Document:

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                                                                    EXHIBIT 10.9

                              EMPLOYMENT AGREEMENT

         THIS EMPLOYMENT AGREEMENT (the "Agreement") is effective as of the 1st
day of July, 2000, by and between Applica Incorporated, a Florida corporation
with its principal place of business at 5980 Miami Lakes Drive, Miami Lakes,
Florida (the "Company"), and Terry L. Polistina, an individual residing in the
State of Florida (the "Employee").

                                    RECITALS:

         A. The Employee is currently employed as the Senior Vice President -
Finance and Administration of the Company.

         B. The Employee possesses intimate knowledge of the business and
affairs of the Company and its subsidiaries, their policies, methods and
personnel.

         C. The Company recognizes that the Employee has contributed to the
growth and success of the Company and its subsidiaries, and desires to assure
the Company and its subsidiaries of the Employee's continued employment and to
compensate him therefor.

         D. The Board of Directors of the Company (the "Board") has determined
that this Agreement will reinforce and encourage the Employee's continued
attention and dedication to the Company and its subsidiaries.

         E. The Employee is willing to make his services available to the
Company on the terms and conditions hereinafter set forth.

                                    AGREEMENT

         Therefore, in consideration of the premises, mutual covenants and
agreements of the parties contained herein, and other good and valuable
consideration, the receipt and adequacy of which is hereby acknowledged, the
Company and the Employee hereby agree as follows:

         1. EMPLOYMENT. Commencing on the date hereof, the Company shall employ
the Employee and the Employee shall accept employment by the Company, upon the
terms and conditions set forth in this Agreement.

         2. TERM. The term of employment (the "Term") of this Agreement shall
begin on the date hereof and, except as otherwise provided in Sections 7, 8, 9
and 10 below, shall end on June 30, 2003. The Term shall automatically renew for
successive one year terms, unless sooner terminated as provided herein or unless
either party gives notice at least 60 days prior to the end of the Term that
such party does not intend to renew the Term.

<PAGE>   2

         3. DUTIES. The Employee will have such duties as are assigned or
delegated to the Employee by the Board, the President and Chief Executive
Officer or the Chief Operating Officer of the Company, and will initially serve
as the Senior Vice President - Finance and Administration of the Company. The
Employee will devote his entire business time, attention, skill, and energy
exclusively to the business of the Company and its subsidiaries, will use his
best efforts to promote the success of the Company and its subsidiaries, and
will cooperate fully with the Board in the advancement of the best interests of
the Company and its subsidiaries.

         4. COMPENSATION. During the Term, the Company shall compensate Employee
as follows:

                  (a) SALARY. The Company shall pay Employee an annual salary of
$195,000 (the "Annual Base Salary"), to be distributed in equal periodic
installments according to the Company's customary payroll practices. The Annual
Base Salary will increase progressively for each of the ensuing twelve month
periods during the Term by an amount at least equal to the percentage increase
in the United States Consumer Price Index for all urban consumers (CPI-U), U.S.
City Average - All Items, published by the Bureau of Labor Statistics, United
States Department of Labor (the "Index") for the previous calendar year. If at
any time required for the determination of the Annual Base Salary adjustment as
above described, the Index is no longer published or issued, the parties shall
use such other index as is then generally recognized or accepted for similar
determinations of purchasing power. Nothing contained herein shall be construed
to prevent the Company from increasing Employee's Annual Base Salary more often
than annually or by a higher amount than required by the Index.

                  (b) ANNUAL BONUS. The Employee shall be entitled to receive
incentive compensation (the "Incentive Compensation") for each year during the
Term as set forth below:

                           (i) PERFORMANCE BONUS. At the beginning of each
         calendar year during the Term, the Board (or the Compensation Committee
         thereof) shall establish target goals for (A) earnings before interest,
         taxes, depreciation and amortization ("EBITDA") of the Company on a
         consolidated basis and (B) the Employee's personal performance
         (collectively, the "Performance Goals"). The Employee shall be entitled
         to an annual bonus (the "Performance Bonus") based 50% on the
         achievement of the Performance Goal set forth in (A) above and 50% on
         the achievement of the Performance Goal set forth in (B) above, it
         being understood that a pro rata Performance Bonus may be earned by the
         Employee as set forth below in any year in which either Performance
         Goal is met. Such Performance Bonus shall be equal to a percentage of
         his Annual Base Salary to be determined as follows:

<TABLE>
<CAPTION>

                  AGGREGATE PERCENTAGE OF                                              BONUS AS PERCENTAGE
                  PERFORMANCE GOALS ACHIEVED                                          OF ANNUAL BASE SALARY
                  --------------------------                                          ---------------------
<S>                                                                                            <C>
                  75% - 79% (Threshold Performance)                                            15%
                  80% - 84%                                                                    18%
                  85% - 89%                                                                    21%
                  90% - 94%                                                                    24%
                  95% - 99%                                                                    27%
                  100% - 104% (Target Performance)                                             30%
                  105% - 109%                                                                  33%
                  110% - 114%                                                                  36%
                  115% - 119%                                                                  39%
                  120% - 124%                                                                  42%
                  125% and above (Maximum Performance)                                         45%
</TABLE>

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                           (ii) SYNERGY BONUS. At the beginning of each of the
         calendar years, the Board (or the Compensation Committee thereof) shall
         establish target goals for the synergies to be attained as a result of
         the integration of the Household Products Business (the "Synergy
         Goals"). Not later than 90 days after the end of each such year in
         which the portion of the Synergy Goals achieved are at least equal to
         75%, the Employee shall be paid a cash bonus (the "Synergy Bonus")
         equal to a percentage of his Annual Base Salary to be determined as
         follows:

<TABLE>
<CAPTION>

                  AGGREGATE PERCENTAGE OF                                              BONUS AS PERCENTAGE
                  SYNERGY GOALS ACHIEVED                                              OF ANNUAL BASE SALARY
                  ----------------------                                              ---------------------
<S>                                                                                             <C>
                  75% - 79% (Threshold Performance)                                             5%
                  80% - 84%                                                                     7%
                  85% - 89%                                                                     9%
                  90% - 94%                                                                    11%
                  95% - 99%                                                                    13%
                  100% - 104% (Target Performance)                                             15%
                  105% - 109%                                                                  17%
                  110% - 114%                                                                  19%
                  115% - 119%                                                                  21%
                  120% - 124%                                                                  23%
                  125% and above (Maximum Performance)                                         25%

</TABLE>

         5. EXPENSE REIMBURSEMENT AND OTHER BENEFITS.

                  (a) REIMBURSEMENT OF EXPENSES. During the term of Employee's
employment hereunder, the Company, upon the submission of proper substantiation,
including copies of all relevant invoices, receipts or other evidence reasonably
requested by the Company, by the Employee, shall reimburse the Employee for all
reasonable expenses actually paid or incurred by the Employee in the course of
and pursuant to the business of the Company.

