Document:

EX10.1 Q214

Exhibit  10.1

AMENDMENT NO. 1 TO AMENDED AND RESTATED CREDIT AGREEMENT
AMENDMENT NO. 1 TO AMENDED AND RESTATED CREDIT Agreement, dated July 29, 2014 (this “Amendment No. 1”), is by and among Wells Fargo Bank, National Association, in its capacity as agent pursuant to the Credit Agreement (as hereinafter defined) acting for and on behalf of the parties thereto as lenders (in such capacity, “Agent”), the parties to the Credit Agreement as lenders (individually, each a “Lender” and collectively, “Lenders”), Hamilton Beach Brands, Inc., formerly known as Hamilton Beach/Proctor-Silex Inc., a Delaware corporation (“Parent” or “US Borrower”) and Hamilton Beach Brands Canada, Inc., formerly known as Proctor-Silex Canada Inc., an Ontario corporation (“Hamilton Brands Canada” or “Canadian Borrower”, and together with US Borrower, each individually a “Borrower” and collectively, “Borrowers”). 
W I T N E S S E T H :
WHEREAS, Agent, Lenders and Borrowers have entered into financing arrangements pursuant to which Lenders (or Agent on behalf of Lenders) have made and may make loans and advances and provide other financial accommodations to Borrowers as set forth in the Amended and Restated Credit Agreement, dated as of May 31, 2012, by and among Agent, Lenders and Borrowers (as the same now exists and is amended and supplemented pursuant hereto and may hereafter be further amended, modified, supplemented, extended, renewed, restated or replaced, the “Credit Agreement”) and the other Loan Documents; 
WHEREAS, Borrowers desire to amend certain provisions of the Credit Agreement as set forth herein, and Agent and Lenders are willing to agree to such amendments on the terms and subject to the conditions set forth herein;
WHEREAS, by this Amendment No. 1, Agent, Lenders and Borrowers desire and intend to evidence such amendments;
NOW THEREFORE, in consideration of the foregoing and the mutual agreements and covenants contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
1.Definitions.  

(a)Additional Definition.  As used herein or in the Credit Agreement or any of the other Loan Documents, the term “Amendment No. 1” shall mean Amendment No. 1 to Amended and Restated Credit Agreement, dated July 29, 2014, by and among Agent, Lenders and Borrowers, as the same now exists or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced, and the Credit Agreement and the other Loan Documents shall be deemed and are hereby amended to include, in addition and not in limitation, such definition.

(b)Amendments to Definitions.

(i)The definition of “Eligible Trademarks Amount” set forth in the Credit Agreement is hereby deleted in its entirety and replaced with the following:

“Eligible Trademarks Amount” means an amount equal to the lesser of (a) twenty-five (25%) percent of the most recent appraised fair market value of the Eligible Trademarks based on a written appraisal and performed by an appraiser reasonably acceptable to Agent and reviewed and accepted by Agent and (b) $30,000,000, which amount will amortize on a monthly basis by an amount equal to such Eligible Trademarks Amount divided by sixty, commencing on September 1, 2014 and on the first (1st) day of each month thereafter.  Within eighteen (18) months after the date of Amendment No. 1, upon request from US Borrower to Agent, US Borrower shall have a one-time option to increase the Eligible Trademarks Amount to an amount equal to the lesser of (a) twenty-five (25%) percent of the most recent appraised fair market value of the Eligible Trademarks based on a written appraisal conducted after the date of Amendment No. 1 and performed by an appraiser reasonably acceptable to Agent and reviewed and accepted by Agent and (b) $30,000,000 (the “Eligible Trademarks Amount Re-Load”), which amount will amortize on a monthly basis by an amount equal to such Eligible Trademarks Amount divided by sixty, commencing on the first day of the first full month after the date of the Eligible Trademarks Amount Re-Load and on the first (1st) day of each month thereafter; provided, that, (i) on the date of the Eligible Trademarks Amount Re-Load and after giving effect thereto, no Default or Event of Default exists or has occurred and is continuing, (ii) Agent shall have received an updated written appraisal of the Eligible Trademarks conducted after the date of Amendment No. 1 reasonably satisfactory to Agent and performed by an appraiser reasonably acceptable to Agent and reviewed and accepted by Agent, (iii) on the date of the Eligible Trademarks Amount Re-Load and after giving effect thereto, Excess Availability shall be not less than $25,000,000, (iv) Excess Availability for each of thirty (30) consecutive days prior to the date of the Eligible Trademarks Amount Re-Load shall have been not less than $25,000,000 and (v) Borrowers shall pay to Agent, for the account of Lenders, or Agent, at its option, may charge the loan account of Borrowers maintained by Agent, a fee in the amount of $20,000, which fee is fully earned and payable on the date of the Eligible Trademarks Amount Re-Load and will constitute part of the Obligations. 
(ii)The definition of “Applicable Margin” set forth in the Credit Agreement is hereby amended by deleting the interest rate grid therein in its entirety and replacing it with the following:
	
