exv10w1



 





Exhibit 10.1




EXECUTION COPY




FOURTH AMENDMENT

TO CREDIT AGREEMENT




     THIS FOURTH AMENDMENT TO CREDIT AGREEMENT, dated as of May 31, 2007 (this
“Amendment”), is by and among HAMILTON BEACH/PROCTOR-SILEX, INC., a Delaware corporation
(the “Company”), its U.S. and Canadian Subsidiaries identified as Subsidiary Borrowers on
the signature pages hereto (the “Subsidiary Borrowers”) (hereinafter, the Company and the
Subsidiary Borrowers are collectively referred to as the “Borrowers” or individually
referred to as a “Borrower”), each of the financial institutions identified as Lenders on
the signature pages hereto (the “Lenders”), WACHOVIA BANK, NATIONAL ASSOCIATION
(“Wachovia”), as administrative agent for the Lenders (the “Administrative Agent”
or the “Agent”), WACHOVIA CAPITAL FINANCE CORPORATION (CANADA) (as successor to Congress
Financial Corporation (Canada)), as Canadian Agent (the “Canadian Agent”), KEYBANK,
NATIONAL ASSOCIATION, as Syndication Agent, and BANK OF AMERICA, N.A. (as successor to Fleet
Capital Corporation) and NATIONAL CITY BUSINESS CREDIT, INC., as Documentation Agents.



W I T N E S S E T H:




     WHEREAS, pursuant to a Credit Agreement dated as of December 17, 2002 (as amended,
supplemented or otherwise modified from time to time, the “Credit Agreement”) among the
Borrowers, the Lenders and the Administrative Agent, the Lenders have extended commitments to make
certain credit facilities available to the Borrowers;



     WHEREAS, the Borrowers have requested that the Credit Agreement be amended as described
herein;



     WHEREAS, the Lenders are willing to make such amendments to the Credit Agreement and to grant
such waivers, subject to the terms and conditions hereof;



     NOW, THEREFORE, in consideration of the agreements herein contained, the parties hereby agree
as follows:



PART I

DEFINITIONS




     SUBPART 1.1. Certain Definitions. Unless otherwise defined herein or the
context otherwise requires, the following terms used in this Amendment, including its
preamble and recitals, have the following meanings:



     “Fourth Amendment Effective Date” is defined in
Subpart 3.1.









 



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     SUBPART 1.2. Other Definitions. Unless otherwise defined herein or the context
otherwise requires, terms used in this Amendment, including its preamble and recitals, have the
meanings provided in the Credit Agreement (as amended hereby).



PART II

AMENDMENTS TO CREDIT AGREEMENT




     Effective on (and subject to the occurrence of) the Fourth Amendment Effective Date, the
Credit Agreement is hereby amended in accordance with this Part II.



     SUBPART 2.1. Amendments to Section 1.1. Section 1.1 of the Credit Agreement is
hereby amended as follows:




     (A) The definition of “Applicable Percentage” is hereby deleted in its entirety and
replaced with the following:




     “Applicable Percentage” means for Eurodollar Loans, Base Rate Loans,
Bankers’ Acceptances, Letter of Credit Fees and Unused Fees, the appropriate
applicable percentages corresponding to the Quarterly Average Excess Availability as
shown below:



	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Applicable Percentage	 	 	 	 
	 	 	 	 	for Eurodollar Loans,	 	Applicable	 	 
	 	 	 	 	Bankers’ Acceptances	 	Percentage for	 	Applicable
	 	 	Quarterly Average	 	and Letter of Credit	 	Base Rate	 	Percentage for
	Tier	 	Excess Availability	 	Fees	 	Loans	 	Unused Fees
	1

	 	Less than

$12,000,000
	 	 	2.00	%	 	 	0.50	%	 	 	0.20	%
	2

	 	Greater than or
equal to
$12,000,000 but
less than
$20,000,000
	 	 	1.75	%	 	 	0.25	%	 	 	0.20	%
	3

	 	Greater than or
equal to
$20,000,000 but
less than
$30,000,000
	 	 	1.50	%	 	 	0.00	%	 	 	0.20	%
	4

	 	Greater than or
equal to 30,000,000
but less than
$40,000,000
	 	 	1.25	%	 	 	0.00	%	 	 	0.20	%
	5

	 	Greater than or
equal to
$40,000,000
	 	 	1.00	%	 	 	0.00	%	 	 	0.20	%







The Applicable Percentages shall be determined and adjusted quarterly on the
first day of each quarter (each a “Calculation Date”); provided,
however, that (i) the initial Applicable Percentages shall be based on Tier
Level 4 (as shown









 



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above) and shall remain at Tier Level 4 until the fiscal quarter commencing October 1, 2007,
and, thereafter, the Tier Level shall be determined by the Quarterly Average Excess
Availability for the immediately preceding fiscal quarter, and (ii) if the Company
fails to provide the Borrowing Base Certificate required by Section 7.1(i) for any
month as required by and within the time limits set forth in Section 7.1(i) and such
Borrowing Base Certificate has not been provided by the next Calculation Date, the
Applicable Percentages shall be based on Tier Level 1 until five (5) Business Days
after such Borrowing Base Certificate is provided, whereupon the Tier Level shall be
determined by the then current Quarterly Average Excess Availability;
provided, that such new Tier Level shall be effective only from the fifth
Business Day following the date of delivery of such Borrowing Base Certificate and
no interest paid at the higher Tier Level shall be rebated to the Borrowers. Except
as set forth above, each Applicable Percentage shall be effective from one
Calculation Date until the next Calculation Date. Any adjustment in the Applicable
Percentage shall be applicable to all existing Loans and Letters of Credit as well
as any new Loans made or Bankers’ Acceptances or Letters of Credit issued.




