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Exhibit 4.18  

 
 

INTERCREDITOR AGREEMENT    
  

        This Intercreditor Agreement (this "Agreement") dated as of the 22nd day of October, 2001, is by and between U.S.
Bank National Association ("U.S. Bank") and The Chase Manhattan Bank ("Chase"), as a "Lender" and as the
"Agent" for the other Lenders (Chase and such lenders collectively, the "Lenders") as named in the Restated Credit Agreement dated as of
November 29, 1999 (as the same may be amended, supplemented, or modified from time to time in accordance with its terms, the "Chase Credit
Agreement") by and between the Lenders, as lenders, and Water Pik, Inc. ("Water Pik") and Laars, Inc.
("Laars"), as borrowers. (Water Pik and Laars are individually and collectively referred to herein as
"Borrower".) 

        A.    The
Lenders have extended to Borrower financial accommodations pursuant to the terms of the Chase Credit Agreement. Borrower granted to Chase a first priority perfected
security interest in certain of Borrower's present and future assets, including, without limitation, its real property, fixtures, accounts receivable, inventory, equipment and general intangibles (the
"Collateral") as described in the Security Agreement dated November 29, 1999 (the "Chase Security
Agreement") by and between Borrower, Water Pik Technologies, Inc., Jandy Industries, Inc. and Chase as the Agent for the Lenders. The security interests granted
under the Chase Security Agreement have been perfected by, among other things, the filing of Financing Statements on Form UCC-1 (together with any amendments, renewals or extensions
thereof, the "Chase Financing Statements") filed in Delaware, California, Colorado, New Hampshire, and other states. 

        B.    Borrower
has requested that U.S. Bank extend additional financial accommodations to Borrower as described in a Loan Agreement dated October 22, 2001 (as the same
may be amended, supplemented, or modified from time to time in accordance with its terms, the "U.S. Bank Loan Agreement") by and between U.S. Bank and
Borrower, a Deed of Trust, Security Agreement, Financing Statement and Assignment of Rents (the "Deed of Trust"), by Borrower for the benefit of U.S. Bank and certain other documents, including,
without limitation, Financing Statements on Form UCC-1 (together with any amendments, renewals or extensions thereof, the "U.S. Bank Financing
Statements") filed in Delaware, California, Colorado, and New Hampshire. U.S. Bank desires to extend such
accommodations, but only if Chase consents to such accommodations and U.S. Bank is granted a first priority perfected security interest in the Real Property (as defined below) pursuant to the Deed of
Trust, the Fixtures (as defined below) and such other portions of the Collateral that are U.S. Bank Collateral (as defined below). 

        C.    Chase
has agreed to record releases, reconveyances and such other documents and instruments as necessary to release the Lenders' liens on the Real Property and Fixtures.
In addition, Chase has agreed to subordinate its security interests in the Intangible Personalty (as defined below) and Fixtures (to the extent the Fixtures may be deemed to be personal property) on
the condition that U.S. Bank agree that it claims no security interest in the portion of the Collateral that is the Chase Priority Collateral (as defined below). 

        NOW,
THEREFORE, Chase and U.S. Bank hereby agree as follows: 

1. Definitions. 

        1.1  "Chase Priority Collateral" means all the Collateral other than the U.S. Bank Collateral. 

        1.2  "U.S. Bank Collateral" means the Real Property, Fixtures and Intangible Personalty. 

        1.3  "Real Property" means, collectively, the (a) real property owned and occupied by Laars commonly known as 6000
Condor Drive, Moorpark, California, (b) real property owned and occupied 

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by Water Pik commonly known as 1730 East Prospect Road, Ft. Collins, Colorado, (c) real property owned and occupied by Water Pik commonly known as 609 14th Street S.W., Loveland,
Colorado and (d) real property owned and occupied by Laars commonly known as 20 Industrial Way, Rochester, New Hampshire. 

        1.4  "Intangible Personalty" means all of the rents of and from the use, operation, or enjoyment of the Real Property and
improvements thereon, whether such income is attributable to the period, or is collected, prior to or subsequent to any default by Borrower, but excluding all revenues that
arise from the operation and conduct of the business of Borrower on the Real Property; all plans and specifications for the improvements on the Real Property; soil,
environmental, engineering, land planning maps, surveys and other studies and reports concerning the Real Property or prepared for the orderly planning and development of the Real Property, including
all plans, drawings and studies concerning
the subdivision, platting or replatting of the Real Property; all contracts and subcontracts relating to the improvements on the Real Property, or any thereof; all awards and payments, including
interest thereon, resulting from the exercise of any right of eminent domain or any other public or private taking of, casualty or injury to, or decrease in the value of, any of such Real Property,
including without limitation all property insurance payments, proceeds and policies related to such real property; all of the licenses, permits, franchises, and other entitlements to use and all
rights thereto which have been issued by or which are pending before any governmental or quasi-governmental agency which are necessary or appropriate for the Real Property, but
excluding all such items that are used specifically for the operation and conduct of the business of Borrower on the Real Property and do not have a function or purpose with respect to the ownership
or operation of the Real Property generally; all water taps, sewer taps, building permits, curb cut permits, storm water discharge permits; and all of Borrower's rights in and
to contract rights, leases, concessions, operating systems, warranties, licenses, plans, drawings and other items of intangible personal property solely relating to the ownership or operation of the
Real Property, but excluding all such items that are used specifically for the operation and conduct of the business of Borrower on the Real Property and do not relate to the
ownership or operation of the Real Property generally. 