				
	Level
	Average Excess Availability
	Applicable Margin Relative to Base Rate Loans (the “Base Rate Margin”)
	Applicable Margin Relative to LIBOR Rate Loans, Bankers’ Acceptances and Letter of Credit Fees (the “LIBOR Rate Margin”)

	I
	Greater than or equal to $40,000,000
	0%
	1.50%

	II
	Less than $40,000,000
	0%
	1.75%

(iii)The definition of “Applicable Unused Line Fee Percentage” set forth in the Credit Agreement is hereby deleted in its entirety and replaced with the following:

“Applicable Unused Line Fee Percentage” means, as of any date of determination, 0.25%. 
(iv)The definition of “Maturity Date” set forth in the Credit Agreement is hereby deleted in its entirety and replaced with the following:

“Maturity Date” means July 29, 2019.
(c)Interpretation.  For purposes of this Amendment No. 1, all terms used herein which are not otherwise defined herein, including but not limited to, those terms used in the recitals hereto, shall have the respective meanings assigned thereto in the Credit Agreement as amended by this Amendment No. 1.

2.Letters of Credit.  Section 2.11(b)(i) of the Loan Agreement is hereby deleted in its entirety and replaced with the following: 

“(i) the Letter of Credit Usage would exceed $5,000,000, or”.
3.Amendment Fee.  In consideration of the amendments set forth herein, Borrowers shall pay to Agent, for the account of Lenders, or Agent, at its option, may charge the loan account of Borrowers maintained by Agent, an amendment fee in the amount of $200,000, which fee is fully earned and payable on the date of this Amendment No. 1 and shall constitute part of the Obligations.

4.Representations and Warranties.  Borrowers, jointly and severally, represent and warrant with and to Agent and Lenders as follows, which representations and warranties shall survive the execution and delivery hereof, the truth and accuracy of, or compliance with each, together with the representations, warranties and covenants in the other Loan Documents, being a continuing condition of the making of Loans and providing Letters of Credit to Borrowers:

(a)no Default or Event of Default exists or has occurred and is continuing as of the date of this Amendment No. 1; 

(b)this Amendment No. 1 and each other agreement to be executed and delivered by Borrowers in connection herewith (together with this Amendment No. 1, the “Amendment Documents”) has been duly authorized, executed and delivered by all necessary corporate or organizational action on the part of each Borrower which is a party and is in full force and effect as of the date hereof, as the case may be, and the agreements and obligations of each of the Borrowers, as the case may be, contained herein and therein constitute legal, valid and binding obligations of each of the Borrowers, enforceable against them in accordance with their terms, except as enforceability is limited by equitable principals or by bankruptcy, insolvency, reorganization, moratorium or other laws relating to or affecting generally the enforcement of creditors’ rights generally; 

(c)the execution, delivery and performance of this Amendment No. 1 and the other Amendment Documents (i) are all within each Borrower’s corporate powers and (ii) are not in contravention of law or the terms of any Borrower’s certificate of incorporation, bylaws, or other organizational documentation, or any material indenture, agreement or undertaking to which any Borrower is a party or by which any Borrower or its property are bound which such contravention could individually or in the aggregate reasonably be expected to have a Material Adverse Effect; and

(d)all of the representations and warranties set forth in the Credit Agreement and the other Loan Documents, each as amended hereby, are true and correct in all material respects on and as of the date hereof, as if made on the date hereof, except to the extent any such representation or warranty is made as of a specified date, in which case such representation or warranty shall have been true and correct as of such date.

5.Conditions Precedent. The amendments contained herein shall only be effective upon the satisfaction of each of the following conditions precedent in a manner reasonably satisfactory to Agent:

(a)Agent shall have received counterparts of this Amendment No. 1, duly authorized, executed and delivered by Borrowers;

(b)Agent shall have received the consent or authorization from such Lenders as are required for the amendments provided for herein to execute this Amendment No. 1 on behalf of the Lenders;

(c)On the date hereof and after giving effect to the effectiveness of this Amendment No. 1, Excess Availability shall not be less than $30,000,000;    

(d)Agent shall have received a field examination, an Inventory appraisal and a Trademarks appraisal in accordance with the terms of the Credit Agreement, each in form and substance, and with results, reasonably satisfactory to Agent; 

(e)Agent shall have received a true and correct copy of each consent, waiver or approval (if any) to or of this Amendment No. 1, which any Borrower is required to obtain from any other Person, and such consent, approval or waiver (if any) shall be in form and substance reasonably satisfactory to Agent; and

(f)No Default or Event of Default shall exist or have occurred and be continuing.