     (B) The definition of “Benefit Plan” is hereby amended by adding the following sentence
to the end thereof:




     From and after the Spinoff, such term shall not include The Combined Defined
Benefit Plan of NACCO Industries, Inc. and Its Subsidiaries or The NACCO Materials
Handling Group, Inc. Defined Benefit Plan for Union Employees.




     (C) The definition of “Change of Control” is hereby deleted in its entirety and
replaced with the following:




     “Change of Control” means the occurrence of any of the following
events: (a) (i) prior to the occurrence of the Spinoff, NACCO shall fail to own,
directly or indirectly, 100% of the outstanding shares of Capital Stock of Holdings,
or (ii) upon or after occurrence of the Spinoff: (A) any “Person” or “group” (as
such terms are used in Sections 13(d) and 14(d) of the Exchange Act) other than a
Permitted Holder, is or becomes the beneficial owner (as defined in Rules 13d-3 and
13d-5 under the Exchange Act, except that for purposes of this clause such Person or
group shall be deemed to have “beneficial ownership” of all securities that any such
Person or group has the right to acquire, whether such right is exercisable
immediately or only after the passage of time), directly or indirectly, of Voting
Stock representing more than 25% of the voting power of the total outstanding Voting
Stock of Holdings; provided, that, in the event that Permitted Holders collectively
are the beneficial owners of, or have the right to acquire, 33% or more of the
voting power of the total outstanding Voting Stock of Holdings, the such threshold
percentage shall be 40% instead of 25%; or (B) during any period of two consecutive
years, individuals who at the beginning of such period
constituted the Board of Directors of Holdings (together with any









 



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new directors
whose election to such Board of Directors or whose nomination for election was
approved by a vote of 66 2/3% of the directors of Holdings then still in office who
were either directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any reason to
constitute a majority of the Board of Directors of Holdings; (b) Holdings shall fail
to own, directly or indirectly, 100% of the outstanding shares of Capital Stock of
the Company; or (c) the Company shall fail to own, directly or indirectly, 100% of
the outstanding shares of Capital Stock of the other Credit Parties owned by the
Company as of the Closing Date except in accordance with a transaction permitted
pursuant to this Agreement. For the avoidance of doubt, the Spinoff shall not
constitute a Change of Control.




     (D) The definition of “Consolidated adjusted EBITDA” is hereby deleted in its entirety
and replaced with the following:




     “Consolidated Adjusted EBITDA” means, for any applicable period of
computation, without duplication, the sum of (i) Consolidated EBITDA for such period
plus (ii) nonrecurring items determined by the Company and acceptable to the
Required Lenders for such period, plus (iii) equity contributions made in
cash by Holdings to the Company during such period or within thirty days following
the end of such period and specifically designated for allocation to such period and
not in the period in which made, plus (iv) restricted stock awards and
retention payments not to exceed $3,000,000 during such period; provided,
that for the measurement period set forth below, the amounts set forth below for
each such measurement period shall be added back to “Consolidated Adjusted EBITDA”.



	 	 	 	 	 
	Measurement Period Ending
	 	Amount
	June 30, 2007
	 	$	6,174,000	 
	September 30, 2007
	 	$	3,766,000	 
	December 31, 2007
	 	$	1,945,000	 
	March 30, 2008
	 	$	1,797,000	 
	June 30, 2008 and thereafter
	 	$	0	 







     The applicable period of computation shall be the trailing 12-month period
ending as of the date of determination.




     (E) The definition of “Consolidated Fixed Charges” is hereby deleted in its entirety
and replaced with the following:




     “Consolidated Fixed Charges” means, for any applicable period of
computation, without duplication, the sum of (i) all Consolidated Interest Expense
and termination payments under Hedging Agreements and other fees and charges
associated with Funded Debt (including, in the case of any Credit Party, Loans,
Letters of Credit and Bankers’ Acceptances), to the extent paid in cash during the
applicable period (other than the amortization of deferred financing fees and









 



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expenses included in Consolidated Interest Expense) plus (ii) all payments
of principal on Consolidated Funded Debt for the applicable period, other than
mandatory prepayments of the Term Loan Obligations, plus (iii) cash
dividends or other distributions paid by the Company pursuant to Section
9.11 during the applicable period. Except as otherwise provided herein, the
applicable period of computation shall be the trailing 12-month period ending as of
the date of determination. Notwithstanding the foregoing, the Dividend shall be
excluded from Consolidated Fixed Charges.




