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[EXECUTION COPY]
EXHIBIT 10.17
FIRST AMENDMENT
TO
REVOLVING CREDIT AGREEMENT
This FIRST AMENDMENT TO REVOLVING CREDIT AGREEMENT, dated as of March
26, 1998 (this "Amendatory Agreement"), is among HANDY & XXXXXX, a New York
corporation (the "Borrower"), and certain Lenders (as defined below) signatories
hereto.
W I T N E S E T H:
WHEREAS, the Borrower, certain financial institutions from time to time
parties thereto (collectively, the "Lenders") and The Bank of Nova Scotia, as
administrative agent (the "Administrative Agent") are parties to a Revolving
Credit Agreement, dated as of September 29, 1997 (as amended or otherwise
modified to the date hereof, the "Existing Credit Agreement");
WHEREAS, the Borrower has requested that the Lenders amend the Existing
Credit Agreement in certain respects and grant a waiver relating to the
Transaction (as defined below); and
WHEREAS, the parties hereto have agreed, subject to the conditions and
terms hereinafter set forth, to amend the Existing Credit Agreement in certain
respects as herein provided and grant the waiver described below (the Existing
Credit Agreement, as so amended by this Amendatory Agreement, being referred to
as the "Credit Agreement");
NOW, THEREFORE, in consideration of the agreements herein contained,
the parties hereto agree as follows.
PART I
DEFINITIONS
SUBPART 1.1. Certain Definitions. The following terms (whether or not
underscored) when used in this Amendatory Agreement shall have the following
meanings (such meanings to be equally applicable to the singular and plural form
thereof):
"Administrative Agent" is defined in the preamble.
"Amendatory Agreement" is defined in the preamble.
"Borrower" is defined in the preamble.
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"Credit Agreement" is defined in the third recital.
"Existing Credit Agreement" is defined in the first recital.
"First Amendment Effective Date" is defined in Subpart 3.1.
"Lenders" is defined in the preamble.
SUBPART 1.2. Other Definitions. Terms for which meanings are provided
in the Existing Credit Agreement are, unless otherwise defined herein or the
context otherwise requires, used in this Amendatory Agreement with such
meanings.
PART II
AMENDMENTS TO THE
EXISTING CREDIT AGREEMENT
Effective on (and subject to the occurrence of) the First Amendment
Effective Date, the Existing Credit Agreement is hereby amended, and the limited
waiver set forth below is hereby granted, in accordance with this Part II;
except as so amended or waived, the Existing Credit Agreement shall continue in
full force and effect in accordance with its terms.
SUBPART 2.1. Amendments to Article I. Article I of the Existing Credit
Agreement is hereby amended in accordance with Subpart 2.1.1.
SUBPART 2.1.1. Section 1.1 of the Existing Credit Agreement is hereby
amended by inserting the following definitions in such Section in the
appropriate alphabetical sequence:
"Acquisition Sub" means HN Acquisition Corp., a New York
corporation that is a wholly owned Subsidiary of WHX.
"First Amendment" means the First Amendment, dated as of March
26, 1998, to this Agreement among the Borrower and the Lenders party
thereto.
"First Amendment Effective Date" is defined in Subpart 3.1 of
the First Amendment.
"Incremental Amount" means, for any Fiscal Quarter of the
Borrower ended after the First Amendment Effective Date, 50% of
Consolidated Net Income (in excess of zero) for such Fiscal Quarter
(provided, that the calculation of the Incremental Amount for the first
Fiscal Quarter ending after the First Amendment Effective Date shall be
pro rated and based upon the number of days from (and including) the
First Amendment Effective Date to the last day of such Fiscal Quarter).
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"Purchase Agreement" means the Agreement and Plan of Merger, dated as
of March 1, 1998, among WHX, Acquisition Sub and the Borrower, as in effect on
the First Amendment Effective Date, as amended or modified from time to time in
accordance with Section 7.2.14.