        1.5  "Fixtures" shall mean "fixtures" as defined in the Uniform Commercial Code of California, Colorado or New Hampshire, as
applicable (whether such fixtures are actually or constructively attached or incorporated, and including all trade, domestic, and ornamental fixtures) now or hereafter located in, upon, or under the
Real Property or improvements and used or usable in connection with any present or future operation thereof but excluding all fixtures that are equipment and are used
specifically for the operation and conduct of the business of Borrower on the Real Property and do not have a function or purpose with respect to the ownership or operation of the Real Property
generally. 

        2.    Chase
hereby subordinates Lenders' present and future security interest in all the U.S. Bank Collateral, and all proceeds thereof, to U.S. Bank, including, without
limitation, Lenders' priority as to the U.S. Bank Collateral under the Lenders' Security Agreement and the Lenders' Financing Statements. U.S. Bank's security interest in the U.S. Bank Collateral
shall be superior to that of Lenders in the U.S. Bank Collateral. 

        3.    U.S.
Bank hereby agrees that it has no security interest in the Chase Priority Collateral. 

        4.    Chase
shall not enforce Lenders' security interest in the U.S. Bank Collateral, or in any manner interfere with U.S. Bank's security interest in the U.S. Bank Collateral,
without the prior written consent of U.S. Bank or until all indebtedness of Borrower to U.S. Bank secured by any of the U.S. Bank Collateral has been satisfied in full. Chase shall not enforce its
security interest in the Chase Priority Collateral unless and until Chase has provided to U.S. Bank (a) written notice of commencement of such enforcement (including, without limitation,
notices of default and notices of sale under any deeds of trust or mortgages and all other notices required to be given by law) in the 

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same manner and within the same time periods that Chase is required to give such notices to Borrower and (b) rights to cure to the same extent as Borrower's such rights. 

        5.    U.S.
Bank shall not enforce its security interest in the U.S. Bank Collateral, or in any manner interfere with Lenders' security interest in the U.S. Bank Collateral,
unless and until U.S. Bank has provided to Chase (a) written notice of commencement of such enforcement (including, without limitation, notices of default and notices of sale under any deeds of
trust or mortgages and all other notices required to be given by law) in the same manner and within the greater of the time periods that (i) U.S Bank is required to give such notices to
Borrower or (ii) U..S. Bank is required to give such notices to Chase under that certain Mortgagee's Waiver and Consent of even date herewith by U.S. Bank in favor of Chase as Agent for the
Lenders and (b) rights to cure to the same extent as Borrower's such rights. 

        6.    The
priorities specified herein are applicable irrespective of the time or order of attachment or perfection of security interests, filing of mortgages, deeds of trust,
fixture filings, Lenders' Financing Statements or U.S. Bank's Financing Statements, any other financing statements, any renewals or extensions thereof, or the time or order or giving of or failing to
give any notice with respect to purchase money security interests. 

        7.    Except
as expressly provided above, all other priorities with respect to the conflicting security interests of Lenders and U.S. Bank in any piece of Collateral shall be
determined in accordance with the Uniform Commercial Code of the state in which such Collateral is located. Each party agrees to give the other written notice of the time and place of any public sale
or the time after which any private sale or other intended disposition is to be made by any of any item of the Collateral or the Real Property. 

        8.    Except
as otherwise provided herein, any notice or other communication to any party in connection with this Agreement shall be in writing and shall be sent by manual
delivery, facsimile transmission, overnight courier or United States mail (postage prepaid) addressed to such party at the address specified on the signature page hereof, or at such other address as
such party shall have specified to the other party hereto in writing. All periods of notice shall be measured from the date of delivery thereof if manually delivered, from the date of sending thereof
if sent by facsimile transmission, from the first business day after the date of sending if sent by overnight courier, or from four days after the date of mailing if mailed. 

        9.    This
Agreement is solely for the benefit of Chase, the other Lenders and U.S. Bank and no other person including without limitation, Borrower, any guarantor (hereinafter
"Guarantor") of the indebtedness of Borrower or any other creditor, is intended to be benefitted, in any way whatsoever, by this Agreement. 

        10.  Nothing
contained herein shall be deemed to impair or affect any obligations of Borrower or any Guarantor, or constitute a waiver by any party in favor of Borrower or
any Guarantor of any rights or remedies against Borrower or any Guarantor under their respective security agreement or other loan documents. Nothing contained herein is intended to affect or limit, in
any way whatsoever, the security interest that each party has or may have in any and all of the assets of Borrower, whether tangible or
intangible, insofar as the rights of Borrower, Guarantors and third parties are involved. The parties specifically reserve any and all of their respective rights, security interests and rights to
assert security interests as against Borrower, Guarantors and any third parties. The priorities, subordinations and restrictions set froth in this Agreement shall be inapplicable to any real property
collateral and to any collateral owned by any Guarantor. 

        11.  The
subordination and priority provisions and other agreement set forth herein shall remain in full force and effect regardless of whether Chase, Lenders or U.S. Bank in
the future seeks to rescind, amend, terminate or reform by litigation or otherwise, their respective agreements with Borrower. 

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Neither any change in the manner, place or terms of payment of, nor any change or extension of the time of payment of, nor any renewal or alteration of, nor any increase in the principal or interest
on, any of the indebtedness secured by the U.S. Bank Collateral or the Chase Priority Collateral, nor any amendment or supplement to their respective security agreements or other loan documents, nor
any exercising or refraining from exercising of any rights under such agreements and documents, including without limitation the right to waive any default, shall require notice to or consent of the
other parties hereto and none of the foregoing shall in any manner whatsoever impair the subordination and priority provisions set forth herein. 