     (F) The definition of “Credit Documents” is hereby deleted in its entirety and replaced
with the following:




     “Credit Documents” means this Credit Agreement, the Intercreditor
Agreement, the Fourth Amendment Fee Letter, the Revolving Credit Notes, the LOC
Documents, the BA Documents, the Guaranty Agreements, the Security Documents and all
other documents and instruments executed or delivered pursuant thereto, as the same
may be modified, amended, extended, restated or supplemented from time to time.




     (G) The definition of “ERISA Event” is hereby amended by adding the following new
sentence to the end thereof:




     Notwithstanding the foregoing, neither the Spinoff nor the payment of the
Dividend shall be considered an ERISA Event under this Agreement.




     (H) The definition of “Maturity Date” is hereby deleted in its entirety and replaced
with the following:




     “Maturity Date” means July 31, 2012.




     (I) The definition of “Permitted Investments” is hereby amended by re-lettering clause
(m) as clause (n) and adding the following new clause (m):




     (m) Permitted Acquisitions; and




     (J) The definition of “Permitted Liens” is hereby amended by deleting clause (k) and
replacing it with the following:




     (k) Liens granted in favor of the Term Loan Administrative Agent to secure the
Term Loan Obligations, so long as the Intercreditor Agreement or a replacement
intercreditor agreement satisfactory to Agent and all the Lenders is in effect.




     (K) The definition of “Restricted Payments” is hereby amended by adding a new clause
(v) at the end thereof which shall read as follows:









 



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     (v) any payment or prepayment of principal of, premium, if any, or interest on,
redemption, purchase, retirement, defeasance, sinking fund or similar payment with
respect to, any Subordinated Debt of any Credit Party of any of its Subsidiaries.




     (L) The definition of “Senior Financial Officers” is hereby deleted in its entirety and
replaced with the following:




     “Senior Financial Officers” means the Vice President, Chief Financial
Officer and Treasurer; Treasurer; or Assistant Treasurer of the Company or any other
Credit Party.




     (M) The definition of “Senior Management Members” is hereby amended to add the
following titles: Vice President, Operations; Vice President, Chief Financial Officer and
Treasurer.




     (N) The definition of “Single Employer Plan” is hereby amended by adding the following
sentence to the end thereof:




     From and after the Spinoff, such term shall not include The Combined Defined
Benefit Plan of NACCO Industries, Inc. and Its Subsidiaries or The NACCO Materials
Handling Group, Inc. Defined Benefit Plan for Union Employees.




     (O) The definition of “Termination Event” is hereby amended by adding the following new
sentence to the end thereof:




     Notwithstanding the foregoing, neither the Spinoff nor the payment of the
Dividend shall be considered a Termination Event under this Agreement.




     (P) The definition of “U.S. Borrowing Base” is hereby deleted in its entirety and
replaced with the following:




     “U.S. Borrowing Base” means a U.S. dollar amount equal to the
sum of (a) an amount equal to the product of (i) 85% multiplied by (ii) the
Eligible Accounts Receivable of the U.S. Borrowers, plus (b) the U.S.
Eligible Inventory Amount, minus (c) reserves established by the
Administrative Agent from time to time in its reasonable discretion, including,
without limitation, a derivative reserve. Subject to the relevant terms and
provisions set forth herein, the Administrative Agent at all times shall be entitled
to adjust the advance rates and standards of eligibility under this Credit Agreement
in its sole discretion. Promptly, and in any event within ten Business Days’
thereafter, the Administrative Agent will notify the
Company if it establishes reserves or if it adjusts the advance rates and
standards of eligibility under this Credit Agreement.









 



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     (Q) The following definitions are hereby added to Section 1.1 of the Credit Agreement
in appropriate alphabetical order:




     “Dividend” means a special, one-time dividend in an amount not to
exceed $110,000,000 to NACCO or one of its wholly-owned subsidiaries made with the
proceeds of the Term Loan.




     “Fourth Amendment” means that certain Fourth Amendment to Credit
Agreement dated as of May 31, 2007 by and among the Company, the Subsidiary
Borrowers, the Lenders, the Administrative Agent, the Canadian Agent and the
Documentation Agents.




     “Fourth Amendment Effective Date” means May 31, 2007.




     “Fourth Amendment Fee Letter” means that certain Fee Letter dated April
26, 2007 from the Administrative Agent and the Arranger to the Company.




     “Intercreditor Agreement” means the Intercreditor Agreement to be
entered into by and among the Administrative Agent, the Term Loan Administrative
Agent and the Credit Parties in substantially the form of Exhibit A attached
to the Fourth Amendment, as amended, restated, amended and restated, supplemented or
otherwise modified from time to time.




