NOTE MODIFICATION AGREEMENT
EXHIBIT 99.1
This Note
Modification Agreement (“Agreement”), dated this 23rd day of January, 2009, is
entered into by PENSION BENEFIT GUARANTY CORPORATION (“PBGC”), JPMorgan
Investment Management Inc. (“JPMorgan”), as agent for PBGC, and FANSTEEL INC.
(“Fansteel”).
RECITALS:
WHEREAS,
PBGC and Fansteel are parties to a Promissory Note dated January 23, 2004 with
an original balance of $9,500,000.00 and a current balance, as of the date of
execution of this Agreement, of $6,500,000.00;
WHEREAS,
the Promissory Note is secured by the pledged assets set forth in a certain
Pledge Agreement between PBGC, Fansteel, and Fansteel de Mexico, S. de X.X. de
C.V. (the “Pledge Agreement”);
WHEREAS,
Fansteel has requested that XX Xxxxxx modify the Promissory Note as set forth
herein.
NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged by each party to this Agreement to the other, the
parties hereto agree as follows:
1.0 Modification of Promissory
Note. The Promissory Note shall be modified as follows:
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1.1
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January 23, 2009
Payment. Section 2(a) of the Promissory Note shall be
deleted and replaced in its entirety with the following: “Five (5)
consecutive annual installment payments by Fansteel to PBGC of $750,000,
commencing on January 23, 2005 (“Annual Payment Date”), and continuing
thereafter on each of the first, second, third, and fourth anniversaries
of such date, provided, however, that the payment due on January 23, 2009
shall not be due until March 24, 2009;
and”
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1.2
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Restricted Payment
Default. The following Section 6(e) shall be added after
Section 6(d) of the Promissory Note: “6(e) Fansteel makes a Restricted
Payment. Restricted Payment shall mean (i) any dividend or
other distribution on account of any shares of Fansteel’s capital stock or
unit of ownership interest or any security convertible into or right to
acquire such capital stock or other ownership interest (other than
dividends payable solely in shares of capital stock), (ii) any payment
on account of the principal of or premium, if any, on any indebtedness
convertible into shares of the capital stock or (iii) any payment
on account of any purchase, redemption, retirement, exchange or conversion
of any of the Borrower's capital stock. For the purposes of
this definition a “payment” shall include the
transfer of any asset or the issuance of any indebtedness or other
obligation (the amount of any such payment
to be the fair market value of such asset or the amount of such
obligation, respectively) but shall not include the issuance of any
capital stock.”
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2.0 Continuing Effect.
Except as modified herein, nothing contained in this Agreement shall be
construed to affect, modify or cure in any manner or effect a waiver of the
occurrence and/or continuance of, any default or breach of any term, condition,
covenant or agreement contained in the Promissory Note, the Pledge Agreement,
the Loan Documents (as defined in the Pledge Agreement) or any document securing
the Note or any other agreement executed in connection therewith.
3.0 Conditions to
Effectiveness. This Amendment shall be effective as of the
date first above written but shall not become effective as of such date until
the date (the “Effective Date”) that each of the following conditions shall have
been satisfied:
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3.1
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JPMorgan
shall have received this Agreement duly executed by
Fansteel;
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3.2
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JPMorgan
shall have received such other documents and agreements as JPMorgan may
reasonably request;
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3.3
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Each
of the representations and warranties of Fansteel contained in this
Amendment shall be true and correct on and as of the Effective
Date.
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3.4
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Fansteel
shall have paid all fees and expenses incurred by JPMorgan in connection
with the negotiation, execution and delivery of this Agreement and any
other documents or agreements executed in connection herewith (including
the fees and expenses of counsel to XX
Xxxxxx).
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4.0 Representations and
Warranties. In order to induce JPMorgan and PBGC to enter into
this Agreement, Fansteel represents and warrants as follows:
Each of
the representations and warranties of Fansteel set forth in the Promissory Note,
the Pledge Agreement, and the Loan Documents (as defined in the Pledge
Agreement) is true and correct on and as of the Effective Date both before and
after giving effect to this Agreement and no Default or Event of Default has
occurred and is continuing on and as of the Effective Date.
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5.0 Loan Document. The
parties each acknowledge and agree that this Agreement constitutes a Loan
Document (as defined in the Pledge Agreement).
6.0 Governing Law. This
Forbearance Agreement shall be governed by, and shall be construed and enforced
in accordance with federal law, and where federal law is not applicable, by the
laws of the state of Delaware without regard to conflicts of law
principles.
7.0 Counterparts. This
Agreement may be executed in counterparts (and by different parties hereto on
different counterparts), each of which shall constitute an original, but all of
which when taken together shall constitute a single contract.
8.0 Construction. Each
party hereto acknowledges that it has been represented by its own legal counsel
in connection its execution of this Agreement, that it has exercised independent
judgment with respect to this Agreement, that it has been given the opportunity
to consult with its own legal counsel regarding the terms of this Agreement,
that it has done so, and that it has entered into this Agreement freely,
knowingly, and voluntarily.
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as
of the date first set forth above, by their respective duly authorized
officers.
(Signature
page follows.)
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IN
WITNESS WHEREOF the parties have entered into this Note Modification Agreement
the day and year first above written.
PENSION BENEFIT GUARANTY
CORPORATION:
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By:
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/s/ Xxxxxxx X. Xxxxx
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Title:
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Chief Investment Officer
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Date:
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February 27, 2009
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JPMORGAN INVESTMENT MANAGEMENT Inc., as agent for
PBGC
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By:
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W. Xxxxx Xxxxxxx III
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Title:
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Vice President
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Date:
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March 2, 2009
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By:
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Xxxxxx X. Xxxxx, XX
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Title:
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Chief Operating Officer
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Date:
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March 3, 2009
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EXHIBIT
A
WIRE
INSTRUCTIONS
2828371.2
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