        12.  This
Agreement is binding upon and shall inure to the benefit of Chase, Lenders and U.S. Bank and their respective successors and assigns. U.S. Bank and Chase, in the
transfer of its agency role, hereby agree that, upon any sale or assignment to a third person of indebtedness owed by Borrower, the transferring holder shall notify the third person that such holder
is bound by the provisions of this Agreement and, as a condition to such sale or assignment, such transferring holder shall require such third person is bound by the terms of this Agreement. 

        13.  This
Agreement supersedes all prior understandings and agreements, whether written or oral, and all contemporaneous oral understandings and agreement between the parties
or their predecessors in interest relating to their priorities as creditors of Borrower. 

        14.  Except
as otherwise provided herein, priorities between the parties with respect to any of the U.S. Bank Collateral or the Chase Priority Collateral shall be governed in
accordance with the provisions of the Uniform Commercial Code of the state in which such Collateral is located in effect on the date of this Agreement. Except as otherwise provided herein, this
Agreement shall otherwise be governed by the law of the State of New York, without reference to choice of law principles. 

        15.  This
Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which constitute but one and the same instrument. 

        16.  The
execution and delivery of the Agreement, and the performance by the parties hereto of their obligations hereunder are within the their corporate powers and have been
duly authorized by all necessary corporate action and in the case of Chase, by all necessary action by the other Lenders. This Agreement is the legal, valid and binding obligation of the parties,
enforceable in accordance with its terms, the making and performance of which do not and will not contravene or conflict with the parties' charters or by-laws. 

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"Chase"

The
Chase Manhattan Bank, as a "Lender" and as "Agent" for the Lenders, under the Chase Credit Agreement 

	By:	 	/s/  DONNA M. DIFORIO      
	 	 
	Its:	 	Vice President
	 	 
	

 	
 	

Address for Notices to Chase:	
 	

 
	 	 	Ms Donna DiForio

The Chase Manhattan Bank

1166 Avenue of the Americas, 16th Floor

New York, New York 10036	 	 
	

 	
 	

Fax: (212) 899-2929	
 	

 
	

"U.S. Bank"	
 	

 
	

U.S. Bank National Association	
 	

 
	

By:	
 	

/s/  RICHARD M. MCNIVEN      
 Richard M. McNiven,

Vice President	
 	

 
	

 	
 	

Address for Notices to U.S. Bank:	
 	

 
	

 	
 	

Mr. Richard M. McNiven

U.S. Bank National Association

4100 Newport Place, Suite 120

Newport Beach, CA 92660	
 	

 
	

 	
 	

Fax: (949) 863-2335	
 	

 

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BORROWER'S
ACKNOWLEDGEMENT AND CONSENT: 

        Borrower
acknowledges that it has read the above Agreement and consents and agrees to its execution. Furthermore, Borrower agrees that if either Chase or U.S. Bank ("Terminating
Creditor") attempts to terminate the continued effectiveness of the Agreement during such time as Borrower is indebted to the Terminating Creditor or has any right to extensions of credit or other
financial accommodations from the Terminating Creditor, such termination will be an Event of Default under Borrower's indebtedness or obligation to the non-Terminating Creditor and the
non-Terminating Creditor. Additionally, the non-Terminating Creditor shall be entitled to exercise its rights and such remedies as provided by law or pursuant to the terms of
any note, security agreement, credit agreement, or any other agreement or document executed by Borrower in connection with its indebtedness to the non-Terminating Creditor. 

Dated:
October 22, 2001 

"Borrower"

Water
Pik, Inc.,

a Delaware corporation 

	By:	 	 	 	 
	 	 	
 Victor C. Streufert

Vice President—Finance,

Chief Financial Officer, and

Treasurer	 	 
	

Laars, Inc.,

a Delaware corporation	
 	

 
	

By:	
 	

 	
 	

 
	 	 	
 Victor C. Streufert

Vice President—Finance,

Chief Financial Officer, and

Treasurer	 	 

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INTERCREDITOR AGREEMENTExhibit 4.19  

Banc of America Leasing & Capital, LLC  

Note
and Security Agreement

(Variable Rate, LIBOR) 

This
Note and Security Agreement ("Agreement") made as of the date set forth below sets forth the terms and conditions governing the repayment of a loan made by Banc of America
Leasing & Capital, LLC ("Secured Party") to the party identified below as "Debtor" for the purpose of financing the personal property identified below as the
"Equipment", and the granting by Debtor to Secured Party of a security interest in the Equipment and certain related property to secure the repayment of all Debtor's obligations to Secured Party. 

	Date:        December 21,
2001                        Agreement Number: 03132-00701
	

Secured Party:	
 	

Banc of America Leasing & Capital, LLC

2059 Northlake Parkway, 4 South

Tucker, Georgia 30084-4007
	
Debtor	
 	

Laars, Inc., and Jandy Industries, Inc., jointly and severally (individually, a "Co-Debtor", collectively "Debtor").

23 Corporate Plaza, Suite 246

Newport Beach, California 92660
	
Equipment:	
 	

Plastic molding injection and related equipment, machine tools, welding test, furniture, assembly lines and material handling equipment more fully described in Exhibit "A" attached hereto and made a part hereof.
	
Equipment Location:	
 	

6000 Condor Drive, Moorpark, California 93021 and 20 Industrial Way, Rochester, New Hampshire 03867
	 	 	

        Principal Amount of Loan:    Three Million, Four Hundred & Fifty-four
Thousand & Five Hundred and No/100 $3,454,500.00  

         Number of Principal Repayment Installments (including Final Repayment Installment):    Twenty (20) Quarterly
Payments  

        Amount of Each Principal Repayment Installment Prior to Final Repayment Installment:    $172,725.00  

         Amount of Final Principal Repayment Installment:    $172,725.00  

         Due Date of First Principal Repayment Installment:    On the 90th day following the date Secured Party funds this loan. 

