROPER POSTAGE PREPAID. EACH GUARANTOR
HEREBY IRREVOCABLY DESIGNATES AND APPOINTS BORROWER AS SUCH GUARANTOR’S AGENT FOR SERVICE OF
PROCESS IN ANY ACTION, SUIT OR OTHER PROCEEDING INITIATED BY AGENT OR ANY LENDER AGAINST SUCH
GUARANTOR.

          (j) Waiver of Jury Trial. BECAUSE DISPUTES ARISING IN CONNECTION WITH COMPLEX
FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN EXPERIENCED AND EXPERT
PERSON AND THE PARTIES WISH APPLICABLE STATE AND FEDERAL LAWS TO APPLY (RATHER THAN ARBITRATION
RULES), THE PARTIES DESIRE THAT DISPUTES ARISING HEREUNDER OR RELATING HERETO BE RESOLVED BY A
JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF
THE JUDICIAL SYSTEM AND OF ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY
ACTION, SUIT OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR
OTHERWISE, AMONG AGENT, LENDERS, AND OBLIGORS ARISING OUT OF, CONNECTED WITH, RELATED TO, OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED IN CONNECTION WITH, THIS AGREEMENT OR ANY OF THE OTHER
LOAN DOCUMENTS OR THE TRANSACTIONS RELATED HERETO OR THERETO.

          (k) Section Titles. The Section titles contained in this Agreement are and shall be
without substantive meaning or content of any kind whatsoever and are not a part of the agreement
between the parties hereto.

          (1) No Strict Construction. The parties hereto have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly by the parties
hereto and no presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any provisions of this Agreement.

          (m) Advice of Counsel. Each of the parties represents to each other party hereto that
it has discussed this Agreement and, specifically, the provisions of Section 25(i) and Section
25(j), with its counsel.

          (n) Benefit of Lenders. All Liens granted or contemplated hereby shall be for the
benefit of Agent and Lenders, and all proceeds or payments realized from Collateral in accordance
herewith shall be applied to the Obligations in accordance with the terms of the Second Amended
Credit Agreement.

- 21 -

 

     IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be executed and
delivered by its duly authorized officer as of the date first set forth above.

	 	 	 	 	 
	 	BORROWER:

APPLICA INCORPORATED, a Florida 

corporation

 	 
	 	By:  	/s/ Terry Polistina
 	 
	 	Name: 	  	Terry Polistina 	 
	 	Title: 	  	Senior Vice President and Chief Financial
 	 
	 	Officer 	  	 	 
	 
	 	GUARANTORS:

APPLICA CONSUMER PRODUCTS, INC., a 

Florida corporation

 	 
	 	By:  	/s/ Terry Polistina
 	 
	 	Name:	  	Terry Polistina 	 
	 	Title:	  	Senior Vice President and Chief Financial	 
	 	Officer 	  	 	 
	 
	 	WD DELAWARE, INC., a Delaware corporation

 	 
	 	By:  	/s/ Lisa R. Carstarphen
 	 
	 	Name:	  	Lisa R. Carstarphen 	 
	 	Title:	  	Corporate Secretary 	 
	 
	 	HP INTELLECTUAL CORP., a Delaware 

corporation

 	 
	 	By:  	/s/ Lisa R. Carstarphen
 	 
	 	Name:	  	Lisa R. Carstarphen 	 
	 	Title:	  	Corporate Secretary 	 
	 
	 	WINDMERE HOLDINGS CORPORATION, 

a Delaware corporation

 	 
	 	By:  	/s/ Lisa R. Carstarphen
 	 
	 	Name:	  	Lisa R. Carstarphen 	 
	 	Title:	  	Corporate Secretary 	 

- 22 -

 

	 	 	 	 	 
	 	HP DELAWARE, INC., a Delaware 

corporation 	 
	 	By:  	/s/ Lisa R. Carstarphen
 	 
	 	Name:	  	Lisa R. Carstarphen 	 
	 	Title:	  	Corporate Secretary 	 
	 
	 	HPG LLC, a Delaware limited liability

company

 	 
	 	By:  	/s/ Lisa R. Carstarphen
 	 
	 	Name:	  	Lisa R. Carstarphen 	 
	 	Title:	  	Corporate Secretary 	 
	 
	 	APPLICA AMERICAS, INC. (f/k/a

HP AMERICAS, INC.), a Delaware 

corporation

 	 
	 	By:  	/s/ Lisa R. Carstarphen
 	 
	 	Name:	  	Lisa R. Carstarphen 	 
	 	Title:	  	Corporate Secretary 	 
	 
	 	APPLICA MEXICO HOLDINGS, INC., a 

Delaware corporation

 	 
	 	By:  	/s/ Lisa R. Carstarphen
 	 
	 	Name:	  	Lisa R. Carstarphen 	 
	 	Title:	  	Corporate Secretary 	 
	 
	 	AGENT:

BANK OF AMERICA, N.A., as Agent

 	 
	 	By:  	/s/ Sherry D. Lail
 	 
	 	Name:	  	Sherry D. Lail 	 
	 	Title:	  	Senior Vice President 	 
	 

- 23 -Amended & Restated Stock Pledge Agreement

 

Exhibit 10.3

AMENDED AND RESTATED STOCK PLEDGE AGREEMENT

THIS AMENDED AND RESTATED STOCK PLEDGE AGREEMENT (this “Agreement”) is made and entered into as of
December 23, 2005, between the Pledgors identified below (individually referred to as a “Pledgor”
and collectively as the “Pledgors”), and BANK OF AMERICA, N.A., a national banking association, in
its capacity as Collateral and administrative agent (in such capacity, together with its successors
in such capacity, the “Agent”) for each of the financial institutions (the “Lenders” and
collectively with the Agent, the “Secured Parties”) now or hereafter party to the Second Amended
Credit Agreement (as defined below).

Recitals:

     Agent, Lenders, Applica Incorporated, a Florida corporation (“Borrower”), the other Pledgors
(except PPC Industries Ltd., a British Virgin Islands company (“PPC)), Applica Canada Corporation,
a Nova Scotia Corporation and affiliate of Borrower, and certain other entities are parties to a
Second Amended and Restated Credit Agreement dated as of December 23, 2005 (as at any time amended,
modified, restated renewed or extended, the “Second Amended Credit Agreement”), which amends and
restates a certain Amended and Restated Credit Agreement dated November 17, 2004 among certain of
the parties (as amended, the “Prior Credit Agreement). Pursuant to the Second Amended Credit
Agreement, Lenders have agreed to make loans and other extensions of credit to or for the benefit
of Borrower on the terms and subject to all of the conditions set forth in the Second Amended
Credit Agreement. Capitalized terms used in these Recitals and elsewhere in this Agreement, unless
otherwise defined, shall have the meanings ascribed to them in the Second Amended Credit Agreement.

Pursuant to a Stock Pledge Agreement dated December 28, 2001 (together with a Pledge Agreement
Supplement dated as of November 17, 2004, the “Existing Stock Pledge”), Pledgors (other than PPC
and HPG LLC, a Delaware limited liability company) pledged certain capital stock and equity
interests to Agent to secure the payment of all liabilities and obligations of Borrower to Agent
and Lenders under the Prior Credit Agreement and related documents.

As a condition to their extension of any credit to Borrower under the Second Amended Credit
Agreement, Secured Parties have required that Pledgors agree to amend and restate the Existing
Stock Pledge so that, as so amended and restated, the Existing Stock Pledge will read as
hereinafter set forth. To induce each of the Secured Parties to extend credit to Borrower under
the Second Amended Credit Agreement in accordance with the terms thereof (which extensions of
credit inure to the direct and indirect benefit of all Pledgors), Pledgors have agree to execute
and deliver this Agreement.

Each Pledgor acknowledges that it will materially benefit from the loans and advances to be made
and the letters of credit to be issued under the Second Amended Credit Agreement;

Agreement:

NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein, the
parties hereto agree as follows:

- 1 -

 

     1. Pledge and Grant of Security Interest.

          1.1. As collateral security for the payment and performance of all debts, obligations or
liabilities under the Subsidiary Guaranty and of all of the Obligations under (and as defined in)
the Second Amended Credit Agreement (collectively, the “Secured Obligations”), and subject to
Section 10 hereof, each Pledgor hereby pledges and collaterally assigns to the Agent for
the benefit of the Agent and the Lenders, and grants to the Agent for the benefit of the Agent and
the Lenders a first priority security interest in, all of such Pledgor’s right, title and interest
in and to the following:

          (a) in the case of all Pledgors other than PPC, all of the issued and outstanding
            shares of common stock now or hereafter owned by such Pledgor with respect to each of its
Domestic Subsidiaries and 65% of all issued and outstanding shares of stock of each of its
current and future Direct Foreign Subsidiaries, all such Subsidiaries as of the date hereof
(and outstanding shares) being identified on Schedule I hereto;

          (b) in the case of PPC, all issued and outstanding shares of common stock of PPC’s
ownership in Applica Asia Limited, a Hong Kong company (“Applica Asia”), as identified on
Schedule I hereto (together with those shares enumerated in subsection (a), above,
collectively referred to as the “Pledged Interests”);

          (c) all cash, securities, dividends, rights, interests and other property at any time
and from time to time declared or distributed in respect of or in exchange for any or all of
the Pledged Interests; and

          (d) all other property hereafter delivered to the Agent in substitution for or in
addition to any of the foregoing, all certificates and instruments representing or
evidencing such property and all cash, securities, interest, dividends, rights, and other
property at any time and from time to time declared or distributed in respect of or in
exchange for any or all of the Pledged Interests.