     “Permitted Acquisition” shall mean an acquisition or any series of
related acquisitions by a Consolidated Party of (a) the assets or the outstanding
Voting Stock or economic interests of any Person, (b) any division, line of business
or other business unit of any Person or (c) Capital Stock of a joint venture
constituting a majority of the Capital Stock of such Person to the extent such
Consolidated Party already owns Capital Stock of such joint venture (such Person or
such division, line of business or other business unit of such Person or such joint
venture shall be referred to herein as the “Target”), in each case that is a
type of business (or assets used in a type of business) permitted to be engaged in
by the Borrowers and their Subsidiaries pursuant to the terms hereof, so long as (i)
no Default or Event of Default shall then exist or would exist after giving effect
thereto, (ii) the Administrative Agent, on behalf of the Lenders, shall have
received (or shall receive in connection with the closing of such acquisition) a
perfected security interest in all property (including, without limitation, Capital
Stock) acquired with respect to the Target subject to Permitted Liens, to the extent
required, and in accordance with the Security Documents and the Target, if a Person,
shall have executed a joinder agreement in accordance with the terms of Section
7.11, (iii) the Target shall have earnings before interest, taxes, depreciation and
amortization for the four fiscal quarters prior to the acquisition date in an
amount greater than $0 (with pro forma adjustments acceptable to the Administrative
Agent), (iv) such acquisition shall not be a “hostile” acquisition and shall have
been approved by the Board of Directors and/or shareholders of the applicable
Consolidated Party and the Target, (vi) after giving effect to such









 



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acquisition,
there shall be at least $15,000,000 of Excess Availability (including Eligible
Inventory and Eligible Accounts Receivable of the Target, it being agreed that no
Inventory of the Target shall be Eligible Inventory until the Administrative Agent
shall have received all documentation that it reasonably requests, including,
without limitation, a satisfactory appraisal, and no Accounts of the Target shall be
Eligible Accounts Receivable until the Administrative Agent shall have received all
documentation that it reasonably requests, including, without limitation, a
satisfactory field examination) and (v) the total cash consideration for all such
acquisitions made during the term of this Agreement shall not exceed $5,000,000 in
the aggregate.




     “Permitted Holder” means, collectively, the parties to the
Stockholder’s Agreement, dated as of March 15, 1990, as amended from time to time,
by and among National City Bank (Cleveland, Ohio), as depository, the Participating
Stockholders (as defined therein) and NACCO; provided, however, that for purposes of
this definition only, the definition of Participating Stockholders contained in the
Stockholders Agreement shall be such definition in effect on the Fourth Amendment
Effective Date.




     “Quarterly Average Excess Availability” means, at any time, the average
of the Excess Availability for each day of the immediately preceding calendar
quarter as calculated by the Agent (which shall be conclusive absent manifest
error).




     “Spinoff” means the transfer by NACCO or one of its wholly-owned
Subsidiaries of its ownership interest in Holdings to the shareholders of NACCO
pursuant to a spinoff transaction.




     “Spinoff Agreement” means that certain Amended and Restated Spinoff
Agreement, dated April 15, 2007, by and among NACCO, Housewares Holding Company,
Holdings and the Company.




     “Term Loan” shall have the meaning assigned to the term “Term Loan” in
the Term Loan Term Sheet.




     “Term Loan Administrative Agent” means UBS AG, Stamford Branch, in its
capacity as administrative agent under the Term Loan Credit Agreement, together with
its successors and assigns.




     “Term Loan Cap Amount” means $150,000,000.




     “Term Loan Commitment Letter” means that certain commitment letter
dated April 25, 2007 from Wachovia Bank, National Association, Wachovia Capital
Markets, LLC, UBS Securities LLC, UBS Loan Finance LLC and UBS AG, Stamford Branch
to the Company and Holdings, a copy of which is attached to the Fourth Amendment as
Exhibit B.









 



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     “Term Loan Commitment Papers” means the Term Loan Term Sheet and the
Term Loan Commitment Letter.




     “Term Loan Credit Agreement” means a credit agreement evidencing a
senior secured term loan credit facility on the terms and conditions set forth in
the Term Loan Commitment Papers to be entered into by the U.S. Credit Parties, the
Term Loan Administrative Agent and the various lenders and agents thereunder, a copy
of which is attached to the Fourth Amendment as Exhibit C, as the same may
be amended, supplemented, restated or otherwise modified from time to time to the
extent permitted hereunder.




     “Term Loan Documents” shall have the meaning set forth in the
Intercreditor Agreement.




     “Term Loan Obligations” shall have the meaning set forth in the
Intercreditor Agreement.




     “Term Loan Term Sheet” means the Summary of Terms and Conditions
describing a $125,000,000 Senior Secured Term Loan B Facility attached to the Term
Loan Commitment Letter as Exhibit A.




     “Transition Services Agreement” means that certain Transition Services
Agreement to be entered into by and among NACCO, Holdings and Kitchen Collection,
Inc.




     (R) The definitions of the terms “Closing Date Interest Rate Protection Agreements”,
“Current Derivative Exposure”, “Eligible Trademarks Amount”, “Derivative Reserve”, “Eligible
Mexican Accounts Receivable”, “Extraordinary Dividend”, “Funded Derivative Reserve”,
“Initial Current Derivative Exposure”, “Inventory Reliance Percentage”, “NACCO Debt” and
“Special Dividend” are hereby deleted from Section 1.1 of the Credit Agreement.



     SUBPART 2.2. Amendment to Section 6.20. Section 6.20 of the Credit Agreement is
hereby amended by adding the word “patents,” in the first line between the words “right to use,
all” and “trademarks, tradenames”.