        Due Date of Final Principal Repayment Installment:    On the fifth (5th) anniversary of the date Secured Party funds this loan. 

        Variable Interest Rate.    For any year or portion thereof, a per annum rate of interest equal to (i) Two and
25/100 percent (2.25%) plus the LIBOR rate, or (ii) if less, the highest rate of interest permitted by applicable law. The LIBOR rate (London Inter-bank Offered Rate) is the
average per annum rate of interest at which US dollar deposits in the amount of the loan would be offered for a 

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ninety (90) day period by major banks in the London US dollar inter-bank market, as shown on Telerate page 3750 as of 11 AM London time on the day which is two London banking days
preceding the reset date (as defined below), payable on the first day of each January, April, July and October in arrears. The first of such payments shall be due on April 1, 2002, with the
final payment of all remaining unpaid principal and accrued interest due on January 1, 2007 ("Maturity Date"). 

        A
"Banking Day" shall be defined as a day other than Saturday or Sunday on which a Bank is open for business in New York and London and dealing in offshore dollars. Should such due date
fall on a day other than a Banking Day, such as Saturday, Sunday or Holiday, payment shall be due on the next succeeding Banking Day. The LIBOR rate shall be adjusted quarterly on the first day of
each January, April, July and October ("reset date"), or, if such date is not a Banking Day, the next succeeding Banking Day. 

        Loan; Terms of Repayment.    In consideration of the making of a loan by Secured Party to Debtor for the purpose of financing
the Equipment specified above (the "Loan"), Debtor promises and agrees to pay to the order of Secured Party, at Secured Party's address stated above or at such other places as Secured Party may from
time to time designate in writing, the principal amount of the Loan, together with interest calculated as hereinafter provided. Subject to Debtor's right to prepay such principal amount in whole or in
part as hereinafter provided, Debtor shall pay such principal amount in consecutive quarterly installments of principal, each in the amount set forth above under the heading "Amount of Each Principal
Repayment Installment Prior to Final Repayment Installment," due and payable on the "Due Date of First Principal Repayment Installment" set forth above and on a like date of each quarter thereafter
until the Loan is fully repaid; provided, however, that the last such installment shall be in the amount set forth above under the heading "Amount of Final Principal Repayment Installment" or (if
greater) the amount of the then outstanding principal balance of the Loan. 

        Interest.    Interest shall be calculated on the actual number of days on the basis of a year of three hundred sixty
(360) days and shall, during each quarter or portion thereof from and after the date on which funds are disbursed by Secured Party, accrue on unmatured principal balances outstanding during
such period at the "Variable Interest Rate" specified above for the week in which the first day of the quarter prior to such quarter occurs. All interest accrued through the due date of a principal
installment shall be due and payable simultaneously with such installment. 

        Prepayments.    After two (2) years from the date Secured Party funds this Loan, the outstanding principal balance of the
Loan may be prepaid in whole or in part at any time, together with all interest and late charges accrued through the date of prepayment and a prepayment charge calculated as follows:
one-half percent (.5%) of the amount prepaid if prepaid in year 3, one-quarter percent (.25%) of the amount prepaid if prepaid in year 4, and no prepayment charge if prepaid in
year 5. Partial
prepayments shall be applied against principal installments in their inverse order of maturity. Except as provided herein, the Loan may not be prepaid. 

        Late Charges.    To the extent permitted by applicable law, Debtor shall pay on demand, as a late charge, an amount equal to two
percent (2%) of each installment or part thereof that is not paid within ten (10) days after notice, but nothing in this paragraph alters the definitions of events of default hereunder. Debtor
shall pay the late charge, to the extent permitted by applicable law, regardless of whether or not Debtor's failure to pay such installment when due is or becomes a default hereunder and regardless of
whether or not Secured Party proceeds under the "Remedies" provisions hereof or takes any other action, and demand for and collection of the late charge shall not be deemed a waiver of default or of
any other remedies or rights. 

        Security Interest.    Debtor hereby grants to Secured Party a security interest in and security title to the personal property
described above as the "Equipment", together with all related parts, additions or 

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upgrades, accessions, accessories, replacements or substitutions to or for such Equipment (other than equipment replacing or substituted for Equipment permitted to be disposed of under the section
captioned "Sale or Replacement of Collateral" below), and all proceeds therefrom (including any proceeds of insurance against fire or other casualty whether or not the insurance policy contains an
endorsement in favor of Secured Party), all of which is hereinafter called the "Collateral". This security interest is given to secure payment to Secured Party of all present and future obligations of
Debtor to Secured Party, including without limitation the obligation of Debtor to repay the Loan and all other liabilities arising under or in connection with this Agreement; all future advances, if
any, made by Secured Party to Debtor, whether or not made pursuant to any commitment of Secured Party (and nothing in this Agreement shall be construed to create or imply the existence of any such
commitment); and all other liabilities of Debtor to Secured Party now existing or hereafter incurred, matured or unmatured, direct or contingent, whether or not evidenced by a promissory note, and
whether owing originally to Secured Party or acquired by Secured Party from any other party, and any renewals and extension thereof and substitutions therefor,and any swap, forward or option
obligations. (All of the above obligations, including but not limited to obligations in respect of the Loan, are hereinafter called the "Indebtedness.") 