All such Pledged Interests, certificates, instruments, cash, securities, interest, dividends,
rights and other property referred to in this Section 1 are herein collectively referred to
as the “Collateral.” All of the Pledged Interests are owned by the respective Pledgors and
represented by the stock certificates listed on Schedule I hereto. There have been
delivered to the Agent with respect to all the certificated Pledged Interests existing on the date
hereof, certificates evidencing such Pledged Interests, together with undated stock powers or other
transfer instruments duly executed in blank by the Pledgor.

          1.2. The Pledgor agrees to deliver all the Collateral to the Agent at such location as the
Agent shall from time to time designate by written notice pursuant to Section 19 hereof for
its custody at all times until termination of this Agreement, together with such instruments of
assignment and transfer as requested by the Agent.

          1.3. All advances, charges, costs and expenses, including, without limitation, reasonable
attorneys’ fees, incurred or paid by the Agent or any Lender in exercising any right, power or
remedy conferred by this Agreement, or in the enforcement thereof, shall become a part of the
Secured Obligations secured hereunder and shall be paid to the Agent for the benefit of Secured
Parties by each Pledgor immediately upon demand therefor, with interest thereon until paid in full
at the Base Rate.

     2. Status of Pledged Interests.

- 2 -

 

Each Pledgor hereby represents and warrants to the Secured Parties that (a) all of the shares of
the Pledged Interests are validly issued and outstanding, fully paid and nonassessable and
constitute (i) all the issued and outstanding shares of voting stock of each Domestic Subsidiary
(other than Applica Asia), (ii) 65% of all of the issued and outstanding voting stock of the Direct
Foreign Subsidiaries, all as set forth on Schedule I hereto, and (iii) all of the issued
and outstanding shares of voting stock of Applica Asia, (b) each Pledgor is the registered and
record and beneficial owner of its Pledged Interests, free and clear of all Liens, charges,
equities, encumbrances and restrictions on pledge or transfer (other than the pledge hereunder and
under the Loan Documents and applicable restrictions pursuant to federal and state securities laws,
(c) it has full corporate power, legal right and lawful authority to execute this Agreement and to
pledge, assign and transfer its Pledged Interests in the manner and form hereof, and (d) the
pledge, assignment and delivery of its Pledged Interests to the Agent for the benefit of Secured
Parties pursuant to this Agreement creates a valid and perfected first priority security interest
in such Pledged Interests, securing the payment of the Secured Obligations, assuming continuous and
uninterrupted possession thereof by the Agent. Except as otherwise expressly provided herein or in
the Second Amended Credit Agreement, none of the Pledged Interests (nor any interest therein or
thereto) shall be sold, transferred or assigned without the Agent’s prior written consent, which
may be withheld for any reason. Each Pledgor covenants with the Agent for the benefit of the
Lenders that it shall at all times cause its Pledged Interests (other than the Partnership
Interests) to be represented by the certificates now and hereafter delivered to the Agent in
accordance with Section 1 hereof and that it shall cause each of its Subsidiaries not to
issue any capital stock, or securities convertible into capital stock, at any time during the term
of this Agreement other than to the Borrower or another Guarantor who shall immediately pledge such
additional capital stock to the Agent on substantially identical terms as are contained herein.
Each Pledgor hereby agrees not to enter into any agreement requiring that the voting rights
associated with the Pledged Interests be exercised in any particular manner nor grant any interest
in or permit to exist any Lien, charge, encumbrance or restriction with respect to the Pledged
Interests (other than applicable restrictions pursuant to federal and state securities laws).

     3. Preservation and Protection of Collateral.

          3.1. No Secured Party shall be under any duty or liability with respect to the collection,
protection or preservation of the Collateral, or otherwise, beyond the use of reasonable care in
the custody and preservation thereof while in its possession.