     SUBPART 2.3. Amendment to Section 7.1. Section 7.1 of the Credit Agreement is hereby
amended by re-lettering clause (k) as clause (l) and adding a new clause (k) which shall read as
follows:


     (k) Term Loan Notices. Promptly upon receipt thereof, the Company shall
furnish to the Administrative Agent copies of all notices delivered to the Company or sent
by or on behalf of the Company with respect to the Term Loan (other than notices that are
duplicative of notices delivered hereunder and conversion/continuation notices); and










 



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     SUBPART 2.4. Amendment to Section 7.8. Section 7.8 of the Credit Agreement is hereby
deleted in its entirety and replaced with the following:




     7.8 [Reserved].



     SUBPART 2.5. Amendment to Section 7.10. Section 7.10 of the Credit Agreement is hereby
deleted in its entirety and replaced with the following:




     The proceeds of the Loans hereunder will be used solely (a) for capital expenditures
and general corporate and working capital purposes of the Borrowers and their Subsidiaries
in the ordinary course of business and (b) as otherwise permitted under this Agreement.



     SUBPART 2.6. Amendment to Section 7.13. Section 7.13(b) of the Credit Agreement is
hereby deleted in its entirety and replaced with the following:




(b) The Administrative Agent shall be entitled to obtain new Inventory Appraisals from
time to time as it deems necessary. At least one Inventory Appraisal will be conducted per
year for the first two years following the Fourth Amendment Effective Date and each year
thereafter until such time as the Leverage Ratio falls below 2.5 to 1.0, each such Inventory
Appraisal to be at the Credit Parties’ expense. Prior to the occurrence and continuance of
an Event of Default, any additional Inventory Appraisals shall be at the expense of the
Lenders on a pro rata basis according to each such Lender’s aggregate Commitment as of the
date such Inventory Appraisal is requested. After the occurrence and during the continuance
of an Event of Default, each Inventory Appraisal shall be at the sole expense of the Credit
Parties. Upon receipt of each new Inventory Appraisal, the Administrative Agent shall be
entitled to adjust the Applicable Inventory Percentage, as appropriate.



     SUBPART 2.7. Amendment to Article VIII. Article VIII of the Credit Agreement is
hereby amended as follows:




     (A) Section 8.1 is hereby deleted in its entirety and replaced with the following:




     8.1 Fixed Charge Coverage Ratio.




     If, at any time, Excess Availability is less than $25,000,000 (the
“Availability Threshold”) for more than three consecutive days, the
Consolidated Group shall maintain a Fixed Charge Coverage Ratio of not less than
1.00 to 1.00. If the Availability Threshold is triggered, compliance with this
covenant will be
tested retroactively as of the most recently ended fiscal quarter for which
financial statements were required to have been delivered pursuant to Section
7.1(b), and compliance with this covenant will be tested as of each subsequent
fiscal quarter end thereafter until Excess Availability is greater than the
Availability Threshold for each day during one complete fiscal quarter.









 



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     (B) Sections 8.2 and 8.3 are hereby deleted in their entirety.



     SUBPART 2.8. Amendment to Section 9.1. Section 9.1 of the Credit Agreement is hereby
amended as follows:




     (A) Clause (d) is hereby amended by deleting the words “(exluding the Mexican Property
Financing)”.




     (B) Clause (f) is hereby deleted in its entirety and replaced with the following:




     (f) obligations of the Borrowers in respect of Hedging Agreements (including
Interest Rate Protection Agreements) entered into in order to manage existing or
anticipated interest rate, exchange rate or commodity price risks and not for
speculative purposes;




     (C) Clause (g) is hereby deleted in its entirety and replaced with the following:




     (g) the guaranty by one Credit Party of another Credit Party’s obligations, to
the extent such obligations constitute Indebtedness permitted hereunder;




     (D) Clause (k) is hereby deleted in its entirety and replaced with the following:




     (k) provided that the Intercreditor Agreement has been executed and delivered,
the Term Loan Obligations of the Company in an aggregate principal amount not to
exceed the Term Loan Cap Amount and renewals, refinancings or extensions thereof in
whole or in part, so long as the Intercreditor Agreement or a replacement
intercreditor agreement satisfactory to Administrative Agent and all the Lenders is
in effect;




     (E) Clause (l) is hereby deleted in its entirety and replaced with the following:




     (l) [Intentionally Omitted];



     SUBPART 2.9. Amendment to Section 9.5. Section 9.5 of the Credit Agreement is hereby
amended by deleting clause (i) in its entirety and replacing it with the following:




     (i) sales, licenses, assignments, transfers and other dispositions of Intellectual
Property in the ordinary course of business and the license of Intellectual Property to The
Kitchen Collection, Inc. without any right of The Kitchen Collection, Inc. to
sublicense such Intellectual Property; and



     SUBPART 2.10. Amendment to Section 9.7. Section 9.7 of the Credit Agreement is
hereby amended by deleting the proviso at the end thereof in its entirety and replacing it with the
following:











 



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     provided, that the following transactions shall be permitted (i) the license of
Intellectual Property by the Company to The Kitchen Collection, Inc. without the right of
The Kitchen Collection, Inc. to sublicense such Intellectual Property, (ii) payments or
repayments of advances to NACCO or Holdings pursuant to the Tax Sharing Agreement to the
extent consistent with past practices, (iii) transactions permitted pursuant to Sections
9.1, 9.4, 9.5, 9.10 or 9.11, (iv) transactions pursuant to and in accordance with the
Transition Services Agreement; and (v) transactions pursuant to and in accordance with the
terms of the Spinoff Agreement.