6.Effect of this Amendment.  Except as expressly set forth herein, no other amendments, changes or modifications to the Loan Documents are intended or implied, and in all other respects the Loan Documents are hereby specifically ratified, restated and confirmed by all parties hereto as of the effective date hereof and Borrowers shall not be entitled to any other or further amendment by virtue of the provisions of this Amendment No. 1 or with respect to the subject matter of this Amendment No. 1.  To the extent of conflict between the terms of this Amendment No. 1 and the other Loan Documents, the terms of this Amendment No. 1 shall control.  The Credit Agreement and this Amendment No. 1 shall be read and construed as one agreement.

7.Governing Law.  The validity, interpretation and enforcement of this Amendment No. 1 and any dispute arising out of the relationship between the parties hereto whether in contract, tort, equity or otherwise, shall be governed by the internal laws of the State of New York but excluding any principles of conflicts of law or other rule of law that would cause the application of the law of any jurisdiction other than the laws of the State of New York.

8.Binding Effect.  This Amendment No. 1 shall be binding upon and inure to the benefit of each of the parties hereto and their respective successors and assigns.

9.Further Assurances.  Borrowers shall execute and deliver such additional documents and take such additional action as may be reasonably requested by Agent to effectuate the provisions and purposes of this Amendment No. 1.

10.Entire Agreement.  This Amendment No. 1 represents the entire agreement and understanding concerning the subject matter hereof among the parties hereto, and supersedes all other prior agreements, understandings, negotiations and discussions, representations, warranties, commitments, proposals, offers and contracts concerning the subject matter hereof, whether oral or written.

11.Headings.  The headings listed herein are for convenience only and do not constitute matters to be construed in interpreting this Amendment No. 1.

12.Counterparts.  This Amendment No. 1 may be executed in any number of counterparts, each of which shall be an original, but all of which taken together shall constitute one and the same agreement.  Delivery of an executed counterpart of this Amendment No. 1 by telefacsimile or other electronic method of transmission shall have the same force and effect as delivery of an original executed counterpart of this Amendment No. 1.  Any party delivering an executed counterpart of this Amendment No. 1 by telefacsimile or other electronic method of transmission shall also deliver an original executed counterpart of this Amendment No. 1, but the failure to do so shall not affect the validity, enforceability, and binding effect of this Amendment No. 1.

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1 to be duly executed and delivered by their authorized officers as of the day and year first above written. 
	
		
	 
	US BORROWER
HAMILTON BEACH BRANDS, INC.

	 
	 /s/ James H. Taylor

	 
	James H. Taylor

	 
	Vice President and Chief Financial Officer

	 
	 

	 
	CANADIAN BORROWER

HAMILTON BEACH BRANDS CANADA, INC.

	 
	 /s/ James H. Taylor

	 
	James H. Taylor

	 
	Vice President and Chief Financial Officer

AGENT AND LENDERS
WELLS FARGO BANK, NATIONAL 
ASSOCIATION, as Agent and a Lender
	
	
	/s/ Sang Kim

	Sang Kim

	Vice President

                    
WELLS FARGO CAPITAL FINANCE
CORPORATION CANADA, as a Lender
	
	
	/s/ Sang Kim

	Sang Kim

	Vice President

    
    