          3.2. Each Pledgor agrees to pay when due all taxes, charges, Liens and assessments against the
Collateral, unless being contested in good faith by appropriate proceedings diligently conducted
and against which adequate reserves have been established in accordance with GAAP. Upon the
failure of any Pledgor to so pay or contest such taxes, charges, Liens or assessments, the Agent at
its option may pay or contest any of them (the Agent having the sole right to determine the
legality or validity and the amount necessary to discharge such taxes, charges, Liens or
assessments).

     4. Default.

          If any of the Secured Obligations are not paid as of the end of the Business Day on which such
Secured Obligations become due and payable and after the expiration of all grace or cure periods,
if any, and all extensions or waivers, if any, and should such failure to pay continue, or should
any other Event of Default set forth in the Second Amended Credit Agreement occur and be
continuing, or should any
Pledgor fail otherwise to comply with the terms hereof (any of the foregoing an “Event of
Default”), the Agent is given full power and authority, then or at any time thereafter, to sell,
assign and deliver or collect the whole or any part of the Collateral, or any substitute therefor
or any addition thereto, in one or

- 3 -

 

more sales, with or without any previous demands or demand of
performance or, to the extent permitted by law, notice or advertisement, in such order as the Agent
may elect; and any such sale may be made either at public or private sale at the Agent’s place of
business or elsewhere, either for cash or upon credit or for future delivery, at such price as the
Agent may reasonably deem fair; and the Agent may be the purchaser of any or all Collateral so sold
and hold the same thereafter in its own right free from any claim of a Pledgor or right of
redemption. Demands of performance, advertisements and presence of property and sale and notice of
sale are hereby waived to the extent permissible by law. Any sale hereunder may be conducted by an
auctioneer or any officer or agent of the Agent. Pledgors recognize that the Agent may be unable
to effect a public sale of the Collateral by reason of certain prohibitions contained in the
Securities Act of 1933, as amended (the “Securities Act”), and applicable state law, and may be
otherwise delayed or adversely affected in effecting any sale by reason of present or future
restrictions thereon imposed by Governmental Authorities, and that as a consequence of such
prohibitions and restrictions the Agent may be compelled (i) to resort to one or more private sales
to a restricted group of purchasers who will be obliged to agree, among other things, to acquire
the stock for their own account, for investment and not with a view to the distribution or resale
thereof, (ii) to seek regulatory approval of any proposed sale or sales, or (iii) to limit the
amount of Collateral sold to any Person or group. Each Pledgor agrees and acknowledges that
private sales so made may be at prices and upon terms less favorable to Pledgors than if such
Collateral was sold either at public sales or at private sales not subject to other regulatory
restrictions, and that the Agent has no obligation to delay the sale of any of the Collateral for
the period of time necessary to permit the issuer of such Collateral to register or otherwise
qualify them, even if such issuer would agree to register or otherwise qualify such Collateral for
public sale under the Securities Act or applicable state law. Each Pledgor further agrees, to the
extent permitted by applicable law, that the use of private sales made under the foregoing
circumstances to dispose of the Collateral shall be deemed to be dispositions in a commercially
reasonable manner. Each Pledgor hereby acknowledges that a ready market may not exist for the
Pledged Interests if such Pledged Interests is not traded on a national securities exchange or
quoted on an automated quotation system and in such event the Pledged Interests may be sold for an
amount less than a pro rata share of the fair market value of the issuer’s assets minus its
liabilities. In addition to the foregoing, the Secured Parties may exercise such other rights and
remedies as may be available under the Loan Documents, at law (including, without limitation, the
UCC) or in equity.

     5. Proceeds of Sale.

          The proceeds of the sale of any of the Collateral and all sums received or collected from or
on account of such Collateral shall first be applied to the payment of expenses incurred or paid by
the Agent in connection with any sale, transfer or delivery of the Collateral, then to the payment
of any other costs, charges, reasonable attorneys’ fees or expenses mentioned herein, and then in
accordance with Section 3.9 of the Second Amended Credit Agreement. The Agent shall, upon
satisfaction in full of all such Secured Obligations (including cash collateralization of all
Letters of Credit) and termination of the Commitments, pay any balance to Pledgors.

     6. Presentments, Etc.

          The Agent shall not be under any duty or obligation whatsoever to make or give any
presentments, demands for performances, notices of nonperformance, protests, notice of protest or
notice of dishonor in connection with any obligations or evidences of indebtedness held thereby as
collateral, or in
connection with any obligations or evidences of indebtedness which constitute in whole or in
part the Secured Obligations.