                  (b) EXECUTIVE BENEFITS. Employee shall participate in the
Company's Group Health and Hospitalization Plan, Group Life Insurance Plan,
Group Disability Insurance Plan and all other insurances, or insurance plans
(collectively, the "Welfare Benefits"), and Employee benefits and bonuses
covering the Company senior executive officers as are now or may in the future
be in effect, subject to applicable eligibility requirements.

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<PAGE>   4

                  (c) STOCK OPTIONS. During the Term of this Agreement, the
Employee shall be eligible to be granted options to acquire shares of the
Company Common Stock under (and therefore subject to all terms and conditions
of) the Company stock option plans as then in effect, and all rules and
regulations of the Securities and Exchange Commission applicable to stock option
plans. Such options will contain such restrictions as required by the Board or
the applicable committee of the Board charged with administration of the stock
option plan. The number of shares of Common Stock subject to the stock options
shall be adjusted for any subsequent stock splits, stock dividends or similar
recapitalizations of the Company's Common Stock which results in an increase or
decrease of the number of shares of outstanding Common Stock of the Company. The
number of options and terms and conditions of options shall be determined in the
sole discretion of the Board, or applicable committee thereof, and shall be
based on several factors, including the performance of the Company on a
consolidated basis.

                  (d) AUTOMOBILE. During the Term, the Company shall provide
Employee with an automobile allowance of $900 monthly.

                  (e) VACATION. During the Term, the Employee will be entitled
to three weeks' paid vacation for each year. The Employee will also be entitled
to the paid holidays and other paid leave set forth in the Company's policies.
Vacation days and holidays during any fiscal year that are not used by the
Employee during such fiscal year may not be carried over and used in any
subsequent fiscal year.

         6. RESTRICTIONS.

                  (a) NON-COMPETITION. During the Term and for a one year period
after the termination of the Term for any reason, the Employee shall not,
directly or indirectly, engage or invest in, own, manage, operate, finance,
control, or participate in any manner in the ownership, management, operation,
financing, or control of, be employed by, associated with, or in any manner
connected with, lend his name or any similar name to, lend his credit to or
render services or advice to, purchase product from or distribute on behalf of
(whether as an employee, officer, director, partner, agent, security holder,
creditor, consultant or otherwise), any person or entity that directly or
indirectly (or through any affiliated entity) engages in competition with the
Company (for this purpose, any business that engages in the manufacture or
distribution of products similar to those products manufactured or distributed
by the Company at the time of termination of the Agreement shall be deemed to be
in competition with the Company); provided that such provision shall not apply
to the Employee's ownership of Common Stock of Applica or the acquisition by the
Employee, solely as an investment, of any issuer that is registered under
Section 12(b) or 12(g) of the Securities Exchange Act of 1934, as amended, and
that are listed or admitted for trading on any United States national securities
exchange or that are quoted on the National Association of Securities Dealers
Automated Quotations System, or any similar system or automated dissemination of
quotations of securities prices in common use, so long as the Employee does not
control, acquire a controlling interest in or become a member of a group which
exercises direct or indirect control or, more than one percent of any class of
capital stock of such corporation.

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                  (b) NONDISCLOSURE. During the Term and after the termination
of the Term for any reason, the Employee shall not at any time divulge,
communicate, use to the detriment of the Company or for the benefit of any other
person or persons, or misuse in any way, any Confidential Information (as
hereinafter defined) pertaining to the business of the Company. Any Confidential
Information or data now or hereafter acquired by the Employee with respect to
the business of the Company shall be deemed a valuable, special and unique asset
of the Company that is received by the Employee in confidence and as a
fiduciary, and Employee shall remain a fiduciary to the Company with respect to
all of such information. For purposes of this Agreement, "Confidential
Information" means information disclosed to the Employee or known by the
Employee as a consequence of or through his employment by the Company (including
information conceived, originated, discovered or developed by the Employee)
prior to or after the date hereof, and not generally known, about the Company or
its business. Confidential Information shall include, but not be limited to, any
and all:

                           (i) trade secrets and data concerning the past,
         current and planned business, strategy, operations and affairs of the
         Company, data, know-how, compositions, processes, designs, sketches,
         photographs, graphs, drawings, samples, inventions and ideas, past,
         current, and planned research and development, customer lists, client
         lists, agent lists, current and anticipated customer and client
         requirements, price lists, commission information, market studies,
         business plans, computer software and programs (including object code
         and source code), computer software and database technologies, systems,
         concepts, ideas, designs, methods and information relating directly or
         indirectly to the Company;

                           (ii) information concerning the past, current and
         planned business, strategy, operations and affairs of the Company,
         which includes historical financial statements, financial projections
         and budgets, historical and projected income, capital spending budgets
         and plans, the names and backgrounds of key personnel, suppliers,
         distributors, manufacturers, customers and clients, and any and all
         information relating to contracts and agreements with such persons,
         however documented; and

                           (iii) notes, analysis, compilations, studies,
         summaries, and other material prepared by or for the Company containing
         or based, in whole or in part, on any information included in the
         foregoing.

                  Notwithstanding the foregoing, nothing herein shall be deemed
to restrict the Employee from disclosing Confidential Information to the extent
required by law; provided, however, that the Employee provides prior notice of
such disclosure to the Company and provides the Company with a reasonable
opportunity to prevent, limit or protect such disclosure. None of the foregoing
obligations and restrictions apply to any Confidential Information that the
Employee demonstrates was or became generally available to the public other than
as a result of disclosure by the Employee.