"Transaction" means the acquisition of the issued and
outstanding shares of the Borrower by Acquisition Sub, and the
subsequent merger of Acquisition Sub with and into the Borrower with
the Borrower being the surviving Person, all in accordance with the
terms of the Purchase Agreement.
"WHX" means WHX Corporation, a Delaware corporation.
"WHX Group" means WHX, each Subsidiary of WHX and each
Affiliate of WHX (other than the Borrower and its Subsidiaries and
joint ventures) (provided, that when used in this definition, clause
(b) of the definition of "Affiliate" shall be deemed to be modified to
substitute "WHX or any Subsidiary of WHX" for the words "the Borrower
or any Restricted Subsidiary(ies))".
SUBPART 2.2. Amendments to Article VII. Article VII of the Existing
Credit Agreement is hereby amended in accordance with Subparts 2.2.1 through
2.2.9.
SUBPART 2.2.1. A new Section 7.1.7 is hereby added to the Existing
Credit Agreement, to read in its entirety as follows:
"Section 7.1.7. Corporate Formalities. The Borrower and each
of its Subsidiaries will satisfy customary corporate formalities,
including the maintenance of separate corporate records in accordance
with past practice. Neither the Borrower nor any of its Subsidiaries
shall make any payment to a creditor of any member of the WHX Group in
respect of any liability of such Person (other than pursuant to a
liability or transaction otherwise permitted hereunder), and no bank
account of the Borrower or any of its Subsidiaries shall be commingled
with any bank account of any other Person. Any financial statements
distributed to any creditors of the Borrower and its Subsidiaries
shall, to the extent permitted by GAAP, clearly establish the corporate
separateness of such Person from each member of the WHX Group and each
other Affiliate. Finally, neither the Borrower nor any of its
Subsidiaries shall take any action, or conduct its affairs in a manner,
which is likely to result in the corporate existence of the Borrower or
such Subsidiary on the one hand and of any other Person on the other
hand being ignored, or in the assets and liabilities of the Borrower or
any of its Subsidiaries being substantively consolidated with those of
any other Person in a bankruptcy, reorganization or other insolvency
proceeding."
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SUBPART 2.2.2. Section 7.2.2 of the Existing Credit Agreement is hereby
amended by adding the following sentence to the end of such Section.
"Furthermore, notwithstanding the foregoing or any other
provision of this Agreement to the contrary, neither the
Borrower nor any of its Subsidiaries shall directly or
indirectly create, incur, assume, guarantee or otherwise
become directly or indirectly liable with respect to any Debt
of any member of the WHX Group. For purposes of the
immediately preceding sentence, "Debt" shall be deemed to also
include any liability associated with the reimbursement for
disbursements made under letters of credit, bankers
acceptances and bonds."
SUBPART 2.2.3. Section 7.2.3 of the Existing Credit Agreement is hereby
amended by adding a new clause (c), to read in its entirety as follows:
"(c) Notwithstanding the foregoing or any other
provision of this Agreement to the contrary, neither the
Borrower nor any of its Subsidiaries shall directly or
indirectly create, incur, assume or permit to exist (upon the
happening of a contingency or otherwise) any Lien on or with
respect to any Property or asset (including, without
limitation, any document or instrument in respect of goods or
accounts receivable) of the Borrower or any such Subsidiary,
whether now owned or held or hereafter acquired, or any income
or profits therefrom, in favor of any member of the WHX Group
or as security for any obligation of such member."
SUBPART 2.2.4. Clause (a) of Section 7.2.4 of the Existing Credit
Agreement is hereby amended in its entirety to read as follows:
"(a) Its Consolidated Net Worth at any time prior to
the First Amendment Effective Date to be less than the amount
set forth in this clause under this Agreement (and determined
pursuant to the terms of this Agreement) as in effect prior to
such date, and from and after the First Amendment Effective
Date, at any time to be less than the sum of:
(i) $320,000,000 (provided, that if as a
result of the Transaction the Consolidated Net Worth
amount is increased or decreased from the amount set
forth on Schedule A to the First Amendment, then the
$320,000,000 figure shall be deemed to be similarly
increased or decreased (as the case may be) as of the
First Amendment Effective Date by the amount of such
increase or decrease).
plus
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(ii) the sum of all Incremental Amounts for
all Fiscal Quarters from and after the First
Amendment Effective Date."