- 4 -

 

     7. Attorney-in-Fact.

          Each Pledgor hereby appoints the Agent as such Pledgor’s attorney-in-fact for the purposes of
carrying out the provisions of this Agreement and taking any action and executing any instrument
which the Agent may deem necessary or advisable to accomplish the purposes hereof, which
appointment is irrevocable and coupled with an interest; provided that the Agent shall have
and may exercise rights under this power of attorney only upon the occurrence and during the
continuance of a Default or an Event of Default. Without limiting the generality of the foregoing,
upon the occurrence and during the continuance of a Default or an Event of Default, the Agent shall
have the right and power to receive, endorse and collect all checks and other orders for the
payment of money made payable to such Pledgor representing any dividend, payment, or other
distribution payable or distributable in respect to the Collateral or any part thereof and to give
full discharge for the same.

     8. Absolute Rights and Obligations.

          All rights of the Agent and the other Secured Parties, and all obligations of the Pledgors
hereunder, shall be absolute and unconditional irrespective of:

          8.1. any lack of validity or enforceability of the Second Amended Credit Agreement, the
Subsidiary Guaranty, any other Loan Document or any other agreement or instrument relating to any
of the Secured Obligations;

          8.2. any change in the time, manner or place of payment of, or in any other term of, all or
any of the Obligations, or any other amendment or waiver of or any consent to any departure from
the Second Amended Credit Agreement, the Subsidiary Guaranty, any other Loan Document or any other
agreement or instrument relating to any of the Secured Obligations;

          8.3. any exchange, release or non-perfection of any other collateral, or any release or
amendment or waiver of or consent to departure from the Subsidiary Guaranty, any guaranty, or any
other security for all or any of the Secured Obligations; or

          8.4. any other circumstances which might otherwise constitute a defense available to, or a
discharge of, any Pledgor in respect of the Secured Obligations or of this Agreement.

     9. Waivers by Pledgors.

          Each Pledgor waives (to the extent permitted by applicable law) (a) any right to require any
Secured Party or any other obligee of the Secured Obligations to (i) proceed against the Borrower,
any Guarantor or any other Person, (ii) proceed against or exhaust any Collateral as defined in the
Second Amended Credit Agreement, or (iii) pursue any other remedy in its power and (b) any defense
arising by reason of any disability or other defense of the Borrower, any Guarantor or any other
Person, or by reason of the cessation from any cause whatsoever of the liability of the Borrower,
any Guarantor or any other Person. Until termination of this Agreement, no Pledgor shall have any
right of subrogation, and each Pledgor waives any right to enforce any remedy which any Secured
Party or any other obligee of the Secured Obligations now has or may hereafter have against any
other Person and waives (to the extent
permitted by applicable law) any benefit of and any right to participate in any collateral or
security whatsoever now or hereafter held by the Agent for the benefit of the Secured Parties.
Each Pledgor authorizes any Secured Party and any other obligee of the Secured Obligations without
notice (except notice required by applicable law) or demand and without affecting such Pledgor’s
liability hereunder or

- 5 -

 

under the Loan Documents from time to time to (i) take and hold security,
other than the Collateral herein described, for the payment of such Secured Obligations or any part
thereof, and exchange, enforce, waive and release the Collateral herein described or any part
thereof or any such other security; and (ii) apply such Collateral or other security and direct the
order or manner of sale thereof as the Agent may determine.

          The Agent may at any time deliver (without representation, recourse or warranty) the
Collateral or any part thereof to a Pledgor free and clear of all Liens and the receipt thereof by
such Pledgor shall be a complete and full acquittance for the Collateral so delivered, and the
Secured Parties shall thereafter be discharged from any liability or responsibility therefor.

     10. Dividends and Voting Rights.

          10.1. All dividends and other distributions with respect to any of the Pledged Interests shall
be subject to the pledge hereunder except, during any period that no Default or Event of Default
exists, for dividends, if any, permitted to be retained by a Pledgor under the Second Amended
Credit Agreement. So long as no Default or Event of Default shall have occurred and be continuing,
any such dividends may be retained by such Pledgor free from any Liens hereunder to the extent
permitted by the Second Amended Credit Agreement. Following the occurrence and during the
continuance of any Default or Event of Default, all dividends shall be promptly delivered to the
Agent (together with stock powers or instruments of assignment duly executed in blank affixed to
any capital stock or other negotiable document or instrument so distributed) to be held, released
or disposed of by it hereunder or, at the option of the Agent, to be applied to the Secured
Obligations hereby secured as they become due.

          10.2. So long as no Event of Default shall have occurred and be continuing, the registration
of the Collateral in the name of a Pledgor shall not be changed and such Pledgor shall be entitled
to exercise all voting and other rights and powers pertaining to the Collateral for all purposes
not inconsistent with the terms hereof.