BANK OF AMERICA, N.A., as a Lender
	
	
	/s/ Stephen L. Hipsman

	Stephen L. Hipsman

	Senior Vice President

KEYBANK, NATIONAL ASSOCIATION, as a Lender
	
	
	/s/ Nadine M. Eames

	Nadine M. Eames

	Vice PresidentMSO-6.30.2014 Ex. 10.1

Exhibit 10.1

AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT
AMENDMENT, dated as of May 19, 2014 (this "Amendment"), to the AMENDED AND RESTATED LOAN AGREEMENT, dated as of February 14, 2012, as amended (the "Loan Agreement"), between Martha Stewart Living Omnimedia, Inc., a Delaware corporation (the "Borrower"), and BANK OF AMERICA, N.A. (the "Bank").
The parties desire to amend the Loan Agreement.
Therefore, in consideration of premises and the agreements herein, the Borrower hereby agrees with the Bank as follows:
1.    Definitions.  All terms used herein which are defined in the Loan Agreement and not otherwise defined herein are used herein as defined therein.
2.    Amendments.
(a)    The definition of "Expiration Date" contained in the Loan Agreement is hereby amended and restated as follows: 
"Expiration Date" means June 30, 2015."
(b)    Section 2.9 of the Loan Agreement is hereby amended and restated as follows:
"2.9 Collateral. The Obligations were secured by the pledge by the Borrower to the Bank of an investment account at the Bank pursuant to a Pledge Agreement from the Borrower in favor of the Bank. The Bank hereby releases its lien and security interest in such collateral, and such Pledge Agreement shall not hereafter constitute a "Loan Document" for any purpose hereof."
(c)    The following is added to the Loan Agreement as Section 8.3:
"8.3 Unencumbered Liquid Assets. The Borrower shall maintain Unencumbered Liquid Assets having an aggregate market value of not less than 100% of the sum of the outstanding principal amount of the Facility and the aggregate standby letters of credit issued under the Facility. The foregoing will be tested quarterly based on the Borrower's periodic reports filed with the Securities and Exchange Commission.
"Unencumbered Liquid Assets" mean the following assets (excluding assets of any retirement plan) which (i) are not the subject  of any lien, pledge, security interest or other arrangement with any creditor to have its claim satisfied out of the asset (or proceeds thereof) prior to the general creditors of the owner of the

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asset, and (ii) are held solely in the name of the Borrower (with no other persons or entities having ownership rights therein); (iii) may be converted to cash within five (5) business days; (iv) are otherwise acceptable to the Bank in its reasonable discretion; and (v) are not being counted or included to satisfy any other liquidity requirement under any other obligation, whether with the Bank or any other lender, unless otherwise expressly agreed by the Bank in writing:
a) Cash or cash equivalents held in the United States and denominated in United States dollars; and
b) United States Treasury or governmental agency obligations which constitute full faith and credit of the United States of America."
3.    Representations and Warranties. The Borrower hereby represents and warrants to the Bank as follows:
(a)    The representations and warranties made by the Borrower in the Loan Agreement and in each other Loan Document delivered by the Borrower are true and correct on and as of the date hereof as though made on and as of the date hereof (except to the extent such representations and warranties expressly relate to an earlier date).
(b)    The Borrower has all requisite power and authority to execute, deliver and perform this Amendment and to perform the Loan Agreement, as amended hereby.
(c)    The execution, delivery and performance by the Borrower of this Amendment, and the performance by the Borrower of the Loan Agreement, as amended hereby, (i) do not and will not contravene any law or any contractual restriction binding on or affecting the Borrower or any of the Borrower's properties, and (ii)  do not and will not result in or require the creation of any lien, security interest or other charge or encumbrance upon or with respect to any of Borrower 's properties, other than in favor of the Bank.
(d)    The Loan Agreement, as amended hereby, constitutes the legal, valid and binding obligation of the Borrower, enforceable against the Borrower in accordance with its terms.
4.    Continued Effectiveness of the Loan Agreement.  Except as otherwise expressly provided herein, the Loan Agreement and the other Loan Documents are, and shall continue to be, in full force and effect and are hereby ratified and confirmed in all respects except that on and after the date hereof, all references in the Loan Agreement to "this Agreement", "hereto", "hereof", "hereunder" or words of like import referring to the Loan Agreement shall mean the Loan Agreement as amended by this Amendment.

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         5.    Counterparts.  This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which shall be deemed to be an original, but all of which taken together shall constitute one and the same agreement.
6.    Headings.  Section headings herein are included for convenience of reference only and shall not constitute a part of this Amendment for any other purpose.
7.    Governing Law.  This Amendment shall be governed by, and construed in accordance with, the laws of the State of New York.
8.    Effectiveness of this Amendment. This Amendment shall be effective upon (i) the receipt by the Bank of a counterpart of this Amendment signed by the Borrower, (ii) the payment to the Bank of a renewal fee of $25,000 and (iii) the payment of the fees of the Bank's counsel in connection with the preparation of this Amendment.

[Signature page follows]
 

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed and delivered as of the date first above written.

	
		
	 
	MARTHA STEWART LIVING OMNIMEDIA, INC.

	 
	 

	 
	 

	 
	 

	By:
	/s/ Kenneth P. West

	 
	Name: Kenneth P. West

	 
	Title: CFO

	 
	 

	 
	 

	 
	 

	 
	BANK OF AMERICA, N.A.

	 
	 

	 
	 

	 
	 

	By:
	/s/ Jane R. Heller

	 
	Name: Jane R. Heller

	 
	Title: Managing Director

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