                  (c) NONSOLICITATION OF EMPLOYEES AND CLIENTS. During the Term
and for a one year period after the termination of the Term for any reason, the
Employee shall not, directly or indirectly, for himself or for any other person,
firm, corporation, partnership, association or other entity, other than in

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connection with the performance of Employee's duties under this Agreement, (a)
employ or attempt to employ or enter into any contractual arrangement with any
employee or former employee of the Company, unless such employee or former
employee has not been employed by the Company for a period in excess of six
months, (b) call on or solicit any of the actual or targeted prospective
customers or clients of the Company on behalf of any person or entity in
connection with any business competitive with the business of the Company, (c)
make known the names and addresses of such customers or clients or any
information relating in any manner to the Company's trade or business
relationships with such customers or clients (unless the Employee can
demonstrate that such information was or became generally available to the
public other than as a result of a disclosure by the Employee) and/or (d)
interfere with the Company's relationship with any person, including employees,
consultants, contractors, suppliers, distributors, clients, or customers of
Company.

                  (d) OWNERSHIP OF DEVELOPMENTS. All copyrights, patents, trade
secrets, or other intellectual property rights associated with any ideas,
concepts, techniques, inventions, processes, or works of authorship developed or
created by Employee during the course of performing work for the Company or its
customers (collectively, the "Work Product") shall belong exclusively to the
Company and shall, to the extent possible, be considered a work made by the
Employee for hire for the Company within the meaning of Title 17 of the United
States Code. To the extent the Work Product may not be considered work made by
the Employee for hire for the Company, the Employee agrees to assign, and
automatically assign at the time of creation of the Work Product, without any
requirement of further consideration, any right, title, or interest the Employee
may have in such Work Product. Upon the request of the Company, the Employee
shall take such further actions, including execution and delivery of instruments
of conveyance, as may be appropriate to give full and proper effect to such
assignment.

                  (e) BOOKS AND RECORDS. All books, records, and accounts
relating in any manner to the customers of the Company, whether prepared by the
Employee or otherwise coming into the Employee's possession, shall be the
exclusive property of the Company and shall be returned immediately to the
Company on termination of the Employee's employment hereunder or on the
Company's request at any time. The Employee will not remove from the Company's
premises any other proprietary or confidential document, agreement, record,
notebook, plan, model, component, device, or computer software or code, whether
embodied in a disk or in any other form (collectively, the "Proprietary Items").
The Employee recognizes that, as between the Company and the Employee, all of
the Proprietary Items, whether or not developed by the Employee, are the
exclusive property of the Company. Upon termination of this Agreement by either
party, or upon the request of the Company during the term of this Agreement, the
Employee will promptly return to the Company all of the Proprietary Items in the
Employee's possession or subject to the Employee's control, and the Employee
shall not retain any copies or other physical embodiment of any of the
Proprietary Items.

                  (f) DEFINITION OF COMPANY. Solely for purposes of this Section
6, the term "Company" shall mean Applica, along with its current direct and
indirect subsidiaries, any existing or future subsidiaries of Applica that are
operating during the time periods described herein and any other entities that

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directly or indirectly, through one or more intermediaries, control, are
controlled by or are under common control with Applica during the periods
described herein.

                  (g) ACKNOWLEDGMENT BY EMPLOYEE. The Employee acknowledges and
confirms that (a) the restrictive covenants contained in this Section 6 are
reasonably necessary to protect the legitimate business interests of the
Company, and (b) the restrictions contained in this Section 6 (including without
limitation the length of the term of the provisions of this Section 6) are not
overbroad, overlong, or unfair and are not the result of overreaching, duress or
coercion of any kind. The Employee further acknowledges and confirms that his
full, uninhibited and faithful observance of each of the covenants contained in
this Section 6 will not cause him any undue hardship, financial or otherwise,
and that enforcement of each of the covenants contained herein will not impair
his ability to obtain employment commensurate with his abilities and on terms
fully acceptable to him or otherwise to obtain income required for the
comfortable support of him and his family and the satisfaction of the needs of
his creditors. The Employee acknowledges and confirms that his special knowledge
of the business of the Company is such as would cause the Company serious injury
or loss if he were to use such ability and knowledge to the benefit of a
competitor or were to compete with the Company in violation of the terms of this
Section 6. The Employee further acknowledges that the restrictions contained in
this Section 6 are intended to be, and shall be, for the benefit of and shall be
enforceable by, the Company's successors and assigns.

                  (h) REFORMATION BY COURT. In the event that a court of
competent jurisdiction shall determine that any provision of this Section 6 is
invalid or more restrictive than permitted under the governing law of such
jurisdiction, then only as to enforcement of this Section 6 within the
jurisdiction of such court, such provision shall be interpreted and enforced as
if it provided for the maximum restriction permitted under such governing law.

                  (i) EXTENSION OF TIME. If the Employee shall be in violation
of any provision of this Section 6, then each time limitation set forth in this
Section 6 shall be extended for a period of time equal to the period of time
during which such violation or violations occur. If the Company seeks injunctive
relief from such violation in any court, then the covenants set forth in this
Section 6 shall be extended for a period of time equal to the pendency of such
proceeding including all appeals by the Employee.

                  (j) SURVIVAL. The provisions of this Section 6 shall survive
the termination of this Agreement, as applicable.

                  (k) INJUNCTIVE RELIEF. The Employee acknowledges that the
injury that would be suffered by the Company as a result of a breach of any
provision of this Section 6 would be irreparable and that an award of monetary
damages for such a breach would be an inadequate remedy. Consequently, the
Employee consents to, and the Company will have the right (in addition to any

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other rights it may have) to request, the issuance of a temporary restraining
order or a preliminary or permanent injunction to prohibit or restrain any
breach or threatened breach or otherwise to specifically enforce any provision
of this Section 6, or to maintain the status quo pending the outcome of any
proceeding which may be initiated. The Company will not be obligated to post
bond or other security in seeking such relief.

         7. TERMINATION FOR CAUSE.

                  (a) The Company shall have the right to terminate the Term and
the Employee's employment hereunder for Cause (as defined below). Upon any
termination pursuant to this Section 7, the Company shall pay to the Employee
any unpaid Annual Base Salary through the effective date of termination
specified in such notice. The Company shall have no further liability hereunder
(other than for reimbursement for reasonable business expenses incurred prior to
the date of termination, subject, however, to the provisions of Section 5(a)).