          10.3. Upon the occurrence and during the continuance of any Event of Default, at the option of
the Agent, all rights of each Pledgor to receive and retain dividends upon the Collateral shall
cease and shall thereupon be vested in the Agent for the benefit of the Lenders.

          10.4. Upon the occurrence and during the continuance of an Event of Default, at the option of
the Agent, all rights of each Pledgor to exercise the voting or consensual rights and powers which
it is otherwise authorized to exercise shall cease and the Agent may thereupon (but shall not be
obligated to) cause such Collateral to be registered in the name of the Agent or its nominee or
agent for the benefit of Secured Parties and exercise such voting or consensual rights and powers
as appertain to ownership of such Collateral, and to that end each Pledgor hereby appoints the
Agent as its proxy, with full power of substitution, to vote and exercise all other rights as a
shareholder with respect to such Pledged Interests hereunder upon the occurrence and during the
continuance of an Event of Default, which proxy is coupled with an interest and is irrevocable
prior to termination of this Agreement, and each Pledgor hereby agrees to provide such further
proxies as the Agent may request; provided, however, that the Agent in its
discretion may from time to time refrain from exercising, and shall not be obligated to exercise,
any such voting or consensual rights or such proxy.

     11. Power of Sale.

Until termination of this Agreement, the power of sale and other rights, powers and remedies
granted to

- 6 -

 

the Agent for the benefit of Secured Parties hereunder shall continue to exist and may
be exercised by the Agent at any time and from time to time, upon the occurrence and during the
continuance of an Event of Default, irrespective of the fact that any Secured Obligations or any
part thereof may have become barred by any statute of limitations or that the liability of a
Pledgor may have ceased.

     12. Other Rights.

The rights, powers and remedies given to the Agent for the benefit of Secured Parties by this
Agreement shall be in addition to all rights, powers and remedies given to any Secured Party by
virtue of any statute or rule of law. Any forbearance or failure or delay by the Agent in
exercising any right, power or remedy hereunder shall not be deemed to be a waiver of such right,
power or remedy, and any single or partial exercise of any right, power or remedy hereunder shall
not preclude the further exercise thereof; and every right, power and remedy of the Secured Parties
shall continue in full force and effect until such right, power or remedy is specifically waived by
the Required Lenders by an instrument in writing.

     13. Further Assurances.

Each Pledgor agrees at its own expense to do such further acts and things, and to execute and
deliver such additional conveyances, assignments, financing statements, agreements and instruments,
as the Agent may at any time reasonably request in connection with the administration or
enforcement of this Agreement or related to the Collateral or any part thereof or in order better
to assure and confirm unto the Agent its rights, powers and remedies for the benefit of Secured
Parties hereunder. Each Pledgor hereby consents and agrees that the issuers of or obligors in
respect of the Collateral shall be entitled to accept the provisions hereof as conclusive evidence
of the right of the Agent, on behalf of Secured Parties, to exercise its rights hereunder with
respect to the Collateral, notwithstanding any other notice or direction to the contrary heretofore
or hereafter given by such Pledgor or any other Person to any of such issuers or obligors.

     14. Binding Agreement; Assignment.

          This Agreement, and the terms, covenants and conditions hereof, shall be binding upon and
inure to the benefit of the parties hereto, and to their respective successors and assigns, except
that no Pledgor shall be permitted to assign this Agreement or any interest herein or in the
Collateral, or any part thereof, or otherwise pledge, encumber or grant any option with respect to
the Collateral, or any part thereof, or any cash or property held by the Agent as Collateral under
this Agreement. All references herein to a Secured Party shall include any successor of such
party, including, without limitation, any obligees from time to time of the Secured Obligations.

     15. Severability.

          In case any security interest or other right or Lien of any Secured Party or any provision
hereof shall be held to be invalid, illegal or unenforceable, such invalidity, illegality or
unenforceability shall not affect any other Lien, security interest or other right granted hereby
or provision hereof.

     16. Counterparts.

This Agreement may be executed in any number of counterparts and all the counterparts taken
together shall be deemed to constitute one and the same instrument.