SUBPART 2.2.5. Section 7.2.5 of the Existing Credit Agreement is hereby
amended by adding the following sentence at the end of such Section.
"Notwithstanding the foregoing or any other provision of this
Agreement to the contrary, neither the Borrower nor any of its
Subsidiaries shall make, incur or assume any Investment in any
member of the WHX Group."
SUBPART 2.2.6. Section 7.2.8 of the Existing Credit Agreement is hereby
amended by adding the following sentence at the end of such Section.
"Notwithstanding the foregoing or any other provision of this
Agreement to the contrary, neither the Borrower nor any of its
Subsidiaries shall engage in a Sale-and-Leaseback transaction
with any member of the WHX Group."
SUBPART 2.2.7. Section 7.2.10 of the Existing Credit Agreement is
hereby amended by adding a new clause (c), to read in its entirety as follows:
"(c) Notwithstanding the foregoing or any other
provision of this Agreement to the contrary, in no event shall
the Borrower or any of its Subsidiaries (other than the merger
of Acquisition Sub with the Borrower in connection with the
Transaction), consolidate with or merge with, or convey,
transfer or lease any of their assets in a single transaction
or series of transactions to, any member of the WHX Group
except as otherwise permitted pursuant to the provisions of
this Agreement."
SUBPART 2.2.8. Section 7.2.11 of the Existing Credit Agreement is
hereby amended by adding the following sentence to the end of such Section.
"Notwithstanding the foregoing or any other provision of this
Agreement to the contrary, neither the Borrower nor any of its
Subsidiaries shall make any Asset Disposition to any member of
the WHX Group."
SUBPART 2.2.9. A new Section 7.2.14 is added to Existing Credit
Agreement to read in its entirety as follows:
"SECTION 7.2.14. The Borrower will not agree to any amendment,
supplement, waiver or other modification to the terms of the
Purchase Agreement if such amendment, supplement, waiver or
modification could reasonably be expected to result in a
Material Adverse Effect."
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SUBPART 2.3. Limited Waiver, etc. The Lenders hereby waive through (but
only through and including) June 30, 1998 the Event of Default under Section
8.1.8 of the Existing Credit Agreement arising as a result of the Transaction.
The Borrower acknowledges and agrees that the foregoing is a limited waiver and
that the Lenders reserve all of their rights and remedies under the Loan
Documents from and after July 1, 1998 with respect to such Event of Default.
PART III
CONDITIONS TO EFFECTIVENESS
SUBPART 3.1. First Amendment Effective Date. This Amendatory Agreement
shall become effective on the date (the "First Amendment Effective Date") when
each of the conditions set forth in this Part shall have been satisfied.
SUBPART 3.1.1. Execution of Counterparts. The Administrative Agent
shall have received counterparts of this Amendatory Agreement, duly executed on
behalf of the Borrower and the Required Lenders.
SUBPART 3.1.2. Amendment Fee. The Administrative Agent shall have
received an amendment fee in the amount of $200,000 for the pro rata account of
the Lenders based on their Percentages and any other fees payable by the
Borrower on the First Amendment Effective Date.
SUBPART 3.1.3. Acquisition of Shares. Acquisition Sub shall have
purchased a sufficient number of the shares of common stock of the Borrower such
that the Borrower is a Subsidiary of WHX.
SUBPART 3.1.4. Legal Details, etc. All documents executed or submitted
pursuant hereto shall be satisfactory in form and substance to the
Administrative Agent and its counsel. The Administrative Agent and its counsel
shall have received all information and such counterpart originals or such
certified or other copies or such materials, as the Administrative Agent or its
counsel may reasonably request, and all legal matters incident to the
transactions contemplated by this Amendatory Agreement shall be satisfactory to
the Administrative Agent and its counsel.