     SUBPART 2.11. Amendment to Section 9.11. Section 9.11 of the Credit Agreement is
hereby deleted in its entirety and replaced with the following:




     9.11 Restricted Payments.




     The Consolidated Parties will not make any Restricted Payment other than, without
duplication:




     (a) (i) dividends, distributions or other payments from any Consolidated Party
(other than a Credit Party) to any Borrower, (ii) distributions or other payments
from any U.S. Credit Party to any Canadian Credit Party not to exceed $5,000,000 in
the aggregate (which $5,000,000 limitation shall include Investments made pursuant
to clause (c)(i) of the definition of Permitted Investments, loans under Section
9.1(e)(iii) and asset dispositions under Section 9.5(d)(v)), and (iii) dividends,
distributions or other payments from any Canadian Credit Party to any U.S. Credit
Party not to exceed $15,000,000 in the aggregate (which $15,000,000 limitation shall
include Investments made pursuant to clause (c)(ii) of the definition of Permitted
Investments, loans under Section 9.1(e)(i) and asset dispositions under Section
9.5(d)(vi));




     (b) the payment by the Company of cash dividends on its common Capital Stock in
the aggregate not to exceed in any one fiscal year an amount equal to (A) $5,000,000
plus (B) 50% of Consolidated Net Income since the Fourth Amendment Effective Date,
plus (C) 100% of the Net Cash Proceeds of any Equity Issuances since the Closing
Date; provided, that both before and after the payment of such dividends, no Default
or Event of Default shall exist;




     (c) the payment of the Dividend with the proceeds of the Term Loan;




     (d) dividends or distributions by any Borrower to Holdings consistent with past
practices (i) to pay franchise taxes and other amounts allocable to any Borrower and
its respective Subsidiaries required by Holdings to maintain its corporate
existence, and (ii) to reimburse Holdings for the payment of amounts relating to
travel and entertainment expenses and legal, consulting, software, accounting and
other similar services provided by third parties on the Borrowers’ or any of their
Subsidiaries’ behalf in the ordinary course of its business;









 



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     (e) dividends or distributions by the Borrowers to Holdings to pay for all
operating and overhead expenses of Holdings actually incurred by Holdings
(including, without limitation, salaries and other compensation of employees, and
directors’ fees and expenses);




     (f) prior to the consummation of the Spinoff, payments or repayments of
advances to NACCO or Holdings pursuant to the Tax Sharing Agreement to the extent
consistent with past practices; and




     (g) payments pursuant to and in accordance with the terms of the Transition
Services Agreement.



     SUBPART 2.12. Amendment to Section 9.15. Section 9.15 of the Credit Agreement is
hereby amended by adding the following paragraph:




     No Term Loan Document may be amended or otherwise modified and no Term Loan Obligations
may be refinanced other than consistent with, and subject to, the terms of the Intercreditor
Agreement.



     SUBPART 2.13. Amendment to Section 9.20. Section 9.20 of the Credit Agreement is
hereby deleted in its entirety and replaced with the following:




     9.20 Excess Availability.




     The Credit Parties will not permit Excess Availability to be less than $15,000,000 (net
of past due accounts payable) at any time.



     SUBPART 2.14. Addition of Section 9.21. A new Section 9.21 is hereby added in
appropriate numerical order which shall read as follows:




     9.21 Prepayments of the Term Loan Obligations.




     No optional or mandatory prepayments in respect of the Term Loan shall be made other
than in accordance with the terms of Section 2.10 (and the defined terms used therein) of
the Term Loan Credit Agreement as in effect on the date of Term Loan Credit Agreement, as
amended from time to time in accordance with the terms of the
Intercreditor Agreement. For the avoidance of doubt, scheduled payments of principal
and interest in respect of the Term Loan are permitted.



     SUBPART 2.15. Amendment to Article X. Article X of the Credit Agreement is hereby
amended by adding a new Section 10.4 which shall read as follows:




     10.4 Intercreditor Agreement.









 



14



     Each of the Lenders hereby acknowledges that it has received and reviewed the
Intercreditor Agreement and agrees to be bound by the terms thereof. Each Lender (and each
Person that becomes a Lender hereunder pursuant to Section 14.3) hereby authorizes the
Administrative Agent to enter into the Intercreditor Agreement on behalf of such Lender and
agrees that the Administrative Agent may take such actions on its behalf as is contemplated
by the terms of the Intercreditor Agreement.



     SUBPART 2.16. Amendment to Section 11.1. Section 11.1 of the Credit Agreement is
hereby amended as follows:




     (A) Clause (g) is hereby amended by adding the words “(including, without limitation,
the Term Loan)” following the words “With respect to any Indebtedness” at the beginning of
such clause.