- 7 -

 

     17. Termination.

This Agreement and all Liens granted by the Pledgors hereunder shall terminate without delivery of
any instrument or performance of any act by any party on the date that all of the Secured
Obligations have been paid in full (or, in the case of outstanding Letters of Credit, cash
collateralized in accordance with the Second Amended Credit Agreement) and the Second Amended
Credit Agreement and all Commitments thereunder have terminated. Upon such termination of this
Agreement, the Agent shall, at the sole expense of the Pledgors, deliver to each Pledgor the
certificates evidencing their respective shares of Pledged Interests (and any other property
received as a dividend or distribution or otherwise in respect of such Pledged Interests), together
with any cash then constituting the Collateral, not then sold or otherwise disposed of in
accordance with the provisions hereof and take such further actions as may be necessary to effect
the same. Notwithstanding any termination of this Agreement, all of the indemnification provisions
of this Agreement and the other Loan Documents shall survive and continue in full force and effect.

     18. Indemnification.

Each Pledgor hereby covenants and agrees to pay, indemnify, and hold the Agent and each Lender
harmless from and against any and all other out-of-pocket liabilities, costs, expenses or
disbursements of any kind or nature whatsoever arising in connection with any claim or litigation
by any Person resulting from the execution, delivery, enforcement, performance and administration
of this Agreement or the Loan Documents, or the transactions contemplated hereby or thereby, or in
any respect relating to the Collateral or any transaction pursuant to which such Pledgor has
incurred any Secured Obligation (all the foregoing, collectively, the “Indemnified Liabilities”);
provided, however, that the Pledgors shall have no obligation hereunder to a
Secured Party with respect to Indemnified Liabilities arising from the willful misconduct or gross
negligence of such Secured Party. The agreements in this subsection shall survive termination of
this Agreement.

19. Notices.

All notices shall be sent in the manner and to the addresses specified in the Second Amended Credit
Agreement and shall be deemed to have been received and be effective as and when specified in the
Second Amended Credit Agreement.

     20. Governing Law; Waivers.

          (a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH STATE.

          (b) EACH PARTY HEREBY EXPRESSLY AND IRREVOCABLY AGREES AND CONSENTS THAT ANY SUIT, ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREIN
MAY BE INSTITUTED IN ANY STATE OR FEDERAL COURT SITTING IN THE STATES OF NEW YORK, FLORIDA OR
GEORGIA, AND, BY THE EXECUTION AND DELIVERY OF THIS AGREEMENT, EXPRESSLY WAIVES ANY OBJECTION THAT
IT MAY HAVE NOW OR HEREAFTER TO THE LAYING OF THE VENUE OR TO THE JURISDICTION OF ANY SUCH SUIT,
ACTION OR PROCEEDING, AND IRREVOCABLY SUBMITS GENERALLY AND UNCONDITIONALLY TO THE JURISDICTION OF
ANY SUCH COURT IN ANY SUCH

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SUIT, ACTION OR PROCEEDING.

          (c) EACH PARTY AGREES THAT SERVICE OF PROCESS MAY BE MADE BY PERSONAL SERVICE OF A COPY OF THE
SUMMONS AND COMPLAINT OR OTHER LEGAL PROCESS IN ANY SUCH SUIT, ACTION OR PROCEEDING, OR BY
REGISTERED OR CERTIFIED MAIL (POSTAGE PREPAID) TO THE ADDRESS OF SUCH PARTY SPECIFIED IN
SECTION 19 HEREOF OR BY ANY OTHER METHOD OF SERVICE PROVIDED FOR UNDER THE APPLICABLE LAWS
IN EFFECT IN THE STATES OF NEW YORK, FLORIDA OR GEORGIA.

          (d) NOTHING CONTAINED IN SUBSECTIONS (b) OR (c) HEREOF SHALL PRECLUDE ANY
PARTY FROM BRINGING ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR
THE OTHER LOAN DOCUMENTS IN THE COURTS OF ANY PLACE WHERE ANY OTHER PARTY OR ANY OF SUCH PARTY’S
PROPERTY OR ASSETS MAY BE FOUND OR LOCATED. TO THE EXTENT PERMITTED BY THE APPLICABLE LAWS OF ANY
SUCH JURISDICTION, EACH PARTY HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT AND
EXPRESSLY WAIVES, IN RESPECT OF ANY SUCH SUIT, ACTION OR PROCEEDING, THE JURISDICTION OF ANY OTHER
COURT OR COURTS WHICH NOW OR HEREAFTER, BY REASON OF ITS PRESENT OR FUTURE DOMICILE, OR OTHERWISE,
MAY BE AVAILABLE TO IT.

          (e) IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS OR REMEDIES UNDER OR RELATED
TO THIS AGREEMENT OR ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR THAT MAY IN THE
FUTURE BE DELIVERED IN CONNECTION WITH THE FOREGOING, EACH PARTY HEREBY AGREES, TO THE EXTENT
PERMITTED BY APPLICABLE LAW, THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND
NOT BEFORE A JURY AND EACH PARTY HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ANY
OBJECTION THAT IT MAY HAVE THAT EACH ACTION OR PROCEEDING HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM.