                  (b) For purposes hereof, the term "Cause" shall mean: (i) the
Employee's failure to perform his duties hereunder; (ii) the Employee's failure
to adhere to any written policy of the Company if such failure to adhere has or
is likely to have an adverse effect on the business, operations or prospects the
Company; (iii) the appropriation (or attempted appropriation) of a business
opportunity of the Company, including attempting to secure or securing any
personal profit in connection with any transaction entered into on behalf the
Company; (iv) the misappropriation (or attempted misappropriation) of any of the
Company's funds or property; (v) the conviction of, the indictment for (or its
procedural equivalent), or the entering of a guilty plea or plea of no contest
with respect to, a felony, the equivalent thereof, or any other crime with
respect to which imprisonment is a possible punishment; (vi) the commission by
the Employee of any act which shocks, insults and offends the community and
ridicules public morals and decency, or (vii) any gross or willful improper
conduct of the Employee resulting in loss to the Company, damage to the
Company's reputation or theft from the Company.

         8. TERMINATION WITHOUT CAUSE. At any time the Company shall have the
right to terminate the Term and the Employee's employment hereunder by written
notice to the Employee. Upon any termination pursuant to this Section 8 (that is
not a termination under any of Sections 7, 9, or 10), the Company shall pay to
the Employee a lump sum equal to the sum of (A) the Annual Base Salary at the
date of termination multiplied by 1.5, and (B) the product of the sum of the
Performance Bonus for the prior year multiplied by 1.5. The Company shall also
continue to pay the premiums for the same or substantially similar Welfare
Benefits for 12 months. Further, any Applica stock option granted to Employee
shall be exercisable immediately and the Applica stock acquired pursuant to such
exercise may be sold by Employee subject to no restrictions by the Company
whatsoever (other than those imposed by federal and state securities laws). The
Company shall have no further liability hereunder (other than for reimbursement
for reasonable business expenses incurred prior to the date of termination,
subject, however, to the provisions of Section 5(a)).

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<PAGE>   9

         9. TERMINATION BY EMPLOYEE.

                  (a) The Employee shall at all times have the right, upon 60
days written notice to the Company, to terminate the Term and his employment
hereunder.

                  (b) Upon any termination pursuant to this Section 9 by the
Employee without Good Reason (as defined below), the Company shall pay to the
Employee any unpaid Annual Base Salary through the effective date of termination
specified in such notice. The Company shall have no further liability hereunder
(other than for reimbursement for reasonable business expenses incurred prior to
the date of termination, subject, however, to the provisions of Section 5(a)).

                  (c) Upon any termination pursuant to this Section 9 by the
Employee for Good Reason, the Company shall pay to the Employee the same amounts
that would have been payable by the Company to the Employee under Section 8 of
this Agreement if the Employee's employment had been terminated by the Company
without Cause. The Company shall have no further liability hereunder (other than
for reimbursement for reasonable business expenses incurred prior to the date of
termination, subject, however, to the provisions of Section 5(a)).

                  (d) For purposes of this Agreement, "Good Reason" shall mean
any failure by the Company to comply with any of the material provisions of
Section 4 of this Agreement, other than an isolated, insubstantial and
inadvertent failure not occurring in bad faith and which is remedied by the
Company promptly after receipt of notice thereof given by the Employee.

         10. CHANGE IN CONTROL.

                  (a) In the event that (i) a Change in Control (as defined in
paragraph (b) of this Section 10) in the Company shall occur during the Term,
and (ii) prior to the earlier of the expiration of the Term and one year after
the date of the Change in Control, the Term and Employee's employment with the
Company is terminated by the Company without Cause, as defined in Section 7(b)
or the Employee terminates the Term and his employment for Good Reason, as
defined in Section 9(d), the Company shall (1) pay to the Employee any unpaid
Annual Base Salary through the effective date of termination, (2) pay to the
Employee the Incentive Compensation, if any, not yet paid to the Employee for
any year prior to such termination, at such time as the Incentive Compensation
otherwise would have been payable to the Employee, (3) at the time of such
termination, pay to the Employee a lump sum equal to the sum of (A) the Annual
Base Salary at the date of termination multiplied by 1.5, and (B) the product of
the sum of the Performance Bonus for the prior year multiplied by 1.5. The
Company shall also continue to pay the premiums for the same or substantially
similar Welfare Benefits for 12 months. Further, any Company stock option
granted to Employee shall be exercisable immediately and the Company stock
acquired pursuant to such exercise may be sold by Employee subject to no
restrictions by Company whatsoever (other than those imposed by federal and
state securities laws). The Company shall have no further liability hereunder
(other than for reimbursement for reasonable business expenses incurred prior to
the date of termination, subject, however, to the provisions of Section 5(a)).

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                  (b) For purposes of this Agreement, the term "Change in
Control" shall mean:

                           (i) Approval by the shareholders of the Company of
         (x) a reorganization, merger, consolidation or other form of corporate
         transaction or series of transactions, in each case, with respect to
         which persons who were the shareholders of the Company immediately
         prior to such reorganization, merger or consolidation or other
         transaction do not, immediately thereafter, own more than 50% of the
         combined voting power entitled to vote generally in the election of
         directors of the reorganized, merged or consolidated company's then
         outstanding voting securities, or (y) a liquidation or dissolution of
         the Company or (z) the sale of all or substantially all of the assets
         of the Company (unless such reorganization, merger, consolidation or
         other corporate transaction, liquidation, dissolution or sale is
         subsequently abandoned); or

                           (ii) Individuals who, as of the date hereof,
         constitute the Board of Directors of the Company (as of the date hereof
         the "Incumbent Board") cease for any reason to constitute at least a
         majority of the Board, provided that any person becoming a director
         subsequent to the date hereof whose election, or nomination for
         election by the Company's shareholders, was approved by a vote of at
         least a majority of the directors then comprising the Incumbent Board
         (other than an election or nomination of an individual whose initial
         assumption of office is in connection with an actual or threatened
         election contest relating to the election of the Directors of the
         Company, as such terms are used in Rule 14a-11 of Regulation 14A
         promulgated under the Securities Exchange Act) shall be, for purposes
         of this Agreement, considered as though such person were a member of
         the Incumbent Board; or

                           (iii) The acquisition (other than from the Company)
         by any person, entity or "group", within the meaning of Section
         13(d)(3) or 14(d)(2) of the Securities Exchange Act (excluding, for
         this purpose, the Company or its subsidiaries, or any employee benefit
         plan of the Company or its subsidiaries) which acquires beneficial
         ownership (within the meaning of Rule 13d-3 promulgated under the
         Securities Exchange Act), of 20% or more of either the then outstanding
         shares of the Company 's Common Stock or the combined voting power of
         the Company 's then outstanding voting securities entitled to vote
         generally in the election of directors.