     (B) Clause (h) is hereby amended by deleting the number “1,000,000” and replacing it
with the number “2,000,000.




     (C) Clause (l) is hereby deleted in its entirety and replaced with the following:




     (l) Defective Liens. Other than with respect to de minimus items of
Collateral not to exceed $250,000 in the aggregate, any security interest and Lien
purported to be created by any Security Document shall cease to be in full force and
effect (other than in accordance with its terms), or shall cease to give the
Administrative Agent for the benefit of the Lenders, the Liens, rights, powers and
privileges purported to be created and granted under such Security Document in favor
of the Administrative Agent, including a perfected first priority security interest
in and Lien on all of the Collateral (except as otherwise expressly provided in this
Agreement or such Security Document, subject to Permitted Liens), or shall be
asserted by the Borrower or any other Credit Party not to be a valid, perfected and
first priority security interest in or Lien on the Collateral covered thereby
(except as otherwise expressly provided in this Agreement or such Security Document,
subject to Permitted Liens).




     (D) The following new clause (m) is hereby added to Section 11.1:




     (m) Intercreditor Agreement. The Intercreditor Agreement, at any time
after its execution and delivery and for any reason (other than (i) as expressly
permitted hereunder, (ii) upon satisfaction in full of all the Obligations or
(iii) if terminated by the Lenders), ceases to be in full force and effect or is
determined by any Governmental Authority or arbitral entity having jurisdiction to
be void, unenforceable or otherwise not in full force and effect, in whole or in
part, for any reason.









 



15


PART III

CONDITIONS TO EFFECTIVENESS




     SUBPART 3.1. Amendment Effective Date. This Amendment shall be and become effective
as of the date hereof (the “Amendment Effective Date”) when all of the conditions set forth
in this Subpart 3.1 shall have been satisfied.


SUBPART 3.1.1. Execution of Counterparts of Amendment. The
Administrative Agent shall have received counterparts of this Amendment, which collectively
shall have been duly executed on behalf of the Borrower and all of the Lenders.



SUBPART 3.1.2. Amendment Fee. The Company shall have paid or caused to be
paid an amendment fee to the Administrative Agent in connection with this Amendment for the
account of each Lender that shall have returned executed signature pages to this Amendment
on May 30, 2007, as directed by the Administrative Agent, in an aggregate amount equal to
$172,500 to be shared by such Lenders on a pro rata basis according to each such Lender’s
aggregate Commitment as of the date hereof.



SUBPART 3.1.3. Other Fees. The Company shall have paid or caused to be paid
such other fees and expenses owed by them to the Lenders and the Administrative Agent to the
extent invoiced prior to the Fourth Amendment Effective Date or reflected in the Fourth
Amendment Fee Letter.



SUBPART 3.1.4. Resolutions. The Administrative Agent shall have received
certified copies of resolutions of the board of directors of each of the Borrowers and
consents from any applicable third party approving this Amendment and authorizing the
execution and delivery hereof.



SUBPART 3.1.5. Legal Opinion. The Administrative Agent shall have received an
opinion, or opinions, in form and substance satisfactory to the Administrative Agent,
addressed to the Agents on behalf of the Lenders and dated as of the date hereof, from U.S.
legal counsel to the Credit Parties which covers, among other matters, valid corporate
existence and authority, legality, validity and binding effect of this Amendment and the
Credit Agreement, as amended by this Amendment, and the absence of any violation of law or
regulation or conflict with any existing material contracts.



SUBPART 3.1.6. Opening Availability. The Company shall have Excess
Availability of at least $25,000,000 on the Fourth Amendment Effective Date, after giving
effect to the transactions contemplated by this Amendment



SUBPART 3.1.7. Payment of Legal Fees. The Company shall have paid or caused
to be paid (i) the legal fees and expenses of Moore & Van Allen, PLLC, legal counsel to the
Administrative Agent, related to this Amendment and the transactions contemplated hereby and
(ii) the outstanding legal fees and expenses of Border Ladner Gervais, Canadian legal
counsel to the Administrative Agent.










 



16



SUBPART 3.1.8 Other Documents. The Administrative Agent shall have received
such other documentation and legal opinions as the Administrative Agent may reasonably
request in connection with the foregoing, all in form reasonably satisfactory to the
Administrative Agent.




PART IV

REPRESENTATIONS AND WARRANTIES




     SUBPART 4.1. Each Borrower hereby represents and warrants that (i) the representations and
warranties contained in Article VI of the Credit Agreement are true and correct in all material
respects on and as of the date hereof as though made on and as of such date (except for those which
by their terms expressly relate to an earlier date) and after giving effect to the transactions
contemplated herein, (ii) no Default or Event of Default has occurred and is continuing on and as
of the date hereof and after giving effect to the transactions contemplated herein, (iii) it has
the corporate power and authority to execute and deliver this Amendment and to perform its
obligations hereunder and has taken all necessary corporate action to authorize the execution,
delivery and performance by it of this Amendment, and (iv) it has duly executed and delivered this
Amendment, and this Amendment constitutes its legal, valid and binding obligation enforceable in
accordance with its terms except as the enforceability thereof may be limited by bankruptcy,
insolvency or other similar laws affecting the rights of creditors generally or by general
principles of equity.