     21. Amendment and Restatement. This Agreement amends and restates the Existing Stock
Pledge and is not intended to create or result in a novation or accord and satisfaction. The terms
of the Existing Stock Pledge, together with all rights, duties, remedies and covenants thereunder
and the grant of each security interest thereunder, shall continue in full force and effect in this
Agreement, which shall constitute the entire understanding of the parties hereto with respect to
the subject matter hereof. This Agreement is intended to confirm and continue the security
interests granted pursuant to the Existing Stock Pledge in the “Collateral” described therein, all
of which security interests shall continue in full force and effect pursuant to this Agreement, and
this Agreement is not intended to grant a new security interest in any Collateral with respect to
which a security interest was previously granted by Pledgors pursuant to the Existing Stock Pledge.

     22. Additional Shares and Interests.

          If a Pledgor shall acquire or hold (a) any additional shares of capital stock of, or other
partnership, ownership or equity interest in, any Person listed on Schedule I hereto or (b)
any shares of capital stock of, or any other partnership, ownership or equity interest in, any
Subsidiary not listed on Schedule I hereto, which stock or partnership or other ownership
or equity interests are required to be

- 9 -

 

subject to a Pledge Agreement pursuant to the terms of
Section 7.24 of the Second Amended Credit Agreement (any such shares or other ownership or equity
interests described in clauses (a) or (b) above being referred to herein as the “Additional
Interests”), the Pledgor shall deliver to the Agent for the benefit of the Secured Parties (i) a
revised Schedule I hereto reflecting the ownership and pledge of such Additional Interests
and (ii) a Pledge Agreement Supplement in the form of Exhibit A hereto with respect to such
Additional Interests duly completed and signed by the Pledgor. The Pledgor shall comply with the
requirements of this Section 21 concurrently with the acquisition of any such Additional
Interests in the case of shares and other ownership or equity interests described in clause (a)
above, and within the applicable time periods specified in the Second Amended Credit Agreement with
respect to shares and other partnership, ownership or equity interests described in clause (b)
above.

IN WITNESS WHEREOF, the parties have duly executed this Agreement on the day and year first written
above.

	 	 	 	 	 
	 	PLEDGORS:

APPLICA INCORPORATED,

a Florida corporation 	 
	 	By:  	     /s/ Terry Polistina
 	 
	 	Name:	  	Terry Polistina 	 
	 	Title:	  	Senior Vice President and Chief Financial Officer 	 
	 
	 	PPC INDUSTRIES LTD.,

a British Virgin Islands company

 	 
	 	By:  	/s/ Lisa R. Carstarphen
 	 
	 	Name:	  	Lisa R. Carstarphen 	 
	 	Title:	  	Corporate Secretary 	 
	 
	 	WD DELAWARE, INC.,

a Delaware corporation

 	 
	 	By:  	/s/ Lisa R. Carstarphen
 	 
	 	Name:	  	Lisa R. Carstarphen 	 
	 	Title:	  	Corporate Secretary 	 
	 
	 	WINDMERE HOLDINGS CORPORATION,

a Delaware corporation

 	 
	 	By:  	/s/ Lisa R. Carstarphen
 	 
	 	Name:	  	Lisa R. Carstarphen 	 
	 	Title:	  	Corporate Secretary 	 
	 

- 10 -

 

	 	 	 	 	 
	 	HP DELAWARE, INC.,

a Delaware corporation

 	 
	 	By:  	/s/ Lisa R. Carstarphen
 	 
	 	Name:	  	Lisa R. Carstarphen 	 
	 	Title:	  	Corporate Secretary 	 
	 
	 	HPG LLC, a Delaware limited liability company

 	 
	 	By:  	/s/ Lisa R. Carstarphen
 	 
	 	Name:	  	Lisa R. Carstarphen 	 
	 	Title:	  	Corporate Secretary 	 
	 
	 	APPLICA MEXICO HOLDINGS, INC.,

a Delaware corporation

 	 
	 	By:  	/s/ Lisa R. Carstarphen
 	 
	 	Name:	  	Lisa R. Carstarphen 	 
	 	Title:	  	Corporate Secretary 	 
	 
	 	AGENT:

BANK OF AMERICA, N. A., as Agent for the Lenders

 	 
	 	By:  	/s/ Sherry D. Lail
 	 
	 	Name:	  	Sherry D. Lail 	 
	 	Title:	  	Senior Vice President 	 
	 

- 11 -

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