                  (c) The payments made pursuant to paragraph (a) above shall be
in lieu of any and all compensation due to Employee for the years that would
otherwise be remaining in the Term. Upon receipt of said lump sum payment, this
Agreement and all rights and duties of the parties shall be terminated, except
as follows. In consideration for such lump sum payment and for the right to
terminate under the conditions set forth above, Employee agrees to consult with
the Company (or its successors), and its officers if requested to do so for a
period of at least two years from the date of such termination. However,
Employee shall be required to devote only such part of his time to such services
as Employee believes reasonable in Employee's sole discretion, and the time and
date such services are offered shall be determined by Employee so long as that
time and date is within a reasonable period of time after the request. It is
expressly agreed that the Company's rights to avail itself of the advice and
consultation services of Employee shall at all times be exercised in a

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reasonable manner, that adequate notice shall be given to Employee in such
events, and that non-compliance with any such request by Employee for good
reason, including, but not limited to, ill health or prior commitments, shall
not constitute a breach or violation of this Agreement. Employee agrees that,
except for reimbursement of all reasonable expenses incurred by him with respect
to such consultation and advisory services, payable as such consultation and
advisory services are rendered, he shall not be entitled to any further
compensation. It is understood that in furnishing any advisory and consulting
services provided herein, Employee shall not be an employee of the Company but
shall act in the capacity of independent contractor.

         11. WAIVERS. It is understood that either party may waive the strict
performance of any covenant or agreement made herein; however, any waiver made
by a party hereto must be duly made in writing in order to be considered a
waiver, and the waiver of one covenant or agreement shall not be considered a
waiver of any other covenant or agreement unless specifically in writing as
aforementioned.

         12. SAVINGS PROVISIONS. The invalidity, in whole or in part, of any
covenant or restriction, or any section, subsection, sentence, clause, phrase or
word, or other provisions of this Agreement, as the same may be amended from
time to time shall not affect the validity of the remaining portions thereof.

         13. GOVERNING LAW. This Agreement shall be construed in accordance with
and governed by the laws of the State of Florida without giving effect to its
choice of law provision.

         14. NOTICES. If either party desires to give notice to the other in
connection with any of the terms and provisions of this Agreement, said notice
must be in writing and shall be deemed given when (a) delivered by hand (with
written confirmation of receipt), (b) sent by facsimile (with written
confirmation of receipt), provided that a copy is mailed by registered mail,
return receipt requested, or (c) when received by the addressee, if sent by a
nationally recognized overnight delivery service (receipt requested), in each
case addressed to the party for whom it is intended as follows (or such other
addresses as either party may designated by notice to the other party):

                  If to the Company:         Applica Incorporated
                                             5980 Miami Lakes Drive
                                             Miami Lakes, Florida  33014
                                             Attn: David M. Friedson,
                                                   President and CEO

                  If to Employee:            At the most recent home address
                                             of Employee on the official
                                             records of the Company

         15. DEFAULT. In the event either party defaults in the performance of
its obligations under this Agreement, the non-defaulting party may, after giving
30 days notice to the defaulting party to provide a reasonable opportunity to
cure such default, proceed to protect its rights by suit in equity, action at

                                       11
<PAGE>   12

law, or, where specifically provided for herein, by arbitration, to enforce
performance under this Agreement or to recover damages for breach thereof,
including all costs and attorneys' fees, whether settled out of court,
arbitrated, or tried (at both trial and appellate levels).

         16. SECTION 162(m) LIMITS.

         Notwithstanding any other provision of this Agreement, if and to the
extent that any remuneration payable by the Company to the Employee for any year
would exceed the maximum amount of such remuneration that the Company may deduct
for that year by reason of Section 162(m) of the Code, payment of the portion of
the remuneration for that year that would not be so deductible under Section
162(m) shall, in the sole discretion of the Board, be deferred so that it shall
become payable at such time or times as the Board reasonably determines that it
would be deductible by the Company under Section 162(m), with interest at the
"short-term applicable federal rate" as such term is defined in Section 1274(d)
of the Code.

         17. CERTAIN ADDITIONAL PAYMENTS BY THE COMPANY.

                  (a) Anything in this Agreement to the contrary
notwithstanding, in the event it shall be determined that any payment,
distribution or other action by the Company to or for the benefit of the
Employee (whether paid or payable or distributed or distributable pursuant to
the terms of this Agreement or otherwise, but determined without regard to any
additional payments required under this Section 17) (a "Payment") would be
subject to an excise tax imposed by Section 4999 of the Internal Revenue Code of
1986, as amended (the "Code"), or any interest or penalties are incurred by the
Employee with respect to any such excise tax (such excise tax, together with any
such interest and penalties, are hereinafter collectively referred to as the
"Excise Tax"), the Company shall make a payment to the Employee (a "Gross-Up
Payment") in an amount equal to the Excise Tax imposed upon the Payments.

                  (b) Subject to the provisions of paragraph (c) of this Section
17, all determinations required to be made under this Section 17, including
whether and when a Gross-Up Payment is required and the amount of such Gross-Up
Payment and the assumptions to be utilized in arriving at such determination,
shall be made by Grant Thornton LLP, or such other independent public accounting
firm regularly engaged by the Company from time to time (the "Accounting Firm"),
which shall provide detailed supporting calculations both to the Company and the
Employee within 20 business days of the receipt of notice from the Employee that
there has been a Payment, or such earlier time as is requested by the Company.
In the event that the Accounting Firm is serving as accountant or auditor for
the individual, entity or group effecting the Change of Control, the Company
shall appoint another nationally recognized accounting firm to make the
determinations required hereunder (which accounting firm shall then be referred
to as the Accounting Firm hereunder). All fees and expenses of the Accounting
Firm shall be borne solely by the Company. Any Gross-Up Payment, as determined
pursuant to this Section 17, shall be paid by the Company to the Employee within

                                       12
<PAGE>   13

five days of the receipt of the Accounting Firm's determination. If the
Accounting Firm determines that no Excise Tax is payable by the Employee, it
shall furnish the Employee with a written opinion that failure to report the
Excise Tax on the Employee's applicable federal income tax return would not
result in the imposition of a negligence or similar penalty. Any determination
by the Accounting Firm shall be binding upon the Company and the Employee. As a
result of the uncertainty in the application of Section 4999 of the Code at the
time of the initial determination by the Accounting Firm hereunder, it is
possible that Gross-Up Payments which will not have been made by the Company
should have been made ("Underpayment"), consistent with the calculations
required to be made hereunder. In the event that the Company exhausts its
remedies pursuant to Section 17 and the Employee thereafter is required to make
a payment of any Excise Tax, the Accounting Firm shall determine the amount of
the Underpayment that has occurred and any such Underpayment shall be promptly
paid by the Company to or for the benefit of the Employee.