Debtor Warrants and Represents that:  

        Good Standing.    Debtor is organized and existing in good standing under the laws of the jurisdiction of its formation, has the
power to own its property and to carry on its business as now being conducted, and is duly qualified to do business and is in good standing in each jurisdiction in which the character of the property
owned by it therein or the transaction of its business makes such qualification necessary. 

        Co-Debtor Aspects.    Each Co-Debtor shall be jointly and severally liable to Secured Party for each and
every representation, warranty, and covenant of Debtor or any Co-Debtor made in or pursuant to this Agreement. 

        Insofar
as Secured Party is concerned, the act of any Co-Debtor shall bind all other Co-Debtors, and Secured Party (and Debtor's and each Co-Debtor's
rights and duties to Secured Party) shall not be affected by any notice or action to the contrary. Secured Party shall be fully protected, as to Debtor and all Co-Debtors, in dealing with
any Co-Debtor. 

A
Co-Debtor's obligations under this Agreement shall not be affected by any action taken or not taken by Secured Party, by any lack of prior enforcement or retention of any rights against
Debtor or any Co-Debtor, by any illegality, unenforceability, or invalidity of any Co-Debtor's obligations, or by any circumstance or condition, including, without limitation,
(i) any termination, amendment, or modification of, or supplement to this Agreement or any action by any Co-Debtor with respect to the Equipment(s); (ii) any failure or delay
to conform or comply with any term of this Agreement; (iii) any waiver, consent, extension, indulgence, compromise, settlement, release, or other action or inaction under or in respect of this
Agreement, or any exercise or non-exercise of any right, remedy, power, or privilege under or in respect of this Agreement; (iv) any voluntary or involuntary bankruptcy, insolvency,
or similar proceeding with respect to any Co-Debtor; (v) any limitation on the liability or obligations of the Secured Party or any Co-Debtor, or any discharge,
termination, cancellation, frustration, invalidity or unenforceability of this Agreement; (vi) any defect in title to or condition of the Equipment(s); (vii) any merger or consolidation
of any Co-Debtor into or with any other corporation; and (viii) any other condition or circumstance which might otherwise constitute a legal or equitable discharge, release,
defense, or limitation arising out of any laws of the United States of America or any state thereof. Each Co-Debtor agrees that Secured Party shall not be required to file suit or proceed
to obtain or assert a claim against any other Co-Debtor or its assets, either before or as a condition to enforcing such first Co-Debtor's liability under this Agreement. 

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Nothing
in this section shall limit any Co-Debtor's rights against any other Co-Debtor as to contribution, reimbursement, use of the Equipment(s), or otherwise. 

Secured
Party shall have no duty to see any allocation of use or benefits of the Equipment(s), regardless of any notice or request from any Co-Debtor, all relations between or among
Co-Debtors being an internal matter for them and not for Secured Party. 

        Authority.    Debtor has full power and authority to enter into this Agreement, to make the borrowing hereunder, and to incur
the obligations provided for herein, all of which have been duly authorized by all proper and necessary action. No consent or approval of stockholders, partners, members or co-owners or of
any public authority is required as a condition to the validity of this Agreement. 

        Binding Agreement.    This Agreement constitutes the valid and legally binding obligation of Debtor enforceable in accordance
with its terms. 

        Litigation.    There are no proceedings pending or threatened before any court or administrative agency that might materially
adversely affect the financial condition or operation of Debtor. 

        No Conflicting Agreements.    There is no charter, by-law, preference stock or partnership agreement provision of
Debtor and no provision of any other organizational documents or existing mortgage, indenture, contract or agreement binding on Debtor or affecting its property which would conflict with or in any way
prevent the execution, delivery or performance of the terms of this Agreement. 

        Ownership Free of Encumbrances.    Subject to removal of liens by other lenders which shall be removed prior to any funding, and
except for the security interest granted hereby, Debtor now owns, or will use the proceeds hereof to become the owner of, the Collateral free from any prior lien, security interest or encumbrance. No
financing statement covering the Collateral or any proceeds thereof is on file in any public office, except for financing statements showing Secured Party as the sole secured party thereunder. Debtor
has a good right to grant a security interest in the Collateral to Secured Party. 

        Fixtures.    None of the Collateral is now a part of any real property. 

        Merger/Name Change.    Within the two (2) years preceding the date hereof, Debtor has not changed its name or been party
to any merger or other corporate reorganization. 

Debtor Covenants and Agrees that until all the Indebtedness is fully satisfied:  

        Insurance.    Debtor shall maintain continuously, and pay when due all premiums for, fire and casualty insurance with extended
coverage on the Collateral, insuring the same against loss by fire, explosion, theft and such other casualties as are usually insured against by companies engaged in the same or similar businesses
with a responsible company or companies satisfactory to Secured Party, in an amount not less than the unpaid balance of the Loan. Each of such insurance policies shall have attached thereto a standard
loss payable endorsement, without contribution, in favor of Secured Party as its interest may appear; shall provide that it may not be canceled without thirty (30) days' prior written notice to
Secured Party; shall provide that, in respect of Secured Party's interest in such policy, the insurance shall not be invalidated by any action or inaction of Debtor or any other person (other than
Secured Party); shall insure Secured Party's interest in the Collateral as it may appear, regardless of
any breach or violation of any warranty, declaration or condition contained in such policy by Debtor or any other person (other than Secured Party); and shall otherwise be in form and substance
acceptable to Secured Party. Debtor shall deliver forthwith to Secured Party certificates of insurance evidencing, among other things, the loss payable endorsement in respect of property damage
insurance. 