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PART IV
MISCELLANEOUS
SUBPART 4.1. Cross-References. References in this Amendatory Agreement
to any Part or Subpart are, unless otherwise specified or otherwise required by
the context, to such Part or Subpart of this Amendatory Agreement.
SUBPART 4.2. Loan Document Pursuant to Existing Credit Agreement. This
Amendatory Agreement is a Loan Document executed pursuant to the Existing Credit
Agreement and shall be construed, administered and applied in accordance with
all of the terms and provisions of the Existing Credit Agreement.
SUBPART 4.3. Successors and Assigns. This Amendatory Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns.
SUBPART 4.4. Counterparts. This Amendatory Agreement may be executed by
the parties hereto in several counterparts, each of which when executed and
delivered shall be deemed to be an original and all of which shall constitute
together but one and the same agreement.
SUBPART 4.5. Representations, No Default, etc. Both before and after
giving effect to this Amendatory Agreement, the Borrower hereby represents and
warrants to the Administrative Agent and the Lenders as follows:
(a) the representations and warranties set forth in Article VI
of the Existing Credit Agreement (excluding, however, those contained
in Section 6.7 thereof) are true and correct in all material respects
(unless stated to relate solely to an earlier date, in which case such
representations and warranties were true and correct as of such earlier
date);
(b) except as disclosed by the Borrower to the Administrative
Agent and the Lenders pursuant to Section 6.7 of the Existing Credit
Agreement,
(i) no litigation, arbitration or governmental
investigation or proceeding is pending or, to the knowledge of
the Borrower, threatened against the Borrower or any of its
Subsidiaries which may reasonably be expected to materially
adversely affect the Borrower's, or the Borrower and its
Subsidiaries' taken as a whole, financial condition,
operations, assets, businesses, properties or prospects or
which purports to affect the legality, validity or
enforceability of the Existing Credit Agreement, the Notes or
any other Loan Document; and
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(ii) no development has occurred in any litigation,
arbitration or governmental investigation or proceeding
disclosed pursuant to Section 6.7 of the Existing Credit
Agreement which may reasonably be expected to materially
adversely affect the financial condition, operations, assets,
businesses, properties or prospects of the Borrower or the
Borrower and its Subsidiaries, taken as a whole; and
(c) no Default has occurred and is continuing.
SUBPART 4.6. Limited Waiver, etc. No amendment, waiver or approval by
the Administrative Agent or any Lender under this Amendatory Agreement shall,
except as may be otherwise stated in this Amendatory Agreement, be applicable to
subsequent transactions. No amendment, waiver or approval hereunder shall
require any similar or dissimilar amendment, waiver or approval to be granted
after the date hereof, and except as expressly modified or waived by this
Amendatory Agreement, the provisions of the Existing Credit Agreement shall
remain in full force and effect, without amendment or other modification.
SUBPART 4.7. Governing Law. THIS AMENDATORY AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendatory
Agreement to be executed by their respective authorized officers as of the day
and year first above written.
HANDY & XXXXXX
By_________________________________
Title:
THE BANK OF NOVA SCOTIA,
in its capacity as Administrative
Agent, Issuer and Lender
By_________________________________
Title:
THE BANK OF NEW YORK
By_________________________________
Title:
BANK OF TOKYO - MITSUBISHI
TRUST COMPANY
By_________________________________
Title:
THE CHASE MANHATTAN BANK
By_________________________________
Title:
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COMERICA BANK
By_________________________________
Title:
DEN DANSKE BANK AKTIESELSKAB,
CAYMAN ISLANDS BRANCH
By_________________________________
Title:
FIRST UNION NATIONAL BANK
By_________________________________
Title:
FLEET PRECIOUS METALS
By_________________________________
Title:
KEYBANK NATIONAL ASSOCIATION
By_________________________________
Title:
THE LONG TERM CREDIT BANK
OF JAPAN, LIMITED
By_________________________________
Title:
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NATIONSBANK, N.A.
By_________________________________
Title:
PNC BANK, NATIONAL ASSOCIATION
By_________________________________
Title:
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