                  (c) The Employee shall notify the Company in writing of any
claim by the Internal Revenue Service that, if successful, would require the
payment by the Company of the Gross-Up Payment. Such notification shall be given
as soon as practicable but no later than five business days after the Employee
is informed in writing of such claim and shall apprise the Company of the nature
of such claim and the date on which such claim is requested to be paid. The
Employee shall not pay such claim prior to the expiration of the 30-day period
following the date on which it gives such notice to the Company (or such shorter
period ending on the date that any payment of taxes with respect to such claim
is due). If the Company notifies the Employee in writing prior to the expiration
of such period that it desires to contest such claim, the Employee shall:

                           (i) give the Company any information reasonably
         requested by the Company relating to such claim,

                           (ii) take such action in connection with contesting
         such claim as the Company shall reasonably request in writing from time
         to time, including, without limitation, accepting legal representation
         with respect to such claim by an attorney reasonably selected by the
         Company,

                           (iii) cooperate with the Company in good faith in
         order effectively to contest such claim, and

                           (iv) permit the Company to participate in any
         proceedings relating to such claim;

provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold the Employee harmless, on an
after-tax basis, for any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such representation and
payment of costs and expenses. Without limitation on the foregoing provisions of
this Section 17(c), the Company shall control all proceedings taken in
connection with such contest and, at its sole option, may pursue or forego any
and all administrative appeals, proceedings, hearings and conferences with the
taxing authority in respect of such claim and may, at its sole option, either
direct the Employee to pay the tax claimed and sue for a refund or contest the
claim in any permissible manner, and the Employee agrees to prosecute such
contest to a determination before any administrative tribunal, in a court of

                                       13
<PAGE>   14

initial jurisdiction and in one or more appellate courts, as the Company shall
determine; provided, however, that if the Company directs the Employee to pay
such claim and sue for a refund, the Company shall advance the amount of such
payment to the Employee, on an interest-free basis and shall indemnify and hold
the Employee harmless, on an after-tax basis, from any Excise Tax or income tax
(including interest or penalties with respect thereto) imposed with respect to
such advance or with respect to any imputed income with respect to such advance;
and further provided that any extension of the statute of limitations relating
to payment of taxes for the taxable year of the Employee with respect to which
such contested amount is claimed to be due is limited solely to such contested
amount. Furthermore, the Company's control of the contest shall be limited to
issues with respect to which a Gross-Up Payment would be payable hereunder and
the Employee shall be entitled to settle or contest, as the case may be, any
other issue raised by the Internal Revenue Service or any other taxing
authority.

                  (d) If, after the receipt by the Employee of an amount
advanced by the Company pursuant to Section 17(c), the Employee becomes entitled
to receive any refund with respect to such claim, the Employee shall (subject to
the Company's complying with the requirements of Section 17(c)) promptly pay to
the Company the amount of such refund (together with any interest paid or
credited thereon after taxes applicable thereto). If, after the receipt by the
Employee of an amount advanced by the Company pursuant to Section 17(c), a
determination is made that the Employee shall not be entitled to any refund with
respect to such claim and the Company does not notify the Employee in writing of
its intent to contest such denial of refund prior to the expiration of 30 days
after such determination, then such advance shall be forgiven and shall not be
required to be repaid and the amount of such advance shall offset, to the extent
thereof, the amount of Gross-Up Payment required to be paid.

         18. NO THIRD PARTY BENEFICIARY. Nothing expressed or implied in this
Agreement is intended, or shall be construed, to confer upon or give any person,
other than the Company, the parties hereto and their respective heirs, personal
representatives, legal representatives, successors and assigns, any rights or
remedies under or by reason of this Agreement.

         19. WAIVER OF JURY TRIAL. ALL PARTIES KNOWINGLY WAIVE THEIR RIGHTS TO
REQUEST A TRIAL BY JURY IN ANY LITIGATION IN ANY COURT OF LAW, TRIBUNAL OR LEGAL
PROCEEDING INVOLVING THE PARTIES HERETO OR ANY DISPUTES ARISING OUT OF OR
RELATED TO THIS AGREEMENT.

                                       14
<PAGE>   15

         IN WITNESS WHEREOF, the Company, by its appropriate officer, signed
this Agreement and Employee has signed this Agreement, as of the day and year
first above written.

                                          APPLICA INCORPORATED

                                           By:  /s/ Harry D. Schulman
                                                -------------------------------
                                           Name:    Harry D. Schulman
                                           Its:     Chief Operating Officer

                                          EMPLOYEE

                                          /s/ Terry L. Polistina
                                          -------------------------------------
                                          Terry L. Polistina

                                       15<PAGE>   1

                                                                    Exhibit 10.1
                                 THIRD AMENDMENT

         THIS THIRD AMENDMENT (this "Amendment") dated as of September 30 ,
2000, to the Credit Agreement referenced below, is by and among AVTEAM, INC., a
Florida corporation, the Subsidiaries of the Borrower identified as Guarantors
on the signature pages hereto, the lenders identified herein, and Bank of
America, N.A., a national banking association formerly known as NationsBank,
N.A., as Administrative Agent. Terms used herein but not otherwise defined
herein shall have the meanings provided to such terms in the Credit Agreement.

                                    Recitals

         A. A $70 million credit facility has been extended pursuant to the
terms of that Credit Agreement dated as of April 30, 1998 (as amended and
modified, the "Credit Agreement") among the Borrower, the Subsidiaries of the
Borrower identified as Guarantors therein, the Lenders identified therein, and
NationsBank, N.A. (now known as Bank of America, N.A.), as Administrative Agent.