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In addition, Debtor shall maintain, and pay when due all premiums for, liability and other insurance in such amounts and against such risks as is customarily carried by persons in similar businesses
owning similar property. Debtor irrevocably appoints Secured Party as Debtor's attorney-in-fact, with full power of substitution, during the existence of any default under this
Agreement, to execute loss claims and other applications for payment of benefits under any insurance policy in the name of Debtor or Secured Party affecting the Collateral, to receive all monies and
to endorse drafts, checks and other instruments for the payment of any proceeds of any insurance. This appointment shall be deemed a power coupled with an interest and shall not be terminable by
Debtor so long as Debtor remains indebted to Secured Party. 

        Maintenance and Clear Title.    Debtor shall keep the Collateral in good condition and free from liens and security interests,
shall not sign or suffer to be filed any financing statements relating to the Collateral except those showing Secured Party as sole secured party, shall not sell or lease or offer to sell or lease or
otherwise encumber or dispose of any of the Collateral (except as otherwise allowed herein), shall defend the Collateral against all claims and demands of all persons at any time claiming any interest
or right therein, and shall not use the Collateral illegally. Secured Party may examine and inspect the Collateral at any time, wherever located. 

        Change of Name, Residence or Place of Business.    Debtor shall not change its name, residence or place of business or do
business under any assumed or fictitious name without giving Secured Party at least thirty (30) days prior written notice. 

        Use of Collateral.    Debtor shall use the Collateral exclusively for business operations. 

        Inspection: Non-Interference.    (a) Secured Party, its agents and employees shall have the right to enter
any property where any Collateral is located and inspect any Collateral together with its related books and records, at any reasonable time and upon reasonable prior notice. Such right shall not
impose any obligation on Secured Party. 

        Fixtures.    Debtor shall not permit any of the Collateral to become a part of or affixed to any real property. 

        Location of Collateral.    Except for items of Collateral that constitute mobile goods and that are in fact in use by Debtor in
the ordinary course of business at other locations, all the Collateral shall, from and after the moment that Debtor acquires possession or control of it, be kept at the "Equipment
Location" set forth above, and all records relating to the Collateral shall likewise be kept only at such location or locations. If at any time the Collateral, or any part thereof, is removed to a new
location, Debtor: (a) shall provide written notice thereof to Secured Party within thirty (30) days from the date of such relocation; and (b) either (i) the premises in
which such Collateral will be installed will be owned by Debtor free of any liens or encumbrances, or (ii) if not owned by Debtor free of liens or encumbrances, the owner of such premises
and/or the holder of any such liens or encumbrances on such premises shall have consented and acknowledge the superiority of Secured Party's interest in such Collateral. 

        Indemnification.    Debtor shall indemnify Secured Party against all claims arising out of or connected with the ownership or
use of the Collateral. 

        Taxes.    Debtor shall pay promptly when due all taxes, charges and assessments that are or may become a lien on the Collateral
or any part thereof, except to the extent that the same are contested in good faith and by appropriate proceedings. 

5

 

Financial Statements.  

        (a)  During
the term of this Agreement, Debtor shall (i) maintain books and records in accordance with generally accepted accounting principles ("GAAP") and prudent
business practice, (ii) promptly and in no event later than 120 days after each fiscal year end furnish Secured Party annual CPA audited financial statements of Debtor and of any
Guarantor, prepared in accordance with GAAP consistently applied, together with an unqualified opinion of an independent auditor, and (iii) at Secured Party's request, furnish Secured Party all
other financial quarterly or other interim financial statements of Debtor and of any Guarantor. Debtor shall furnish such other information as Secured Party may reasonably request at any time
concerning Debtor, Guarantor and their respective affairs, or any Collateral, provided, however, that all non-public information will be maintained by Secured Party in strictest
confidentiality. Debtor shall promptly notify Secured Party of any event of default or event or circumstance which, with notice, lapse of time or both, would be an event of default. (b) Debtor
represents and warrants that all information furnished and to be furnished by Debtor or any Guarantor to Secured Party is accurate in all material respects when made, and that all financial statements
Debtor or any Guarantor has furnished and hereafter may furnish to Secured Party reasonably reflect and will reflect, as of their respective dates, results of the operations and the financial
condition of Debtor, such Guarantor or other entity they purport to cover. (c) Credit and other information regarding Debtor, any Guarantor or their affiliates may be shared by Secured Party
with its affiliates and agents. 

        Reimbursement for Expenses.    At its option, and with no obligation to do so, Secured Party may (i) if an event of
default exists, discharge taxes or other encumbrances on the Collateral, or pay for the repair, maintenance and preservation of the Collateral and (ii) ten (10) days after notifying
Debtor of Secured Party's intent to do so, arrange and pay for insurance on the Collateral. Debtor agrees to reimburse Secured Party on demand for any payments so made; Debtor also agrees to reimburse
and pay to Secured Party on demand all expenses incurred or paid by Secured Party in perfecting the security interest granted hereunder and in collecting the Indebtedness and in protecting or
enforcing Secured Party's rights under this Agreement, including but not limited to reasonable attorney's fees and legal expenses. Until Debtor makes such reimbursement, the amount of all such
payments and expenses, with interest at the rate then applicable to principal installments of the Loan not paid when due, from the date of payment until reimbursement, shall be added to the
Indebtedness and shall be secured by the security interest granted by Debtor under this Agreement. Nothing in this paragraph relieves Debtor of the duty to care for, insure and protect the Collateral
and Secured Party's interests therein and to pay tax on or related to the Collateral, or of any other duty. 

        Sale or Replacement of Collateral.    Debtor shall not sell or replace any item or part of the Collateral without the prior
written consent of Secured Party, provided, however, that Debtor may dispose of up to Fifty Thousand Dollars ($50,000) per year of Collateral without Secured Party consent. 