PART V

MISCELLANEOUS




     SUBPART 5.1. Cross-References. References in this Amendment to any Part or Subpart
are, unless otherwise specified, to such Part or Subpart of this Amendment.



     SUBPART 5.2. Instrument Pursuant to Credit Agreement. This Amendment is a Credit
Document executed pursuant to the Credit Agreement and shall (unless otherwise expressly indicated
therein) be construed, administered and applied in accordance with the terms and provisions of the
Credit Agreement.



     SUBPART 5.3. References in Other Credit Documents. At such time as this Amendment
shall become effective pursuant to the terms of Subpart 3.1, all references in the Credit
Documents to the “Credit Agreement” shall be deemed to refer to the Credit Agreement as amended by
this Amendment.



     SUBPART 5.4. Survival. Except as expressly modified and amended in this Amendment,
all of the terms and provisions and conditions of each of the Credit Documents shall remain
unchanged.



     SUBPART 5.5. 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









 



17



shall
not be necessary in making proof of this Amendment to produce or account for more than one such
counterpart. Delivery of an executed counterpart of this Amendment by telecopy shall be as
effective as an original executed counterpart hereof and shall constitute a representation that an
original executed counterpart will be delivered.



     SUBPART 5.6. Governing Law. THIS AMENDMENT SHALL BE DEEMED TO BE A CONTRACT MADE
UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE
CONFLICT OF LAW PRINCIPLES THEREOF.



     SUBPART 6.7. Successors and Assigns. This Amendment shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and assigns.



     SUBPART 6.8. Anticipated Subordination of Lien in Certain Collateral. The Agent and
the Lenders hereby acknowledge and agree that the terms of the Intercreditor Agreement to be
entered into with the Term Loan Administrative Agent at the time of the execution of the Term Loan
Documents will subordinate the Administrative Agent’s existing lien in certain collateral as
described in the Summary of Terms and Conditions describing this amendment and the Term Loan
Commitment Papers.



[remainder of page intentionally left blank]











 



 




     Each of the parties hereto has caused a counterpart of this Amendment to be duly executed
and delivered as of the date first above written.



	 	 	 	 	 	 	 
	COMPANY:	 	HAMILTON BEACH/PROCTOR-SILEX, INC.,
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ James H. Taylor	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	James H. Taylor	 	 
	 

	 	Title:
	 	Vice President, Chief Financial Officer and Treasurer	 	 
	 
	 	 	 	 	 	 
	 	 	U.S. SUBSIDIARY BORROWERS:	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	NONE.	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	CANADIAN BORROWER:
	 
	 	 	 	 	 	 
	 	 	PROCTOR-SILEX CANADA INC.
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ James H. Taylor	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	James H. Taylor	 	 
	 

	 	Title:
	 	Vice President, Chief Financial Officer and Treasurer	 	 












 



 


	 	 	 	 	 	 	 
	 	 	AGENTS AND LENDERS:
	 
	 	 	 	 	 	 
	 	 	WACHOVIA BANK, NATIONAL ASSOCIATION
	 	 	in its capacity as Administrative Agent and as a Lender
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Bruce Rhodes	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Bruce Rhodes	 	 
	 

	 	Title:
	 	Director	 	 












 



 


	 	 	 	 	 	 	 
	 	 	WACHOVIA CAPITAL FINANCE CORPORATION
	 	 	(CANADA) (as successor to Congress Financial
	 	 	Corporation (Canada)), in its capacity as Canadian Agent
	 
	 	 	 	 	 	 
	 

	 	By:
	 	     /s/ Bruce Rhodes	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Bruce Rhodes	 	 
	 

	 	Title:
	 	Director	 	 












 



 


	 	 	 	 	 	 	 
	 	 	KEY BANK, NATIONAL ASSOCIATION
	 	 	in its capacity as Syndication Agent and as a Lender
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Timothy W. Kenealy	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Timothy W. Kenealy	 	 
	 

	 	Title:
	 	Vice President	 	 












 



 


	 	 	 	 	 	 	 
	 	 	BANK OF AMERICA, N.A.,
	 	 	in its capacity as Documentation Agent and as a Lender
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Seth Benefield	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Seth Benefield	 	 
	 

	 	Title:
	 	Vice President	 	 












 



 


	 	 	 	 	 	 	 
	 	 	NATIONAL CITY BUSINESS CREDIT, INC.,
	 	 	in its capacity as Documentation Agent and as a Lender
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Tom Buda	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Tom Buda	 	 
	 

	 	Title:
	 	VP	 	 






[end of signature pages]










 



 




Exhibit A

to

Fourth Amendment to Credit Agreement




Form of Intercreditor Agreement




See attached.










 



 


Exhibit B

to

Fourth Amendment to Credit Agreement




Term Loan Commitment Letter




See attached.











 



 




Exhibit C

to

Fourth Amendment to Credit Agreement




Term Loan Credit Agreement




See attached.