         B. The Borrower has requested the Lenders to consent to certain
modifications to the Credit Agreement and grant waivers of certain covenant
violations.

         C. The requested modifications and waivers require the consent of the
Required Lenders.

         D. The Required Lenders have agreed to the requested modifications and
waivers on the terms and conditions set forth herein.

         NOW, THEREFORE, in consideration of the foregoing Recitals and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

         1. Amendments. The Credit Agreement is amended in the following
respects:

            (a) Interest Rates. Notwithstanding any provision of Section 2.1(c)
of the Credit Agreement or any other provisions of the Credit Agreement or the
other Credit Documents to the contrary, as of October 1, 2000, (i) interest on
all Loans made on and after such date and until the Obligations are paid in
full, and all other amounts owing under the Credit Agreement or under the other
Credit Documents, shall bear interest at the Base Rate plus the Applicable
Percentage, (ii) all Eurodollar Loans outstanding on such date shall be
converted to Base Rate Loans as of the last day of the applicable Eurodollar
Interest Period with respect thereto, (iii) following such conversion, no
further Eurodollar Loans shall be made, and (iv) the "Applicable Percentage"
under the Credit Agreement shall be, and remain until the Obligations are paid
in full, (A) 2.0%, in case of Base Rate Loans, (B) 3.50%, in the case of Letter
of Credit Fees, and (C) 0.50%, in the case of the Commitment Fee. This Amendment
shall not modify in any way those provisions of the Credit Agreement or other
Credit Documents establishing the Default Rate of interest on the Loans and any
other amounts owing under the Credit Agreement or under the other Credit
Documents upon the occurrence, and

<PAGE>   2

during the continuance, of an Event of Default, all of which provisions shall
remain in full force and effect.

            (b) Minimum Consolidated Net Sales. There shall be added to Section
7.9 of the Credit Agreement a new subsection (g) to read as follows:

            (g) Minimum Consolidated Net Sales. The cumulative amount of
         consolidated net sales and revenues of the Consolidated Group, as
         determined in accordance with GAAP, for the months of October, November
         and December, 2000, shall not be less than the respective minimum
         amounts set forth below:

<TABLE>
<CAPTION>
                                              Cumulative
                Month                       Minimum Amount
             --------------               -----------------
<S>                                           <C>
              October, 2000                    $ 3,180,000
              November, 2000                   $ 8,669,000
              December, 2000                   $18,314,000
</TABLE>
         2. Reserves Against Borrowing Base. Notwithstanding any provision of
the Credit Agreement or any of the other Credit Documents to the contrary, the
Administrative Agent reserves the right, in its sole discretion, to add reserves
against the Borrowing Base based on the results of the Appraisal and the Field
Exam (as such terms are hereinafter defined).

         3. Covenant Compliance Waiver. Lenders hereby waive Borrower's
noncompliance as of September 30, 2000 with the financial covenants set forth in
Sections 7.9(b), 7.9(c), 7.9(d) and 7.9(f) of the Credit Agreement
(collectively, the "Financial Covenants"). Nothing herein shall be deemed a
waiver of Borrower"s compliance with the Financial Covenants at December 31,
2000 or at any time thereafter.

         4. Financial Advisor. Notwithstanding the waiver contained in Section 3
of this Amendment, until February 15, 2001, and thereafter until such time as
the Borrower delivers to the Lenders quarterly financial statements which
demonstrate complete compliance with the Financial Covenants, the Borrower will
continue to retain the services of a financial advisor, reasonably acceptable to
the Lenders, to advise the Borrower with respect to preparation and presentation
of its financial reporting to the Lenders under Sections 7.1 and 7.2 of the
Credit Agreement.

         5. Amendment Fee. In consideration of the above amendments and the
Financial Covenant waivers provided herein, the Borrower shall pay to the
Administrative Agent, for the ratable benefit of the Lenders who execute a
counterpart of this Amendment, an amendment fee of $200,000 (the "Amendment
Fee"), the first installment of which shall be $125,000, payable on or before
October 31, 2000. If Borrower fails to timely pay such first installment, the
waivers of Borrower's non-compliance with the Financial Covenants shall be
deemed not to have been given and shall be of no force or effect. The balance of
the Amendment Fee (i.e., $75,000) shall be due and payable on January 31, 2001
unless, prior to that date, the Borrower has entered into a letter of

                                      -2-
<PAGE>   3
intent or binding agreement for the sale of the Borrower's business in a bona
fide arm's length transaction, which transaction provides for the repayment in
full of all Obligations, a copy of which letter of intent or agreement shall
have been furnished to the Administrative Agent by the Borrower. Such sale may
take the form of a business combination, a purchase of substantially all of
Borrower's assets (including the shares of subsidiaries) or purchase of a
controlling interest in the Borrower's outstanding common stock.

         6. Field Examination; Inventory Appraisal. The Administrative Agent (or
its agents) has commenced a field exam of the inventory and the accounts
receivables systems, processes and controls of the Credit Parties (the "Field
Exam"). The Credit Parties agree to cooperate fully with the Administrative
Agent (and its agents) in the conduct of the Field Exam, providing reasonable
access to all personnel, books and records and facilities of the Credit Parties
necessary for the conduct of the Field Exam. The Credit Parties shall promptly
pay upon demand all reasonable costs, expenses and fees incurred by the
Administrative Agent and any of its agents and designees related thereto. The
Administrative Agent, on behalf of the Lenders, has engaged an appraiser to make
a recertification of an appraisal completed on June 12, 2000 by Aviation Asset
Management, Inc. of the inventory of the Credit Parties (current fair market
value and one-year orderly liquidation value) (the "Appraisal"). The Credit
Parties agree to cooperate fully with the Administrative Agent and the appraiser
in the conduct of the Appraisal, providing reasonable access to all personnel,
books and records and facilities of the Credit Parties necessary for the conduct
of the Appraisal. The Credit Parties shall promptly pay upon demand all
reasonable costs, expenses, and fees incurred by the Administrative Agent and
any of its agents and designees related thereto; provided, however, that the
aggregate fee relating thereto (exclusive of costs and expenses) shall not
exceed $50,000.