        Post Default Interest.    Any principal balance not paid when due (whether by acceleration or otherwise) shall accrue interest
at the "Default Rate" until such principal balance is paid. "Default Rate" shall be a per annum rate of interest equal to (i) ten percent (10.0%) or (ii), if less, the highest rate of interest
permitted by applicable law. Secured Party may, at its option, apply late payments (either in full or partial) in the following manner: first to interest, then to principal, and finally to late
charges. To the extent permitted by applicable law, Debtor shall pay interest on delinquent principal installments on demand regardless of whether or not Secured Party proceeds under the "Remedies"
provisions hereof or takes any other action, and demand for and collection of interest on such overdue installments at the Default Rate shall not be deemed a waiver of default or of any other remedies
or rights. 

6

 

        Events of Default.    Debtor shall be in default under this Agreement upon the happening of any of the following events or
conditions, each of which is an event of default: 

        (1) Debtor
fails to pay within ten days of the day when due any installment of the Loan, or in the payment of any other Indebtedness, when and as the same becomes due and payable,
whether at the stated maturity thereof or by acceleration or otherwise; (2) Debtor fails to maintain insurance as required for more than ten (10) days in respect of any Collateral, or
sells, leases, subleases, assigns, conveys, encumbers or suffers to exist any lien or charge against, any Collateral without Secured Party's prior consent, except as otherwise provided for herein, or
any Collateral is subjected to levy, seizure or attachment; (3) Debtor fails to perform and comply with any other covenant or obligation under this Loan or other Indebtedness and, if curable,
such failure continues for 30 days after written notice thereof by Secured Party to Debtor, (4) any representation, warranty or other written statement made to Secured Party in
connection with this Loan, or any guaranty, by Debtor or any person or entity
providing such guaranty ("Guarantor"), including financial statements, proves to have been incorrect in any material respect when made; (5) Debtor (x)without Secured Party's prior written
consent, enters into any merger or consolidation with, or sells or transfers all, substantially all or any substantial portion of its assets to, or enters into any partnership or joint venture other
than in the ordinary course of business with, any entity, (y) dissolves, liquidates or ceases or suspends the conduct of business, or ceases to maintain its existence, or (z) without
Secured Party's prior written consent, enters into or suffers any transaction or series of transactions as a result of which Debtor is directly or indirectly controlled by persons or entities not
affiliates of Debtor as of the date of this Agreement; (6) Debtor undertakes any general assignment for the benefit of creditors or commences any voluntary case or proceeding for relief under
the Bankruptcy Code, or any other law for the relief of debtors, or takes any action to authorize or implement any of the foregoing; (7) the filing of any petition or application against Debtor
under any law for the relief of debtors, including proceedings under the Bankruptcy Code, or for the subjection of property of Debtor to the control of any court, receiver or agency for the benefit of
creditors if such petition or application is consented to by Debtor or not dismissed within 60 days from the date of filing; (8) any unwaived payment default or other unwaived event of
default occurs under any other bilateral or multi-lateral loan, lease, or credit, or other agreement or instrument to which Debtor and Secured Party or any affiliate of Secured Party are now or
hereafter party; (9) any unwaived payment default or other unwaived event of default occurs under any other lease, or credit, or other agreement or instrument or any combination thereof to
which Debtor is now or hereafter party and under which there is outstanding (on a present value basis for all future rent, in the case of leases), owing or committed an aggregate amount greater than
Five Hundred Thousand Dollars ($500,000.00), which materially affects Debtor's ability to repay the Loan; (10) the repudiation of or breach or default under any guaranty relating to any
Indebtedness; or (11) the occurrence of any event described in clauses (5), (6), (7), (8) or (9) of this Section with reference to "any Guarantor" in lieu of "Debtor". 

        Secured
Party agrees that it shall, on the occurrence of the first event of default during any twelve (12) month period (but not more frequently than once in any
12-month period) give written notice of such event of default under this Agreement to JPMorgan Chase Bank ("Agent"), at the address below, as Agent for the Lenders under a Restated Credit
Agreement dated as of November 29, 1999 among Water Pik, Inc., Laars, Inc., certain guarantors named therein, certain lenders named therein and JPMorgan Chase Bank (f/k/a The
Chase Manhattan Bank), as Agent, as amended, modified or supplemented from time to time. For a period of 30 days following sending such notice, Secured Party shall accept cure of any such event
of default from Agent, it being understood that if a subsequent event of default occurs during such 12-month period, Secured Party shall have no obligation to either send such notice or
accept cure of such event of default. 

7

 

JP
Morgan Chase Bank,

as Agent for Lenders under Restated Credit Agreement 11/29/99

1166 Avenue of the Americas

New York, NY 10036-2708

Attention: Donna DiFiorio 

        Remedies.    Upon any occurrence and continuation of an event of default, Secured Party may declare all the Indebtedness
immediately due and payable in full (unless such event of default comprises one or more of the events described in paragraphs 7 or 8 above, in which case all the Indebtedness shall become immediately
due and payable in full without declaration, notice or other action on the part of Secured Party), and may proceed to enforce payment thereof and exercise any and all of the rights and remedies
provided by the Uniform Commercial Code as well as all other rights and remedies of Secured Party hereunder or under other applicable law; provided that if, after expiration of the 30-day
period following notice to Agent referenced in the preceding section, or if not applicable, at any time after the occurrence of an event of default, Secured Party has commenced exercise of remedies
upon the occurrence of or during the continuation of an event of default and the event is subsequently cured by either Debtor or Agent, Secured Party may, at its option, continue to exercise remedies
including without limitation, acceleration of the Indebtedness. Upon the occurrence of an event of default, Debtor shall, upon demand by Secured Party, assemble the Collateral and make it available to
Secured Party at a place designated by Secured Party reasonably convenient to both parties. Secured Party may, at its election, enforce its rights under this Agreement by a suit in equity for specific
performance. Debtor grants Secured Party the right to enter upon any premises of Debtor for the purpose of recovering possession of the Collateral or any part thereof after the occurrence of an event
of default, or for the preservation or enforcement of Secured Party's other rights hereunder, all without demand or notice to Debtor and without judicial hearing or proceedings, which Debtor hereby
expressly waives. The requirements of reasonable notice shall be deemed met if such notice is mailed to an address of Debtor shown at the beginning of this Agreement at least ten (10) days
before the time of the sale or disposition, but nothing contained herein shall be construed to mean that other notice or a shorter period of time does not constitute reasonable notice of the sale or
other disposition of the Collateral. Debtor shall reimburse Secured Party for all Secured Party's expenses of retaking, holding, preparing for sale, selling or otherwise dealing with or disposing of
the Collateral including reasonable attorney's fees if collection is by or through an attorney at law. Subject to applicable law, Debtor shall pay any Indebtedness remaining unpaid after sale or other
disposition of any or all of the Collateral. Any surplus proceeds from the sale or other disposition of the Collateral remaining after full satisfaction of the Indebtedness shall be paid to Debtor or
to such other persons as may be entitled thereto under applicable law. 

        Cumulative Rights and No Waiver.    Each and every right granted to Secured Party hereunder or in connection herewith, or
allowed it by law or equity, shall be cumulative and may be exercised from time to time. No failure on the part of Secured Party to exercise, and no delay in exercising, any right shall operate as a
waiver thereof, nor shall any single or partial exercise by Secured Party of any right preclude any other or future exercise thereof or the exercise of any other right. 

        Financing Statements.    Debtor shall sign and deliver to Secured Party such financing statements and other documents as Secured
Party may deem necessary to perfect, protect and continue its security interest in the Collateral, in form satisfactory to Secured Party. Debtor will reimburse Secured Party for all expenses incurred
in the filing of financing statements, continuation statements, termination statements and any other documents relating to the perfection of Secured Party's security interest in the Collateral. A
carbon, photographic or other reproduction of this Agreement or of a financing statement relating to the security interest herein granted is sufficient as a financing statement. Debtor authorizes
Secured Party to file financing statements as to the Collateral signed only by Secured Party and not by Debtor. 

8

 

        Severability.    Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. 

        Assignability.    Debtor acknowledges that the rights of Secured Party may be assigned to any person in whole or in part at the
sole discretion of Secured Party, and Debtor agrees that any defense it may have against Secured Party as to events occurring prior to any assignment shall not be asserted, and shall be void, against
any assignee of the rights of Secured Party. Debtor shall not assign any of its rights or obligations under this Agreement to any person without the prior written consent of Secured Party, and in the
absence of such prior written consent, no such assignment of any right or obligation of Debtor hereunder shall be binding on Secured Party. Subject to the foregoing limitations, the terms and
conditions of this Agreement shall be binding on and shall inure to the benefit of the heirs, executors, administrators, successors, and assigns of the parties. 

(The
balance of this page is intentionally blank.) 

9

 

        Material Adverse Change.    There has been no material adverse change in the operations business, properties or condition
(financial or otherwise ("Material Adverse Change") of Debtor or any Guarantor since September 30, 2001. There is not pending against Debtor any litigation, proceeding, dispute or claim that
may result in a Material Adverse Change as to Debtor or that may call into question or impair Debtor's legal or other ability to enter into and perform its obligations under this Agreement. 

        Warranty Disclaimer.    Secured Party is not a manufacturer or seller of the Collateral and makes no warranties whatsoever with
respect to the Collateral, including without limitation warranties of title, merchantability or fitness for any particular purpose. Debtor shall not assert any breach of any such warranty as a defense
to any of its obligations to Secured Party under this Agreement; however, nothing in this Agreement shall be construed to impair any of Debtor's remedies for breach of warranty against any seller or
manufacturer of the Collateral. 

        Governing Law; Consent to Venue and Personal Jurisdiction.    This agreement shall be construed and enforced in accordance with
and governed by the laws of the State of California as of the date hereof. If the address of Debtor's residence or principal place of business shown herein is not in the State of California, Debtor
consents to the exercise of personal jurisdiction over Debtor by any court or record sitting in the State of California in connection with any action arising out of this Agreement, and waives all
objections to service of process on Debtor at such address. 

        Waiver of Jury Trial.    Secured Party and Debtor each waive trial by jury in any action, proceeding or counterclaim brought by
either of the parties against the other on any matter whatsoever arising out of or in any way connected with this Agreement. 

        IN WITNESS WHEREOF, the parties have caused their names to be signed and their seals affixed as of the date first above written. By
execution hereof, each party intends and agrees to be legally bound by all the provisions of this Agreement. 

	Banc of America Leasing & Capital, LLC
 (Secured Party)	 	Laars, Inc. (Debtor)
	

By:	
 	

 	
 	

By:	
 	

/s/  VICTOR C. STREUFERT      
	 	 	
	 	 	 	

	Printed Name:	 	    
	 	 	 	Victor C. Streufert

Vice President—Finance
	Title:	 	    
	 	 	 	 
	

 	
 	

 	
 	
Jandy Industries, Inc. (Debtor)
	

 	
 	

 	
 	

By:	
 	

/s/  VICTOR C. STREUFERT      
 Victor C. Streufert

Vice President—Finance

10

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