         7. Weekly Reporting. The Borrower shall furnish to the Administrative
Agent on a weekly basis (but not later than Wednesday of each week with regard
to the immediately preceding week) a report of all sales, cash receipts, cash
disbursements, inventory purchases, agings of accounts receivable and accounts
payable, schedule of Revenue Producing Equipment and schedule of Engines on
Hand. The obligation to furnish these reports shall continue until the
Obligations are paid in full. A violation of this covenant shall be an Event of
Default unless cured within three (3) Business Days after Borrower receives
notice of such violation from the Administrative Agent.

         8. Consultant to Lenders. The Administrative Agent has engaged
Pricewaterhouse Coopers, LLC (the "Consultant") to serve as a consultant and
financial advisor to the Administrative Agent and the Lenders with regard to
analyzing and examining various aspects of the Borrower"s business. The Borrower
shall continue to provide the Consultant reasonable access to all business
records, facilities and appropriate personnel and professionals of the Credit
Parties, including without limitation the Borrower"s accountants and auditors,
to facilitate the Consultant"s review and analysis. The Credit Parties shall
promptly pay upon demand all reasonable costs, expenses and fees of the
Consultant as and when incurred by the Administrative Agent.

         9. Effectiveness of Amendment. This Amendment shall be effective as of
the date hereof upon (i) it being executed and delivered by the Borrower to the
Administrative Agent, (ii) the execution and delivery to the Administrative
Agent of counterpart copies hereof executed by the

                                      -3-
<PAGE>   4
Required Lenders, and (iii) receipt by the Administrative Agent of evidence of
payment of all fees and expenses of the Administrative Agent in connection with
this Amendment, including without limitation the fees and disbursements of
special counsel to the Lenders.

         10. No Other Amendments. Except as modified hereby, all of the terms
and provisions of the Credit Agreement and the other Credit Documents (including
schedules and exhibits thereto) shall remain in full force and effect.

         11. Representations and Warranties of Credit Parties. Each Credit Party
hereby represents and warrants that (a) after giving effect to this Amendment,
each of the representations and warranties contained in the Credit Agreement and
the other Credit Documents are true and correct as of the date hereof (except
those which expressly relate to an earlier period), (b) except as set forth on
Schedule 1 to this Amendment, no Credit Party is in default under or with
respect to any Contractual Obligation (including, without limitation, any
Operating Lease or any Capital Lease), and (c) no Credit Party has any claims,
counterclaims, offsets or defenses to the Credit Documents and the performance
of its obligations thereunder, including but not limited to the repayment of the
Obligations.

         12. Acknowledgment and Consent of Guarantors; Reaffirmations. Each of
the Guarantors (i) acknowledges and consents to all of the terms and conditions
of this Amendment, (ii) affirms all of its obligations under the Credit
Documents and (iii) agrees that this Amendment and all documents executed in
connection herewith do not operate to reduce or discharge the Guarantors"
obligations under the Credit Agreement or the other Credit Documents.

         13. Release of Administrative Agent and Lenders. In consideration of
the Lenders" willingness to enter into this Amendment, each of the Credit
Parties hereby releases the Administrative Agent, the Lenders, and the
Administrative Agent"s and the Lender"s respective officers, employees,
representatives, agents, counsel, trustees and directors from any and all
actions, causes of action, claims, demands, damages and liabilities of whatever
kind or nature, in law or in equity, now known or unknown, suspected or
unsuspected, to the extent that any of the foregoing arises from any action or
failure to act on or prior to October 31, 2000.

         14. Expenses of Administrative Agent. The Borrower agrees to pay upon
demand all reasonable costs and expenses of the Administrative Agent in
connection with the preparation, execution and delivery of this Amendment,
including without limitation the reasonable fees and expenses of Stearns Weaver
Miller Weissler Alhadeff & Sitterson, P.A.

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

         16. Governing Law. This Amendment shall be deemed to be a contract made
under, and for all purposes shall be construed in accordance with, the laws of
the State of Florida.

                                      -4-
<PAGE>   5

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

BORROWER:         AVTEAM, INC.
                      a Florida corporation

                      By: /s/
                          -----------------------------------------
                      Name:
                            ---------------------------------------
                      Title:
                             --------------------------------------

GUARANTORS:       AVTEAM AVIATION FIELD SERVICES, INC.
                      a Florida corporation

                      By: /s/
                          -----------------------------------------
                      Name:
                            ---------------------------------------
                      Title:
                             --------------------------------------

LENDERS:              BANK OF AMERICA, N.A., a national banking association
                      formerly known as NationsBank, N.A., individually in its
                      capacity as a Lender and in its capacity as Administrative
                      Agent

                      By: /s/
                          -----------------------------------------
                      Name:
                            ---------------------------------------
                      Title:
                             --------------------------------------

                      [Lenders" signatures continue on following page]

                                      -5-

<PAGE>   6

                       SOUTHTRUST BANK

                       By: /s/
                           -----------------------------------------
                       Name:
                             ---------------------------------------
                       Title:
                              --------------------------------------

                       NATIONAL CITY BANK OF KENTUCKY

                       By: /s/
                           -----------------------------------------
                       Name:
                             ---------------------------------------
                       Title:
                              --------------------------------------

                       NATIONAL BANK OF CANADA

                       By: /s/
                           -----------------------------------------
                       Name:
                             ---------------------------------------
                       Title:
                              --------------------------------------

                       BANK AUSTRIA CREDITANSTALT CORPORATE FINANCE, INC.

                       By: /s/
                           -----------------------------------------
                       Name:
                             ---------------------------------------
                       Title:
                              --------------------------------------

                       WILLIAM E. SIMON & SONS SPECIAL SITUATION PARTNERS, L.P.
                       (by assignment from CITIZENS BANK OF MASSACHUSETTS, as
                       successor to USTRUST)

                       By: /s/
                           -----------------------------------------
                       Name:
                             ---------------------------------------
                       Title:
                              --------------------------------------

                       BANK LEUMI LE-ISRAEL B.M. MIAMI AGENCY

                       By: /s/
                           -----------------------------------------
                       Name:
                             ---------------------------------------
                       Title:
                              --------------------------------------

                                      -6-

<PAGE>   7

                          Schedule 1 to Third Amendment

                     Defaults Under Contractual Obligations

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